As filed with the Securities and Exchange Commission on November 30, 1995
Registration Nos. 2-87203;
811-3881
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. __ [ ]
Post-Effective Amendment No. 33 [X]
==
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940 [X]
Amendment No. 34 [X]
==
PIMCO ADVISORS FUNDS
(Exact Name of Registrant as Specified in Charter)
2187 Atlantic Street
Stamford, Connecticut 06902
(Address of principal executive offices)
(203) 352-4990
(Registrant's telephone number, including area code)
Name and address
of agent for service Copy to
- -------------------- -------
Newton B. Schott, Jr., Esq. Douglass N. Ellis, Jr., Esq.
c/o PIMCO Advisors L.P. Ropes & Gray
2187 Atlantic Street One International Place
Stamford, Connecticut 06902 Boston, Massachusetts 02110
It is proposed that this filing will become effective (check appropriate box)
[ ] immediately upon filing pursuant to paragraph (b), or
[ ] on [date] pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[X] on February 1, 1996 pursuant to paragraph (a)(1)
[ ] 75 days after filing pursuant to paragraph (a)(2)
[ ] on [date] pursuant to paragraph (a)(2) of Rule 485
If appropriate, check the following box:
[ ] this [post-effective] amendment designates a new effective date for a
previously filed [post-effective amendment] [registration statement]
Pursuant to Rule 24f-2(a) under the Investment Company Act of 1940, the
Registrant has registered an indefinite number or amount of its shares of
beneficial interest under the Securities Act of 1933. The Registrant filed a
Rule 24f-2 Notice with respect to the Registrant's fiscal year ended September
30, 1995 on November 20, 1995.
<PAGE>
PIMCO ADVISORS FUNDS
--------------------
Cross Reference Sheet for Items Required by
Form N-1A
Form N-1A Part A Item Prospectus Caption
- --------------------- ------------------
1. Cover Page
2. Prospectus Summary; Schedule of Fees
3. Financial Highlights;
Performance Information
4. Description of the Trust; Cover
Page; Investment Objectives and
Policies; Description and Risks of
Fund Investments
5. Management of the Trust; Back Cover
5A. N/A (Information contained in Annual
Report)
6. Description of the Trust; Back
Cover; Distributions; Taxes
7. How to Buy Shares; Alternative
Purchase Arrangements; Back Cover;
Distributor and Distribution and
Servicing Plans; How Net Asset
Value is Determined
8. How to Redeem
9. None
-2-
<PAGE>
PIMCO ADVISORS FUNDS
Cross Reference Sheet for Items Required by
Form N-1A
Caption in Statement of
Additional Information
----------------------
10. Cover Page
11. Table of Contents
12. Not Applicable
13. Investment Objectives and
Policies; Derivative Instruments;
Investment Restrictions; Portfolio
Transactions
14. Management of the Trust
15. Not Applicable
16. Management of the Trust;
Distributor and Distribution and
Servicing Plans; Other Services
17. Portfolio Transactions
18. Organization and Capitalization of
the Trust
19. Contingent Deferred Sales Charge -
Class A, Class B and C Shares;
Distributor and Distribution and
Servicing Plans; Exchange
Privilege; How to Redeem; How Net
Asset Value Is Determined
20. Taxes
21. Distributor and Distribution and
Servicing Plans
22. Calculation of Yield and Return;
Performance Comparisons
23. Financial Statements
-3-
<PAGE>
PIMCO Advisors Funds
PIMCO Prospectus February 1, 1996
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
PIMCO Advisors Funds (the "Trust") is an open-end series management
investment company offering sixteen diversified portfolios and one
non-diversified portfolio (each a "Fund") with different investment
objectives and strategies. Unless otherwise noted, each of the Funds referred
to below is a "diversified" portfolio. For a discussion of the significance
and/or risks associated with "non-diversified" portfolios, see "Description
and Risks of Fund Investments -- Diversified and Non-Diversified Portfolios"
in this Prospectus. PIMCO Advisors Funds, 2187 Atlantic Street, Stamford, CT
06902
- --------------------------------------------------------------------------------
PIMCO ADVISORS
EQUITY FUNDS
EQUITY INCOME FUND seeks long-term growth of capital and current income. The
Fund invests primarily in common stocks, preferred stocks and convertible
securities. It may also invest a portion of its assets in bonds and other
fixed-income securities.
VALUE FUND seeks long-term growth of capital and current income. The Fund
invests primarily in common stocks of companies that are characterized by
having below average price to earnings ("P/E") ratios and/or higher dividend
yields relative to their industry groups.
GROWTH FUND seeks long-term growth of capital. Income is an incidental
consideration. The Fund invests primarily in common stocks of companies with
medium to large equity capitalizations.
TARGET FUND seeks capital appreciation. No consideration is given to income.
The Fund invests primarily in common stocks of companies with medium equity
capitalizations.
DISCOVERY FUND seeks capital appreciation. No consideration is given to
income. The Fund invests primarily in common stocks of small companies with
equity capitalizations of $500 million to $1 billion which exhibit favorable
growth characteristics and reasonable valuations.
OPPORTUNITY FUND seeks capital appreciation. No consideration is given to
income. The Fund invests primarily in common stocks of companies with small
equity capitalizations, which may include companies without wide market
recognition. THE OPPORTUNITY FUND IS CURRENTLY CLOSED TO NEW INVESTORS.
INNOVATION FUND seeks capital appreciation. No consideration is given to
income. The Fund invests primarily in common stocks of companies which use
innovative technology to gain a strategic, competitive advantage in their
industry as well as companies that provide and service those technologies.
INTERNATIONAL FUND seeks capital appreciation through investments in an
international portfolio. Income is an incidental consideration. The Fund
invests primarily in equity securities of companies whose principal
activities are outside of the United States.
EMERGING MARKETS FUND seeks capital appreciation. No consideration is given
to income. The Fund invests primarily in an international portfolio of equity
securities of companies whose principal activities are in countries with
emerging markets and developing economies.
PRECIOUS METALS FUND seeks capital appreciation. No consideration is given to
income. The Fund concentrates investments in a global portfolio of common
stocks of companies principally engaged in precious metals-related
activities.
- --------------------------------------------------------------------------------
PIMCO ADVISORS
INCOME FUNDS
GLOBAL INCOME FUND is a non-diversified portfolio that seeks maximum total
return, consistent with preservation of capital. The Fund invests primarily
in investment grade U.S. and foreign fixed-income securities and has an
intermediate duration portfolio.
HIGH INCOME FUND seeks maximum total return, consistent with preservation of
capital. The Fund invests primarily in higher yielding, lower-rated
fixed-income securities and has an intermediate duration portfolio.
TOTAL RETURN INCOME FUND seeks maximum total return, consistent with
preservation of capital. The Fund invests primarily in investment grade
fixed-income securities and has an intermediate duration portfolio.
TAX EXEMPT FUND seeks high current income exempt from federal income taxes,
consistent with preservation of capital. The Fund invests primarily in
investment grade municipal securities and has an intermediate to long
duration portfolio.
U.S. GOVERNMENT FUND seeks maximum total return, consistent with preservation
of capital. The Fund invests in U.S. government securities and has an
intermediate duration portfolio.
SHORT-INTERMEDIATE FUND seeks current income, consistent with relatively low
volatility of principal. The Fund invests primarily in investment grade
fixed-income securities and has a shorter duration portfolio.
MONEY MARKET FUND seeks the maximum current income believed to be consistent
with preservation of capital and maintenance of liquidity. The Fund invests in
high quality, short-term fixed-income instruments.
- --------------------------------------------------------------------------------
THE EQUITY INCOME FUND AND THE HIGH INCOME FUND MAY INVEST WITHOUT LIMIT IN
LOWER-RATED BONDS (COMMONLY CALLED "JUNK BONDS"), INCLUDING CONVERTIBLE BONDS,
WHICH MAY BE CONSIDERED HIGHLY SPECULATIVE. INVESTORS SHOULD CONSIDER THE RISKS
ASSOCIATED WITH AN INVESTMENT IN THESE FUNDS--SEE "DESCRIPTION AND RISKS OF FUND
INVESTMENTS--RISKS OF HIGH YIELD BONDS" IN THIS PROSPECTUS.
INVESTMENT IN THE MONEY MARKET FUND IS NEITHER INSURED NOR GUARANTEED BY THE
U.S. GOVERNMENT, AND THERE CAN BE NO ASSURANCE THAT THE FUND WILL BE ABLE TO
MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.
Each Fund (except the Opportunity Fund) currently offers three classes of
shares: Class A shares (generally sold subject to an initial sales load),
Class B Shares (sold subject to a contingent deferred sales charge) and Class
C shares (sold subject to an asset based sales charge). The Opportunity Fund
does not offer Class B shares.
This Prospectus concisely describes the information which investors should
know before investing. Please read this Prospectus carefully and keep it for
further reference.
Information about the investment objective of each Fund, along with a
detailed description of the types of securities in which each Fund may
invest, and of investment policies and restrictions applicable to each Fund,
is set forth in this Prospectus. There can be no assurance that the
investment objective of any Fund will be achieved. Because the market value
of the Funds' investments will change, the net asset value per share of each
Fund will also vary.
A Statement of Additional Information dated February 1, 1996, as supplemented
from time to time, is available free of charge by writing to PIMCO Advisors
Distribution Company (the "Distributor"), 2187 Atlantic Street, Stamford,
Connecticut 06902 or by telephoning 800-426-0107. The Statement of Additional
Information, which contains more detailed information about the Trust, has
been filed with the Securities and Exchange Commission (the "SEC") and is
incorporated by reference in this Prospectus.
Table of Contents
- -------------------------------------------------------
Page
Prospectus Summary 3
Schedule of Fees 4
Financial Highlights 7
Investment Objectives and Policies 22
Equity Funds 22
Income Funds 26
Description and Risks of Fund Investments 31
Performance Information 41
How to Buy Shares 42
General 44
Alternative Purchase Arrangements 45
Exchange Privilege 52
How to Redeem 53
Distributor and Distribution and
Servicing Plans 56
How Net Asset Value is
Determined 58
Distributions 58
Taxes 59
Management of the Trust 60
Description of the Trust 64
Mailings to Shareholders 65
Appendix A 65
- -------------------------------------------------------
<PAGE>
PIMCO Advisors Funds 3
- --------------------------------------------------------------------------------
Prospectus Summary
PIMCO Advisors L.P. (the "Manager") is the manager of all of the Funds. PIMCO
Advisors L.P. is one of the largest investment management firms in the U.S.
As of September 30, 1995, PIMCO Advisors L.P. had approximately $87 billion
in assets under management. Each of the PIMCO Advisors Funds also has a
sub-adviser responsible for portfolio investment decisions. All of the Funds'
sub-advisers are affiliates of PIMCO Advisors L.P. except for Van Eck
Associates Corporation, an independent sub-adviser that advises the Precious
Metals Fund. The affiliated sub-advisers are listed below.
<TABLE>
<CAPTION>
PIMCO Advisors Investment Firm Location Funds Managed
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Columbus Circle Investors Stamford, CT Equity Income, Growth, Target, Opportunity,
Innovation, Tax Exempt, Money Market
- --------------------------------------------------------------------------------------------------------------
Cadence Capital Management Boston, MA Discovery
- --------------------------------------------------------------------------------------------------------------
NFJ Investment Group Dallas, TX Value
- --------------------------------------------------------------------------------------------------------------
Blairlogie Capital Management Edinburgh, Scotland International, Emerging Markets
- --------------------------------------------------------------------------------------------------------------
Pacific Investment Management Global Income, High Income, Total Return Income,
Company Newport Beach, CA U.S. Government, Short-Intermediate
- --------------------------------------------------------------------------------------------------------------
</TABLE>
Presented in the tables below are some key facts and comparisons of the PIMCO
Advisors Funds.
<TABLE>
<CAPTION>
PIMCO Advisors Equity Funds
- ------------------------------------------------------------------------------------------------------------------
Fund Primary Objective Primary Investments Industries Foreign(1)
<S> <C> <C> <C> <C>
Equity Income Fund Long-term growth Income-producing stocks and Diversified 0-15%
of capital and convertibles of companies with
current income small, medium and large equity
capitalizations
- ------------------------------------------------------------------------------------------------------------------
Value Fund Long-term growth Stocks of companies with small, Diversified 0-15%
of capital and medium and large equity
current income capitalizations
- ------------------------------------------------------------------------------------------------------------------
Growth Fund Long-term growth Stocks of companies with medium Diversified 0-15%
of capital to large equity capitalizations
Income is
incidental
- ------------------------------------------------------------------------------------------------------------------
Target Fund Capital Stocks of companies with medium Diversified 0-15%
appreciation equity capitalizations
- ------------------------------------------------------------------------------------------------------------------
Discovery Fund Capital Stocks of small companies with Diversified 0-15%
appreciation equity capitalizations of
$500 million to $1 billion
- ------------------------------------------------------------------------------------------------------------------
Opportunity Fund Capital Stocks of companies with small Diversified 0-15%
appreciation equity capitalizations
- ------------------------------------------------------------------------------------------------------------------
Innovation Fund Capital Stocks of companies with small, Technology-related 0-15%
appreciation medium and large equity
capitalizations
- ------------------------------------------------------------------------------------------------------------------
International Fund Capital Non-U.S. stocks of companies with Diversified 65-100%
appreciation small, medium and large equity
Income is capitalizations
incidental
- ------------------------------------------------------------------------------------------------------------------
Emerging Markets Capital Non-U.S. stocks of companies in Diversified 65-100%
Fund appreciation emerging markets
- ------------------------------------------------------------------------------------------------------------------
Precious Metals Fund U.S. and non-U.S. stocks of Precious 0-100%
Capital companies with medium and large Metals-related
appreciation equity capitalizations
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Refers to securities principally traded in securities markets outside the
United States. The Equity Funds may invest without limit in securities of
foreign issuers traded in U.S. securities markets.
PIMCO Advisors Income Funds
<TABLE>
<CAPTION>
Fund Primary Objective Primary Investments Duration(1) Credit Quality Foreign(2)
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Global Income Fund Maximum total Investment grade 3-6 yrs. B to Aaa 25-75%
return, U.S. and foreign 0-10% below
consistent with fixed-income Baa
preservation of securities
capital
- ------------------------------------------------------------------------------------------------------------------
High Income Fund Maximum total Higher yielding 2-6 yrs. B to Aaa; min 0-20%
return, fixed-income of 65% below
consistent with securities Baa
preservation of
capital
- ------------------------------------------------------------------------------------------------------------------
Total Return Income Maximum total Investment grade 3-6 yrs. B to Aaa; 0-20%
Fund return, fixed-income 0-10% below
consistent wit securities Baa
preservation of
capital
- ------------------------------------------------------------------------------------------------------------------
Tax Exempt Fund High current Investment grade 3-10 yrs. Ba to Aaa; None
income exempt municipal 0-20% below
from federal securities Baa
income taxes,
consistent with
preservation of
capital
- ------------------------------------------------------------------------------------------------------------------
U.S. Government Fund Maximum total U.S. government 3-6 yrs. Gov't. AAA None
return, securities
consistent with
preservation of
capital
- ------------------------------------------------------------------------------------------------------------------
Short-Intermediate Current income Short- to 1-3 yrs. B to Aaa; 0-20%
Fund consistent with Intermediate-term 0-10% below
relatively low investment grade Baa
volatility of fixed-income
principal securities
- ------------------------------------------------------------------------------------------------------------------
Money Market Fund Maximum current Money market less than A-1, P-1 None
income believed instruments 1 yr.
to be consistent
with preservation
of capital and
maintenance of
liquidity
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Based, in the case of callable securities or securities subject to early
repayment, on the relevant sub-adviser's estimates.
(2) Refers to securities denominated in foreign currencies. The Income Funds may
invest beyond these limits in U.S. dollar-denominated securities of foreign
issuers.
<PAGE>
4 PIMCO Advisors Funds
- -------------------------------------------------------------------------------
Schedule of Fees
<TABLE>
<CAPTION>
Shareholder Transaction Expenses (All Funds) Class A Shares Class B Shares Class C Shares
<S> <C> <C> <C>
Maximum initial sales charge imposed on purchases (as
a percentage of offering price at time of purchase)
Equity Income, Value, Growth, Target, Discovery,
Opportunity, Innovation, International, Emerging
Markets, and Precious Metals Funds 5.50% None None
Global Income, High Income, Total Return Income, Tax
Exempt and U.S. Government Funds 4.75% None None
Short-Intermediate Fund 3.00% None None
Money Market Fund None* None None
Maximum sales charge imposed on reinvested dividends
(as a percentage of net asset value at time of
purchase) None None None
Maximum contingent deferred sales charge ("CDSC") (as
a percentage of original purchase price) 1%** 5%*** 1%****
Exchange Fee None* None None
</TABLE>
*Regular sales charges apply when Class A shares of the Money Market Fund
(on which no sales charge was paid at time of purchase) are exchanged for
shares of any other Fund.
**Imposed only in certain circumstances where Class A shares are purchased
without a sales charge at the time of purchase. See "Alternative Purchase
Arrangements" in this Prospectus.
***The maximum CDSC is imposed on shares redeemed in the first year. For
shares held longer than one year, the CDSC declines according to the
schedules set forth under "Deferred Sales Charge Alternative--Class B
Shares" in this Prospectus.
****The CDSC on Class C shares is imposed only on shares redeemed in the first
year.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
Example: You would pay the
following expenses on a Example: You would pay the
Annual Fund $1,000 investment assuming following expenses on a
Operating Expenses (1) 5% annual return and (2) $1,000 investment assuming
(As a percentage of average redemption at the end of (1) 5% annual return and (2)
Class A Shares net assets) each time period: no redemption:
- -----------------------------------------------------------------------------------------------------------------
Total
Fund
Management 12b-1 Other Operating 1 3 5 10 1 3 5 10
Fund Fees Fees(1) Expenses Expenses Year Years Years Years Year Years Years Years
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Equity Income .75% .25% .25% 1.25% $67 $92 $120 $198 $67 $92 $120 $198
Value .70 .25 .25 1.20 67 91 117 192 67 91 117 192
Growth .66 .25 .19 1.10 66 88 112 182 66 88 112 182
Target .71 .25 .29 1.25 67 92 120 198 67 92 120 198
Discovery .75 .25 .25 1.25 67 92 120 198 67 92 120 198
Opportunity .71 .25 .19 1.15 66 90 115 187 66 90 115 187
Innovation .75 .25 .25 1.25 67 92 120 198 67 92 120 198
International .80 .25 .35 1.40 68 97 127 214 68 97 127 214
Emerging Markets -- -- -- -- -- -- -- -- -- -- -- --
Precious Metals .75 .25 .35 1.35 68 95 125 208 68 95 125 208
Global Income .70 .25 .25 1.20 59 84 -- -- 59 84 -- --
High Income .60 .25 .25 1.10 58 81 105 175 58 81 105 175
Total Return
Income .60 .25 .25 1.10 58 81 105 175 58 81 105 175
Tax Exempt .60 .25 .25 1.10 58 81 105 175 58 81 105 175
U.S. Government .58 .25 .17 1.00 57 78 100 164 57 78 100 164
Short-Intermediate .50 .25 .20 .95 39 59 81 143 39 59 81 143
Money Market .10(2) .10(3) .25 .45(4) 5 14 25 57 5 14 25 57
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
(1) 12b-1 fees represent servicing fees which are paid annually to the
Distributor and repaid to participating brokers. See "Distributor and
Distribution and Servicing Plans."
(2) The Manager has voluntarily undertaken to reduce its advisory fee with
respect to the Money Market Fund to .10% of the Fund's average daily net
assets until further notice. Absent such undertaking, the advisory fee
would be .50% of the Fund's average daily net assets.
(3) The Distributor has voluntarily undertaken to reduce the 12b-1 fee it
receives with respect to the Money Market Fund to .10% of the Fund's
average daily net assets until further notice. Absent such undertaking,
the 12b-1 fee would be .20% of the Fund's average daily net assets.
(4) Absent the undertakings noted, the total operating expenses for the Money
Market Fund would be .95% of the Fund's average daily net assets.
<PAGE>
PIMCO Advisors Funds 5
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
Example: You would pay the
following expenses on a Example: You would pay the
Annual Fund $1,000 investment assuming following expenses on a
Operating Expenses (1) 5% annual return and (2) $1,000 investment assuming
(As a percentage of average redemption at the end of (1) 5% annual return and (2)
Class B Shares net assets) each time period: no redemption:
- -----------------------------------------------------------------------------------------------------------------
Total
Fund
Management Other Operating 1 3 5 10 1 3 5 10
Fund Fees 12b-1 Fees Expenses Expenses Year Years Years Years Year Years Years Years
---------------------------------------------------- ------------- --------------------- -------------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Equity Income .75% 1.00% .25% 2.00% $70 $ 93 $128 $233 $20 $63 $108 $233
Value .70 1.00 .25 1.95 70 91 125 227 20 61 105 227
Growth .66 1.00 .19 1.85 69 88 120 217 19 58 100 217
Target .71 1.00 .29 2.00 70 93 128 233 20 63 108 233
Discovery .75 1.00 .25 2.00 70 93 128 233 20 63 108 233
Opportunity .71 1.00 .19 1.90 69 90 123 222 19 60 103 222
Innovation .75 1.00 .25 2.00 70 93 128 233 20 63 108 233
International .80 1.00 .35 2.15 72 97 135 248 22 67 115 248
Emerging Markets -- -- -- -- -- -- -- -- -- -- -- --
Precious Metals .75 1.00 .35 2.10 71 96 133 243 21 66 113 243
Global Income .70 1.00 .25 1.95 70 91 -- -- 20 61 -- --
High Income .60 1.00 .25 1.85 69 88 120 217 19 58 100 217
Total Return
Income .60 1.00 .25 1.85 69 88 120 217 19 58 100 217
Tax Exempt .60 1.00 .25 1.85 69 88 120 217 19 58 100 217
U.S. Government .58 1.00 .17 1.75 68 85 115 206 18 55 95 206
Short-Intermediate .50 1.00 .20 1.70 67 84 112 201 17 54 92 201
Money Market 10(1) 1.00 .25 1.35(2) 64 73 94 162 14 43 74 162
</TABLE>
(1) The Manager has voluntarily undertaken to reduce its advisory fee with
respect to the Money Market Fund to .10% of the Fund's average daily net
assets until further notice. Absent such undertaking, the advisory fee
would be .50% of the Fund's average daily net assets.
(2) Absent the undertaking noted, the total operating expenses for the Money
Market Fund would be 1.75% of the Fund's average daily net assets.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
Example: You would pay the
following expenses on a Example: You would pay the
Annual Fund $1,000 investment assuming following expenses on a
Operating Expenses (1) 5% annual return and (2) $1,000 investment assuming
(As a percentage of average redemption at the end of (1) 5% annual return and (2)
Class C Shares net assets) each time period: no redemption:
- -----------------------------------------------------------------------------------------------------------------
Total
Fund
Management 12b-1 Other Operating 1 3 5 10 1 3 5 10
Fund Fees Fees(1) Expenses Expenses Year Years Years Years Year Years Years Years
---------------------------------------------------- ------------- --------------------- -------------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Equity Income .75% 1.00% .25% 2.00% $30 $63 $108 $233 $20 $63 $108 $233
Value .70 1.00 .25 1.95 30 61 105 227 20 61 105 227
Growth .66 1.00 .19 1.85 29 58 100 217 19 58 100 217
Target .71 1.00 .29 2.00 30 63 108 233 20 63 108 233
Discovery .75 1.00 .25 2.00 30 63 108 233 20 63 108 233
Opportunity .71 1.00 .19 1.90 29 60 103 222 19 60 103 222
Innovation .75 1.00 .25 2.00 30 63 108 233 20 63 108 233
International .80 1.00 .35 2.15 32 67 115 248 22 67 115 248
Emerging Markets -- -- -- -- -- -- -- -- -- -- -- --
Precious Metals .75 1.00 .35 2.10 31 66 113 243 21 66 113 243
Global Income .70 1.00 .25 1.95 30 61 -- -- 20 61 -- --
High Income .60 1.00 .25 1.85 29 58 100 217 19 58 100 217
Total Return
Income .60 1.00 .25 1.85 29 58 100 217 19 58 100 217
Tax Exempt .60 1.00 .25 1.85 29 58 100 217 19 58 100 217
U.S. Government .58 1.00 .17 1.75 28 55 95 206 18 55 95 206
Short-Intermediate .50 .75 .20 1.45 25 46 79 174 15 46 79 174
Money Market .10(2) .10(3) .25 .45(4) 15 14 25 57 5 14 25 57
</TABLE>
(1) 12b-1 fees which equal or are less than .25% represent servicing fees
which are paid annually to the Distributor and repaid by the Distributor
to participating brokers, and 12b-1 fees which exceed .25% represent
aggregate distribution and servicing fees. See "Distributor and
Distribution and Servicing Plans."
(2) The Manager has voluntarily undertaken to reduce its advisory fee with
respect to the Money Market Fund to .10% of the Fund's average daily net
assets until further notice. Absent such undertaking, the advisory fee
would be .50% of the Fund's average daily net assets.
(3) The Distributor has voluntarily agreed to reduce the 12b-1 fee it
receives with respect to the Money Market Fund to .10% of the Fund's
average daily net assets until further notice. Absent such undertaking,
the 12b-1 fee would be .20% of the Fund's average daily net assets.
(4) Absent the undertakings noted, the total operating expenses for the Money
Market Fund would be .95% of the Fund's average daily net assets.
<PAGE>
6 PIMCO Advisors Fund
- --------------------------------------------------------------------------------
The purpose of the foregoing tables is to assist investors in understanding
the various costs and expenses of the Trust that are borne directly or
indirectly by shareholders. Except for the Value, Discovery, Emerging Markets
and Global Income Funds, Annual Fund Operating Expenses are based on actual
expenses during the fiscal year ended September 30, 1995 and Fund average net
assets during such fiscal year. Annual Fund Operating Expenses for the Value,
Discovery, Emerging Markets and Global Income Funds are based on estimated
expenses for the fiscal year ending September 30, 1996. The Examples for
Class A shares assume payment of the current maximum applicable sales load.
Due to the 12b-1 distribution fee imposed on Class B and Class C shares, a
Class B or Class C shareholder of the Trust may, depending on the length of
time the shares are held, pay more than the economic equivalent of the
maximum front-end sales charges permitted by relevant rules of the National
Association of Securities Dealers, Inc.
NOTE: THE FIGURES SHOWN IN THE EXAMPLES ARE ENTIRELY HYPOTHETICAL. THEY ARE
NOT REPRESENTATIONS OF PAST OR FUTURE PERFORMANCE OR EXPENSES; ACTUAL
PERFORMANCE AND/OR EXPENSES MAY BE MORE OR LESS THAN SHOWN.
<PAGE>
PIMCO Advisors Funds 7
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
The financial highlights set forth below and on the following pages present
certain information and ratios as well as performance information for each of
the Funds. Additional information about the performance of all of the Funds
of the Trust is contained in the Trust's Annual Report to Shareholders which
may he obtained without charge from the Distributor. The information provided
below for each Fund has been audited by Coopers & Lybrand L.L.P., the
Trust's independent accountants, whose report thereon, for the five year
period ended September 30, 1995, appears in the Statement of Additional
Information. Financial Statements and related Notes are also included in the
Statement of Additional Information.
- --------------------------------------------------------------------------------
The following schedule of financial highlights for the Equity Income Fund is
for shares outstanding throughout the periods listed. The information
provided reflects results of operations under the Fund's former investment
objective and policies through January 31, 1992; such results would not
necessarily have been achieved had the Fund's current objective and policies
then been in effect.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------
Equity Income Fund
Class A Class B Class C Class A Class C Class A Class C Class A
-------- -------- -------- -------- -------- -------- -------- ---------
Year Ended September 30,
-------------------------------------------------------------------------------------------
1995 1995(1) 1995 1994 1994 1993 1993 1992
-------------- -------- -------- -------- -------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset
value,
beginning of
period $12.50 $12.55 $12.47 $12.88 $12.85 $10.57 $10.56 $9.92
-------- -------- -------- -------- -------- -------- -------- ---------
Income From
Investment
Operations
Net investment
income 0.36 0.11 0.27 0.34 0.24 0.33 0.25 0.34
Net gains or
losses on
securities
(both realized
and
unrealized) 1.61 1.55 1.59 (0.17) (0.16) 2.30 2.29 0.71
-------- -------- -------- -------- -------- -------- -------- ---------
Total from
investment
operations 1.97 1.66 1.86 0.17 0.08 2.63 2.54 1.05
-------- -------- -------- -------- -------- -------- -------- ---------
Less
Distributions
Dividends
(from net
investment
income) (0.33) (0.08) (0.24) (0.33) (0.24) (0.32) (0.25) (0.40)
Distributions
(from capital
gain) -- -- -- (0.22) (0.22) -- -- --
-------- -------- -------- -------- -------- -------- -------- ---------
Total
distributions (0.33) (0.08) (0.24) (0.55) (0.46) (0.32) (0.25) (0.40)
-------- -------- -------- -------- -------- -------- -------- ---------
Net asset
value,
end of period $14.14 $14.13 $14.09 $12.50 $12.47 $12.88 $12.85 $1O.57
======== ======== ======== ======== ======== ======== ======== =========
Total Return
(without sales
charge) 16.1% 13.3% 15.2% 1.4% 0.7% 25.3% 24.4% 10.7%
Ratios/Supplemental
Data
Net assets,
end of period
(in 000's) $12,933 $1,760 $174,316 $14,942 $178,892 $6,328 $94,247 $2,593
Ratio of
expenses to
average net
assets 1.3% 2.1%* 2.1% 1.3% 2.0% 1.3% 2.1% 1.4%
Ratio of net
investment
income to
average net
assets 2.9% 2.2%* 2.1% 2.7% 2.0% 2.9% 2.2% 3.3%
Portfolio
turnover rate 176.9% 176.9% 176.9% 174.9% 174.9% 167.9% 167.9% 149.0%
</TABLE>
<TABLE>
<CAPTION>
Equity Income Fund
Class C Class A Class C Class C
---------- ---------- ---------- ---------------------------------------
Period Ended
Year Ended September 30, September
---------------------------------------------------------------- 30,
1992 1991(2) 1991 1990 1989 1988(3)
-------------------- ---------- ---------- ---------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $ 9.91 $ 8.38 $ 8.16 $ 11.17 $ 10.05 $ 10.00
---------- ---------- ---------- ---------- ---------- ------------
Income From
Investment
Operations
Net investment
income 0.29 0.28 0.36 0.49 0.55 0.24
Net gains or losses
on securities (both
realized and
unrealized) 0.68 1.54 1.75 (2.32 ) 1.19 (0.05)
---------- ---------- ---------- ---------- ---------- ------------
Total from
investment
operations 0.97 1.82 2.11 (1.83 ) 1.74 0.19
---------- ---------- ---------- ---------- ---------- ------------
Less Distributions
Dividends (from net
investment income) (0.32) (0.28) (0.36) (0.49 ) (0.62) (0.14)
Distributions (from
capital gain) -- -- -- (0.69 ) -- --
---------- ---------- ---------- ---------- ---------- ------------
Total distributions (0.32) (0.28) (0.36) (1.18 ) (0.62) (0.14)
---------- ---------- ---------- ---------- ---------- ------------
Net asset value,
end of period $ 10.56 $ 9.92 $ 9.91 $ 8.16 $ 11.17 $ 10.05
========== ========== ========== ========== ========== ============
Total Return
(without sales
charge) 9.9% 34.8% 26.5% (18.0%) 17.9% 4.3%
Ratios/Supplemental
Data
Net assets, end of
period (in 000's) $45,101 $ 15 $22,651 $25,758 $45,168 $47,118
Ratio of expenses to
average net assets 2.1% 1.6%* 2.2% 2.0% 1.9% 2.0%
Ratio of net
investment income to
average net assets 2.7% 4.4%* 4.2% 5.1% 5.2% 5.4%
Portfolio turnover
rate 149.0% 142.7% 142.7% 70.2% 84.8% 22.9%
</TABLE>
(1) The distribution of Class B shares commenced on May 22, 1995.
(2) The distribution of Class A shares commenced on February 1, 1991.
(3) The Fund commenced operations on April 18, 1988.
* Annualized
<PAGE>
8 PIMCO Advisors Funds
- --------------------------------------------------------------------------------
Financial Highlights
The following schedule of financial highlights for the Value Fund is for
shares outstanding thoughout the period listed.
<TABLE>
<CAPTION>
--------------------------------
Value Fund
----------
Class
Class A B Class C
---------- ------ --------
Period Ended September 30, (4)
--------------------------------
1995 1995(5) 1995
- ----------------------------------------- ---------- ------ --------
<S> <C> <C> <C>
Net asset value, beginning of period $10.00 $10.00 $10.00
---------- ------ --------
Income from investment operations
Net investment income 0.07 0.05 0.05
Net gains or losses on securities
(both realized and unrealized) 0.68 0.68 0.68
---------- ------ --------
Total from investment operations 0.75 0.73 0.73
---------- ------ --------
Less Distributions
Dividends (from net investment income) (0.07 ) (0.05 ) (0.05 )
Distributions (from capital gain) -- -- --
---------- ------ --------
Total distributions (0.07 ) (0.05 ) (0.05 )
---------- ------ --------
Net asset value, end of period $10.68 $10.68 $10.68
========== ====== ========
Total Return (without sales charge) 7.5% 7.3% 7.3%
Ratios/Supplemental Data
Net assets, end of period (in 000's) $2,492 $3,975 $6,643
Ratio of expenses to average net assets 1.3%* 2.1%* 2.0%*
Ratio of net investment income to average
net assets 2.7%* 1.9%* 1.9%*
Portfolio turnover rate 0.5% 0.5% 0.5%
- ----------------------------------------- ---------- ------ --------
</TABLE>
(4) The Fund commenced operations on June 27, 1995.
(5) The distribution of Class B shares commenced on May 22, 1995.
* Annualized
<PAGE>
PIMCO Advisors Fund 9
- --------------------------------------------------------------------------------
Financial Highlights
The following schedule of financial highlights for the Growth Fund is for
shares outstanding throughout the periods listed.
<TABLE>
<CAPTION>
-----------------------------------------------------
Growth Fund
-----------------------------------------------------
Class A Class B Class C Class A
---------- ---------- ---------- ------------
Year Ended September 30,
-----------------------------------------------------
1995 1995(6) 1995 1994
- ------------------------------------------- ---------- ---------- ---------- ------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 22.01 $ 22.63 $ 21.52 $ 23.64
---------- ---------- ---------- ------------
Income from investment operations
Net investment income (loss) 0.12 (0.03) (0.04) 0.12
Net gains or losses on securities
(both realized and unrealized) 4.79 2.34 4.65 0.12
---------- ---------- ---------- ------------
Total from investment operations 4.91 2.31 4.61 0.24
---------- ---------- ---------- ------------
Less Distributions
Dividends (from
net investment income) -- -- -- --
Distributions (from capital gain) (1.19) -- (1.19) (1.87)
---------- ---------- ---------- ------------
Total distributions (1.19) -- (1.19) (1.87)
---------- ---------- ---------- ------------
Net asset value, end of period $ 25.73 $ 24.94 $ 24.94 $ 22.01
========== ========== ========== ============
Total Return (without sales charge) 23.7% 10.2% 22.8% 1.3%
Ratios/Supplemental Data
Net assets, end of period (in 000's) $134,819 $7,671 $1,290,152 $107,269
Ratio of expenses to average net assets 1.1% 1.9%* 1.9% 1.1%
Ratio of net investment income (loss)
to average net assets 0.5% (0.4%)* (0.2%) 0.6%
Portfolio turnover rate 110.6% 110.6% 110.6% 115.3%
</TABLE>
<TABLE>
<CAPTION>
Growth Fund
----------------------------------------------------------------------------------------
Class C Class A Class C Class A Class C Class A Class C
--------- --------- --------- --------- --------- --------- -----------
Year Ended September 30,
------------------------
1994 1993 1993 1992 1992 1991(7) 1991
--------------- --------- --------- --------- --------- --------- --------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset
value,
beginning of
period $23.32 $20.76 $20.64 $20.63 $20.54 $16.99 $16.93
--------- --------- --------- --------- --------- --------- -----------
Income from
investment
operations
Net investment
income (loss) (0.04) 0.09 (0.07) 0.14 (0.01) 0.21 0.12
Net gains or
losses on
securities
(both realized
and unrealized) 0.11 3.53 3.49 1.38 1.37 5.28 5.32
--------- --------- --------- --------- --------- --------- -----------
Total from
investment
operations 0.07 3.62 3.42 1.52 1.36 5.49 5.44
--------- --------- --------- --------- --------- --------- -----------
Less
Distributions
Dividends (from
net investment
income) -- -- -- (0.14) (0.01) (0.19) (0.17)
Distributions
(from capital
gain) (1.87) (0.74) (0.74) (1.25) (1.25) (1.66) (1.66)
--------- --------- --------- --------- --------- --------- -----------
Total
distributions (1.87) (0.74) (0.74) (1.39) (1.26) (1.85) (1.83)
--------- --------- --------- --------- --------- --------- -----------
Net asset
value, end of
period $21.52 $23.64 $23.32 $20.76 $20.64 $20.63 $20.54
========= ========= ========= ========= ========= ========= ===========
Total Return
(without sales
charge) 0.5% 17.7% 16.9% 7.7% 6.9% 38.6% 35.1%
Ratios/Supplemental
Data
Net assets, end
of period (in
000's) $1,085,427 $97,509 $1,077,490 $71,209 $853,121 $17,064 $564,398
Ratio of
expenses to
average net
assets 1.9% 1.1% 1.9% 1.1% 1.9% 1.2%* 1.8%
Ratio of net
investment
income (loss) to
average net
assets (0.2%) 0.4% (0.3%) 0.7% (0.1%) 0.9%* 0.6%
Portfolio
turnover rate 115.3% 109.9% 109.9% 92.3% 92.3% 95.3% 95.3%
</TABLE>
(6) The distribution of Class B shares commenced on May 23, 1995.
(7) The distribution of Class A shares commenced on October 26, 1990.
* Annualized
<TABLE>
<CAPTION>
-----------------------------------------------------
Growth Fund
Class C
-----------------------------------------------------
Year Ended September 30,
---------------------------------------------------------
1990 1989 - 1988 1987 1986
- ----------------------------------------- ------- ------- ------- ------- ---------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $19.71 $13.93 $ 18.04 $ 14.76 $ 11.92
------- ------- ------- ------- ---------
Income from investment operations
Net investment income (loss) 0.19 0.11 0.09 0.14 0.33
Net gains or losses on securities
(both realized and unrealized) (1.67) 5.77 (2.96) 5.24 3.82
------- ------- ------- ------- ---------
Total from investment operations (1.48) 5.88 (2.87) 5.38 4.15
------- ------- ------- ------- ---------
Less Distributions
Dividends (from
net investment income) (0.18) (0.10) (0.11) (0.18) (0.43)
Distributions (from capital gain) (1.12) -- (1.13) (1.92) (0.88)
------- ------- ------- ------- ---------
Total distributions (1.30 ) (0.10) (1.24 ) (2.10) (1.31)
------- ------- ------- ------- ---------
Net asset value, end of period $16.93 $19.71 $ 13.93 $ 18.04 $ 14.76
======= ======= ======= ======= =========
Total Return (without sales charge) (8.0%) 42.4% (14.8%) 41.5% 37.9%
Ratios/Supplemental Data
Net assets, end of period (in 000's) $314,075 $373,490 $338,493 $509,348 $192,325
Ratio of expenses to average net assets 1.7% 1.7% 1.8% 1.6% 1.7%
Ratio of net investment income to average
net assets 1.0% 0.7% 0.6% 0.8% 2.4%
Portfolio turnover rate 88.7% 82.5% 103.6% 128.1% 168.7%
</TABLE>
<PAGE>
10 PIMCO Advisors Funds
- --------------------------------------------------------------------------------
Financial Highlights
The following schedule of financial highlights for the Target Fund is for
shares outstanding throughout the periods listed.
<TABLE>
<CAPTION>
------------------------------------------------------------------------
Target Fund
Class A Class B Class C Class A Class C Class A Class C
------- ------ ------- ------- ------- ------- -------
Year Ended September 30,
------------------------------------------------------------------------------------
1995 1995(8) 1995 1994 1994 1993(9) 1993(9)
---------------------------- ------- ------ ------- ------ ------- ------ ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period $ 13.13 $ 13.93 $ 12.95 $ 12.72 $ 12.65 $10.00 $10.00
------- ------ ------- ------ ------- ------ ---------
Income from Investment
Operations
Net investment loss (0.02) (0.05) (0.12) (0.04) (0.14) (0.02) (0.09)
Net gains or losses on
securities (both realized
and unrealized) 3.45 2.18 3.38 0.57 0.56 2.74 2.74
------- ------ ------- ------ ------- ------ ---------
Total from investment
operations 3.43 2.13 3.26 0.53 0.42 2.72 2.65
------- ------ ------- ------ ------- ------ ---------
Less Distributions
Dividends (from net
investment income) -- -- -- -- -- -- --
Distributions (from capital
gain) (0.16) -- (0.16) (0.12) (0.12) -- --
------- ------ ------- ------ ------- ------ ---------
Total distributions (0.16) -- (0.16) (0.12) (0.12) -- --
------- ------ ------- ------ ------- ------ ---------
Net asset value, end of
period $ 16.40 $ 16.06 $ 16.05 $ 13.13 $ 12.95 $12.72 $12.65
======= ====== ======= ====== ======= ====== =========
Total Return (without sales
charge) 26.5% 15.3% 25.6% 4.2% 3.4% 27.2% 26.5%
Ratios/Supplemental Data
Net assets, end of peirod
(in 000's) $121,915 $7,554 $780,355 $90,527 $556,043 $48,787 $298,238
Ratio of expenses to average
net assets 1.2% 2.0%* 2.0% 1.2% 2.0% 1.3%* 2.0%*
Ratio of net investment
income (loss) to average
net assets (0.1%) (0.9%)* (0.9%) (0.3%) (1.1%) (0.3%)* (1.0%)*
Portfolio turnover rate 128.3% 128.3% 128.3% 103.5% 103.5% 76.0% 76.0%
</TABLE>
(8) The distribution of Class B shares commenced on May 22, 1995.
(9) The Fund commenced operations on December 17, 1992.
* Annualized
<PAGE>
PIMCO Advisors Funds 11
- --------------------------------------------------------------------------------
Financial Highlights
The following schedule of financial highlights for the Discovery Fund is for
shares outstanding throughout the period listed.
<TABLE>
<CAPTION>
----------------------------
Discovery Fund
Class A Class B Class C
------ ------ --------
Period Ended September
30,(10)
--------------------------------
1995 1995(11) 1995
- ------------------------------------------ ------ ------ --------
<S> <C> <C> <C>
Net asset value, beginning of period $10.00 $10.00 $10.00
---- ---- ------
Income from investment operations
Net investment income 0.01 0.01 0.01
Net gains or losses on securities
(both realized and unrealized) 0.88 0.87 0.87
---- ---- ------
Total from investment operations 0.89 0.86 0.86
---- ---- ------
Less Distributions
Dividends (from
net investment income) -- -- --
Distributions (from capital gain) -- -- --
---- ---- ------
Total distributions -- -- --
---- ---- ------
Net asset value, end of period $10.89 $10.86 $10.86
==== ==== ======
Total Return (without sales charge) 8.9% 8.6% 8.6%
Ratios/Supplemental Data
Net assets, end of period (in 000's) $7,658 $10,832 $20,260
Ratio of expenses to average net assets 1.3%* 2.0%* 2.0%*
Ratio of net investment income (loss) to
average net assets 0.2%* (0.5%)* (0.5%)*
Portfolio turnover rate 34.9% 34.9% 34.9%
- ------------------------------------------ ---- ---- ------
</TABLE>
(10) The Fund commenced operations on June 27, 1995.
(11) The distribution of Class B shares commenced on May 22, 1995.
* Annualized
<PAGE>
12 PIMCO Advisors Funds
- --------------------------------------------------------------------------------
Financial Highlights
The following schedule of financial highlights for the Opportunity Fund is
for shares outstanding throughout the periods listed.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
Opportunity Fund
Class Class Class Class Class Class Class Class Class Class
A C A C A C A C A C
------- ------- ------ ------- ------- ------- ------ ----- ---- ------
Year Ended September 30,
- --------------------------------------------------------------------------------------------------------------------------------
1995 1995 1994 1994 1993 1993 1992 1992 1991(12) 1991
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $ 28.87 $ 28.04 $33.43 $32.77 $ 19.84 $ 19.60 $17.95 $17.87 $ 11.78 $ 11.93
----- ----- ---- ----- ----- ----- ---- ----- ---- ------
Income from
investment operations
Net investment income
(loss) (0.11) (0.34) (0.17) (0.38) (0.15) (0.34) (0.04) (0.18) (0.03) (0.11)
Net gains or losses
on securities (both
realized and unrealized) 11.19 10.81 (2.02) (1.98) 14.00 13.77 3.61 3.59 6.20 6.42
----- ----- ---- ----- ----- ----- ---- ----- ---- ------
Total from
investment operations 11.08 10.47 (2.19) (2.36) 13.85 13.43 3.57 3.41 6.17 6.31
----- ----- ---- ----- ----- ----- ---- ----- ---- ------
Less Distributions
Dividends (from net
investment income) -- -- -- -- -- -- -- -- -- --
Distributions (from
capital gain) (0.87) (0.87) (2.26) (2.26) (0.26) (0.26) (1.68) (1.68) -- (0.37)
Return of capital
distribution -- -- (.11) (.11) -- -- -- -- -- --
----- ----- ---- ----- ----- ----- ---- ----- ---- ------
Total distributions (0.87) (0.87) (2.37) (2.37) (0.26) (0.26) (1.68) (1.68) -- (0.37)
----- ----- ---- ----- ----- ----- ---- ----- ---- ------
Net asset value,
end of period $39.08 $37.64 $28.87 $28.04 $33.43 $32.77 $19.84 $19.60 $17.95 $17.87
===== ===== ==== ===== ===== ===== ==== ===== ==== ======
Total Return (without
sales charge) 39.7% 38.6% (6.7%) (7.4%) 70.4% 69.1% 21.6% 20.8% 70.9% 54.4%
Ratios/Supplemental Data
Net assets, end of
period (in 000's) $120,830 $715,191 $95,261 $553,460 $106,666 $618,193 $22,454 $179,081 $1,623 $58,656
Ratio of expenses
to average net assets 1.2% 1.9% 1.1% 1.9% 1.2% 2.0% 1.3% 2.0% 1.4%* 2.0%*
Ratio of net investment
income (loss) to
average net assets (0.4%) (1.1%) (0.6%) (1.4%) (0.6%) (1.3%) (0.2%) (1.0%) (0.5%)* (0.8%)*
Portfolio turnover
rate 101.6% 101.6% 78.4% 78.4% 105.4% 105.4% 93.8% 93.8% 144.6% 144.6%
</TABLE>
(12) The distribution of Class A shares commenced on December 17, 1990.
* Annualized.
<TABLE>
<CAPTION>
------------------------------------------------
Opportunity Fund
Class C
------------------------------------------------
Year Ended September 30,
------------------------------------------------
1990 1989 1988 1987 1986
- ------------------------------------------- ------ ------ ------ ------ --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 15.78 $ 11.84 $ 16.73 $ 13.18 $ 12.04
---- ---- ---- ---- ------
Income from investment operations
Net investment income (loss) (0.01) (0.03) 0.03 0.02 (0.03)
Net gains or losses on securities
(both realized and unrealized) (2.13) 3.97 (2.34) 4.80 2.00
---- ---- ---- ---- ------
Total from investment operations (2.14) 3.94 (2.31) 4.82 1.97
---- ---- ---- ---- ------
Less Distributions
Dividends (from net investment income) -- -- (0.03) -- (0.03)
Distributions (from capital gain) (1.71) -- (2.55) (1.27) (0.80)
Return of capital distribution -- -- -- -- --
---- ---- ---- ---- ------
Total distributions (1.71) -- (2.58) (1.27) (0.83)
---- ---- ---- ---- ------
Net asset value, end of period $ 11.93 $ 15.78 $ 11.84 $ 16.73 $ 13.18
==== ==== ==== ==== ======
Total Return (without sales charge) (14.8%) 33.3% (9.0%) 40.2% 17.2%
Ratios/Supplemental Data
Net assets, end of period (in 000's) $33,472 $51,680 $51,062 $74,235 $52,233
Ratio of expenses to average net assets 1.9% 1.9% 2.0% 1.7% 1.8%
Ratio of net investment income (loss) to
average net assets (0.1%) (0.2%) 0.3% 0.1% (0.3%)
Portfolio turnover rate 106.2% 153.4% 124.9% 188.7% 108.6%
</TABLE>
<PAGE>
PIMCO Advisors Funds 13
- --------------------------------------------------------------------------------
Financial Highlights
The following schedule of financial highlights for the Innovation Fund is for
shares outstanding throughout the period listed.
----------------------------
Innovation Fund
Class A Class B Class C
------- ------- --------
Period Ended September 30,(13)
------------------------------
1995(15) 1995(14) 1995(15)
- ------------------------------------------ ------ ------ --------
Net asset value, beginning of period $10.00 $11.81 $10.00
---- ---- ------
Income from investment operations
Net investment income (loss) (0.06) (0.08) (0.13)
Net gains or losses on securities
(both realized and unrealized) 4.80 2.93 4.78
---- ---- ------
Total from investment operations 4.74 2.85 4.65
---- ---- ------
Less Distributions
Dividends (from
net investment income) -- -- --
Distributions (from capital gain) -- -- --
---- ---- ------
Total distributions -- -- --
---- ---- ------
Net asset value, end of period $14.74 $14.66 $14.65
==== ==== ======
Total Return (without sales charge) 47.4% 24.1% 46.5%
Ratios/Supplemental Data
Net assets, end of period (in 000's) $28,239 $6,509 $63,952
Ratio of expenses to average net assets 1.4%* 2.3%* 2.2%*
Ratio of net investment income (loss)
to average net assets (0.6%)* (1.7%)* (1.4%)*
Portfolio turnover rate 86.1% 86.1% 86.1%
- ------------------------------------------ ---- ---- ------
(13) The Fund commenced operations on December 22, 1994.
(14) The distribution of Class B shares commenced on May 22, 1995.
(15) Reflecting voluntary waiver of investment advisory fee of $4,666 (.00
per share) by the Manager as more fully described in note 3(a) to the
Financial Statements.
* Annualized
<PAGE>
14 PIMCO Advisors Funds
- --------------------------------------------------------------------------------
Financial Highlights
The following schedule of financial highlights for the International Fund is
for shares outstanding throughout the periods listed. The information
provided reflects results of operations the Fund's former investment
objective and policies through August 31, 1992; such results would not
necessarily have been achieved had the Fund's current objective and policies
been in effect. On November 15, 1994, Blairlogie Capital Management became
the sub-adviser of the Fund.
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------
International Fund
Class A Class B Class C Class A Class C Class A Class C Class A Class C Class A Class C
------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Year Ended September 30,
---------------------------------------------------------------------------------------------------------
1995 1995(16) 1995 1994 1994 1993 1993 1992 1992 1991(17) 1991
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $12.92 $ 11.30 $ 12.56 $12.17 $11.92 $10.04 $ 9.92 $10.54 $10.49 $9.48 $10.04
------ ------- ------- ------ ------ ------ ------ ------ ------ ----- ------
Income from
investment operations
Net investment
income (loss) 0.07 0.00 (0.02) 0.04 (0.06) 0.07 (0.01) 0.05 (0.06) 0.02 (0.08)
Net gains or
losses on securities
(both realized
and unrealized) (0.56) 0.45 (0.55) 0.94 0.93 2.80 2.75 (0.37) (0.33) 1.04 1.76
------ ------- ------- ------ ------ ------ ------ ------ ------ ----- ------
Total from
investment operations (0.49) 0.45 (0.57) 0.98 0.87 2.87 2.74 (0.32) (0.39) 1.06 1.68
------ ------- ------- ------ ------ ------ ------ ------ ------ ----- ------
Less Distributions
Dividends (from net
investment income) -- -- -- -- -- -- -- -- -- -- --
Distributions
(from capital gain) (0.24) -- (0.24) (0.23) (0.23) (0.74) (0.74) (0.18) (0.18) -- (1.23)
------ ------- ------- ------ ------ ------ ------ ------ ------ ----- ------
Total distributions (0.24) -- (0.24) (0.23) (0.23) (0.74) (0.74) (0.18) (0.18) -- (1.23)
------ ------- ------- ------ ------ ------ ------ ------ ------ ----- ------
Net asset value,
end of period $12.19 $ 11.75 $ 11.75 $12.92 $12.56 $12.17 $11.92 $10.04 $9.92 $10.54 $10.49
====== ======= ======= ====== ====== ====== ====== ====== ===== ====== ======
Total Return
(without sales
charge) (3.7%) 4.0% (4.5%) 8.2% 7.4% 30.4% 29.4% (3.1%) (3.8%) 17.3% 18.3%
Ratios/Supplemental Data
Net assets,
end of period
(in 000's) $17,951 $503 $215,349 $23,289 $294,492 $11,992 $147,194 $471 $28,299 $22 $33,594
Ratio of expenses
to average
net assets 1.5% 2.3%* 2.2% 1.4% 2.2% 1.4% 2.2% 1.9% 2.6% 1.9%* 2.6%
Ratio of net
investment income (loss)
to average net assets 0.6% (0.1%)* (0.2%) 0.3% (0.5%) 0.6% (0.1%) 0.5% (0.6%) 0.7%* (0.2%)
Portfolio
turnover rate 169.6% 169.6% 169.6% 55.1% 55.1% 67.6% 67.6% 159.6% 159.6% 107.1% 107.1%
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(16) The distribution of Class B shares commenced on May 22, 1995.
(17) The distribution of Class A shares commenced on February 1, 1991.
* Annualized
<PAGE>
<TABLE>
<CAPTION>
----------------------------------------------------------------
International Fund
Class C
----------------------------------------------------------------
Year Ended September 30, Period Ended
September 30,
1990 1989 1988 1987 1986(18)
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 13.33 $ 10.07 $ 12.87 $ 9.70 $ 10.00
Income from investment operations
Net investment income (loss) (0.10) (0.18) (0.10) (0.10) --
Net gains or losses on securities
(both realized and unrealized) (2.02) 3.44 (1.83) 3.27 (0.30)
Total from investment operations (2.12) 3.26 (1.93) 3.17 (0.30)
Less Distributions
Dividends (from net investment income) -- -- -- -- --
Distributions (from capital gain) (1.17) -- (0.87) -- --
Total distributions (1.17) -- (0.87) -- --
Net asset value, end of period $ 10.04 $ 13.33 $ 10.07 $ 12.87 $ 9.70
Total Return (without sales charge) (17.4%) 32.4% (14.0%) 32.7% (26.9%)
Ratios/Supplemental Data
Net assets, end of period (in 000's) $36,282 $56,150 $60,394 $107,584 $67,668
Ratio of expenses to average net assets 2.3% 2.3% 2.4% 2.4% 2.3%*
Ratio of net investment income (loss)
to average net assets (0.3%) (0.7%) (0.5%) (0.9%) (0.3%)*
Portfolio turnover rate 93.0% 83.6% 94.9% 134.0% --
- -------------------------------------------------------------------------------------------------------------
</TABLE>
(18) The Fund commenced operations on August 25, 1986.
<PAGE>
PIMCO Advisors Funds 15
- --------------------------------------------------------------------------------
Financial Highlights
The following schedule of financial highlights for the Precious Metals Fund
is for shares outstanding throughout the periods listed. The information
provided reflects results of operations under the Fund's former investment
objective and policies through November 14, 1994; such results would not
necessarily have been achieved had the Fund's current objective and policies
been in effect.
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------
Precious Metals Fund
Class A Class B Class C Class A Class C Class A Class C Class A Class C Class A
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Year Ended September 30,
------------------------------------------------------------------------------------------------
1995 1995(19) 1995 1994 1994 1993 1993 1992 1992 1991(20)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $14.14 $ 11.61 $ 13.75 $10.32 $10.11 $ 7.54 $ 7.44 $7.51 $ 7.46 $7.19
------ ------- ------- ------ ------ ------ ------ ----- ------ -----
Income From
Investment
Operations
Net investment
income (loss) 0.07 (0.01) (0.02) 0.08 (0.02) 0.06 (0.02) (0.01) (0.06) (0.07)
Net gains or losses
on securities (both
realized and
unrealized) (1.88) 0.30 (1.83) 3.74 3.66 2.72 2.69 0.04 0.04 0.39
------ ------- ------- ------ ------ ------ ------ ----- ------ -----
Total from investment
operations (1.81) 0.29 (1.85) 3.82 3.64 2.78 2.67 0.03 (0.02) 0.32
------ ------- ------- ------ ------ ------ ------ ----- ------ -----
Less Distributions
Dividends
(from net
investment
income) -- -- -- -- -- -- -- -- -- --
Distributions
(from
capital gain) -- -- -- -- -- -- -- -- -- --
------ ------- ------- ------ ------ ------ ------ ----- ------ -----
Total distributions -- -- -- -- -- -- -- -- -- --
------ ------- ------- ------ ------ ------ ------ ----- ------ -----
Net asset value,
end of period $12.33 $ 11.90 $ 11.90 $14.14 $13.75 $10.32 $10.11 $7.54 $ 7.44 $7.51
====== ======= ======= ====== ====== ====== ====== ===== ====== =====
Total Return
(without
sales charge) (12.8%) 2.5% (13.5%) 37.0% 36.0% 36.9% 35.9% 0.4% (0.3%) 6.8%
Ratios/Supplemental
Data
Net assets,
end of period
(in 000's) $7,670 $251 $42,341 $11,229 $62,825 $3,425 $23,884 $668 $6,633 $514
Ratio of expenses
to average net
assets 1.4% 2.2%* 2.2% 1.3% 2.1% 1.4% 2.2% 1.9% 2.6% 2.1%*
Ratio of net
investment income
(loss) to average
net assets 0.6% (0.2%)* (0.2%) 0.6% (0.2%) 0.6% (0.2%) (0.1%) (0.8%) (1.4%)*
Portfolio
turnover rate 8.7% 8.7% 8.7% 11.0% 11.0% 10.0% 10.0% 29.6% 29.6% 19.4%
- -----------------------------------------------------------------------------------------------------------------------
(19) The distribution of Class B shares commenced on June 15, 1995.
(20) The distribution of Class A shares commenced on February 1, 1991.
* Annualized]
<PAGE>
<CAPTION>
----------------------------------
Precious Metals Fund
Class C
-----------------------------------
Period Ended
September 30,
1991 1990 1989(21)
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period $9.40 $ 9.86 $10.00
------ ------ ------
Income From Investment Operations
Net investment income (loss) (0.05) (0.05) (0.05)
Net gains or losses on securities
(both realized and unrealized) (1.89) (0.41) (0.08)
------ ------ ------
Total from investment operations (1.94) (0.46) (0.13)
------ ------ ------
Less Distributions
Dividends (from net
investment income) -- -- (0.01)
Distributions (from
capital gain) -- -- --
------ ------ ------
Total distributions -- -- (0.01)
------ ------ ------
Net asset value,
end of period $7.46 $ 9.40 $ 9.86
=== ====== ====== ======
Total Return (without
sales charge) (20.6%) (4.7%) (1.3%)
Ratios/Supplemental Data
Net assets, end of period
(in 000's) $6,995 $9,918 $6,630
------ ------ ------
Ratio of expenses to average net
assets 2.4% 2.4% 2.5%*
Ratio of net investment income (loss)
to average net assets (0.8%) (0.8%) (0.6%)*
Portfolio turnover rate 19.4% 22.5% 8.8%
- -------------------------------------------------------------------------------
</TABLE>
(21) The Fund commenced operations on October 10, 1988.
* Annualized
<PAGE>
16 PIMCO Advisors Funds
- --------------------------------------------------------------------------------
Financial Highlights
The following schedule of financial highlights for the High Income Fund is
for shares outstanding throughout the periods listed. The information
provided reflects results of operations under the Fund's former investment
objective and policies through November 14, 1994; such results would not
necessarily have been achieved had the Fund's current objective and policies
been in effect.
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------
High Income Fund
Class A Class B Class C Class A Class C Class A Class C Class A
------- ------- ------- ------- ------- ------- ------- -------
Year Ended September 30,
---------------------------------------------------------------------------------
1995 1995(22) 1995 1994 1994 1993 1993 1992
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 7.56 $ 7.75 $ 7.51 $ 8.78 $ 8.75 $ 8.68 $8.65 $ 8.36
------ ------- ------- ------ -------- ------ ----- -------
Income from investment operations
Net investment income 0.65 0.22 0.58 0.68 0.62 0.75 0.68 0.79
Net gains or losses on securities (both
realized and unrealized) 0.39 0.16 0.39 (1.23) (1.26) 0.10 0.10 0.29
------ ------- ------- ------ -------- ------ ----- -------
Total from investment operations 1.04 0.38 0.97 (0.55) (0.64) 0.85 0.78 1.08
------ ------- ------- ------ -------- ------ ----- -------
Less Distributions
Dividends (from net investment income) (0.66) (0.21) (0.60) (0.67) (0.60) (0.75) (0.68) (0.76)
Distributions (from capital gain) -- -- -- -- -- -- -- --
------ ------- ------- ------ -------- ------ ----- -------
Total distributions (0.66) (0.21) (0.60) (0.67) (0.60) (0.75) (0.68) (0.76)
------ ------- ------- ------ -------- ------ ----- -------
Net asset value, end of period $ 7.94 $ 7.92 $ 7.88 $ 7.56 $7.51 $ 8.78 $8.75 $ 8.68
====== ======= ======= ====== ===== ====== ===== =======
Total Return (without sales charge) 14.5% 4.9% 13.5% (6.5%) (7.5%) 10.3% 9.5% 13.5%
Ratios/Supplemental Data
Net assets, end of period (in 000's) $7,791 $4,552 $157,507 $4,336 $179,274 $5,675 $255,266 $4,257
Ratio of expenses to average net assets 1.1% 1.9%* 1.9% 1.1% 1.9% 1.2% 2.0% 1.2%
Ratio of net investment income to average net
assets 8.5% 7.8%* 7.7% 8.4% 7.7% 8.7% 8.0% 9.3%
Portfolio turnover rate 162.5% 162.5% 162.5% 133.9% 133.9% 124.1% 124.1% 162.8%
- -----------------------------------------------------------------------------------------------------------------------------------
(22) The distribution of Class B shares commenced on May 22, 1995.
(23) The distribution of Class A shares commenced on February 6, 1991.
* Annualized
<CAPTION>
--------------------------------
High Income Fund
Class C Class A Class C
------- ------- -------
Year Ended September 30,
--------------------------------
1992 1991(23) 1991
- ----------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period $8.36 $ 8.56 $8.55
------- ---------- -------
Income from investment operations
Net investment income 0.74 0.57 0.85
Net gains or losses on securities (both
realized and unrealized) 0.25 (0.14) (0.17)
------- ---------- -------
Total from investment operations 0.99 0.43 0.68
------- ---------- -------
Less Distributions
Dividends (from net investment income) (0.70) (0.63) (0.87)
Distributions (from capital gain) -- -- --
------- ---------- -------
Total distributions (0.70) (0.63) (0.87)
------- ---------- -------
Net asset value, end of period $8.65 $8.36 $8.36
Total Return (without sales charge) 12.4% 8.2% 8.5%
======= ========== =======
Ratios/Supplemental Data
Net assets, end of period (in 000's) $242,160 $1,456 $270,622
Ratio of expenses to average net assets 1.9% 1.2%* 1.9%
Ratio of net investment income to average net
assets 8.7% 10.5%* 10.1%
Portfolio turnover rate 162.8% 124.0% 124.0%
- ----------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
High Income Fund
Class C
-----------------------------------------------------------
Year Ended September 30,
------------------------
1990 1989 1988 1987 1986
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $9.31 $9.69 $9.74 $10.14 $10.00
Income from investment operations
Net investment income 0.93 0.94 0.97 1.03 1.16
Net gains or losses on securities (both realized
and unrealized) (0.74) (0.36) (0.04) (0.43) 0.10
Total from investment operations 0.19 0.58 0.93 0.60 1.26
Less Distributions
Dividends (from net investment income) (0.95) (0.96) (0.98) (1.00) (1.12)
Distributions (from capital gain) -- -- -- -- --
Total distributions (0.95) (0.96) (0.98) (1.00) (1.12)
Net asset value, end of period $8.55 $9.31 $9.69 $9.74 $10.14
Total Return (without sales charge) 2.2% 6.3% 10.1% 5.9% 12.9%
Ratios/Supplemental Data
Net assets, end of period (in 000's) $356,427 $579,254 $524,966 $438,304 $335,404
Ratio of expenses to average net assets 1.8% 1.6% 1.6% 1.6% 1.6%
Ratio of net investment income to average net
assets 10.5% 9.8% 10.0% 10.1% 11.2%
Portfolio turnover rate 63.8% 94.6% 127.7% 81.7% 59.2%
</TABLE>
<PAGE>
PIMCO Advisors Funds 17
- --------------------------------------------------------------------------------
Financial Highlights
The following schedule of financial highlights for the Total Return Income
Fund is for shares outstanding throughout the period listed.
<TABLE>
<CAPTION>
------------------------------
Total Return Income Fund
Class A Class B Class C
------ ------ --------
Period Ended September 30,(25)
--------------------------
1995 1995(26) 1995
- ----------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period $10.00 $10.48 $10.00
---- ---- ------
Income from investment operations
Net investment income 0.41 0.16 0.35
Net gains or losses on securities
(both realized and unrealized) 0.68 0.24 0.69
---- ---- ------
Total from investment operations 1.09 0.40 1.04
---- ---- ------
Less Distributions
Dividends (from
net investment income) (0.39) (0.15) (0.34)
Distributions (from capital gain) -- -- --
---- ---- ------
Total distributions (0.39) (0.15) (0.34)
---- ---- ------
Net asset value, end of period $10.70 $10.73 $10.70
==== ==== ======
Total Return (without sales charge) 11.1 % 3.8% 10.5%
Ratios/Supplemental Data
Net assets, end of period (in 000's) $37,714 $8,805 $45,631
Ratio of expenses to average net assets 1.2%* 2.0%* 2.0%*
Ratio of net investment income to average
net assets 5.1%* 4.2%* 4.3%*
Portfolio turnover rate 98.0% 98.0% 98.0%
- ----------------------------------------------------------------------------
</TABLE>
(25) The Fund commenced operations on December 22, 1994.
(26) The distribution of Class B shares commenced on May 22, 1995.
* Annualized
<PAGE>
18 PIMCO Advisors Funds
- --------------------------------------------------------------------------------
Financial Highlights
The following schedule of financial highlights for the Tax Exempt Fund is for
shares outstanding throughout the periods listed.
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------
Tax Exempt Fund
Class A Class B Class C Class A Class C Class A Class C Class A Class C
------- ------- ------- ------- ------- ------- ------- ------- -------
Year Ended September 30,
------------------------------------------------------------------------------------------
1995 1995(27) 1995 1994 1994 1993 1993 1992 1992
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 11.21 $ 11.90 $11.21 $12.74 $12.73 $11.94 $11.94 $11.53 $ 11.53
------- ------- ------ ------ ------ ------ ------ ------ -------
Income from investment operations
Net investment income 0.57 0.16 0.48 0.56 0.47 0.61 0.52 0.65 0.58
------- ------- ------ ------ ------ ------ ------ ------ -------
Net gains or losses on securities
(both realized and unrealized) 0.63 (0.07) 0.62 (1.31) (1.30) 1.02 1.01 0.42 0.41
------- ------- ------ ------ ------ ------ ------ ------ -------
Total from investment operations 1.20 0.09 1.10 (0.75) (0.83) 1.63 1.53 1.07 0.99
Less Distributions
Dividends (from net
investment income) (0.58) (0.15) (0.49) (0.58) (0.49) (0.64) (0.55) (0.66) (0.58)
Distributions (from capital gain) -- -- -- (0.20) (0.20) (0.19) (0.19) -- --
------- ------- ------ ------ ------ ------ ------ ------ -------
Total distributions (0.58) (0.15) (0.49) (0.78) (0.69) (0.83) (0.74) (0.66) (0.58)
Net asset value, end of period $ 11.83 $ 11.84 $11.82 $11.21 $11.21 $12.74 $12.73 $11.94 $ 11.94
======= ======= ====== ====== ====== ====== ====== ====== =======
Total Return (without sales charge) 11.0% 0.8% 10.1% (6.1%) (6.7%) 14.2% 13.3% 9.5% 8.8%
Ratios/Supplemental Data
Net assets, end of period (in 000's) $2,701 $288 $54,224 $2,726 $68,214 $2,852 $81,475 $2,295 $52,113
Ratio of expenses to average net assets 1.1% 1.9%* 1.8% 1.1% 1.8% 1.1% 1.8% 1.1% 1.8%
Ratio of net investment income to
average net assets 5.0% 4.0%* 4.3% 4.7% 4.0% 5.0% 4.2% 5.6% 4.9%
Portfolio turnover rate 35.0% 35.0% 35.0% 63.2% 63.2% 55.9% 55.9% 107.4% 107.4%
- -----------------------------------------------------------------------------------------------------------------------------------
(27) The distribution of Class B shares commenced on May 30, 1995.
<CAPTION>
------------------------------------
Tax Exempt Fund
Class A Class C
------- -------
Year Ended September 30,
------------------------------------
1991(28) 1991
- ----------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period $11.30 $10.97
---- ------
Income from investment operations
Net investment income 0.38 0.62
Net gains or losses on securities
(both realized and unrealized) 0.23 0.56
---- ------
Total from investment operations 0.61 1.18
---- ------
Less Distributions
Dividends (from net
investment income) (0.38) (0.62)
Distributions (from capital gain) -- --
---- ------
Total distributions (0.38) (0.62)
---- ------
Net asset value, end of period $11.53 $11.53
==== ======
Total Return (without sales charge) 10.4% 11.0%
Ratios/Supplemental Data
Net assets, end of period (in 000's) $321* $46,663
Ratio of expenses to average net assets 1.1% 1.8%
Ratio of net investment income to
average net assets 5.8%* 5.5%
Portfolio turnover rate 119.0% 119.0%
- -----------------------------------------------------------------------------------------------------------------------------------
(28) The distribution of Class A shares commenced on March 14, 1991.
* Annualized
</TABLE>
<TABLE>
<CAPTION>
-----------------------------------------------------
Tax Exempt Fund
Class C
-----------------------------------------------------
Year Ended September 30,
------------------------------------
Period Ended
September 30,
1990 1989 1988 1987 1986(29)
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $11.10 $10.82 $10.23 $11.51 $10.00
------- ------- ------- ------- -------
Income from investment operations
Net investment income 0.63 0.65 0.65 0.66 0.61
Net gains or losses on securities
(both realized and unrealized) (0.13) 0.28 0.59 (0.84) 1.51
------- ------- ------- ------- -------
Total from investment operations 0.50 0.93 1.24 (0.18) 2.12
------- ------- ------- ------- -------
Less Distributions
Dividends (from net
investment income) (0.63) (0.65) (0.65) (0.66) (0.61)
Distributions (from capital gain) -- -- -- (0.44) --
------- ------- ------- ------- -------
Total distributions (0.63) (0.65) (0.65) (1.10) (0.61)
------- ------- ------- ------- -------
Net asset value, end of period $10.97 $11.10 $10.82 $10.23 $ 11.51
======= ======= ======= ======= =======
Total Return (without sales charge) 4.5% 8.8% 12.4% (2.1%) 23.9%
Ratios/Supplemental Data
Net assets, end of period (in 000's) $46,630 $60,609 $63,261 $66,610 $53,370
======= ======= ======= ======= =======
Ratio of expenses to average net assets 1.7% 1.7% 1.8% 1.8% 1.8%*
Ratio of net investment income to
average net assets 5.6% 5.9% 6.1% 5.9% 6.1%*
Portfolio turnover rate 77.5% 203.6% 211.3% 204.4% 301.0%
- -------------------------------------------------------------------------------------------------
</TABLE>
(29) The Fund commenced operations on November 1, 1985.
* Annualized.
<PAGE>
PIMCO Advisors Funds 19
- --------------------------------------------------------------------------------
Financial Highlights
The following schedule of financial highlights for the U.S. Government Fund
is for shares outstanding throughout the periods listed.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------
U.S. Government Fund
Class A Class B Class C Class A Class C Class A Class C Class A
------- ------- ------- ------- ------- ------- ------- -------
Year Ended September 30,
-----------------------------------------------------------------------------
1995 1995(30) 1995 1994 1994 1993 1993 1992
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 8.68 $ 9.17 $8.65 $9.71 $9.68 $9.61 $9.58 $9.46
------- ------ -------- ------- -------- ------- -------- -------
Income from investment operations
Net investment income 0.58 0.16 0.51 0.60 0.53 0.65 0.58 0.75
Net gains or losses on securities (both
realized and unrealized) 0.47 (0.02) 0.48 (1.03) (1.03) 0.10 0.10 0.19
------- ------ -------- ------- -------- ------- -------- -------
Total from investment operations 1.05 0.14 0.99 (0.43) (0.50) 0.75 0.68 0.94
------- ------ -------- ------- -------- ------- -------- -------
Less Distributions
Dividends (from net investment income) (0.57) (0.16) (0.51) (0.60) (0.53) (0.65) (0.58) (0.79)
Distributions (from capital gain) -- -- -- -- -- -- -- --
------- ------ -------- ------- -------- ------- -------- -------
Total distributions (0.57) (0.16) (0.51) (0.60) (0.53) (0.65) (0.58) (0.79)
------- ------ -------- ------- -------- ------- -------- -------
Net asset value, end of period $ 9.16 $9.15 $9.13 $8.68 $8.65 $9.71 $9.68 $9.61
======= ====== ======== ======= ======== ======= ======== =======
Total Return (without sales charge) 12.6% 1.6% 11.8% (4.6%) (5.3%) 8.2% 7.4% 10.3%
Ratios/Supplemental Data
Net assets, end of period (in 000's) $16,248 $1,671 $287,086 $15,250 $365,044 $19,939 $533,288 $15,224
Ratio of expenses to average net assets 1.0% 1.8%* 1.8% 1.0% 1.7% 1.0% 1.7% 1.0%
Ratio of net investment income to average net
assets 6.5% 5.6%* 5.8% 6.5% 5.8% 6.8% 6.1% 7.8%
Portfolio turnover rate 120.3% 120.3% 120.3% 121.0% 121.0% 199.7% 199.7% 156.4%
- -----------------------------------------------------------------------------------------------------------------------------------
(30) The distribution of Class B shares commenced on June 2, 1995.
<CAPTION>
--------------------------------
U.S. Government Fund
Class C Class A Class C
------- ------- -------
Year Ended September 30,
--------------------------------
1992 1991(31) 1991
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period $9.45 $9.31 $9.02
-------- ------ --------
Income from investment operations
Net investment income 0.69 0.65 0.81
Net gains or losses on securities (both
realized and unrealized) 0.15 0.15 0.46
-------- ------ --------
Total from investment operations 0.84 0.80 1.27
-------- ------ --------
Less Distributions
Dividends (from net investment income) (0.71) (0.65) (0.84)
Distributions (from capital gain) -- -- --
-------- ------ --------
Total distributions (0.71) (0.65) (0.84)
-------- ------ --------
Net asset value, end of period $9.58 $9.46 $ 9.45
======== ====== ========
Total Return (without sales charge) 9.2% 12.3% 14.8%
Ratios/Supplemental Data
Net assets, end of period (in 000's) $531,310 $3,983 $429,796
Ratio of expenses to average net assets 1.8% 1.1%* 1.8%
Ratio of net investment income to average net
assets 7.3% 9.3%* 8.8%
Portfolio turnover rate 156.4% 37.1% 37.1%
- -----------------------------------------------------------------------------------------------------------------------------------
(31) The distribution of Class A shares commenced on January 3, 1991.
* Annualized
</TABLE>
<TABLE>
<CAPTION>
------------------------------------------------------------------
U.S. Government Fund
Class C
------------------------------------------------------------------
Year Ended September 30,
------------------------------------------------
1990 1989 1988 1987 1986
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $9.35 $9.42 $9.32 $10.48 $10.00
-------- -------- -------- -------- --------
Income from investment operations
Net investment income 0.80 0.84 0.86 0.86 0.94
Net gains or losses on securities (both realized and
unrealized) (0.31) (0.08) 0.12 (1.00) 0.47
-------- -------- -------- -------- --------
Total from investment operations 0.49 0.76 0.98 (0.14) 1.41
-------- -------- -------- -------- --------
Less Distributions
Dividends (from net investment income) (0.82) (0.83) (0.88) (0.92) (0.83)
Distributions (from capital gain) -- -- -- (0.10) (0.10)
-------- -------- -------- -------- --------
Total distributions (0.82) (0.83) (0.88) (1.02) (0.93)
-------- -------- -------- -------- --------
Net asset value, end of period $9.02 $9.35 $9.42 $9.32 $10.48
======== ======== ======== ======== ========
Total Return (without sales charge) 5.4% 8.5% 10.8% (1.7%) 15.1%
Ratios/Supplemental Data
Net assets, end of period (in 000's) $447,272 $583,667 $733,306 $783,545 $409,482
Ratio of expenses to average net assets 1.7% 1.7% 1.7% 1.7% 1.7%
Ratio of net investment income to average net assets 8.6% 9.0% 9.0% 8.5% 8.9%
Portfolio turnover rate 99.1% 188.4% 221.8% 332.0% 252.3%
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
20 PIMCO Advisors Funds
- --------------------------------------------------------------------------------
Financial Highlights
The following schedule of financial highlights for the Short-Intermediate
Fund is for shares outstanding throughout the periods listed. The information
provided reflects results of operations under the Fund's former investment
objective and policies through November 15, 1994; such results would not
necessarily have been achieved had the Fund's current objective and policies
been in effect.
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------
Short-Intermediate Fund
Class A Class B Class C Class A Class C Class A Class C Class A Class C
------- ------- ------- ------- ------- ------- ------- ------- -------
Year Ended September 30,
------------------------------------------------------------------------------------------
1995 1995(33) 1995 1994 1994 1993 1993 1992 1992
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period $9.37 $9.49 $9.37 $9.81 $9.82 $9.96 $9.97 $10.03 $10.03
------ ---- ------- ------ ------- ------ -------- ------- --------
Income From Investment
Operations
Net investment income 0.59 0.18 0.54 0.47 0.42 0.48 0.44 0.60(35) 0.55(34)
Net gains or losses on
securities (both
realized and unrealized) 0.25 0.13 0.23 (0.43) (0.44) (0.15) (0.16) (0.04) (0.03)
------ ---- ------- ------ ------- ------ -------- ------- --------
Total from investment
operations 0.84 0.31 0.77 0.04 (0.02) 0.33 0.28 0.56 0.52
------ ---- ------- ------ ------- ------ -------- ------- --------
Less Distributions
Dividends (from net
investment income) (0.59) (0.18) (0.54) (0.48) (0.43) (0.48) (0.43) (0.62) (0.57)
Distributions (from
capital gain) -- -- -- -- -- -- -- (0.01) (0.01)
------ ---- ------- ------ ------- ------ -------- ------- --------
Total distributions (0.59) (0.18) (0.54) (0.48) (0.43) (0.48) (0.43) (0.63) (0.58)
------ ---- ------- ------ ------- ------ -------- ------- --------
Net asset value, end of
period $9.62 $9.62 $9.60 $9.37 $9.37 $9.81 $9.82 $9.96 $9.97
====== ==== ======= ====== ======= ====== ======== ======= ========
Total Return (without
sales charge) 9.3% 3.3% 8.5% 0.4% (0.2%) 3.4% 2.9% 5.8% 5.4%
Ratios/Supplemental Data
Net assets, end of period
(in 000's) $6,343 $941 $65,608 $4,913 $88,909 $7,169 $123,857 $13,535 $135,655
Ratio of expenses to
average net assets 1.0% 1.7%* 1.5% 0.9% 1.4% 1.0% 1.5% 0.9% 1.3%
Ratio of net investment
income to average net
assets 6.3% 5.4%* 5.7% 4.9% 4.4% 4.9% 4.4% 6.0% 5.5%
Portfolio turnover rate 173.4% 173.4% 173.4% 86.2% 86.2% 112.7% 112.7% 132.8% 132.8%
- ---------------------------------------------------------------------------------------------------------------------------
(33) The distribution of Class B shares commenced on May 22, 1995.
(34) Reflecting expense reduction of $2,957 (.00 per share) and voluntary
waiver of investment advisory fee of $29,149 (.01 per share) by the Manager
as more fully described in Note 3(a) to the Financial Statements.
<PAGE>
<CAPTION>
Annualized
---------------------------
Short-Intermediate Fund
Class A Class C
------- -------
Period Ended September 30,
1991(35) 1991(35)
- ---------------------------------------------------------
<S> <C> <C>
Net asset value, beginning
of period $10.00 $10.00
---- -------
Income From Investment
Operations
Net investment income 0.07(36) 0.07(36)
Net gains or losses on
securities (both
realized and unrealized) 0.03 0.03
---- -------
Total from investment
operations 0.10 0.10
---- -------
Less Distributions
Dividends (from net
investment income) (0.07) (0.07)
Distributions (from
capital gain) -- --
---- -------
Total distributions (0.07) (0.07)
---- -------
Net asset value, end of
period $10.03 $10.03
==== =======
Total Return (without
sales charge) 8.5% 8.6%
Ratios/Supplemental Data
Net assets, end of period
(in 000's) $844 $32,052
Ratio of expenses to
average net assets 0.4%* 0.9%*
Ratio of net investment
income to average net
assets 5.3%* 5.0%*
Portfolio turnover rate 114.6% 114.6%
- ---------------------------------------------------------
</TABLE>
(35) The Fund commenced operations on August 16, 1991.
(36) Reflecting voluntary waiver of investment advisory fee of $138,110 (.02
per share) by the Manager as more fully described in Note 3(a) to the
Financial Statements.
* Annualized
<PAGE>
PIMCO Advisors Funds 21
- --------------------------------------------------------------------------------
Financial Highlights
The following schedule of financial highlights for the Money Market Fund is
for shares outstanding throughout the periods listed.
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------
Money Market Fund
Class A Class B Class C Class A Class C Class A Class C
------- ------- ------- ------- ------- ------- -------
Year ended September 30,
-----------------------------------------------------------------------------------
1995 1995(37) 1995 1994 1994 1993 1993
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
------- ----- ------- ------- ------- ------ ------
Income from investment operations
Net investment income 0.054(39) 0.007 0.054(39) 0.030(40) 0.030(40) 0.025(41) 0.025(41)
------- ----- ------- ------- ------- ------ ------
Less Distributions
Dividends (from net investment income) (0.054) (0.007) (0.054) (0.030) (0.030) (0.025) (0.025)
------- ----- ------- ------- ------- ------ ------
Net asset value, end of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
======= ===== ======= ======= ======= ====== ======
Total Return (without sales charge) 5.4% 0.7% 5.4% 3.0% 3.0% 2.5% 2.5%
Ratios/Supplemental Data
Net assets, end of period (in 000's) $13,553 $21 $69,364 $12,933 $84,064 $3,729 $44,657
Ratio of expenses to average net assets 0.49% 1.46%* 0.50% 0.75% 0.75% 0.75% 0.75%
Ratio of net investment income to average
net assets 5.40% 4.79%* 5.37% 3.38% 3.18% 2.47% 2.51%
- ---------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
---------------------------------------------
Money Market Fund
Class A Class C Class A Class C
------- ------- ------- -------
Year ended September 30,
---------------------------------------------
1992 1992 1991(38) 1991
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $1.00 $1.00 $1.00 $1.00
---- ------- ---- -------
Income from investment operations
Net investment income 0.032(42) 0.034(42) 0.029 0.053
---- ------- ---- -------
Less Distributions
Dividends (from net investment income) (0.032) (0.034) (0.029) (0.053)
---- ------- ---- -------
Net asset value, end of period $1.00 $1.00 $1.00 $1.00
==== ======= ==== =======
Total Return (without sales charge) 3.2% 3.4% 2.9% 5.3%
Ratios/Supplemental Data
Net assets, end of period (in 000's) $655 $50,761 $275 $63,751
Ratio of expenses to average net assets 0.9% 1.0% 1.1%* 1.5%
Ratio of net investment income to average
net assets 3.2% 3.4% 4.8%* 5.5%
- ---------------------------------------------------------------------------------------------
</TABLE>
(37) The distribution of Class B shares commenced on July 17, 1995.
(38) The distribution of Class A shares commenced on March 5, 1991.
(39) Reflecting voluntary waiver of investment advisory fee of $23,048 (.000 per
share) by the Manager as more fully described in Note 3(a) to the Financial
Statements.
(40) Reflecting voluntary waiver of investment advisory fee of $142,336 (.002
per share) by the Manager as more fully described in Note 3(a) to the
Financial Statements included in the Statement of Additional Information.
(41) Reflecting voluntary waiver of investment advisory fee of $160,471 (.003
per share) by the Manager as more fully described in Note 3(a) to the
Financial Statements included in the Statement of Additional Information.
(42) Reflecting voluntary waiver of investment advisory fee of $31,042 (.001 per
share) by the Manager as more fully described in Note 3(a) to the Financial
Statements included in the Statement of Additional Information.
* Annualized
<TABLE>
<CAPTION>
---------------------------------------------------
Money Market Fund
Class C
---------------------------------------------------
Year ended September 30,
---------------------------------------------------
1990 1989 1988 1987 1986
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $1.00 $1.00 $1.00 $1.00 $1.00
-------- -------- ------- ------- -------
Income from investment operations
Net investment income 0.069 0.077 0.057 0.043 0.047
-------- -------- ------- ------- -------
Less Distributions
Dividends (from net investment income) (0.069) (0.077) (0.057) (0.043) (0.047)
-------- -------- ------- ------- -------
Net asset value, end of period $1.00 $1.00 $ 1.00 $1.00 $1.00
===== ===== ====== ===== =====
Total Return (without sales charge) 6.9% 7.7% 5.7% 4.3% 4.7%
Ratios/Supplemental Data
Net assets, end of period (in 000's) $104,002 $104,198 $98,896 $64,291 $13,936
Ratio of expenses to average net assets 1.6% 1.6% 1.6% 1.7% 2.1%
Ratio of net investment income to average net
assets 6.9% 7.7% 5.7% 4.6% 4.6%
</TABLE>
<PAGE>
22 PIMCO Advisors Funds
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVES AND POLICIES
PIMCO Advisors Equity Funds
The PIMCO Advisors Equity Funds consist of ten Funds with the objectives and
policies set forth below. Under normal market conditions, each of the Equity
Funds (other than the Emerging Markets Fund and the Precious Metals Fund)
will invest at least 65% of its assets in equity securities (income-producing
equity securities in the case of the Equity Income Fund), including common
stocks, preferred stocks and securities (including debt securities and
warrants) convertible into or exercisable for common stocks.
As indicated below, the Equity Funds invest in companies whose equity
capitalizations (i.e., the number of shares times the market price per share)
range from small to medium to large. Generally, small equity capitalization is
less than $1 billion and large equity capitalization is more than $5 billion.
Whether an issuer's equity capitalization is medium is determined by reference
to the capitalization for all issuers whose equity securities are listed on a
United States national securities exchange or which are reported on NASDAQ.
Issuers with market capitalization within the range of capitalization of
companies included in the S&P Mid Cap 400 Index are regarded as being issuers
with medium equity capitalization.
EQUITY INCOME FUND seeks long-term growth of capital and current income. The
Fund invests primarily in a variety of income-producing equity securities.
Income-producing equity securities include common stocks that pay dividends,
preferred stocks and securities (including debt securities) that are convertible
into common stocks ("convertible securities"). Under unusual conditions, for
temporary defensive purposes, the Fund may invest up to 100% of its assets in
non-convertible debt securities. The Fund invests in common stocks of companies
with small, medium and large equity capitalizations.
The Fund may invest without limit in preferred stocks and convertible securities
rated at least B by Moody's Investors Service, Inc. ("Moody's") or Standard &
Poor's Corporation ("S&P") (or similarly rated by another Nationally Recognized
Statistical Rating Organization ("NRSRO"), or unrated but determined by the
Fund's sub-adviser to be of comparable quality), and may invest up to 10% of its
total assets in convertible securities rated below B by Moody's or S&P (or
similarly rated by another NRSRO or unrated but determined by the sub-adviser to
be of comparable quality). Securities rated Ba or below by Moody's or BB or
below by S&P (or of similar quality) are not considered to be of "investment
grade" quality. These lesser rated debt securities may involve special risks.
See "Description and Risks of Fund Investments -- Risks of High Yield Bonds."
The Fund will not invest in convertible securities that are in default at the
time of acquisition.
The non-convertible debt securities in which the Fund may invest include
corporate or government debt securities of any maturity, including zero coupon
securities. These non-convertible debt securities may be rated B or higher by
Moody's or S&P (or similarly rated by another NRSRO or unrated and determined by
the subadviser to be of comparable quality), but no more than 35% of the Fund's
total assets will be invested in nonconvertible debt securities rated below
investment grade quality by two NRSROs at the time of purchase (or unrated but
determined by the sub-adviser to be of comparable quality). See "Description and
Risks of Fund Investments -- Credit Ratings and NRSROS" for an explanation of
securities ratings.
See "Additional Investment Techniques Used By The Equity Funds" below for a list
of additional investments that the Fund may make.
VALUE FUND seeks long-term growth of capital and current income. The Fund
invests primarily in common stocks of companies that are characterized by having
below-average price to earnings ("P/E") ratios and/or higher dividend yields
relative to their industry groups. In selecting stocks, a universe of
approximately 2,500 stocks, each of companies having minimum capitalizations of
$200 million, is classified by industry. The universe is then analyzed to find
the lowest P/E and/or highest yielding stocks in each industry, subject to
quality, earnings and price momentum screens. The stocks with the lowest P/E
ratios and/or highest dividend yields in each industry that meet the quality,
earnings and price momentum criteria are selected for the Fund. Although
quarterly rebalancing is a general rule, replacements are made whenever an
alternative stock within the same industry has a significantly lower P/E ratio
or higher dividend yield than the current Fund holding.
See "Additional Investment Techniques Used By The Equity Funds" below for a list
of additional investments that the Fund may make.
GROWTH FUND seeks long-term growth of capital. Income is an incidental
consideration. The Fund invests primarily in common stocks of companies with
medium to large equity capitalizations. See "Additional Investment Techniques
Used By The Equity Funds" below for a list of additional investments that the
Fund may make.
<PAGE>
PIMCO Advisors Funds 23
- --------------------------------------------------------------------------------
TARGET FUND seeks capital appreciation. No consideration is given to income. The
Fund invests primarily in common stocks of companies with medium equity
capitalizations. See "Additional Investment Techniques Used By The Equity Funds"
below for a list of additional investments that the Fund may make.
DISCOVERY FUND seeks capital appreciation. No consideration is given to income.
The Fund invests primarily in common stocks of small companies with equity
capitalizations of $500 million to $1 billion which exhibit favorable growth
characteristics and reasonable valuations. The Fund is intended for equity
investors seeking above average gains who are willing to accept the greater
risks associated therewith. See "Risks of Investment in Companies with Small and
Medium Equity Capitalizations" under "Description and Risks of Fund Investments"
for a description of certain of such risks. See "Additional Investment
Techniques Used By The Equity Funds" below for a list of additional investments
that the Fund may make.
OPPORTUNITY FUND seeks capital appreciation. No consideration is given to
income. The Fund is currently closed to new investors. The Fund invests
primarily in common stocks of companies with small equity capitalizations. The
Fund is intended for aggressive investors seeking above average gains and
willing to accept the greater risks associated therewith. See "Additional
Investment Techniques Used By The Equity Funds" below for a list of additional
investments that the Fund may make.
INNOVATION FUND seeks capital appreciation. No consideration is given to income.
The Fund will invest primarily (i.e. at least 65% of its assets) in common
stocks of companies which utilize innovative technologies to gain a strategic
competitive advantage in their industry as well as companies that provide and
service those technologies. Securities will be selected with minimal emphasis on
more traditional factors such as growth potential or value relative to intrinsic
worth. Instead, the Fund will be guided by the theory of Positive Momentum &
Positive Surprise, with special emphasis on common stocks of companies whose
perceived strength lies in their use of innovative technologies in new products,
enhanced distribution systems and improved management techniques. Although the
Fund emphasizes the utilization of technologies, it is not restricted to
investment in companies in a particular business sector or industry. See
"Additional Investment Techniques Used By The Equity Funds" below for a list of
additional investments that the Fund may make.
INTERNATIONAL FUND seeks capital appreciation through investments in an
international portfolio. Income is an incidental consideration. Under normal
market conditions, at least 65% of the International Fund's total assets will be
invested in common stocks, which may or may not pay dividends, as well as
convertible bonds, convertible preferred stocks, warrants, rights or other
equity securities for a combination of capital appreciation and income.
Convertible securities may include securities convertible only by certain
classes of investors (which may not include the Fund), but the Fund may not
invest in convertible securities which are of less than investment grade quality
at the time of purchase. The Fund invests in companies with small, medium and
large equity capitalizations.
The International Fund will normally invest in securities traded in foreign
securities markets with particular consideration given to investments
principally traded in North and South American (other than United States),
Japanese, European, Pacific and Australian securities markets, and in foreign
securities traded on United States' securities markets. Investing in foreign
securities and securities of foreign issuers presents special risks. See "Risks
of Foreign Investments" under "Description and Risks of Fund Investments" below.
The Fund will also invest in emerging markets, where markets may not yet fully
reflect the potential of the developing economy. There are no prescribed limits
on geographic asset distribution and the International Fund has the authority to
invest in securities traded in securities markets of any country in the world.
In allocating the International Fund's assets among the various securities
markets of the world, the Fund's sub-adviser will consider such factors as the
condition and growth potential of the various economies and securities markets,
currency and taxation considerations and other pertinent financial, social,
national and political factors. Under certain adverse investment conditions, the
International Fund may restrict the number of securities markets in which its
assets will be invested, although under normal market circumstances the Fund's
investments will involve securities principally traded in at least three
different countries. The Fund will not limit its investments to any particular
type or size of company.
The International Fund may invest up to 10% of its assets in securities of other
investment companies, such as closed-end investment management companies which
invest in foreign markets. See "Description and Risks of Fund
Investments--Investment in Investment Companies."
The Fund will not normally invest in securities of United States issuers traded
on United States securities
<PAGE>
24 PIMCO Advisors Funds
- --------------------------------------------------------------------------------
markets. However, when the sub-adviser believes that conditions in
international securities markets warrant a defensive investment strategy, the
International Fund may invest up to 100% of its assets in domestic debt,
foreign debt and equity securities principally traded in the United States,
including the money market instruments described under "Description and Risks
of Fund Investments--Money Market Instruments," obligations issued or
guaranteed by the U.S. or a foreign government or their respective agencies,
authorities or instrumentalities or corporate bonds and sponsored American
Depository Receipts.
See "Additional Investment Techniques Used By The Equity Funds" below for a list
of additional investments that the Fund may make.
EMERGING MARKETS FUND seeks capital appreciation. No consideration is given to
income. The Fund invests primarily in an international portfolio of equity
securities of companies whose principal activities are in countries with
emerging markets and developing economies. In the opinion of the Fund's
sub-adviser, such countries are currently found in Asia, Latin America, the
Middle East, Eastern Europe and Africa. The Fund is intended for aggressive
investors seeking above average gains and willing to accept the greater risks
associated therewith. The Fund should be considered as one aspect of a
diversified portfolio and may not be suitable by itself as a balanced investment
program.
Under normal market conditions, the Fund invests at least 65% of its total
assets in securities of issuers whose principal activities are in countries with
emerging markets. For this purpose, emerging markets will include any countries
(i) having an "emerging stock market" as defined by the International Finance
Corporation; or (ii) with low-to-middle-income economies according to the
International Bank for Reconstruction and Development (the World Bank); or (iii)
where, in the opinion of the sub-adviser, the markets may not fully reflect the
potential of the developing economy. The countries which the sub-adviser
believes do not constitute emerging markets are the United States, the United
Kingdom, Ireland, France, Germany, Italy, Japan, Canada, Belgium, Switzerland,
Luxembourg, Denmark, The Netherlands and Australia. The sub-adviser determines
whether a particular issuer's principal activities are located in emerging
markets by looking at factors such as the location of its assets, personnel,
sales and earnings. The Fund may also invest up to 35% of its assets in issuers
traded on more established markets not considered as emerging markets as
described above. These issuers may include companies listed on major markets
outside of the emerging markets that, based on information obtained by the
sub-adviser, derive a significant portion of their revenues from trade with or
production in developing countries. Investments in emerging markets may present
greater risks of the types present for foreign investments generally and may
also present special risks. See "Description and Risks of Fund Investments --
Risks of Foreign Investments."
The Fund invests predominantly in individual equity securities listed on
emerging stock exchanges and/or in International and/or American Depositary
Receipts of such stocks listed on markets in industrialized countries or traded
in the international equity market. The Fund may invest voting and non-voting
shares, preferred shares, and bonds, warrants or rights convertible into equity
securities.
The Fund may invest up to 25% of its total assets in equity securities of
companies that are traded in over-the-counter markets or other types of
unlisted securities markets.
Subject to obtaining any necessary local regulatory approvals, the Fund may
invest up to 10% of its total assets through other investment companies, pooled
accounts or other investment vehicles designed to permit investments in a
portfolio of securities listed in a particular developing country or region,
particularly in the case of countries in which such an investment vehicle is the
exclusive or easiest form of foreign portfolio investment. See "Description and
Risks of Fund Investments -- Investment in Investment Companies."
When the sub-adviser believes that conditions in international securities
markets warrant a defensive investment strategy, the Fund may invest up to 100%
of its assets in debt and equity securities principally traded in the United
States, and in foreign debt securities principally traded outside of the United
States, including the money market instruments described under "Description and
Risks of Fund Investments -- Money Markets Instruments," obligations issued or
guaranteed by the U.S. or a foreign government or their respective agencies,
authorities or instrumentalities and corporate bonds.
<PAGE>
PIMCO Advisors Funds 25
- --------------------------------------------------------------------------------
See "Additional Investment Techniques Used By The Equity Funds" below for a list
of additional investments that the Fund may make.
PRECIOUS METALS FUND seeks capital appreciation. No consideration is given to
income. The Precious Metals Fund concentrates investments in a global portfolio
of common stocks of companies principally engaged in precious metal-related
activities which include companies principally engaged in the extraction,
processing, distribution or marketing of precious metals (the "precious metals
industry"). A particular company is deemed to be "principally engaged" in the
precious metals industry if at the time of investment the Fund's sub-adviser
considers that at least 50% of the company's assets, revenues or profits are
derived from the precious metals industry. Normally at least 65% of the assets
of the Precious Metals Fund will be invested in the precious metals industry
plus securities the value of which is linked to the price of a precious metal.
See "Precious Metals" under "Description and Risks of Fund Investments" below.
The Fund invests in companies with small, medium and large equity
capitalizations.
The Precious Metals Fund will seek to identify securities of companies which,
based upon the sub-adviser's evaluation of their fundamental investment
characteristics, are undervalued in comparison to the present or anticipated
value of the precious metals relevant to them. Examples of precious metals
include gold, silver and platinum. To the extent permitted by state securities
laws and federal tax law, the Precious Metals Fund may invest directly in gold
bullion and other precious metals. The Precious Metals Fund has no present
intention of investing directly in precious metals other than gold.
The Precious Metals Fund does not presently intend to invest more than 10% of
its assets in either precious metals such as gold bullion or in futures on
precious metals, such as gold futures, and options thereon. The Precious Metals
Fund may invest up to 100% of its assets in securities principally traded on
foreign securities markets and in securities of foreign issuers that are
traded on U.S. securities markets, including American Depository Receipts, and
may invest up to 100% of its assets in securities of companies whose assets,
revenues or profits are derived from a single precious metal. At the present
time, the Precious Metals Fund has no intention of investing more than 5% of its
assets in securities the value of which is linked to the price of a single
precious metal.
For temporary defensive purposes, the Precious Metals Fund may invest up to 100%
of its net assets in any combination of high-quality, short- or long-term debt
instruments or in common, preferred or convertible securities.
The Precious Metals Fund, because of its emphasis on one industrial sector,
should be considered as one aspect of a diversified portfolio and may not be
suitable by itself as a balanced investment program. See "Additional Investment
Techniques Used By The Equity Funds" below for a list of additional investments
that the Fund may make.
ADDITIONAL INVESTMENT TECHNIQUES USED BY THE EQUITY FUNDS
All of the Equity Funds may invest in convertible securities (including
convertible debt securities) which generally convert into common stock at either
a stated price or stated rate. The International and Emerging Markets Funds may
invest in securities convertible only by certain classes of investors (which may
not include the Fund). The Equity Income Fund may also invest in so-called
"synthetic" convertible securities, which are composed of two or more different
securities whose investment characteristics, taken together, resemble those of
convertible securities. For example the Equity Income Fund may purchase a
non-convertible debt security and a warrant or option.
The Equity Income, Value, Growth, Target, Discovery, Opportunity, and Innovation
Funds each may invest up to 15% of their assets in securities which are traded
principally in securities markets outside of the United States (Eurodollar
certificates of deposit are excluded for purposes of these limitations), and may
also invest without limit in securities of foreign issuers that are traded in
U.S. securities markets. The International, Emerging Markets and Precious Metals
Funds may invest primarily in such securities.
Each of the Equity Funds may engage in transactions in options and futures
contracts either to adjust the risk/ return characteristics of the Funds'
portfolios and/or, in the case of written options, to increase current income.
Each of the Equity Funds may write covered call and covered put options on any
security that it is eligible to purchase. Each Equity Fund may also purchase put
and call options on securities it is eligible to purchase. The Equity Funds may
each buy and sell (write) stock index options. In the case of written call
options on stock indices the Fund(s) will own corresponding securities whose
historic volatility correlates with that of the index. The International,
Emerging Markets and Precious Metals Funds may buy and sell stock index futures
contracts and options on stock index futures contracts. The Precious Metals Fund
may purchase and sell futures contracts on precious metals (such as gold), and
purchase and write options on commodity indices and on precious metals futures
contracts. Some of the derivative instruments and transactions used by the
Equity Funds described above have speculative and/or leveraging characteristics.
Certain limitations on such transac-
<PAGE>
26 PIMCO Advisors Funds
- --------------------------------------------------------------------------------
tions are imposed by the Investment Company Act and the Commodity Exchange Act.
See "Derivatives" and "Investment Restrictions" in the Statement of Additional
Information.
Each of the Equity Funds may buy or sell foreign currencies or may deal in
forward foreign currency contracts. The International, Emerging Markets and
Precious Metals Funds may also invest in currency futures contracts and related
options. The Equity Funds will utilize such transactions in foreign currencies
for the purpose of hedging against foreign currency exchange risk arising from a
Fund's investment or anticipated investment in securities denominated in foreign
currencies, and, in the case of the International and Emerging Markets Funds,
for the purpose of shifting exposure to foreign currency fluctuations from one
currency to another. See "Other Foreign Currency Transactions" under
"Description and Risks of Fund Investments" below.
Each of the Equity Funds may lend its portfolio securities to brokers, dealers
and other financial institutions to earn income; purchase warrants on securities
that it is eligible to purchase; enter into repurchase agreements with banks and
broker-dealers; make short sales of securities held in the Fund's portfolio or
which the Fund has the right to acquire without the payment of further
consideration; and purchase and sell securities on a when-issued or delayed
delivery basis and enter into forward commitments to purchase securities. Each
of the Equity Funds may also purchase "illiquid securities" so long as no more
than 15% of that Fund's net assets would be invested in illiquid securities
after giving effect to the purchase. Each of the Equity Funds may also invest a
portion and, for temporary defensive purposes, up to 100% of its assets in the
money market instruments described in "Money Market Instruments" under
"Description and Risks of Fund Investments" below.
For a description of the securities and investment techniques listed above and
the risks associated with them, see "Description and Risks of Fund Investments"
below.
PIMCO ADVISORS INCOME FUNDS
The PIMCO Advisors Income Funds consist of six diversified Funds and one
non-diversified Fund (the Global Income Fund) with the objectives and policies
set forth below. Each of the Income Funds (other than the Tax Exempt and Money
Market Funds) will invest at least 65% of its assets in the following types of
securities which, except as specifically provided otherwise in the description
of the Funds that follow, may be issued by domestic or foreign entities and
denominated in U.S. dollars or foreign currencies: securities issued or
guaranteed by the U.S. Government, its agencies or instrumentalities ("U.S.
Government securities"); corporate debt securities; corporate commercial paper;
mortgage and other asset-backed securities; variable and floating rate debt
securities; bank certificates of deposit, fixed time deposits and bankers'
acceptances; repurchase agreements and reverse repurchase agreements;
obligations of foreign governments or their subdivisions, agencies and
instrumentalities, international agencies or supranational entities; and foreign
currency exchange-related securities, including foreign currency warrants. Each
of these Income Funds may hold different percentages of its assets in these
various types of securities.
GLOBAL INCOME FUND is a non-diversified portfolio which seeks maximum total
return, consistent with the preservation of capital. The Fund invests primarily
in investment grade U.S. and foreign fixed-income securities and seeks an
intermediate portfolio duration of three to six years. See "Duration" below.
"Investment grade" fixed-income securities are securities rated in one of the
four highest ratings categories by the NRSROs (e.g., Baa or higher for Moody's
and BBB or higher for S&P), or determined to be of comparable quality by the
Fund's sub-adviser. See "Description and Risks of Fund Investments -- Credit
Ratings and NRSROs" below. As a non-diversified portfolio, the Fund may invest a
relatively high percentage of its assets in the securities of relatively few
issuers which the Fund's sub-adviser deems to be attractive investments. Such
concentration may increase the risk of loss to the Fund should there be a
decline in the market value of any one portfolio security. See "Description and
Risks of Fund Investments -- Diversified and Non-Diversified Portfolios" below.
The Fund invests in a non-diversified portfolio of fixed-income securities
denominated in major currencies, baskets of foreign currencies (such as the
European Currency Unit, or "ECU"), and the U.S. dollar. Under normal
circumstances, at least 65% of the Fund's assets will be invested in
fixed-income securities of issuers located in at least three countries (one of
which may be the United States). The Fund may purchase put and call options,
sell (write) covered options, and enter into futures contracts and options on
futures contracts for hedging, investment and risk management purposes. The Fund
may also write options in connection with buy-and-write transactions, and use
index futures or foreign indices for investment, anticipatory hedging and risk
management. See "Options on Securities, Securities Indices, and Currencies" and
"Futures Contracts and
<PAGE>
PIMCO Advisors Funds 27
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Options on Futures Contracts" under "Description and Risks of Fund Investments"
below. The Fund may also hold foreign currencies in demand deposits in order to
facilitate trading in non-U.S. dollar-denominated securities, and may buy and
sell currencies and use forward foreign currency exchange contracts, currency
futures contracts and related options, currency swap contracts and options on
currencies for hedging and for currency risk management. See "Description and
Risks of Fund Investments -- Other Foreign Currency Transactions" below. In
addition, the Fund may use "synthetic bonds" and "synthetic foreign currency
denominated securities" to approximate desired risk/return profiles where the
non-synthetic securities are either unavailable or possess undesirable
characteristics. See the description of "synthetic bonds" and "synthetic foreign
currency denominated securities" in "Additional Investment Techniques Used By
The Income Funds" below.
Depending on the sub-adviser's current opinion as to the proper allocation of
assets among domestic and foreign issuers, investments in the securities of
issuers located outside the United States will normally vary between 25% and 75%
of the Fund's assets. The Fund expects to hedge its foreign currency exposure so
that generally no more than 25% of the Fund's total net assets will be invested
in unhedged foreign currency denominated securities. The Fund may invest up to
10% of its assets in debt securities that are rated below investment grade but
rated at least B by Moody's or S&P (or similarly rated by another NRSRO or, if
unrated, determined by the sub-adviser to be of comparable quality). See
"Description and Risks of Fund Investments -- Credit Ratings and NRSROs" below.
For an explanation of other investments the Fund may make, see "Additional
Investment Techniques Used by The Income Funds" below.
HIGH INCOME FUND seeks maximum total return, consistent with preservation of
capital. The Fund seeks a portfolio duration of two to six years. See "Duration"
below. The Fund seeks to achieve its objective by investing primarily in higher
yielding lower-rated fixedincome securities and invests under normal
circumstances at least 65% of its assets in a diversified portfolio of U.S.
dollar-denominated debt or fixed-income securities of domestic and foreign
issuers rated below investment grade but rated at least B by Moody's or S&P (or
similarly rated by another NRSRO or, if unrated, determined by the Fund's
sub-adviser to be of comparable quality). Such securities are colloquially
referred to as "junk bonds." The Fund also may invest in loan participations and
engage in hedging strategies involving equity options (e.g., the Fund may write
call options as a partial hedge -- to the extent of the premium received -- or
purchase put options on the stock of companies whose high yield debt instruments
are owned by the Fund). Loan participations may be treated as illiquid
securities. The remainder of the Fund's assets will be invested in U.S. dollar-
or foreign currency-denominated investment grade fixed-income securities.
See "Credit Ratings and NRSROs" under "Description and Risks of Fund
Investments" below. The Fund may invest up to 20% of its assets in securities
denominated in foreign currencies.
Investments in high yield securities, while generally providing greater
potential opportunity for capital appreciation and higher yields than
investments in higher rated securities, also entail greater risk, including the
risk of default or bankruptcy of the issuer of such securities. For a further
discussion of the special risks of investment in lower rated securities, see
"Risks of High Yield Bonds" under "Description and Risks of Fund Investments"
below.
For an explanation of other investments which the Fund may make, see "Additional
Investment Techniques Used By The Income Funds" below.
TOTAL RETURN INCOME FUND seeks maximum total return, consistent with
preservation of capital. The Fund invests primarily in investment grade
fixed-income securities and seeks a portfolio duration of three to six years.
See "Duration" below. The Fund may invest up to 10% of its assets in debt or
fixed-income securities that are rated below investment grade but rated at least
B by Moody's or S&P (or similarly rated by another NRSRO or, if unrated,
determined by the Fund's sub-adviser to be of comparable quality). The Fund will
maintain an overall dollar-weighted average quality of at least A (as rated by
Moody's or S&P or of comparable quality). See "Credit Ratings and NRSROs" under
"Description and Risks of Fund Investments" below. The Fund may also invest up
to 20% of its assets in securities denominated in foreign currencies.
For an explanation of other investments which the Fund may make, see "Additional
Investment Techniques Used By The Income Funds" below.
TAX EXEMPT FUND seeks high current income exempt from federal income tax,
consistent with preservation of capital, by investing in debt securities whose
interest is, in the opinion of bond counsel for the issuer at the time of
issuance, exempt from federal income tax ("Tax Exempt Bonds"). Tax Exempt Bonds
generally are
<PAGE>
28 PIMCO Advisors Funds
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issued by states and local governments and their agencies, authorities and other
instrumentalities. It is a policy of the Fund that, under normal market
conditions, at least 80% of its net assets will be invested in Tax Exempt Bonds
rated Baa or higher by Moody's or BBB or higher by S&P, or which are similarly
rated by another NRSRO or unrated and determined by the Fund's sub-adviser to be
of quality comparable to obligations so rated. Tax Exempt Bonds rated in the
fourth highest rating category (e.g. Baa by Moody's) may be considered to
possess some speculative characteristics by certain NRSROs. The Fund seeks a
portfolio duration of 3 to 10 years. See "Duration" below.
The Fund may invest up to 20% of its net assets, under normal market conditions,
in any combination of (1) Tax Exempt Bonds which are rated at least Ba by
Moody's or BB by S&P (or similarly rated by another NRSRO or, if unrated,
determined by the sub-adviser to be of comparable quality) and (2) U.S.
Government securities, money market instruments or "private activity" bonds (see
"Taxes"). Securities rated below investment grade and comparable unrated
securities are subject to greater risks than higher quality bonds. See "Risks of
High Yield Bonds" under "Description and Risks of Fund Investments" below. For
temporary defensive purposes the Fund may invest all or a portion of its assets
in U.S. Government securities and money market instruments. Dividends to Fund
shareholders derived from money market instruments and U.S. Government
securities are taxable as ordinary income. The Fund may seek to reduce
fluctuations in its net asset value by engaging in portfolio strategies
involving options on securities, futures contracts, and options on futures
contracts as described below under "Derivatives" under "Description and Risks of
Fund Investments " below. Any gain derived by the Fund from the use of such
instruments will be treated as a combination of shortterm and long-term capital
gain and, if not offset by realized capital losses incurred by the Fund, will be
distributed to shareholders and will be taxable to shareholders as a combination
of ordinary income and long-term capital gain.
For an explanation of other investments which the Fund may make, see "Additional
Investment Techniques Used By The Income Funds" below.
U.S. GOVERNMENT FUND seeks maximum total return, consistent with preservation of
capital. It is a policy of the U.S. Government Fund to invest 100% of its assets
in U.S. Government securities, related repurchase agreements, put and call
options on U.S. Government securities and futures contracts with respect to U.S.
Government securities and options thereon. The Fund intends to maintain a
portfolio duration of 3-6 years. See "Duration" below. The Fund may purchase
collateralized mortgage obligations ("CMOs") issued by a U.S. Government
instrumentality, invest in "zero coupon" U.S. Government securities or in
certificates representing rights to receive payments of the interest only or
principal only of U.S. Government securities ("IO/PO Strips"). The Fund may seek
to increase its current income and to reduce fluctuation in its net asset value
by engaging in portfolio strategies involving options on U.S. government
securities, futures contracts on U.S. Government securities and options thereon
and in repurchase agreements related to U.S. Government securities.
Investments in the U.S. Government Fund are neither insured nor guaranteed by
the U.S. Government, and are subject to interest rate risk.
For an explanation of other investments which the Fund may make, see "Additional
Investment Techniques Used By The Income Funds" below.
SHORT-INTERMEDIATE FUND seeks current income, consistent with relatively low
volatility of principal. The Fund invests in a diversified portfolio of
investment grade fixed-income securities of varying maturities and seeks a
portfolio duration of one to three years. See "Duration" below. The Fund may
invest up to 10% of its assets in debt or fixed-income securities rated below
investment grade but rated B or higher by Moody's or S&P (or similarly rated by
another NRSRO or, if unrated, determined by the Fund's sub-adviser to be of
comparable quality), and may invest up to 20% of its assets in securities
denominated in foreign currencies. The Fund will maintain an overall dollar
weighted average quality of at least A (as rated by Moody's or S&P). See "Credit
Ratings and NRSROs" under "Description and Risks of Fund Investments" below.
For an explanation of other investments which the Fund may make, see "Additional
Investment Techniques Used By the Income Funds" below.
MONEY MARKET FUND seeks the maximum current income believed to be consistent
with preservation of capital and maintenance of liquidity by investing in a
portfolio of U.S. dollar-denominated short-term, fixed-income instruments which
include:
(bullet) short-term U.S. Government securities;
(bullet) certificates of deposit and bankers' acceptances;
(bullet) prime commercial paper;
(bullet) high-quality, short-term corporate obligations; and
<PAGE>
PIMCO Advisors Funds 29
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(bullet) repurchase agreements with respect to U.S. Government securities.
Although the Fund is of the type commonly known as a "money market fund," Class
B and Class C shares of the Fund are intended only as a temporary investment for
investors who are considering in which of the other Funds to invest or whose
investment objectives have changed so that investment in a portfolio such as
that of the Money Market Fund is suitable. Unlike most money market funds, the
Fund imposes a contingent deferred sales charge on certain redemptions of Class
B and Class C shares and does not offer redemption by check or other services
frequently offered by money market funds.
All of the Fund's investments will, at the time of investment, have remaining
maturities of 397 days or less. The dollar-weighted average maturity of the
Fund's portfolio will be 90 days or less. The Fund's investments are limited to
those which, in accordance with standards established by the Trust's Trustees,
are believed to present minimal credit risk. The Money Market Fund may invest up
to 100% of its assets in bank obligations. Because of the high quality and short
maturity of the Fund's investments, the Fund's yield may be lower than that of
funds that invest in lower-rated securities and securities of longer maturities.
Unlike investments which pay a fixed yield for a stated period of time, money
market fund yields fluctuate.
ADDITIONAL INVESTMENT TECHNIQUES USED BY THE INCOME FUNDS
Each of the Income Funds (other than the Tax Exempt and Money Market Funds) may
buy and sell interest rate futures contracts, futures contracts on securities
and fixed- income securities indices (U.S. Government securities only in the
case of the U.S. Government Fund) and options on such contracts for the purpose
of hedging against changes in the value of securities which a Fund owns or
anticipates purchasing due to anticipated changes in interest rates. Each of
these Funds may also purchase put and call options and may write covered call
and covered put options on any security that it is eligible to purchase. The Tax
Exempt Fund may purchase put or call options on U.S. Government Securities, Tax
Exempt Bonds and Tax Exempt Bond indices, purchase and sell futures contracts on
U.S. Government Securities, Tax Exempt Bonds and Tax Exempt Bond indices, and
purchase put and call options on such futures contracts. Each of the Income
Funds that may invest in securities denominated in foreign currencies also may
engage in foreign currency exchange transactions by means of buying or selling
foreign currencies on a spot basis, entering into foreign currency forward
contracts, and buying and selling foreign currency options, foreign currency
futures, and options on foreign currency futures. Foreign currency exchange
transactions may be entered into for the purpose of hedging against foreign
currency exchange risk arising from a Fund's investment or anticipated
investment in securities denominated in foreign currencies. The Global Income,
High Income, Total Return Income, and Short-Intermediate Funds also may enter
into foreign currency forward contracts and buy or sell foreign currency options
for risk management purposes. Each of the Income Funds (other than the Tax
Exempt and Money Market Funds) may enter into swap agreements for purposes of
attempting to obtain a particular investment return at a lower cost to the Fund
than if the Fund had invested directly in an instrument that provided the
desired return.
The Global Income Fund may combine futures contracts or options on fixed-income
securities with cash, cash equivalent investments or other fixed-income
securities in order to create "synthetic bonds" which approximate desired risk
and return profiles. This may be accomplished where a "non-synthetic" security
having the desired risk/return profile either is unavailable (e.g., short-term
securities of certain foreign governments) or possesses undesirable
characteristics (e.g., interest payments on the security would be subject to
foreign withholding taxes). The Global Income Fund may also purchase foreign
exchange forward contracts in conjunction with U.S. dollar-denominated
securities in order to create a "synthetic foreign currency denominated
security" which approximates desired risk and return characteristics where the
non-synthetic securities either are not available in foreign markets or possess
undesirable characteristics. When a Fund creates a "synthetic bond" with a
futures contract, it will maintain in a segregated account with its custodian
liquid high-quality fixed-income securities with a value at least equal to the
notional value of the futures contract (less the amount of any initial or
variation margin on deposit).
The Global Income Fund may invest without limit in securities denominated in
foreign currencies and the remaining Income Funds (other than the Tax Exempt,
U.S. Government and Money Market Funds) may invest up to 20% of their assets in
such securities.
Each of the Income Funds may lend its portfolio securities to brokers, dealers
and other financial institutions to earn income; enter into repurchase
agreements with banks and broker-dealers; make short sales of securities held in
the Fund's portfolio or which the Fund has the right to acquire without the
payment of further consid-
<PAGE>
30 PIMCO Advisors Funds
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eration; and purchase and sell securities on a when-issued or delayed
delivery basis and enter into forward commitments to purchase securities.
Each of the Income Funds may also purchase "illiquid securities" so long as
no more than 15% of that Fund's net assets would be invested in illiquid
securities immediately after giving effect to the purchase. Each of the
Income Funds may also invest a portion or, for temporary defensive purposes,
up to 100% of its assets in the money market instruments described in "Money
Market Instruments" under "Description and Risks of Fund Investments" below.
See "Description and Risks of Fund Investments" for a more complete description
of the securities and investment techniques listed above and the risks attendant
with such securities and techniques.
Total Return
The "total return" sought by the Income Funds specified above will consist of
interest and dividends from underlying securities, capital appreciation
reflected in realized or unrealized increases in the value of portfolio
securities, and use of futures and options, or gains from favorable changes in
foreign currency exchange rates. Generally, over the long term, the total return
obtained by a portfolio investing primarily in fixed-income securities is not
expected to be as great as that obtained by a portfolio that invests primarily
in equity securities. At the same time, the market risk and price volatility of
a fixed-income portfolio is expected to be less than that of an equity
portfolio, so that a fixed-income portfolio is generally considered to be a more
conservative investment. The change in a market value of fixed income securities
(and therefore their capital appreciation or depreciation) is largely a function
of changes in the current level of interest rates. When interest rates are
falling, a portfolio with a shorter duration generally will not generate as high
a level of total return as a portfolio with a longer duration. Conversely, when
interest rates are rising, a portfolio with a shorter duration will generally
outperform longer duration portfolios. When interest rates are flat, shorter
duration portfolios generally will not generate as high a level of total return
as longer duration portfolios (assuming that long-term interest rates are higher
than short-term rates, which is commonly the case). With respect to the
composition of any fixed income portfolio, the longer the duration of the
portfolio, the greater the anticipated potential for total return, with,
however, greater attendant market risk and price volatility than for a portfolio
with a shorter duration. The market value of securities denominated in
currencies other than the U.S. dollar also may be affected by movements in
foreign currency exchange rates.
Duration
Duration is a measure of the expected life of a fixed-income security that was
developed as a more precise alternative to the concept of "term to maturity."
Duration incorporates a bond's yield, coupon interest payments, final maturity
and call features into one measure. Duration is one of the fundamental tools
used by the sub-advisers in portfolio selection for the Income Funds.
Most debt obligations provide interest ("coupon") payments in addition to a
final ("par") payment at maturity. Some obligations also have call provisions.
Depending on the relative magnitude of these payments, the market values of debt
obligations may respond differently to changes in the level and structure of
interest rates.
Traditionally, a debt security's "term to maturity" has been used as a proxy for
the sensitivity of the security's price to changes in interest rates (which is
the "interest rate risk" or "volatility" of the security). However, "term to
maturity" measures only the time until a debt security provides its final
payment, taking no account of the pattern of the security's payments prior to
maturity. Duration is a measure of the expected life of a fixed-income security
on a present value basis. Duration takes the length of the time intervals
between the present time and the time that the interest and principal payments
are scheduled or, in the case of a callable bond, expected to be received, and
weights them by the present values of the cash to be received at each future
point in time. For any fixed-income security with interest payments occurring
prior to the payment of principal, duration is always less than maturity. In
general, all other things being equal, the lower the stated or coupon rate of
interest of a fixed-income security, the longer the duration of the security;
conversely, the higher the stated or coupon rate of interest of a fixed-income
security, the shorter the duration of the security.
Futures, options and options on futures have durations which, in general, are
closely related to the duration of the securities which underlie them. Holding
long futures or call option positions (backed by a segregated account of cash
and cash equivalents) will lengthen a Fund's duration by approximately the same
amount that holding an equivalent amount of the underlying securities would.
Short futures or put option positions have durations roughly equal to the
negative duration of the securities that underlie these positions, and have the
effect of
<PAGE>
PIMCO Advisors Funds 31
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reducing portfolio duration by approximately the same amount that selling an
equivalent amount of the underlying securities would.
There are some situations where even the standard duration calculation does not
properly reflect the interest rate exposure of a security. For example, floating
and variable rate securities often have final maturities of ten or more years;
however, their interest rate exposure corresponds to the frequency of the coupon
reset. Another example where the interest rate exposure is not properly captured
by duration is the case of mortgage passthrough securities. The stated final
maturity of such securities is generally 30 years, but current prepayment rates
are more critical in determining the securities' interest rate exposure. In
these and other similar situations, the sub-adviser will use more sophisticated
analytical techniques that incorporate the anticipated economic life of a
security into the determination of its interest rate exposure.
DESCRIPTION AND RISKS OF FUND INVESTMENTS
The following describes in greater detail the securities and investment
techniques used by the various PIMCO Advisors Funds, describes the risks
associated with them and sets forth certain other information about the
Funds. Additional information about the Funds' investment practices can be
found in the Statement of Additional Information.
Risks of Investment in Companies with Small
and Medium Equity Capitalizations
Many of the Equity Funds may invest in companies with small equity
capitalizations. The Opportunity Fund may invest primarily in such companies.
The Discovery Fund invests primarily in small companies with equity
capitalizations of $500 million to $1 billion which present risks similar to
those of investments in companies with small equity capitalizations. These
investments may include securities traded over-the-counter and securities of
companies with limited operating histories.
Such companies may have more restricted product lines or more limited financial
resources than larger, more established companies. For these and other reasons,
they may be more severely affected by economic downturns or other adverse
developments than are larger, more established companies. Trading volume of
these companies' securities may also be low and their market values volatile.
Many of the Equity Funds may also invest in companies with medium equity
capitalizations. The Target Fund may invest primarily in such companies.
Securities issued by such issuers share some of the risk characteristics of
small equity capitalization securities described above, although medium equity
capitalization issuers tend to have longer operating histories, broader product
lines, and greater financial resources and their securities tend to be more
liquid and less volatile than those of small equity capitalization issuers.
Risks of Foreign Investments
Many of the Funds may invest a portion of their assets in securities of foreign
issuers, securities traded principally in securities markets outside the United
States and/or securities denominated in foreign currencies. The International
and Precious Metals Funds may invest primarily in such securities and the
Emerging Markets and Global Income Funds may invest in such securities without
limit. Such investments may involve certain special risks due to foreign
economic, political and legal developments, including favorable or unfavorable
changes in currency exchange rates, exchange control regulations (including
currency blockage), expropriation of assets or nationalization, imposition of
withholding taxes on dividend or interest payments, and possible difficulty in
obtaining and enforcing judgments against foreign entities. Furthermore, foreign
issuers are subject to different, often less comprehensive, accounting,
reporting and disclosure requirements than domestic issuers. The securities of
some foreign companies and foreign securities markets are less liquid and at
times more volatile than securities of comparable U.S. companies and U.S.
securities markets. Foreign brokerage commissions and other fees are also
generally higher than in the United States. There are also special tax
considerations which apply to securities of foreign issuers and securities
principally traded overseas.
The risks of investing in foreign securities may be intensified in the case of
investments in emerging markets or countries with limited or developing capital
markets. Security prices in emerging markets can be significantly more volatile
than in the more developed nations of the world, reflecting the greater
uncertainties of investing in less established markets and economies. In
particular, countries with emerging markets may have relatively unstable
governments, present the risk of nationalization of businesses, restrictions on
foreign ownership, or prohibitions of repatriation of assets, and may have less
protection of property rights than more developed countries. The economies of
countries with emerging markets may be predominantly based on only a few
industries or dependent on revenues from particu-
<PAGE>
32 PIMCO Advisors Funds
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lar commodities or on international aid or development assistance, may be highly
vulnerable to changes in local or global trade conditions, and may suffer from
extreme and volatile debt burdens or inflation rates. Local securities markets
may trade a small number of securities and may be unable to respond effectively
to increases in trading volume, potentially making prompt liquidation of
substantial holdings difficult or impossible at times. Consequently, securities
of issuers located in countries with emerging markets may have limited
marketability and may be subject to more abrupt or erratic price movements.
Also, such local markets typically offer less regulatory protections for
investors.
A Fund's investments in foreign currency denominated debt obligations and
hedging activities will likely produce a difference between its book income and
its taxable income. This difference may cause a portion of the Fund's income
distributions to constitute returns of capital for tax purposes or require the
Fund to make distributions exceeding book income to qualify as a regulated
investment company for federal tax purposes.
Money Market Instruments
The money market instruments in which the Money Market Fund invests include:
(1) short-term U.S. Government securities;
(2) certificates of deposit, bankers' acceptances and other bank obligations
rated in the two highest rating categories by at least two Nationally
Recognized Statistical Rating Organizations ("NRSROs"), or, if rated by only
one NRSRO, in such agency's two highest grades, or unrated but determined to
be of comparable quality by the sub-adviser. Bank obligations must be those
of a bank that has deposits in excess of $2 billion or that is a member of
the Federal Deposit Insurance Corporation. The Fund may invest in
obligations of U.S. branches or subsidiaries of foreign banks ("Yankee
dollar obligations") or foreign branches of U.S. banks ("Eurodollar
obligations");
(3) commercial paper rated in the two highest rating categories by at least
two NRSROs, or, if rated by only one NRSRO, in such agency's two highest
grades, or if not rated, of comparable quality as determined by the
sub-adviser;
(4) corporate obligations with a remaining maturity of 397 days or less
whose issuers have outstanding short-term debt obligations rated in the
highest rating category by at least two NRSROs, or, if rated by only one
NRSRO, in such agency's highest grade, or if not rated, of comparable
quality as determined by the sub-adviser; and
(5) repurchase agreements with domestic commercial banks or registered
broker-dealers. See "Repurchase Agreements" below.
Federal law limits the percentage of the Money Market Fund's assets that may be
invested in instruments that are not rated in the highest rating category (or
that are unrated but determined to be of comparable quality by the sub-adviser).
Each of the other Funds may also invest a portion or, for temporary defensive
purposes, up to 100% of its assets in the foregoing kinds of money market
instruments.
In addition, the International Fund may invest in bankers' acceptances or
negotiable bank certificates of deposit issued by United States or foreign banks
having outstanding debt rated in the three highest rating categories by any
NRSRO or, if not so rated, of equivalent investment quality as determined by the
sub-adviser of those Funds; prime commercial paper issued by companies having an
outstanding debt issue rated in the three highest rating categories by any NRSRO
or, if not rated, of comparable quality as determined by the subadviser; and
short-term corporate obligations rated in the three highest rating categories by
any NRSRO or, if not rated, of comparable quality as determined by the
sub-adviser.
U.S. Government Securities
"U.S. Government securities" are obligations of, or guaranteed by, the U.S.
Government, its agencies or instrumentalities. Some U.S. Government securities
(e.g., U.S. Treasury bills, notes and bonds, mortgage participation certificates
guaranteed by the Government National Mortgage Association ("Ginnie Mae") and
Federal Housing Administration debentures) are supported by the full faith and
credit of the United States. Other U.S. Government securities are not backed by
the full faith and credit of the U.S. Government, but instead are backed only by
the credit of an agency or instrumentality, or by the discretionary authority of
the U.S. Government to purchase the issuing entity's obligations. Agencies or
instrumentalities whose obligations are not backed by the full faith and credit
of the U.S. Government include, among others, the Federal Home Loan Mortgage
Corporation, Federal Home Loan Banks, the Federal National Mortgage Association
("Fannie Mae"), the Tennessee Valley Authority and the Bank for Cooperatives.
U.S. Government securities generally do not involve the credit risks associated
with investments in other types of fixed-income securities, although, as a
result,
<PAGE>
PIMCO Advisors Funds 33
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the yields available from U.S. Government securities are generally lower than
the yields available from otherwise comparable corporate fixed-income
securities. Like other fixed-income securities, however, the values of U.S.
Government securities change as interest rates fluctuate. Fluctuations in the
value of portfolio securities will in many cases not affect interest income
on existing portfolio securities, but will be reflected in a Fund's net asset
value. Because the magnitude of these fluctuations will generally be greater
at times when a Fund's average maturity is longer, under certain market
conditions a Fund may invest in short-term investments yielding lower current
income rather than investing in higher-yielding long-term securities.
U.S. Government securities include mortgage-backed securities that are
guaranteed by a federal agency or collateralized mortgage obligations
("CMOs") issued by a U.S. Government instrumentality. See "Mortgage-Related
and Other Asset-Backed Securities" below.
Some U.S. Government securities are "zero coupon" securities (see "Zero Coupon
and Pay-in-Kind Securities" below) or are certificates representing rights to
receive payments of the interest only or the principal only of U.S. Government
securities ("IO/PO Strips"). IO/PO Strips tend to be more volatile than other
types of U.S. Government securities. Mortgage-backed I0 Strips involve the
additional risk of loss of the entire value of the investment if the underlying
mortgages are prepaid.
Diversified and Non-Diversified Portfolios
As diversified companies under the Investment Company Act of 1940 (the "1940
Act"), each Fund (other than the Global Income Fund) may (i) invest no more
than 5% of its assets in the securities of any one issuer, although up to 25%
of each Fund's assets may be invested without regard to this restriction and
(ii) may not own more than 10% of the outstanding voting securities of any
single issuer.
In contrast, the Global Income Fund is a "non-diversified company" under the
1940 Act and is therefore not subject to the diversification requirements stated
above. As a non-diversified company, the Global Income Fund may invest a
relatively high percentage of its assets in the securities of relatively few
issuers which the Fund's sub-adviser deems to be attractive investments. Such
concentration may, however, increase the risk of loss to the Fund should there
be a decline in the market value of any one portfolio security. Accordingly,
investment in the Global Income Fund may entail greater risks in this regard
than investments in the diversified Funds.
Corporate Debt Securities
Corporate debt securities include corporate bonds, debentures, notes and
other similar corporate debt instruments, including convertible securities.
Debt securities may be acquired with warrants attached. Corporate
income-producing securities may also include forms of preferred or preference
stock. The rate of return or return of principal on some debt obligations may
be linked or indexed to the level of exchange rates between the U.S. dollar
and a foreign currency or currencies, to the price of certain commodities or
to a security or an index of securities.
Investments in corporate debt securities that are below investment grade (e.g.,
rated below Baa by Moody's or BBB by S&P) are described as "speculative" both by
Moody's and S&P. Such securities are sometimes referred to as "junk bonds," and
may be subject to greater market fluctuations, less liquidity and greater risk
of loss of income or principal, including a greater possibility of default or
bankruptcy of the issuer of such securities, than are more highly rated debt
securities. Moody's also describes securities rated Baa as having speculative
characteristics. The Manager and the sub-advisers seek to minimize the risks
associated with lower rated securities through diversification, in-depth credit
analysis and attention to current developments in interest rates and market
conditions. See "Risks of High Yield Bonds" below.
Mortgage-Related and Other Asset Backed Securities
Mortgage backed securities are securities representing interests in "pools"
of mortgage loans secured by residential or commercial real property in which
payments of both interest and principal on the securities are generally made
monthly, in effect "passing through" monthly payments made by the individual
borrowers on the mortgage loans which underlie the securities (net of fees
paid to the issuer or guarantor of the securities). Early repayment of
principal on some mortgage-backed securities (arising from prepayments of
principal due to sale of the underlying property, refinancing, or
foreclosure, net of fees and costs which may be incurred) may expose a Fund
to a lower rate of return upon reinvestment of principal. Also, if a security
subject to prepayment has been purchased at a premium, in the event of
prepayment the value of the premium would be lost. Like other fixed-income
securities, when interest rates rise, the value of a mortgage backed security
generally
<PAGE>
34 PIMCO Advisors Funds
- --------------------------------------------------------------------------------
will decline; however, when interest rates are declining, the value of
mortgage backed securities with prepayment features may not increase as much
as other fixed-income securities.
Payment of principal and interest on some mortgage backed securities (but not
the market value of the securities themselves) may be guaranteed by the full
faith and credit of the U.S. Government (in the case of securities guaranteed by
GNMA); or guaranteed by agencies or instrumentalities of the U.S. Government (in
the case of securities guaranteed by FNMA or the Federal Home Loan Mortgage
Corporation ("FHLMC"), which are supported only by the discretionary authority
of the U.S. Government to purchase the agency's obligations). Mortgage backed
securities created by nongovernmental issuers (such as commercial banks, savings
and loan institutions, private mortgage insurance companies, mortgage bankers
and other secondary market issuers) may be supported by various forms of
insurance or guarantees, including individual loan, title, pool and hazard
insurance and letters of credit, which may be issued by governmental entities,
private insurers or the mortgage poolers.
Collateralized Mortgage Obligations ("CMOs") are hybrid mortgage-related
instruments. Interest and prepaid principal on a CMO are paid, in most cases,
semiannually. CMOs may be collateralized by whole mortgage loans but are more
typically collateralized by portfolios of mortgage backed securities guaranteed
by GNMA, FHLMC, or FNMA. CMOs are structured into multiple classes, with each
class bearing a different stated maturity. Monthly payments of principal,
including prepayments, are first returned to investors holding the shortest
maturity class; investors holding the longer maturity classes receive principal
only after the first class has been retired. CMOs that are issued or guaranteed
by the U.S. Government or by any of its agencies or instrumentalities will be
considered U.S. Government securities by the Funds, while other CMOs, even if
collateralized by U.S. Government securities, will have the same status as other
privately issued securities for purposes of applying a Fund's diversification
tests.
Commercial mortgage-related securities are generally structured like
pass-through securities or CMOs, although other structures are possible. They
may pay fixed or adjustable rates of interest. Commercial mortgage-related
securities have been issued in public or private transactions by a variety of
public and private issuers. The commercial mortgage loans that underlie
commercial mortgage-related securities have certain distinct risk
characteristics. Commercial mortgage loans generally lack standardized terms,
which may complicate their structure. Commercial properties themselves tend to
be unique and are more difficult to value than single family residential
properties. Commercial mortgage loans also tend to have shorter maturities than
residential mortgage loans, and may not be fully amortizing, meaning that they
may have a significant principal balance, or "balloon" payment, due on maturity.
Assets underlying commercial mortgage-related securities may relate only to a
few properties or a single property. The risk involved in single property
financings is highly concentrated.
Other mortgage-related securities include securities other than those described
above that directly or indirectly represent a participation in, or are secured
by and payable from, mortgage loans on real property, such as CMO residuals or
stripped mortgage backed securities, and may be structured in classes with
rights to receive varying proportions of principal and interest. In addition,
the Funds may invest in other asset-backed securities that have been offered to
investors. For a discussion of the characteristics of some of these instruments,
see the Statement of Additional Information. The duration of CMOs and other
mortgage-related securities is often difficult to determine because the
underlying mortgages may be subject to early repayment. Thus, the determination
of duration will be dependent on the sub-adviser's assumptions regarding the
likelihood and incidence of prepayment and, to the extent that such assumptions
prove to be incorrect, the duration of a Fund's portfolio, and thus its relative
exposure to fluctuation of interest rates, may be significantly different than
intended and may increase the overall risk of the Fund's portfolio.
Tax Exempt Securities
Tax Exempt Bonds generally are issued by states and local governments and
their agencies, authorities and other instrumentalities. Tax Exempt Bonds are
subject to credit and market risk. Credit risk relates to the ability of the
issuer to make payments of principal and interest. The issuer of a Tax Exempt
Bond may make such payments from money raised through a variety of sources,
including (1) the issuer's general taxing power, (2) a specific type of tax,
or (3) a particular facility or project. The ability of an issuer to make
such payments could be affected by litigation, legislation or other political
events or the bankruptcy of the issuer. Market risk relates to changes in a
security's value as a result of changes in interest rates. Lower rated Tax
Exempt Bonds generally provide higher yields but are subject to greater
credit and market risk than higher quality Tax Exempt Bonds.
<PAGE>
PIMCO Advisors Funds 35
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Convertible Securities
Many of the Funds may invest in convertible securities. Convertible
securities are generally preferred stocks or fixed-income securities that are
convertible into common stock at either a stated price or a stated rate. The
price of the convertible security will normally vary in some proportion to
changes in the price of the underlying common stock because of this
conversion feature. A convertible security will normally also provide a fixed
income stream. For this reason, the convertible security may not decline in
price as rapidly as the underlying common stock.
A Fund's sub-adviser will select convertible securities to be purchased by the
Fund based primarily upon its evaluation of the fundamental investment
characteristics and growth prospects of the issuer of the security. As a
fixed-income security, a convertible security tends to increase in market value
when interest rates decline and to decrease in value when interest rates rise.
While convertible securities generally offer lower interest or dividend yields
than non-convertible fixed-income securities of similar quality, their value
tends to increase as the market value of the underlying stock increases and to
decrease when the value of the underlying stock decreases.
The International, Emerging Markets and Global Income Funds may invest in
securities that are convertible only by certain classes of investors (which may
not include the Fund). The Equity Income Fund may invest in so-called "synthetic
convertible securities," which are composed of two or more different securities
whose investment characteristics, taken together, resemble those of convertible
securities. For example, the Equity Income Fund may purchase a non-convertible
debt security and a warrant or option. The synthetic convertible differs from
the true convertible security in several respects. Unlike a true convertible
security, which is a single security having a unitary market value, a synthetic
convertible comprises two or more separate securities, each with its own market
value. Therefore, the "market value" of a synthetic convertible is the sum of
the values of its fixed-income component and its convertible component. For this
reason, the values of a synthetic convertible and a true convertible security
may respond differently to market fluctuations.
Risks of High Yield Bonds
Certain of the Funds may invest in high-yield/high-risk fixed-income securities
rated below "investment grade," meaning securities that are not rated in one of
the four highest rating categories by an NRSRO (i.e., securities rated Ba or
below by Moody's or BB or below by S&P) or, if unrated, determined by the
Manager or relevant sub-adviser to be of comparable quality. Non-investment
grade securities are commonly referred to as "junk bonds," and are referred to
herein as "High Yield Securities." See "Credit Ratings and NRSROs" below. Also,
see Appendix A to this Prospectus for a description of the rating categories of
some NRSROs.
High Yield Securities are subject to credit risk and market risk. Market risk
relates to changes in a security's value as a result of changes in interest
rates. Credit risk relates to the ability of the issuer to make payments of
principal and interest. See "Credit and Market Risk of Fixed-Income Securities"
below. High Yield Securities rated B or lower by Moody's or S&P or of comparable
quality are considered to be speculative with respect to the issuer's capacity
to pay interest and repay principal.
High Yield Securities are generally subject to greater credit risk than
higher-rated securities because the issuers are more vulnerable to economic
downturns, higher interest rates or adverse issuer-specific developments. In
addition, the prices of High Yield Securities are generally subject to greater
market risk and therefore react more sharply to changes in interest rates. The
value and liquidity of High Yield Securities may be diminished by adverse
publicity and investor perceptions. Also, legislative proposals limiting the tax
benefits to the issuers or holders of taxable High Yield Securities or requiring
federally-insured savings and loan institutions to reduce their holdings of
taxable High Yield Securities have had and may continue to have an adverse
effect on the market value of these securities.
Because High Yield Securities are frequently traded only in markets where the
number of potential purchasers and sellers, if any, is limited, the ability of
the Funds to sell High Yield Securities at their fair value either to meet
redemption requests or to respond to changes in the financial markets may be
limited. In such an event, such securities could be regarded as illiquid for the
purposes of the limitation on the purchase of illiquid securities described
below. See "Illiquid Securities" below. Thinly-traded High Yield Securities may
be more difficult to value accurately for the purpose of determining a Fund's
net asset value. Also, because the market for certain High Yield Securities is
relatively new, that market may be particularly sensitive to an economic
downturn or a general increase in interest rates. Recent regulatory developments
and declines in the value of certain High Yield Securities have limited (and may
continue to limit) the ability of important participants in the High Yield
Securities market to maintain orderly markets in certain High Yield Securities.
<PAGE>
36 PIMCO Advisors Funds
- --------------------------------------------------------------------------------
Particular types of High Yield Securities may present special concerns.
Some High Yield Securities are zero coupon or pay-in-kind securities. See
"Zero Coupon and Pay-in-Kind Securities" below. Some High Yield Securities in
which a Fund may invest may be subject to redemption or call provisions that
may limit increases in market value that might otherwise result from lower
interest rates while increasing the risk that the Fund may be required to
reinvest redemption or call proceeds during a period of relatively low
interest rates.
The Manager and the sub-advisers have responded to these concerns by attempting
to identify High Yield Securities with relatively favorable investment
characteristics. The credit ratings issued by NRSROs are subject to various
limitations. For example, while such ratings evaluate credit risk, they
ordinarily do not evaluate the market risk of High Yield Securities. In certain
circumstances, the ratings may not reflect in timely fashion adverse
developments affecting an issuer. See "Credit Ratings and NRSROs" below. For
these reasons, the Manager and the sub-advisers conduct their own independent
credit analysis of High Yield Securities. In addition, under ordinary
circumstances, the Manager and the relevant sub-adviser will not purchase a High
Yield Security if that purchase will cause a Fund's holdings of all securities
of the issuer of such security to exceed 5% of the Fund's net assets.
Investment grade debt and convertible securities rated Baa by Moody's or BBB by
S&P (or similarly rated by another NRSRO or judged by the Manager or relevant
sub-adviser to be of comparable quality) may share some of the characteristics
of High Yield Securities described above. Certain convertible securities rated
in the fifth or sixth highest rating category or lower by a NRSRO or judged by
the Manager or the relevant sub-adviser to be of comparable quality may possess
some or all of the characteristics of nonconvertible High Yield Securities.
However, in the view of the Manager and the subadvisers, most convertible
securities are likely to exhibit equity characteristics as well, due to their
conversion feature.
The following chart provides information on the weighted average percentage of
rated and unrated debt or fixed-income securities in the portfolios of those
Funds that held any High Yield Securities during the fiscal year ended September
30, 1995. The numerical rating designations correspond to the associated rating
categories. The designation "1st" corresponds to the top rating category (i.e.,
Aaa by Moody's and/or AAA by S&P), "2nd" corresponds to the second highest
rating category (i.e., Aa by Moody's and/or AA by S&P), etc. For further
description of these rating categories, see Appendix A. The columns related to
unrated securities present the percentage of a Fund's total net assets invested
during such fiscal year (1) in unrated High Yield Securities believed by the
Manager or the relevant sub-advisers to be equivalent in quality to fixed-income
securities of the indicated rating and (2) in all unrated fixed-income
securities.
<TABLE>
<CAPTION>
Rated
-------------------------------------------------------------------------------
1st 2nd 3rd 4th 5th 6th 7th 8th 9th 10th
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Equity Income
High Income TO BE PROVIDED
</TABLE>
<TABLE>
<CAPTION>
Unrated but Considered Equivalent to
-------------------------------------------------------------------------------------------
Total
1st 2nd 3rd 4th 5th 6th 7th 8th 9th 10th Unrated
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Equity Income
High Income TO BE PROVIDED
</TABLE>
Zero Coupon and Pay-in-Kind Securities
Certain of the Funds may invest in zero coupon securities and/or
"pay-in-kind" securities. Zero coupon securities are issued at a significant
discount from face value and pay interest only at maturity rather than at
intervals during the life of the security. Pay-in-kind securities pay
dividends or interest in the form of additional securities of the issuer
rather than in cash.
The prices of pay-in-kind or zero coupon securities may react more strongly to
changes in interest rates than the prices of many other securities. The Funds
are required to accrue and distribute income from pay-in-kind and zero coupon
securities on a current basis, even though the Funds may not receive the income
currently in cash. Thus, a Fund may have to sell other investments to obtain
cash needed to make distributions of such imputed income.
Derivatives
To the extent permitted by the investment objectives and policies of the Funds
described earlier and in the Statement of Additional Information, the Funds may
purchase and write call and put options on securities, securities indexes and on
foreign currencies, and enter into futures contracts and use options on futures
contracts as further described below. Some Funds also may enter into swap
agreements with respect to foreign currencies, interest rates, and securities
indexes. The Funds may use these techniques to hedge against changes in interest
rates, foreign currency exchange rates or securities prices or as part of their
overall investment strategies. The International, Emerging Markets, Global
Income, High Income, Total Return Income and Short-Intermediate Funds may also
purchase and sell options relating to foreign currencies for purposes of
shifting exposure to foreign currency fluctuations from one country to another.
See "Other Foreign
<PAGE>
PIMCO Advisors Funds 37
- --------------------------------------------------------------------------------
Currency Transactions" below. Each Fund will maintain segregated accounts
consisting of cash, U.S. Government securities, or other liquid high grade debt
obligations (or, as permitted by applicable regulation, enter into certain
offsetting positions) to cover its obligations under options and futures
contracts and swaps contracts to avoid leveraging of the Fund. Some of the
derivative instruments and transactions described above, in particular
transactions in which the Fund(s) segregate high grade debt obligations with
longer maturities, have speculative and/or leveraging characteristics which will
expose the Fund(s) to greater credit and market risk and volatility. Certain
limitations on such transactions are imposed by the Investment Company Act and
the Commodity Exchange Act. See "Derivatives" and "Investment Restrictions" in
the Statement of Additional Information.
See "Investment Objectives and Policies" to determine which of the Funds may
employ particular derivative instruments. For those Funds that may invest in one
or more derivative instruments, the risks attendant with such instruments are
described below and further in the Statement of Additional Information.
Options on Securities, Securities Indices, and Currencies
A Fund may purchase put options on securities to protect holdings in an
underlying or related security against a substantial decline in market value. A
Fund may purchase call options on securities to protect against substantial
increases in prices of securities the Fund intends to purchase pending its
ability to invest in such securities in an orderly manner. A Fund may sell put
or call options it has previously purchased, which could result in a net gain or
loss depending on whether the amount realized on the sale is more or less than
the premium and other transaction costs paid on the put or call option which is
sold. A Fund may write a call or put option only if the option is "covered" by
the Fund holding a position in the underlying securities or by other means which
would permit immediate satisfaction of the Fund's obligation as writer of the
option. Prior to exercise or expiration, an exchange traded option may be closed
out by an offsetting purchase or sale of an option of the same series.
The purchase and writing of options involves certain risks. During the option
period, the covered call writer has, in return for the premium on the option,
given up the opportunity to profit from a price increase in the underlying
securities above the exercise price, but, as long as its obligation as a writer
continues, has retained the risk of loss should the price of the underlying
security decline. The writer of an option has no control over the time when it
may be required to fulfill its obligation as a writer of the option. Once an
option writer has received an exercise notice, it cannot effect a closing
purchase transaction in order to terminate its obligation under the option and
must deliver the underlying securities at the exercise price. If a put or call
option purchased by the Fund is not sold when it has remaining value, and if the
market price of the underlying security, in the case of a put, remains equal to
or greater than the exercise price or, in the case of a call, remains less than
or equal to the exercise price, the Fund will lose its entire investment in the
option. Also, where a put or call option on a particular security is purchased
to hedge against price movements in a related security, the price of the put or
call option may move more or less than the price of the related security. There
can be no assurance that a liquid market will exist when a Fund seeks to close
out an option position. Furthermore, if trading restrictions or suspensions are
imposed on the options markets, a Fund may be unable to close out a position.
Funds that invest in foreign currency-denominated securities may buy or sell put
and call options on foreign currencies. Currency options traded on U.S. or other
exchanges may be subject to position limits which may limit the ability of a
Fund to reduce foreign currency risk using such options. Over-the-counter
options differ from traded options in that they are two-party contracts with
price and other terms negotiated between buyer and seller and generally do not
have as much market liquidity as exchanged-traded options.
Futures Contracts and Options on Futures Contracts
Some Funds may invest in interest rate futures contracts, securities index
futures contracts and foreign currency futures contracts and options thereon
("futures options") that are traded on a United States or foreign exchange or
board of trade.
There are several risks associated with the use of futures and futures options
for hedging purposes. There can be no guarantee that there will be a correlation
between price movements in the hedging vehicle and in the portfolio securities
being hedged. An incorrect correlation could result in a loss on both the hedged
securities in a Fund and the hedging vehicle so that the portfolio return might
have been greater had hedging not been attempted. There can be no assurance that
a liquid market will exist at a time when a Fund seeks to close out a futures
contract or a futures option position. Most futures exchanges and boards of
trade limit the amount of fluctuation permitted in futures contract prices
during a single day; once the daily limit has been reached on a particular
contract, no trades may be made that day at a
<PAGE>
38 PIMCO Advisors Funds
- --------------------------------------------------------------------------------
price beyond that limit. In addition, certain of these instruments are
relatively new and without a significant trading history. As a result, there
is no assurance that an active secondary market will develop or continue to
exist. Lack of a liquid market for any reason may prevent a Fund from
liquidating an unfavorable position and the Fund would remain obligated to
meet margin requirements until the position is closed.
The Funds will only enter into futures contracts or futures options which are
standardized and traded on a U.S. or foreign exchange or board of trade, or
similar entity, or quoted on an automated quotation system. Each Fund will use
financial futures contracts and related options only for "bona fide hedging"
purposes, as such term is defined in applicable regulations of the CFTC, or,
with respect to positions in financial futures and related options that do not
qualify as "bona fide hedging" positions, will enter such non-hedging positions
only to the extent that aggregate initial margin deposits plus premiums paid by
it for open futures option positions, less the amount by which any such
positions are "in-the-money," would not exceed 5% of the Fund's total assets.
Swap Agreements
The Income Funds (other than the Tax Exempt and Money Market Funds) may enter
into interest rate, index and currency exchange rate swap agreements for
purposes of attempting to obtain a particular desired return at a lower cost to
the Fund than if the Fund had invested directly in an instrument that yielded
that desired return. Swap agreements are twoparty contracts entered into
primarily by institutional investors for periods ranging from a few weeks to
more than one year. In a standard "swap" transaction, two parties agree to
exchange the returns (or differentials in rates of return) earned or realized on
particular predetermined investments or instruments. The gross returns to be
exchanged or "swapped" between the parties are calculated with respect to a
"notional amount," i.e., the return on or increase in value of a particular
dollar amount invested at a particular interest rate, in a particular foreign
currency, or in a "basket" of securities representing a particular index.
Commonly used swap agreements include interest rate caps, under which, in return
for a premium, one party agrees to make payments to the other to the extent that
interest rates exceed a specified rate, or "cap"; interest rate floors, under
which, in return for a premium, one party agrees to make payments to the other
to the extent that interest rates fall below a specified level, or "floor"; and
interest rate collars, under which a party simultaneously sells a cap and
purchases a floor (or vice versa) in an attempt to protect itself against
interest rate movements exceeding given minimum or maximum levels.
The "notional amount" of the swap agreement is only a fictional basis on which
to calculate the obligations which the parties to a swap agreement have agreed
to exchange. Most swap agreements entered into by a Fund would calculate the
obligations of the parties to the agreement on a "net basis." Consequently, a
Fund's obligations (or rights) under a swap agreement will generally be equal
only to the net amount to be paid or received under the agreement based on the
relative values of the positions described in the swap contract (the "net
amount"). A Fund's obligations under a swap agreement will be accrued daily
(offset against amounts owed to the Fund) and any accrued but unpaid net amounts
owed to a swap counterparty will be covered by the maintenance of a segregated
account consisting of cash, U.S. Government securities, or high grade debt
obligations, to avoid any potential leveraging of the Fund's portfolio. A Fund
will not enter into a swap agreement with any single party if the net amount
owed or to be received under existing contracts with that party (together with
all other securities of that issuer) would exceed 5% of the Fund's assets.
Whether a Fund's use of swap agreements will be successful in furthering its
investment objective will depend on the sub-adviser's ability to predict
correctly whether certain types of investments are likely to produce greater
returns than other investments. Because they are two-party contracts, they may
only be closed out with the swap counterparty. Because swap contracts may have
terms of greater than seven days, swap agreements are generally considered by
the SEC to be illiquid. Moreover, a Fund bears the risk of loss of the amount
expected to be received under a swap agreement in the event of the default or
bankruptcy of a swap agreement counterparty. A sub-adviser will cause a Fund to
enter into swap agreements only with counterparties that would be eligible for
consideration as repurchase agreement counterparties under the Funds' repurchase
agreement guidelines. Certain restrictions imposed on the Funds by the Internal
Revenue Code may limit the Funds' ability to use swap agreements. The swaps
market is a relatively new market and is largely unregulated. It is possible
that developments in the swaps market, including potential government
regulation, could adversely affect a Fund's ability to terminate existing swap
agreements or to realize amounts to be received under such agreements.
Other Foreign Currency Transactions
Foreign currency exchange rates may fluctuate significantly over short
periods of time. They generally are determined by the forces of supply and
demand in the
<PAGE>
PIMCO Advisors Funds 39
- --------------------------------------------------------------------------------
foreign exchange markets and the relative merits of investments in different
countries, actual or perceived changes in interest rates and other complex
factors, as seen from an international perspective. Currency exchange rates
also can be affected unpredictably by intervention by U.S. or foreign
governments or central banks or the failure to intervene, or by currency
controls or political developments in the U.S. or abroad.
All Funds that may invest in securities denominated in foreign currencies may
enter into forward foreign currency exchange contracts to reduce the risks of
adverse changes in foreign exchange rates. A forward foreign currency exchange
contract involves an obligation to purchase or sell a specific currency at a
future date, which may be any fixed number of days from the date of the contract
agreed upon by the parties, at a price set at the time of the contract. By
entering into a forward foreign currency exchange contract, the fund "locks in"
the exchange rate between the currency it will deliver and the currency it will
receive for the duration of the contract. As a result, a Fund reduces its
exposure to changes in the value of the currency it will deliver and increases
its exposure to changes in the value of the currency it will exchange into. The
effect on the value of a Fund is similar to selling securities denominated in
one currency and purchasing securities denominated in another. The Funds may
enter into these contracts for the purpose of hedging against foreign exchange
risks arising from the Fund's investment or anticipated investment in securities
denominated in foreign currencies. Such hedging transactions may not be
successful and may eliminate any chance for a Fund to benefit from favorable
fluctuations in relevant foreign currencies. The International, Emerging
Markets, Global Income, High Income, Total Return Income and Short-Intermediate
Funds may also enter into these contracts for purposes of increasing exposure to
a foreign currency or to shift exposure to foreign currency fluctuations from
one currency to another. To the extent that they do so, the International,
Emerging Markets, Global Income, High Income, Total Return Income and Short-
Intermediate Funds will be subject to the additional risk that the relative
value of currencies will be different than anticipated by the particular Fund's
sub-adviser. The Funds may also use foreign currency futures contracts and
related options on foreign currencies for the same reasons for which forward
foreign currency contracts are used.
The Funds also may invest in foreign currency exchange-related securities, such
as foreign currency warrants and other instruments whose return is linked to
foreign currency exchange rates. For a description of these instruments and
their associated risks, see the Statement of Additional Information.
Credit Ratings and NRSROs
Credit ratings are assigned to many issues of fixed-income, convertible and
preferred equity securities by rating agencies referred to in this Prospectus
as NRSROs. Although ratings assigned by NRSROs are relative and subjective,
such ratings reflect the assessment of the NRSRO at the time of issuance of
the issuer's ability, or the economic viability of the special revenue
source, with respect to the timely payment of interest and the repayment of
principal in accordance with the terms of the obligation.
The use of credit ratings as the sole method of evaluating securities can
involve certain risks. For example, while credit ratings evaluate the safety of
principal and interest payments, they do not address the market risk of
securities. Also, the NRSROs undertake no obligation to update their ratings of
securities to reflect events that may occur after a security has obtained a
rating. The Manager and the sub-advisers do not rely solely on credit ratings
when selecting securities for the Funds and conduct their own analysis of issuer
credit quality. If an NRSRO changes the rating of a security already contained
in a Fund's portfolio, that Fund may retain the security if the Manager or the
relevant sub-adviser deems it is in the best interest of the Fund.
As used in this Prospectus, securities rated below "investment grade" are
securities that are not rated in one of the four highest rating categories by an
NRSRO (i.e., securities rated Ba or below by Moody's or BB or below by S&P) or,
if unrated, determined to be of comparable quality by the Manager or the
relevant sub-adviser. Debt or fixed-income securities rated below investment
grade are generally speculative with respect to the issuer's ability to make
interest and principal payments when due. Securities rated in the lowest
investment grade category (i.e., the fourth highest category) are also
considered by some NRSROs to have speculative characteristics.
See Appendix A to this Prospectus for a description of the rating categories
used by some NRSROs.
Investment in Investment Companies
The International and Emerging Markets Funds may invest in securities of
other investment companies, such as closed-end investment management
companies or in pooled accounts or other investment vehicles which invest in
foreign markets. As a shareholder of an investment company, these Funds may
indirectly bear service
<PAGE>
40 PIMCO Advisors Funds
- --------------------------------------------------------------------------------
and other fees which are in addition to the fees the Funds pay their service
providers.
Precious Metals
The Precious Metals Fund will concentrate its investments in the precious
metals industry. Prices of precious metals can be expected to respond to
changes in rates of inflation and to perceptions of economic and political
instability. The values of companies engaged in precious metal-related
activities whose securities are principally traded on foreign securities
exchanges may also be affected by changes in the exchange rate between the
relevant foreign currency and the dollar. Based on historical experience, the
prices of precious metals and of securities of companies engaged in precious
metal-related activities may be subject to extreme fluctuations, reflecting
wider economic or political instability or for other reasons.
Loans of Portfolio Securities
Each Fund (except the Money Market and Tax Exempt Funds) may lend its
portfolio securities to broker-dealers under contracts calling for collateral
in cash, U.S. Government securities or other high quality debt securities
equal to at least the market value of the securities loaned (except that the
U.S. Government Fund will only accept cash and U.S. Government securities as
collateral). Each Fund's performance will continue to reflect changes in the
value of the securities loaned and will also receive either interest, through
investment of cash collateral by the Fund in permissible investments, or a
fee, if the collateral is U.S. Government securities. Securities lending
involves the risk of loss of rights in the collateral or delay in recovery of
the collateral should the borrower fail financially. The Funds will normally
pay lending fees to the broker-dealer arranging the loan.
Short Sales
Each Fund except the Money Market Fund may from time to time make short sales
involving securities held in the Fund's portfolio or which the Fund has the
right to acquire without the payment of further consideration. The Short-
Intermediate Fund may also make short sales of other securities, but in such
case will maintain in a segregated account, monitored on a daily basis, cash
or U.S. Government securities at such a level that (1) the segregated amount
plus the amount of any collateral deposited with a broker in connection with
the transaction at least equals the current market value of the securities
sold short and (2) the segregated amount plus the amount deposited with the
broker at least equals the value of the securities at the time they were sold
short. Short sales expose the Fund to the risk that it will be required to
purchase securities to cover its short position at a time when the securities
have appreciated in value, thus resulting in a loss to the Fund.
Forward Commitments, When-issued and Delayed Delivery Transactions
Each Fund may purchase securities which it is eligible to purchase on a
when-issued basis, may purchase and sell such securities for delayed delivery
and may make contracts to purchase such securities for a fixed price at a
future date beyond normal settlement time (forward commitments). When-issued
transactions, delayed delivery purchases and forward commitments involve a
risk of loss if the value of the securities declines prior to the settlement
date, which risk is in addition to the risk of decline in the value of the
Fund's other assets. No income accrues to the purchaser of such securities
prior to delivery.
Repurchase Agreements
Each of the Funds may enter into repurchase agreements with banks and
broker-dealers, which are agreements by which a Fund acquires a security
(usually an obligation of the U.S. Government) for cash and obtains a
simultaneous commitment from the seller to repurchase the security at an
agreed-upon price and date. The resale price is in excess of the acquisition
price and reflects an agreed-upon market rate unrelated to the coupon rate on
the purchased security. Such transactions afford an opportunity for the Funds
to earn a return on temporarily available cash at no market risk, although
there is a risk that the seller may default in its obligation to pay the
agreed-upon sum on the redelivery date. Such a default may subject the Funds
to expenses, delays and risks of loss.
Reverse Repurchase Agreements and Other Borrowings
A reverse repurchase agreement is a form of leverage that involves the sale
of a security by a Fund and its agreement to repurchase the instrument at a
specified time and price. The Fund will maintain a segregated account
consisting of cash, U.S. Government securities or other liquid high grade debt
obligations, maturing not later than the expiration of the reverse repurchase
agreement, to cover its obligations under reverse repurchase agreements. A
Fund also may borrow money for investment purposes subject to any policies of
the Fund currently described in this Prospectus or in the Statement of
Additional Information. Such a practice will result in leveraging of a Fund's
assets. Leverage will tend to exaggerate the effect on net asset value of any
increase or decrease in the value of a Fund's portfolio and may cause a Fund
to liquidate portfolio positions when it would not be advantageous to do so.
<PAGE>
PIMCO Advisors Funds 41
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Illiquid Securities
Each Fund may purchase "illiquid securities," defined as securities which may
not be disposed of in the ordinary course of business at approximately the
value at which the Fund has valued such securities, and which includes
certain securities whose disposition is restricted by the securities laws.
Each Fund may purchase "illiquid securities" so long as no more than 15% of
that Fund's net assets would be invested in illiquid securities after giving
effect to the purchase. Illiquid securities at present are considered to
include swap agreements, repurchase agreements maturing in more than seven
days, certain IO/PO Strips and over-the-counter options to the extent
described in the Statement of Additional Information. Transactions in
illiquid securities may involve relatively higher transaction costs.
Portfolio Turnover
Portfolio turnover is not a limiting factor with respect to investment
decisions for the Funds. High portfolio turnover (e.g., over 100%) involves
correspondingly greater brokerage commissions and other transaction costs,
which will be borne directly by the relevant Funds. Portfolio turnover rates
for all of the Funds except for the Emerging Markets and Global Income Funds
are set forth under "Financial Highlights." While it is impossible to predict
with certainty, it is not expected that the annual portfolio turnover rate
for the Emerging Markets or Global Income Funds will exceed 150%.
Credit and Market Risk of Fixed-Income Securities
All fixed-income securities are subject to market risk and credit risk.
Market risk relates to changes in a security's value as a result of changes
in interest rates. The value of a Fund's investments in fixed-income
securities will change as the general level of interest rates fluctuate.
During periods of falling interest rates, the value of a Fund's fixed-income
securities generally rise. Conversely, during periods of rising interest
rates, the value of a Fund's fixed-income securities generally decline.
Credit risk relates to the ability of the issuer to make payments of
principal and interest.
"Fundamental" Policies
Except for any policy explicitly identified as "fundamental," the investment
objective and policies of each Fund described in this Prospectus may be
changed without shareholder approval. If there is a change in a Fund's
investment objective, shareholders should consider whether the Fund remains
an appropriate investment in light of their then current financial position
and needs.
PERFORMANCE INFORMATION
From time to time the Trust may make available certain information about the
performance of the Class A, Class B and Class C shares of some or all of the
Funds. Information about a Fund's performance is based on that Fund's record
to a recent date and is not intended to indicate future performance.
Performance information is computed separately for each Fund's Class A, Class
B and Class C shares in accordance with the formulas described below. Because
Class B and Class C shares bear the expense of the distribution fee attending
the deferred sales charge (Class B) and asset based sales charge (Class C)
alternatives and certain other expenses, it is expected that the level of
performance of a Fund's Class B and Class C shares will be lower than that of
the Fund's Class A shares.
All Funds other than the Money Market Fund may include the Total Return of
each class of shares in advertisements or other written material. When a Fund
advertises its Total Return with respect to its Class A, Class B and Class C
shares, it will be calculated for the past year, the past five years, the
past ten years or the period since the establishment of the Fund. Total
Return is measured by comparing the value of an investment in the class at
the beginning of the relevant period (in the case of Class A shares, giving
effect to the maximum initial sales charge) to the redemption value of the
investment in the class at the end of the period (assuming immediate
reinvestment of any dividends or capital gains distributions at net asset
value and giving effect to the deduction of any contingent deferred sales
charge which would be payable).
Each of the Short-Intermediate Fund, the High Income Fund, the Global Income
Fund, the Total Return Income Fund, the U.S. Government Fund, the Tax Exempt
Fund and the Equity Income Fund may advertise its Yield, accompanied by its
Total Return, with respect to each class. The Yield of a Fund's Class A,
Class B and Class C shares will be computed by dividing the net investment
income per share of each class earned during a recent one-month period by
the maximum offering price per share of each respective class (reduced by any
undeclared earned income expected to be paid shortly as a dividend) on the
last day of the period.
The Tax Exempt Fund may also advertise the tax equivalent yield of its Class A,
Class B and Class C shares, calculated like Yield as described above except
that, for any given tax bracket, net investment income will be calculated as the
sum of (i) any taxable income of the class plus (ii) the tax exempt income of
the class divided by the difference between 1 and the effective federal income
tax rates for taxpayers in that tax bracket.
The Money Market Fund may advertise the Yield and the Effective Yield of its
Class A, Class B and Class C shares. The Yield for each class of the Money
Market Fund is based upon the income earned by each class of the Fund over a
seven-day period and then annualized, i.e., the income earned in the period
is assumed to be earned every seven days over a 52-week period and stated as
a percentage of the investment. Effective Yield for each class is calculated
similarly but, when annualized, the income earned by the investment is
assumed to be reinvested in each class of Fund shares and thus compounded
over the course of a 52-week period.
<PAGE>
42 PIMCO Advisors Funds
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HOW TO BUY SHARES
Shares of each Fund of the Trust are continuously offered through the Trust's
principal underwriter, PIMCO Advisors Distribution Company (the "Distributor"),
and through other firms which have dealer agreements with the Distributor
("participating brokers") or which have agreed to act as introducing brokers for
the Distributor ("introducing brokers"). SHARES OF THE OPPORTUNITY FUND ARE
CURRENTLY NOT OFFERED TO NEW SHAREHOLDERS. SEE "RESTRICTIONS ON SALES OF AND
EXCHANGES FOR SHARES OF THE OPPORTUNITY FUND" below.
There are two ways to purchase shares: either 1) through your dealer or
broker which has a dealer agreement or 2) directly by mailing an Account
Application with payment, as described below under the heading Direct
Investment, to the Distributor (if no dealer is named in the application, the
Distributor may act as dealer).
Each Fund (except the Opportunity Fund) currently offers and sells three
classes of shares (Class A, Class B and Class C). The Opportunity Fund does
not offer Class B shares. Shares may be purchased at a price equal to their
net asset value per share next determined after receipt of an order, plus a
sales charge which, at the election of the purchaser, may be imposed either
(i) at the time of the purchase in the case of Class A shares (the "initial
sales charge alternative"), (ii) on a contingent deferred basis in the case
of Class B shares (the "deferred sales charge alternative") or (iii) by the
deduction of an ongoing asset based sales charge in the case of Class C
shares (the "asset based sales charge alternative"). In certain circumstances
Class A and Class C shares are also subject to a contingent deferred sales
charge. See "Alternative Purchase Arrangements." Purchase payments for Class
B and Class C shares are fully invested at the net asset value next
determined after acceptance of the trade. Purchase payments for Class A
shares, less the applicable sales charge, are invested at the net asset value
next determined after acceptance of the trade.
All purchase orders received by the Distributor prior to the close of regular
trading on the New York Stock Exchange (normally 4:00 p.m. Eastern time), on
a regular business day, are processed at that day's offering price. However,
orders received by the Distributor from dealers or brokers after the offering
price is determined that day will receive such offering price if the orders
were received by the dealer or broker from its customer prior to such
determination and were transmitted to and received by the Distributor prior
to its close of business that day (normally 5:00 p.m. Eastern time) or, in
the case of certain retirement plans, received by the Distributor prior to
10:00 a.m. Eastern time on the next business day. Purchase orders received on
other than a regular business day will be executed on the next succeeding
regular business day. The Distributor, in its sole discretion, may accept or
reject any order for purchase of Fund shares. The sale of shares will be
suspended during any period in which the New York Stock Exchange is closed
for other than weekends or holidays, or if permitted by the rules of the SEC
when trading on the Exchange is restricted or during an emergency which makes
it impracticable for the Funds to dispose of their securities or to determine
fairly the value of their net assets, or during any other period permitted by
the SEC for the protection of investors.
Except for purchases through the PIMCO Advisors Auto Invest plan, the PIMCO
Advisors Auto Exchange plan and tax-qualified programs referred to below, the
minimum initial investment in the Trust is $1,000 and in any Fund is $250,
and the minimum additional investment is $100 per Fund. For information about
dealer commissions, see "Alternative Purchase Arrangements" below. Persons
selling Fund shares may receive different compensation for selling Class A,
Class B or Class C shares. Normally Trust shares purchased through
participating brokers are held in the investor's account with that broker. No
share certificates will be issued unless specifically requested in writing by
an investor or broker-dealer.
Direct Investment
Investors who wish to invest in the Trust directly, rather than through a
participating broker, may do so by opening an account with the Distributor. To
open an account, an investor should complete the Account Application included
with this Prospectus. All shareholders who open direct accounts with the
Distributor will receive from the Distributor individual confirmations of each
purchase, redemption, dividend reinvestment, exchange or transfer of Trust
shares, including the total number of Trust shares owned as of the confirmation
date except that purchases which result from the reinvestment of daily-accrued
dividends and/or distributions will be confirmed once each calendar quarter. See
"Distributions" below. Information regarding direct investment or any other
features or plans offered by the Trust may be obtained by calling the
Distributor at 800-426-0107 or by calling your broker.
Purchase by Mail
Investors who wish to invest directly may send a check payable to PIMCO
Advisors Distribution Company, along with a completed application form to:
PIMCO Advisors Distribution Company
P.O. Box 5866
Denver, CO 80217-5866
<PAGE>
PIMCO Advisors Funds 43
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Purchases are accepted subject to collection of checks at full value and
conversion into federal funds. Payment by a check drawn on any member of the
Federal Reserve System can normally be converted into federal funds within two
business days after receipt of the check. Checks drawn on a non-member bank may
take up to 15 days to convert into federal funds. In all cases, the purchase
price is based on the net asset value next determined after the purchase order
and check are accepted, even though the check may not yet have been converted
into federal funds.
Subsequent Purchases of Shares
Subsequent purchases can be made as indicated above by mailing a check with a
letter describing the investment or with the additional investment portion of a
confirmation statement. Except for subsequent purchases through the PIMCO
Advisors Auto Invest plan, the PIMCO Advisors Auto Exchange plan, tax-qualified
programs and PIMCO Advisors Fund Link referred to below, and except during
periods when an Automatic Withdrawal plan is in effect, the minimum subsequent
purchase is $100 in any Fund. All payments should be made payable to PIMCO
Advisors Distribution Company and should clearly indicate the shareholder's
account number. Checks should be mailed to the address above under "Purchase by
Mail."
Tax-Qualified Retirement Plans
The Distributor makes available retirement plan services and documents for
Individual Retirement Accounts (IRAs), for which First National Bank of
Boston serves as trustee. These accounts include Simplified Employee Pension
Plan (SEP) and Salary Reduction Simplified Employee Pension Plan (SAR/SEP)
IRA accounts and prototype documents. In addition, prototype documents are
available for establishing 403(b)(7) Custodial Accounts with First National
Bank of Boston as custodian. This type of plan is available to employees of
certain non-profit organizations.
The Distributor also makes available prototype documents for establishing Money
Purchase and/or Profit Sharing Plans and 401(k) Retirement Savings Plans.
Investors should call the Distributor at 800-426-0107 for further information
about these plans and should consult with their own tax advisers before
establishing any retirement plan. Investors who maintain their accounts with
participating brokers should consult their broker about similar types of
accounts that may be offered through the broker. The minimum initial and
subsequent investment in any Fund for tax-qualified plans is $25.
PIMCO Advisors Auto Invest
The PIMCO Advisors Auto Invest plan provides for periodic investments into
the shareholder's account with the Trust by means of automatic transfers of a
designated amount from the shareholder's bank account. Investments may be
made monthly or quarterly, and may be in any amount subject to a minimum of
$50 per month for each Fund in which shares are purchased through the plan.
Further information regarding the PIMCO Advisors Auto Invest plan is
available from the Distributor or participating brokers. You may enroll by
completing the appropriate section on the PIMCO Advisors Funds Account
Application, or you may obtain an Auto-Invest Application by calling the
Distributor or your broker.
PIMCO Advisors Auto Exchange
PIMCO Advisors Auto Exchange plan establishes regular, periodic exchanges
from one Fund to another. The plan provides for regular investments into a
shareholder's account in a specific Fund by means of automatic exchanges of a
designated amount from another Fund account of the same class of shares and
with identical account registration. Exchanges for shares of the Opportunity
Fund are currently restricted. See "Restrictions on Sales of and Exchanges
for Shares of the Opportunity Fund" below.
Exchanges may be made monthly or quarterly, and may be in any amount subject to
a minimum of $50 for each Fund whose shares are purchased through the plan.
Further information regarding the PIMCO Advisors Auto Exchange plan is available
from the Distributor at
<PAGE>
44 PIMCO Advisors Funds
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800-426-0107 or participating brokers. You may enroll by completing an
application which may be obtained from the Distributor or by telephone
request at 800-426-0107. For more information on exchanges, see "Exchange
Privilege".
PIMCO Advisors Fund Link (Does not apply to shares held in broker "street name"
accounts.)
PIMCO Advisors Fund Link ("Fund Link") connects your Fund account with a bank
account. Fund Link may be used for subsequent purchases and for redemptions and
other transactions described under "How to Redeem." Purchase transactions are
effected by electronic funds transfers from the shareholder's account at a U.S.
bank or other financial institution that is an Automated Clearing House ("ACH")
member. Investors may use Fund Link to make subsequent purchases of shares in
amounts from $50 to $10,000. To initiate such purchases, call 800-852-8457. All
such calls will be recorded. Fund Link is normally established within 45 days of
receipt of an Application by the Transfer Agent. The minimum investment by Fund
Link is $50 per Fund. Shares will be purchased on the regular business day the
Distributor receives the funds through the ACH system, provided the funds are
received before the close of regular trading on the New York Stock Exchange. If
the funds are received after the close of regular trading, the shares will be
purchased on the next regular business day.
Fund Link privileges must be requested on the PIMCO Advisors Funds Account
Application. To establish Fund Link on an existing account, complete a Fund Link
Application, which is available from the Distributor or your broker, with
signatures guaranteed from all shareholders of record for the account. See
"Signature Guarantee" under "General" below. Such privileges apply to each
shareholder of record for the account unless and until the Distributor receives
written instructions from a shareholder of record cancelling such privileges.
Changes of bank account information must be made by completing a new Fund Link
Application signed by all owners of record of the account, with all signatures
guaranteed. The Distributor, the Transfer Agent and the Fund may rely on any
telephone instructions believed to be genuine and will not be responsible to
shareholders for any damage, loss or expenses arising out of such instructions.
The Fund reserves the right to amend, suspend or discontinue Fund Link
privileges at any time without prior notice.
Restrictions on Sales of and Exchanges for Shares of the Opportunity Fund
Shares of the Opportunity Fund are not available for purchase by new
investors in the Fund. Shareholders who owned shares of the Opportunity Fund
on December 31, 1992 will still be permitted to purchase additional shares of
the Fund for as long as they continue to own some shares of the Opportunity
Fund. Similarly, participants in any self-directed qualified benefit plan
(for example, 401(k), 403(b) and Keogh Plans, but not IRAs or SEP IRAs) that
owned Opportunity Fund shares on March 1, 1993 for any single plan
participant will be eligible to direct the purchase of Opportunity Fund
shares by their plan account for so long as the plan continues to own some
shares of the Opportunity Fund for any single plan participant. In the event
a shareholder redeems all of his or her shares of the Opportunity Fund, or
all participants in a self-directed qualified benefit plan described above
redeem their shares of the Opportunity Fund, such shareholder and the
participants in such plan will no longer be eligible to purchase shares of
the Opportunity Fund.
Shareholders of other Funds are not permitted to exchange any of their shares
for Opportunity Fund shares unless the shareholders are independently eligible
to purchase Opportunity Fund shares because they already owned shares of the
Opportunity Fund on December 31, 1992 (March 1, 1993, in the case of the
self-directed qualified benefit plans described above).
The Trust reserves the right at any time to modify these restrictions, including
the suspension of all sales of Opportunity Fund shares or the lifting of
restrictions on different classes of investors and/or transactions.
General
Changes in registration or account privileges may be made in writing to the
transfer agent (the "Transfer Agent"). Signature guarantees may be required.
See Signature Guarantee below.
All correspondence must include the account number and must be sent to:
PIMCO Advisors Distribution Company
P.O. Box 5866
Denver. CO 80217-5866
Signature Guarantee
When a signature guarantee is called for, the shareholder should have "Signature
Guaranteed" stamped under his signature and guaranteed by any of the following
entities: U.S. banks, foreign banks having a U.S. correspondent bank, credit
unions, savings associations, U.S. registered dealers and brokers, municipal
securities dealers and brokers, government securities dealers and brokers,
national securities exchanges, registered securities associations and clearing
agencies (each an "Eligible Guarantor Institution"). The Distributor reserves
the right to reject any signature guarantee pursuant to its written signature
guarantee standards or procedures, which may be revised in the future to permit
it to reject signature guarantees from Eligible Guarantor Institutions that do
not, based on credit guidelines, satisfy such written standards or procedures.
The Trust may change the signature guarantee requirements from time to time upon
notice to shareholders, which may be given by means of a new or supplemented
Prospectus.
<PAGE>
PIMCO Advisors Funds 45
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ALTERNATIVE PURCHASE ARRANGEMENTS
The Trust offers investors three classes of shares (Class A, Class B and Class
C) which bear sales charges in different forms and amounts and which bear
different levels of expenses. The alternative purchase arrangements are designed
to enable the investor to choose the method of purchasing Fund shares that is
most beneficial to the investor based on all factors to be considered, which
include: the amount and intended length of the investment, the type of Fund
(i.e., Equity vs. Income) and whether the investor intends to exchange shares
for shares of other Funds. Generally, when making an investment decision,
investors should at least consider the anticipated life of an intended
investment in the Funds, the accumulated distribution and servicing fees plus
contingent deferred sales charges on Class B or Class C shares, the initial
sales charge plus accumulated servicing fees on Class A shares (plus a
contingent deferred sales charge in certain circumstances), the possibility that
the anticipated higher return on Class A shares due to the lower ongoing charges
will offset the initial sales charge paid on such shares, the automatic
conversion of Class B shares to Class A shares and the difference in the
contingent deferred sales charges applicable to Class A, B and C shares.
Class A:
The initial sales charge alternative (Class A) might be preferred by
investors purchasing shares of sufficient aggregate value to qualify for
reductions in the initial sales charge applicable to such shares. Similar
reductions are not available on the contingent deferred sales charge
alternative (Class B) or the asset based sales charge alternative (Class C).
Class A shares are subject to a servicing fee but are not subject to a
distribution fee and, accordingly, such shares are expected to pay
correspondingly higher dividends on a per share basis. However, because
initial sales charges are deducted at the time of purchase, not all of the
purchase payment for Class A shares is invested initially. Class B and Class
C shares might be preferable to investors who wish to have all purchase
payments invested initially, although remaining subject to higher
distribution and servicing fees and, for certain periods, being subject to a
contingent deferred sales charge. An investor who qualifies for an
elimination of the Class A initial sales charge should also consider whether
he or she anticipates redeeming shares in a time period which will subject
such shares to a contingent deferred sales charge as described below. See
"Initial Sales Charge Alternative -- Class A Shares -- Class A Deferred Sales
Charge" below.
Class B:
Class B shares might be preferred by investors who intend to invest in the
Funds for longer periods and who do not intend to purchase shares of
sufficient aggregate value to qualify for sales charge reductions applicable
to Class A shares. Both Class B and Class C shares can be purchased at net
asset value without an initial sales charge. However, unlike Class C shares,
Class B shares convert into Class A shares after the shares have been held
for seven years. After the conversion takes place, the shares will no longer
be subject to a contingent deferred sales charge, and will be subject to the
distribution fees charged for Class A shares which are lower than the
distribution fees charged on either Class B or Class C shares. See "Deferred
Sales Charge Alternative -- Class B Shares" below.
Class C:
Class C shares might be preferred by investors who intend to purchase shares
which are not of sufficient aggregate value to qualify for Class A sales
charges of 1% or less and who wish to have all purchase payments invested
initially. Class C shares are preferable to Class B shares for investors who
intend to maintain their investment for intermediate periods and therefore
may also be preferable for investors who are unsure of the intended length of
their investment. Unlike Class B shares, Class C shares are not subject to a
contingent deferred sales charge after they have been held for one year and
are subject to only a 1% contingent deferred sales charge during the first
year. However, because Class C shares do not convert into Class A shares,
Class B shares are preferable to Class C shares for investors who intend to
maintain their investment in the Funds for long periods. See "Asset Based
Sales Charge Alternative -- Class C Shares" below.
In determining which class of shares to purchase, an investor should always
consider whether any waiver or reduction of a sales charge or a contingent
deferred sales charge is available. See generally "Initial Sales Charge
Alternative -- Class A Shares" and "Waiver of Contingent Deferred Sales Charges"
below.
There is no size limit on purchases of Class A shares. The maximum single
purchase of Class B shares accepted is $249,999. The maximum single purchase of
<PAGE>
46 PIMCO Advisors Funds
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Class C shares accepted is $999,999. The Funds may refuse any order to
purchase shares.
For a description of the Distribution and Servicing Plans and distribution and
servicing fees payable thereunder with respect to Class A, Class B and Class C
shares, see "Distributor and Distribution and Servicing Plans" below.
Waiver of Contingent Deferred Sales Charges
The contingent deferred sales charge applicable to Class A and C shares is
currently waived for (i) any partial or complete redemption in connection
with a distribution without penalty under Section 72(t) of the Internal
Revenue Code of 1986, as amended (the "Code") from a retirement plan,
including a 403(b)(7) plan or an IRA (a) upon attaining age 59-1/2, (b) as
part of a series of substantially equal periodic payments, or (c) in the case
of an employer sponsored retirement plan, upon separation from service and
attaining age 55; (ii) any partial or complete redemption in connection with
a qualifying loan or hardship withdrawal from an employer sponsored
retirement plan; (iii) any complete redemption in connection with a
distribution from a qualified employer retirement plan in connection with
termination of employment or termination of the employer's plan and the
transfer to another employer's plan or to an IRA; (iv) any partial or
complete redemption following death or disability (as defined in the Code) of
a shareholder (including one who owns the shares as joint tenant with his or
her spouse) from an account in which the deceased or disabled is named,
provided the redemption is requested within one year of the death or initial
determination of disability; (v) any redemption resulting from a return of an
excess contribution to a qualified employer retirement plan or an IRA; or
(vi) certain periodic redemptions under an Automatic Withdrawal Plan from an
account meeting certain minimum balance requirements, in amounts meeting
certain maximums established from time to time by the Distributor; (vii)
redemptions by Trustees, officers and employees of the Trust and by
directors, officers and employees of the Distributor and the Manager; (viii)
redemptions effected pursuant to a Fund's right to involuntarily redeem a
shareholder's account if the aggregate net asset value of shares held in such
shareholder's account is less than a minimum account size specified in such
Fund's prospectus; (ix) involuntary redemptions caused by operation of law;
(x) redemption of shares of any Fund that is combined with another Fund,
investment company, or personal holding company by virtue of a merger,
acquisition or other similar reorganization transaction; (xi) redemptions by
a shareholder who is a participant making periodic purchases of not less than
$50 through certain employer sponsored savings plans that are clients of a
broker-dealer with which the Distributor has an agreement with respect to
such purchases; or (xii) redemptions effected by trustees or other
fiduciaries who have purchased shares for employer sponsored plans, the
administrator for which has an agreement with the Distributor with respect to
such purchases.
The contingent deferred sales charge applicable to Class B shares is currently
waived for any partial or complete redemption (a) in connection with a
distribution without penalty under Section 72(t) of the Code from a 403(b)(7)
plan or an IRA upon attaining age 59-1/2 and (b) following death or disability
(as defined in the Code) of a shareholder (including one who owns the shares as
joint tenant with his or her spouse) from an account in which the deceased or
disabled is named, provided the redemption is requested within one year of the
death or initial determination of disability.
The Distributor may require documentation prior to waiver of the contingent
deferred sales charge for any class including distribution letters,
certification by plan administrators, applicable tax forms, death certificates,
physicians certificates, etc.
Initial Sales Charge Alternative -- Class A Shares
Class A shares are sold at a public offering price equal to their net asset
value per share plus a sales charge, as set forth below. As indicated below
under "Class A Deferred Sales Charge," certain investors that purchase
$1,000,000 or more of any Fund's Class A shares (and thus pay no initial
sales charge) may be subject to a 1% contingent deferred sales charge if they
redeem such shares during the first 18 months after their purchase.
Equity Income Fund, Value Fund, Growth Fund, Target Fund, Discovery Fund,
Opportunity Fund, Innovation Fund, International Fund, Emerging Markets Fund
and Precious Metals Fund
Discount or
Sales Commission
Sales Charge to Dealers
Charge As % of As % of
As % of the Public Public
Amount of Net Amount Offering Offering
Purchase Invested Price Price
- ---------------- ---------- ----------- -----------
$0-$49,999 5.82% 5.50% 4.75%
$50,000-$99,999 4.71% 4.50% 3.75%
$100,000-$249,999 3.90% 3.75% 3.00%
$250,000-$499,999 2.56% 2.50% 2.00%
$500,000-$999,999 1.78% 1.75% 1.50%
$1,000,000+ 0.00%(1) 0.00%(1) 0.75%
<PAGE>
PIMCO Advisors Funds 47
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Global Income Fund, High Income Fund, Total Return Income Fund,
Tax Exempt Fund and U.S. Government Fund
Discount or
Sales Commission
Sales Charge to Dealers
Charge As % of As % of
As % of the Public Public
Amount of Net Amount Offering Offering
Purchase Invested Price Price
- ---------------- ---------- ----------- -----------
$0-$49,999 4.99% 4.75% 4.00%
$50,000-$99,999 4.44% 4.25% 3.50%
$100,000-$249,999 3.90% 3.75% 3.00%
$250,000-$499,999 2.56% 2.50% 2.00%
$500,000-$999,999 1.78% 1.75% 1.50%
$1,000,000+ 0.00%(1) 0.00%(1) 0.50%
Short-lntermediate Fund
Discount or
Sales Commission
Sales Charge to Dealers
Charge As % of As % of
As % of the Public Public
Amount of Net Amount Offering Offering
Purchase Invested Price Price
- ---------------- ---------- ----------- -----------
$0-$49,999 3.09% 3.00% 2.50%
$50,000-$99,999 2.56% 2.50% 2.00%
$100,000-$249,999 2.04% 2.00% 1.50%
$250,000-$499,999 1.52% 1.50% 1.25%
$500,000-$999,999 1.27% 1.25% 1.00%
$1,000,000+ 0.00%(1) 0.00%(1) 0.50%
(1) As shown, investors that purchase more than $1,000,000 of any Fund's Class A
shares will not pay any initial sales charge on such purchase. However,
except with regard to purchases of Class A shares of the Money Market Fund,
purchasers of $1,000,000 or more of Class A shares (other than those
purchasers described below under "Sales at Net Asset Value") will be subject
to a contingent deferred sales charge of 1% if such shares are redeemed
during the first 18 months after such shares are purchased unless such
purchaser is eligible for a waiver of the contingent deferred sales charge
as described under "Waiver of Contingent Deferred Sales Charge" above. See
"Class A Deferred Sales Charge" below.
Except as described below, the Distributor will pay a commission to dealers
who sell amounts of $1,000,000 or more of Class A shares of each of the
Equity Funds, according to the following schedule: 0.75% of the first
$2,000,000; 0.50% of amounts from $2,000,001 to $5,000,000 and 0.25% of
amounts over $5,000,000, and for Class A shares of each of the Income Funds
except for the Money Market Fund for which no payment is made, according to
the following schedule: 0.50% of the first $2,000,000; and 0.25% of amounts
over $2,000,000.
The Distributor will pay a commission of 0.25% to dealers in connection with
any size purchase of Class A shares by trustees or other fiduciaries
purchasing such shares for certain employer sponsored plans that have at
least 300 eligible participants or at least $3 million in total plan assets
and thus are eligible to purchase Class A shares without any initial sales
charge as described below under "Sales at Net Asset Value." The Distributor
will not pay any commission to dealers upon the sale of Class A shares to
any of the other purchasers described below under "Sales at Net Asset
Value."
No initial sales charge applies to purchases of Class A shares of the Money
Market Fund. However, if a shareholder exchanges Class A shares of the Money
Market Fund, for which no sales load was paid at the time of purchase, for Class
A shares of any other Fund, the sales charge shown above for the other Fund
applies at the time of the exchange.
Each Fund receives the entire net asset value of its Class A shares purchased by
investors. The Distributor receives the sales charge shown above less any
applicable discount or commission "reallowed" to participating brokers in the
amounts indicated in the table above. The Distributor may, however, elect to
reallow the entire sales charge to participating brokers for all sales with
respect to which orders are placed with the Distributor for any particular Fund
during a particular period. A participating broker who receives a reallowance of
90% or more of the sales charge may be deemed to be an "underwriter" under the
Securities Act of 1933. During such periods as may from time to time be
designated by the Distributor, the Distributor will pay an additional amount of
up to 0.50% of the purchase price on sales of Class A shares of all or selected
Funds purchased to each participating broker which obtains purchase orders in
amounts exceeding thresholds established from time to time by the Distributor.
Shares issued pursuant to the automatic reinvestment of income dividends or
capital gains distributions are issued at net asset value and are not subject to
any sales charges.
Under the circumstances described below, investors may be entitled to pay
reduced sales charges for Class A shares.
Combined Purchase Privilege
Investors may qualify for a reduced sales charge by combining purchases of
the Class A shares of one or more Funds (other than the Money Market Fund)
into a "single purchase," if the resulting purchase totals at least $50,000.
The term single purchase refers to: (i) a single purchase by an individual,
or concurrent purchases, which in the aggregate are at least equal to the
prescribed amounts, by an individual, his spouse and their children under the
age of 21 years purchasing Class A shares of the Funds for his, her or their
own account; (ii) a single purchase by a trustee or other fiduciary
purchasing shares for a single trust, estate or fiduciary account although
more than one beneficiary is involved; or (iii) a single purchase for the
employee benefit plans of a single employer. For further information, consult
the Statement of Additional Information or call the Distributor at
800-426-0107 or your broker.
Cumulative Quantity Discount (Right of Accumulation)
A purchase of additional Class A shares of any Fund (other than the Money
Market Fund) may qualify for a Cumulative Quantity Discount at the rate
applicable to the discount bracket obtained by adding:
(i) the investor's current purchase;
(ii) the value (at the close of business on the day of the current
purchase) of all Class A shares of any Fund (other than the Money
Market Fund) held by the investor computed at the maximum offering
price; and
(iii) the value of all shares described in paragraph (ii) owned by
another shareholder eligible to be combined with the investor's
purchase into a "single purchase" as defined above under "Combined
Purchase Privilege."
<PAGE>
48 PIMCO Advisors Funds
- --------------------------------------------------------------------------------
For example, if you owned Class A shares of the High Income Fund worth $25,000
at the current maximum offering price and wished to purchase Class A shares of
the Growth Fund worth an additional $30,000, the sales charge for the $30,000
purchase would be at the 4.50% rate applicable to a single $55,000 purchase of
shares of the Growth Fund, rather than the 5.50% rate.
An investor or participating broker must notify the Distributor whenever a
quantity discount or reduced sales charge is applicable to a purchase and must
provide the Distributor with sufficient information at the time of purchase to
verify that each purchase qualifies for the privilege or discount. Upon such
notification, the investor will receive the lowest applicable sales charge. The
quantity discounts described above may be modified or terminated at any time.
Letter of Intent
An investor may also obtain a reduced sales charge by means of a written Letter
of Intent, which expresses an intention to invest not less than $50,000 within a
period of 13 months in Class A shares of any Fund(s) (other than the Money
Market Fund). Each purchase of shares under a Letter of Intent will be made at
the public offering price or prices applicable at the time of such purchase to a
single transaction of the dollar amount indicated in the Letter. At the
investor's option, a Letter of Intent may include purchases of Class A shares of
any Fund (other than the Money Market Fund) made not more than 90 days prior to
the date the Letter of Intent is signed; however, the 13-month period during
which the Letter is in effect will begin on the date of the earliest purchase to
be included and the sales charge on any purchases prior to the Letter will not
be adjusted.
Investors qualifying for the Combined Purchase Privilege described above may
purchase shares of the Funds under a single Letter of Intent. For example, if at
the time you sign a Letter of Intent to invest at least $100,000 in Class A
shares of any Fund (other than the Money Market Fund), you and your spouse each
purchase Class A shares of the Growth Fund worth $30,000 (for a total of
$60,000), it will only be necessary to invest a total of $40,000 during the
following 13 months in Class A shares of any of the Funds (other than the Money
Market Fund) to qualify for the 3.75% sales charge on the total amount being
invested (the sales charge applicable to an investment of $100,000 in any of the
Funds other than the Money Market and Short-lntermediate Funds).
A Letter of Intent is not a binding obligation to purchase the full amount
indicated. The minimum initial investment under a Letter of Intent is 5% of such
amount. Shares purchased with the first 5% of such amount will be held in escrow
(while remaining registered in your name) to secure payment of the higher sales
charge applicable to the shares actually purchased in the event the full
intended amount is not purchased. If the full amount indicated is not purchased,
a sufficient amount of such escrowed shares will be involuntarily redeemed to
pay the additional sales charge applicable to the amount actually purchased, if
necessary. Dividends on escrowed shares, whether paid in cash or reinvested in
additional Fund shares, are not subject to escrow. When the full amount
indicated has been purchased, the escrow will be released.
If you wish to enter into a Letter of Intent in conjunction with your initial
investment in Class A shares of a Fund, you should complete the appropriate
portion of the Account Application included with this Prospectus. If you are a
current Class A shareholder desiring to do so you can obtain a form of Letter of
Intent by contacting the Distributor at 800-426-0107 or any broker participating
in this program.
Reinstatement Privilege
A Class A shareholder who has caused any or all of his shares (other than Money
Market Fund shares that were not acquired by exchanging Class A shares of
another Fund) to be redeemed may reinvest all or any portion of the redemption
proceeds in Class A shares of any Fund at net asset value without any sales
charge, provided that such reinvestment is made within 90 calendar days after
the redemption or repurchase date. Shares are sold to a reinvesting shareholder
at the net asset value next determined as described above. A reinstatement
pursuant to this privilege will not cancel the redemption transaction and,
consequently, any gain or loss so realized may be recognized for federal tax
purposes except that no loss may be recognized to the extent that the proceeds
are reinvested in shares of the same Fund within 30 days. The reinstatement
privilege may be utilized by a shareholder only once, irrespective of the number
of shares redeemed, except that the privilege may be utilized without limit in
connection with transactions whose sole purpose is to transfer a shareholder's
interest in a
<PAGE>
PIMCO Advisors Funds 49
- --------------------------------------------------------------------------------
Fund to his Individual Retirement Account or other qualified retirement plan
account. An investor may exercise the reinstatement privilege by written
request sent to the Distributor or to the investor's broker.
Sales at Net Asset Value
Each Fund may sell its Class A shares at net asset value without a sales
charge to a) current or retired officers, trustees, directors or employees of
the Trust, the Manager or the Distributor, to a spouse or child of such
person or to any trust, profitsharing or pension plan for the benefit of any
such person, b) current or retired trustees of Cash Accumulation Trust,
another registered investment company for which the Manager acts as
investment adviser, c) current registered representatives and other full-time
employees of participating brokers or such persons' spouses, d) trustees or
other fiduciaries purchasing shares for certain employer sponsored plans that
have at least 300 eligible participants or at least $3 million in total plan
assets, e) trustees or other fiduciaries purchasing shares for certain
employer-sponsored plans, the trustee, fiduciary or administrator for which
has an agreement with the Distributor with respect to such purchases, f)
participants investing through accounts known as "wrap accounts" established
with brokers or dealers approved by the Distributor where such brokers or
dealers are paid a single, inclusive fee for brokerage and investment
management services, and g) broker-dealers or registered investment advisers
affiliated with such broker-dealers with which the Distributor has an
agreement for the use of PIMCO Advisors Funds in particular investment
products for which a fee is charged. As described above, the Distributor will
not pay any initial commission to dealers upon the sale of Class A shares to
the purchasers described in this paragraph except for sales to purchasers
described under d) in this paragraph.
In addition, the PIMCO Advisors U.S. Government Fund may also (subject to
appropriate documentation) sell its Class A shares without a sales charge where
the amount invested represents proceeds of a redemption from a mutual fund not
distributed by PIMCO Advisors Distribution Company if such redemption occurred
no more than 60 days prior to the purchase of the Fund's Class A shares and the
shareholder either (i) paid an initial sales charge on the redeemed shares (or
was entitled to a waiver of the initial sales charge) or (ii) was at some time
subject to a deferred sales charge with respect to the redemption proceeds,
whether or not a deferred sales charge was in fact paid.
Class A Deferred Sales Charge
For all Funds except the Money Market Fund, investors who purchase $1,000,000
or more of Class A shares (and, thus, purchase such shares without any
initial sales charge) may be subject to a 1% contingent deferred sales charge
(the "Class A CDSC") if such shares are redeemed within 18 months of their
purchase. The Class A CDSC does not apply to investors purchasing $1,000,000
or more of any Fund's Class A shares if such investors are otherwise eligible
to purchase Class A shares without any sales charge because they are
described under "Sales at Net Asset Value" above.
For purchases subject to the Class A CDSC, a 1% CDSC will apply for any
redemption of such Class A shares that occurs within 18 months of their
purchase. No CDSC will be imposed if the shares redeemed have been acquired
through the reinvestment of dividends or capital gains distributions or if the
amount redeemed is derived from increases in the value of the account above the
amount of purchase payments subject to the CDSC. In determining whether a CDSC
is payable, it is assumed that Class A shares acquired through the reinvestment
of dividends and distributions are redeemed first, and thereafter that Class A
shares that have been held by an investor for the longest period of time are
redeemed first.
The Class A CDSC does not apply to Class A shares of the Money Market Fund but,
if Money Market Fund Class A shares are purchased in a transaction that, for any
other Fund, would be subject to the CDSC (i.e., a purchase of $1,000,000 or
more) and are subsequently exchanged for Class A shares of any other Fund, a
Class A CDSC will apply to the shares of the Fund acquired by exchange for a
period of 18 months from the date of the exchange.
The Class A CDSC is currently waived in connection with certain redemptions as
described above under "Alternative Purchase Arrangements -- Waiver of Contingent
Deferred Sales Charge."
For more information about the Class A CDSC, call the Distributor at
800-426-0107.
Participating Brokers
Investment dealers and other firms provide varying arrangements for their
clients to purchase and redeem Fund shares. Some may establish higher minimum
investment requirements than set forth above. Firms may arrange with their
clients for other investment or administrative services. Such firms may
independently establish and charge additional amounts to their clients for such
services, which charges would reduce clients' return. Firms also may hold Fund
shares in nominee or street name as agent for and on behalf of their customers.
In such instances, the Trust's transfer agent will have no information with
respect to or control over accounts of specific shareholders. Such shareholders
may obtain access to their accounts and information about their accounts only
from their broker. In addition, certain privileges with respect to the purchase
and redemption of shares or the reinvestment of dividends may not be available
through such firms. Some firms may participate in a program allowing them access
to their clients' accounts for servicing including, without limitation,
transfers of registration and dividend payee changes; and may perform functions
such as generation of confirmation statements and disbursement of cash
dividends. This Prospectus should be read in connection with such firms'
material regarding their fees and services.
<PAGE>
50 PIMCO Advisors Funds
- --------------------------------------------------------------------------------
Deferred Sales Charge Alternative--
Class B Shares
Class B shares are sold at their current net asset value without any initial
sales charge. The full amount of an investor's purchase payment will be
invested in shares of the Fund(s) selected. A contingent deferred sales
charge ("CDSC") will be imposed on Class B shares (including Money Market
Fund shares) if an investor redeems an amount which causes the current value
of the investor's account for a Fund to fall below the total dollar amount of
purchase payments subject to the CDSC, except that no CDSC is imposed if the
shares redeemed have been acquired through the reinvestment of dividends or
capital gains distributions or if the amount redeemed is derived from
increases in the value of the account above the amount of purchase payments
subject to the CDSC.
Initial purchases of Class B shares of the Short-Intermediate Fund are suitable
only as a temporary investment for investors who expect to exchange such shares
into Class B shares of another Fund within a short time after purchase.
Investors who expect to hold shares of the Short-Intermediate Fund for longer
periods should purchase Class A or Class C shares.
Class B shares of the Money Market Fund are not offered for initial purchases
but may be obtained through exchanges of Class B shares of other Funds. See
"Exchange Privilege" below.
Class B shares are not available for purchase by employer sponsored retirement
plans.
Whether a CDSC is imposed and the amount of the CDSC will depend on the number
of years since the investor made a purchase payment from which an amount is
being redeemed. Purchases are subject to the CDSC according to the following
schedule:
Year Since Purchase Percentage Contingent
Payment Was Made Deferred Sales Charge
- ---------------------- ------------------------
First 5
Second 4
Third 3
Fourth 3
Fifth 2
Sixth 1
Seventh 0
Eighth *
*Class B shares convert into Class A shares as
described below.
In determining whether a CDSC is payable, it is assumed that the purchase
payment from which a redemption is made is the earliest purchase payment from
which a redemption or exchange has not already been fully effected.
In determining whether an amount is available for redemption without incurring a
CDSC, the purchase payments made for all Class B shares in the shareholder's
account with the particular Fund are aggregated, and the current value of all
such shares is aggregated. Any CDSC imposed on a redemption of Class B shares is
either paid to the Distributor or directly to a third party at the direction of
the Distributor.
Class B shares are subject to higher distribution fees than Class A shares for a
fixed period after their purchase, after which they automatically convert to
Class A shares and are no longer subject to such higher distribution fees. Class
B shares of each Fund automatically convert into Class A shares after they have
been held for seven years.
For sales of Class B shares made and services rendered to Class B shareholders,
the Distributor intends to make payments to participating brokers, at the time a
shareholder purchases Class B shares, of 4% of the purchase amount for each of
the Funds. During such periods as may from time to time be designated by the
Distributor, the Distributor will pay selected participating brokers an
additional amount of up to 0.50% of the purchase price on sales of Class B
shares of all or selected Funds purchased to each participating broker which
obtains purchase orders in amounts exceeding thresholds established from time to
time by the Distributor.
The Class B CDSC is currently waived in connection with certain redemptions as
described above under "Alternative Purchase Arrangements -- Waiver of Contingent
Deferred Sales Charge."
For more information about the Class B CDSC, call the Distributor at
800-426-0107.
<PAGE>
PIMCO Advisors Funds 51
- --------------------------------------------------------------------------------
Asset Based Sales Charge Alternative --
Class C Shares
Class C shares are sold at their current net asset value without any initial
sales charge. A CDSC is imposed on Class C shares (including Money Market
Fund shares) if an investor redeems an amount which causes the current value
of the investor's account for a Fund to fall below the total dollar amount of
purchase payments subject to the CDSC, except that no CDSC is imposed if the
shares redeemed have been acquired through the reinvestment of dividends or
capital gains distributions or if the amount redeemed is derived from
increases in the value of the account above the amount of purchase payments
subject to the CDSC. All of an investor's purchase payments are invested in
shares of the Fund(s) selected.
Whether a CDSC is imposed and the amount of the CDSC will depend on the
number of years since the investor made a purchase payment from which an
amount is being redeemed and the date such purchase payment was made.
Purchases are subject to the CDSC according to the following schedules:
Purchase payments made on or after July 1, 1991:
Percentage
Year Since Contingent
Purchase Deferred Sales
Payment Was Made Charge
- ------------------ --------------------
First 1
Thereafter 0
Purchase payments made before July 1, 1991:
Year Since Purchase Percentage Contingent
Payment Was Made Deferred Sales Charge
- ----------------------- ------------------------
Fifth 2
Sixth and following O
In determining whether a CDSC is payable, it is assumed that the purchase
payment from which the redemption is made is the earliest purchase payment (from
which a redemption or exchange has not already been effected). If the earliest
purchase from which a redemption has not yet been effected was made on or after
July 1, 1991 and within 12 months before the redemption, then a CDSC at the rate
of 1% will be imposed. If the earliest purchase payment from which a redemption
has not yet been effected was made before July 1, 1991, then a CDSC of 2% may be
imposed, in accordance with the table above.
The following examples will illustrate the operation of the CDSC:
(1) Assume that an individual opens an account and makes a purchase payment of
$10,000 after July 1, 1991 for Class C shares of a Fund and that six months
later the value of the investor's account for that Fund has grown through
investment performance and reinvestment of distributions to $11,000. The
investor then may redeem up to $1,000 from that Fund ($11,000 minus $10,000)
without incurring a CDSC. If the investor should redeem $3,000, a CDSC would
be imposed on $2,000 of the redemption (the amount by which the investor's
account for the Fund was reduced below the amount of the purchase payment).
At the rate of 1%, the CDSC would be $20.
(2) Assume that the same individual in example (1) above had, in addition to the
purchase payment on or after July 1, 1991, also made a purchase payment of
$10,000 before July 1, 1991, and 41/2 years before the redemption. Assume
that the value of the $20,000 combined investment has grown to $21,000. As
in example (1) above, the investor may redeem $1,000 without incurring a
CDSC. If the investor redeemed $3,000, the $2,000 subject to a CDSC would be
assumed to have come from the purchase payment made before July 1, 1991,
which is in its fifth year since purchase. Therefore, the charge would be at
the 2% rate, according to the CDSC schedule which was in effect at the time
of that purchase payment. The total charge would be $40.
In determining whether an amount is available for redemption without incurring a
CDSC, the purchase payments made for all Class C shares in the shareholder's
account with the particular Fund are aggregated, and the current value of all
such shares is aggregated. Any sales charges imposed on redemptions are paid to
the Distributor.
Unlike Class B shares, Class C shares do not automatically convert to any other
class of shares of the Funds.
Except as described below, for sales of Class C shares made and services
rendered to Class C shareholders, the Distributor expects to make payments to
participating brokers, at the time the shareholder purchases Class C shares, of
1.00% (representing 0.75% distribution fees and 0.25% servicing fees) of the
purchase amount for all Funds except the Short-Intermediate Fund for which the
expected payment is 0.75% (representing 0.50% distribution fees and 0.25%
servicing fees) and the Money Market Fund for which no payment is expected to be
made. For sales of Class C shares made to participants making periodic purchases
of not less than $50 through certain employer sponsored savings plans which are
clients of a broker-dealer with which the Distributor has an agreement with
respect to such purchases, no payments are made at the time of purchase. At the
time shares of the Money Market Fund on which no commission has been paid are
exchanged for shares of another Fund, the Distributor intends to make the
payments to participating brokers that are described above applicable to that
other Fund. During such periods as may from time to time be designated by the
Distributor, the Distributor will pay an additional amount of up to 0.50% of the
purchase price on sales of Class C shares of all or selected Funds purchased to
each participating broker which obtains purchase orders in amounts exceeding
thresholds established from time to time by the Distributor.
The Class C CDSC is currently waived in connection with certain
redemptions as described above under "Alternative Purchase Arrangements --
Waiver of Contingent Deferred Sales Charge."
For more information about the Class C CDSC, contact the Distributor at
800-426-0107.
<PAGE>
52 PIMCO Advisors Funds
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EXCHANGE PRIVILEGE
Except with respect to exchanges for shares of the Opportunity Fund which
currently are subject to certain restrictions, a shareholder may exchange
Class A, Class B and Class C shares of any Fund for the same Class of shares
of any other Fund in an account with identical registration on the basis of
their respective net asset values (except that a sales charge will apply on
exchanges of Class A shares of the Money Market Fund on which no sales load
was paid at the time of purchase). For information on restrictions applicable
to exchanges of shares for shares of the Opportunity Fund, see "How To Buy
Shares -- Restrictions on Sales of and Exchanges for Shares of the
Opportunity Fund" above. Class A shares of the Money Market Fund may be
exchanged for Class A shares of any other Fund, but the usual sales charges
applicable to investments in such other Fund apply on shares for which no
sales load was paid at the time of purchase. There are currently no exchange
fees or charges. Except with respect to tax-qualified programs and exchanges
effected through the PIMCO Advisors Auto Exchange plan, exchanges are subject
to the $250 minimum initial purchase requirement for each Fund. An exchange
will constitute a taxable sale for federal income tax purposes.
Investors who maintain their account with the Distributor may exchange shares
by a written exchange request sent to PIMCO Advisors Distribution Company,
P.O. Box 5866, Denver, CO 80217-5866 or, unless the investor has specifically
declined telephone exchange privileges on the Account Application or elected
in writing not to utilize telephone exchanges, by a telephone request to the
Transfer Agent at 800-852-8457. The Trust will employ reasonable procedures
to confirm that instructions communicated by telephone are genuine, and may
be liable for any losses due to unauthorized or fraudulent instructions if it
fails to employ such procedures. The Trust will require a form of personal
identification prior to acting on a caller's telephone instructions, will
provide written confirmations of such transactions and will record telephone
instructions. Exchange forms are available from the Distributor at
800-426-0107 and may be used if there will be no change in the registered
name or address of the shareholder. Changes in registration information or
account privileges may be made in writing to the Transfer Agent, Shareholder
Services, Inc., P.O. Box 5866, Denver, Colorado 80217-5866, or by use of
forms which are available from the Distributor. A signature guarantee is
required. See "Signature Guarantee" under "General." Telephone exchanges may
be made between 9:00 a.m. and the close of regular trading on the New York
Stock Exchange (normally 4:00 p.m. Eastern time) on any day the Exchange is
open (generally weekdays other than normal holidays). The Trust reserves the
right to refuse exchange purchases if, in the judgment of the Manager, the
purchase would adversely affect the Fund and its shareholders. In particular,
a pattern of exchanges characteristic of "market-timing" strategies may be
deemed by the Manager to be detrimental to the Fund. Although the Trust has
no current intention of terminating or modifying the exchange privilege, it
reserves the right to do so at any time. Except as otherwise permitted by SEC
regulations, the Trust will give 60 days' advance notice to shareholders of
any termination or material modification of the exchange privilege. For
further information about exchange privileges, contact your participating
broker or call the Transfer Agent at 800-426-0107.
With respect to Class B and Class C shares, or Class A shares subject to a
CDSC, if less than all of an investment is exchanged out of a Fund, any
portion of the investment attributable to capital appreciation and/or
reinvested dividends or capital gains distributions will be exchanged first,
and thereafter any portions exchanged will be from the earliest investment
made in the Fund from which the exchange was made. Share-holders should take
into account the effect of any exchange on the applicability of any CDSC that
may be imposed upon any subsequent redemption. Although the Class A CDSC does
not apply to Class A shares of the Money Market Fund, if Money Market Fund
Class A shares purchased in a transaction that would other-wise be subject
to the Class A CDSC (i.e. most purchases of $1,000,000 or more) are
subsequently exchanged for Class A shares of any other Fund, a Class
<PAGE>
PIMCO Advisors Funds 53
- --------------------------------------------------------------------------------
A CDSC will apply to the shares of the Fund acquired by exchange for a period
of 18 months from the date of the exchange. See "Initial Sales Charge
Alternative -- Class A Shares -- Class A Deferred Sales Charge" above.
Auto Exchange
Investors may also select the PIMCO Advisors Auto Exchange plan which
establishes automatic periodic exchanges. For further information on
automatic exchanges see "PIMCO Advisors Auto Exchange" under "How to Buy
Shares."
HOW TO REDEEM
Shares may be redeemed through a participating broker, by telephone, by
submitting a written redemption request directly to the Transfer Agent (for
non-broker accounts) or through an Automatic Withdrawal Plan or PIMCO
Advisors Fund Link. In the event a shareholder redeems all of his or her
shares of the Opportunity Fund after December 31, 1992, or all participants
in certain self-directed qualified benefit plans redeem their shares of the
Opportunity Fund after March 31, 1993, such shareholder and the participants
in such plans will no longer be eligible to purchase shares of the
Opportunity Fund. See "How to Buy Shares -- Restrictions on Sales of and
Exchanges for Shares of the Opportunity Fund."
A CDSC may apply to a redemption of Class A, Class B or Class C shares. See
"Alternative Purchase Arrangements" above. Shares are redeemed at their net
asset value next determined after a proper redemption request has been
received, less any applicable CDSC. There is no charge by the Distributor
(other than applicable CDSC) with respect to redemption; however, a
participating broker who processes a redemption for an investor may charge
customary commissions for its services. Dealers and other financial services
firms are obligated to transmit orders promptly. Requests for redemption
received by dealers or other firms prior to the close of regular trading on
the New York Stock Exchange (normally 4:00 p.m. Eastern time) on a regular
business day and received by the Distributor prior to the close of the
Distributor's business day will be confirmed at the net asset value effective
as of the closing of the Exchange on that day, less any applicable CDSC.
Direct Redemption
A shareholder's original Account Application permits the shareholder to
redeem by written request and by telephone (unless the shareholder
specifically elects not to utilize telephone redemptions) and to elect one or
more of the additional redemption procedures described below. A shareholder
may change the instructions indicated on his original Account Application, or
may request additional redemption options, only by transmitting a written
direction to the Transfer Agent. Requests to institute or change any of the
additional redemption procedures will require a signature guarantee.
Redemption proceeds will normally be mailed to the redeeming shareholder within
seven days or, in the case of wire transfer or Fund Link redemptions, sent to
the designated bank account within one business day. Fund Link redemptions may
be received by the bank on the second or third business day. In cases where
shares have recently been purchased by personal check, redemption proceeds may
be withheld until the check has been collected, which may take up to 15 days. To
avoid such withholding, investors should purchase shares by certified or bank
check or by wire transfer.
Written Requests
(Does not apply to shares held in broker "street name" accounts.) To redeem
shares in writing (whether or not represented by certificates), a shareholder
must send the following items to the Fund's Transfer Agent, Shareholder
Services, Inc., P.O. Box 5866, Denver, Colorado 80217-5866: (1) a written
request for redemption signed by all registered owners exactly as the account
is registered on the Transfer Agent's records, including fiduciary titles, if
any, and specifying the account number and the dollar amount or number of
shares to be redeemed; (2) for certain redemptions described below, a
guarantee of all signatures on the written request or on the share
certificate or accompanying stock power, if required, as described under
"Signature Guarantee"; (3) any share certificates issued for any of the
shares to be redeemed (see "Certificated Shares" below); and (4) any
additional documents which may be required by the Transfer Agent for
redemption by corporations, partnerships or other organizations, executors,
administrators, trustees, custodians or guardians, or if the redemption is
requested by anyone other than the shareholder(s) of record. Transfers of
shares are subject to the same requirements. A signature guarantee is not
required for redemptions of $50,000 or less, requested by and payable to all
shareholders of record for the account, to be sent to the address of record
for that account. To avoid delay in redemption or transfer, shareholders
having any questions about these requirements should contact the Transfer
Agent in writing or by calling 1-800-426-0107 before submitting a request.
REDEMPTION OR TRANSFER REQUESTS WILL NOT BE HONORED UNTIL ALL REQUIRED
DOCUMENTS IN THE PROPER FORM HAVE BEEN RECEIVED BY THE TRANSFER AGENT.
If the proceeds of the redemption (i) exceed $50,000, (ii) are to be paid to a
person other than the record owner, (iii) are to be sent to an address other
than the
<PAGE>
54 PIMCO Advisors Funds
- --------------------------------------------------------------------------------
address of the account on the Transfer Agent's records, or (iv) are to be
paid to a corporation, partnership, trust or fiduciary, the signature(s) on
the redemption request and on the certificates, if any, or stock power must
be guaranteed as described above, except that the Distributor may waive the
signature guarantee requirement for redemptions up to $2,500 by a trustee of
a qualified retirement plan, the administrator for which has an agreement
with the Distributor.
Telephone Redemptions
(Does not apply to shares held in broker "street name" accounts.) The Trust
accepts telephone requests for redemption of uncertificated shares for
amounts up to $50,000 within any 7 calendar day period, except for investors
who have specifically declined telephone redemption privileges on the Account
Application or elected in writing not to utilize telephone redemptions. The
proceeds of a telephone redemption will be sent to the record shareholder at
his record address. Changes in account information must be made in a written
authorization with a signature guarantee. See "Signature Guarantee" under
"General." Telephone redemptions will not be accepted during the 30-day
period following any change in an account's record address.
By completing an Account Application, an investor agrees that the Trust, the
Distributor and the Transfer Agent shall not be liable for any loss incurred by
the investor by reason of the Trust accepting unauthorized telephone redemption
requests for his account if the Trust reasonably believes the instructions to be
genuine. Thus, shareholders risk possible losses in the event of a telephone
redemption not authorized by them. The Trust may accept telephone redemption
instructions from any person identifying himself as the owner of an account or
the owner's broker where the owner has not declined in writing to utilize this
service. The Trust will employ reasonable procedures to confirm that
instructions communicated by telephone are genuine, and may be liable for any
losses due to unauthorized or fraudulent instructions if it fails to employ such
procedures. The Trust will require a form of personal identification prior to
acting on a caller's telephone instructions, will provide written confirmations
of such transactions and will record telephone instructions.
A shareholder making a telephone redemption should call the Transfer Agent at
800-852-8457 and state (i) the name of the shareholder as it appears on the
Transfer Agent's records, (ii) his account number with the Trust, (iii) the
amount to be withdrawn and (iv) the name of the person requesting the
redemption. Usually the proceeds are sent to the investor on the next Trust
business day after the redemption is effected, provided the redemption request
is received prior to the close of regular trading on the New York Stock Exchange
(normally 4:00 p.m. Eastern time) that day. If the redemption request is
received after the closing of the Exchange, the redemption is effected on the
following Trust business day at that day's net asset value and the proceeds are
usually sent to the investor on the second following Trust business day. The
Trust reserves the right to terminate or modify the telephone redemption service
at any time. During times of severe disruptions in the securities markets, the
volume of calls may make it difficult to redeem by telephone, in which case a
shareholder may wish to send a written request for redemption as described under
"Written Requests" above. Telephone communications may be recorded by the
Distributor or the Transfer Agent.
Fund Link Redemptions
(Does not apply to shares held in broker "street name" accounts.) If a
shareholder has established Fund Link, the shareholder may redeem shares by
telephone and have the redemption proceeds sent to a designated account at a
financial institution. Fund Link is normally established within 45 days of
receipt of the Application by the Transfer Agent. To use Fund Link for
redemptions, call the Transfer Agent at 800-852-8457. Subject to the
limitations set forth above under "Telephone Redemptions," the Distributor,
the Trust and the Transfer Agent may rely on instructions by any registered
owner believed to be genuine and will not be responsible to any shareholder
for any loss, damage or expense arising out of such instructions. Requests
received by the Transfer Agent prior to the close of regular trading on the
New York Stock Exchange (normally 4:00 p.m. Eastern time) on a business day
will be processed at the net asset value on that day and the proceeds (less
any CDSC) will normally be sent to the designated bank account on the
following business day and received by the bank on the second or third
business day. If the redemption request is received after the close of
regular trading on the Exchange, the redemption is effected on the following
business day. Shares purchased by check may not be redeemed through Fund Link
until such shares have been owned (i.e., paid for) for at least 15 days. Fund
Link may not be used to redeem shares held in certificated form. Changes in
bank account information must be made by completing a new Fund Link
Application, signed by all owners of record of the account, with all
signatures guaranteed. See "Signature Guarantee" under "General." See "PIMCO
Advisors Fund Link" under "How to Buy Shares" for information on establishing
the Fund Link privilege. The Trust may terminate the Fund Link program at any
time without notice to shareholders.
<PAGE>
PIMCO Advisors Funds 55
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Expedited Wire Transfer Redemptions
(Does not apply to shares held in broker "street name" accounts.) If a
shareholder has given authorization for expedited wire redemption, shares can
be redeemed and the proceeds sent by federal wire transfer to a single
previously designated bank account. Requests received by the Trust prior to
the close of the Exchange will result in shares being redeemed that day at
the next determined net asset value (less any CDSC) and normally the proceeds
being sent to the designated bank account the following business day. The
bank must be a member of the Federal Reserve wire system. Delivery of the
proceeds of a wire redemption request may be delayed by the Trust for up to 7
days if the Distributor deems it appropriate under then current market
conditions. Once authorization is on file, the Trust will honor requests by
any person identifying himself as the owner of an account or the owner's
broker by telephone at 800-852-8457 or by written instructions. The Trust
cannot be responsible for the efficiency of the Federal Reserve wire system
or the shareholder's bank. The Trust does not currently charge for wire
transfers. The shareholder is responsible for any charges imposed by the
shareholder's bank. The minimum amount that may be wired is $2,500. The Trust
reserves the right to change this minimum or to terminate the wire redemption
privilege. Shares purchased by check may not be redeemed by wire transfer
until such shares have been owned (i.e., paid for) for at least 15 days.
Expedited wire transfer redemptions may be authorized by completing a form
available from the Distributor. Wire redemptions may not be used to redeem
shares in certificated form. To change the name of the single bank account
designated to receive wire redemption proceeds, it is necessary to send a
written request with signatures guaranteed to PIMCO Advisors Distribution
Company, P.O. Box 5866, Denver, CO 80217-5866. See "Signature Guarantee"
under "General."
Certificated Shares
To redeem shares for which certificates have been issued, the certificates
must be mailed to or deposited with the Trust, duly endorsed or accompanied
by a duly endorsed stock power or by a written request for redemption.
Signatures must be guaranteed as described under "Signature Guarantee."
Further documentation may be requested from institutions or fiduciary
accounts, such as corporations, custodians (e.g., under the Uniform Gifts to
Minors Act), executors, administrators, trustees or guardians ("institutional
account owners"). The redemption request and stock power must be signed
exactly as the account is registered, including indication of any special
capacity of the registered owner.
Automatic Withdrawal Plan
An investor who owns or buys shares of a Fund having a net asset value of
$10,000 or more may open an Automatic Withdrawal plan and have a designated
sum of money (not less than $100 per Fund) paid monthly (or quarterly) to the
investor or another person. Such a plan may be established by completing the
appropriate section of the PIMCO Advisors Funds Account Application or you
may obtain an Automatic Withdrawal plan Application from the Distributor or
your broker. If an Automatic Withdrawal Plan is set up after the account is
established providing for payment to a person other than the record
shareholder or to an address other than the address of record, a signature
guarantee is required. See "Signature Guarantee" under "General." Shares of
either class of any Fund are deposited in a plan account and all
distributions are reinvested in additional shares of that class of the Fund
at net asset value. Shares in a plan account are then redeemed at net asset
value (less any applicable CDSC) to make each withdrawal payment. Any
applicable CDSC may be waived for certain redemptions under an Automatic
Withdrawal plan. See "Waiver of Contingent Deferred Sales Charges" under
"Alternative Purchase Agreements" above.
Redemptions for the purpose of withdrawals are ordinarily made on the business
day preceding the day of payment at that day's closing net asset value and
checks are mailed on the day of payment selected by the shareholder. The
Transfer Agent may accelerate the redemption and check mailing date by one day
to avoid weekend delays. Payment will be made to any person the investor
designates; however, if the shares are registered in the name of a trustee or
other fiduciary, payment will be made only to the fiduciary, except in the case
of a profit-sharing or pension plan where payment will be made to the designee.
As withdrawal payments may include a return of principal, they cannot be
considered a guaranteed annuity or actual yield of income to the investor. The
redemption of shares in connection with an Automatic Withdrawal plan may result
in a gain or loss for tax purposes. Continued withdrawals in excess of income
will reduce and possibly exhaust invested principal, especially in the event of
a market decline. The maintenance of an Automatic Withdrawal plan concurrently
with purchases of additional shares of the Fund would be disadvantageous to the
investor because of the CDSC that may become payable on such withdrawals in the
case of Class A, Class B or Class C shares and because of the initial sales
charge in the case of Class A shares. For this reason, the minimum investment
accepted for a Fund while an Automatic With-
<PAGE>
56 PIMCO Advisors Funds
- --------------------------------------------------------------------------------
drawal plan is in effect for that Fund is $1,000, and an investor may not
maintain a plan for the accumulation of shares of the Fund (other than
through reinvestment of distributions) and an Automatic Withdrawal plan at
the same time. The cost of administering the Automatic Withdrawal plans for
the benefit of those shareholders participating in them is borne by the Trust
as an expense of all shareholders. The Trust or the Distributor may terminate
or change the terms of the Automatic Withdrawal plan at any time.
Because the Automatic Withdrawal plan may involve invasion of capital, investors
should consider carefully with their own financial advisers whether the plan and
the specified amounts to be withdrawn are appropriate in their circumstances.
The Trust and the Distributor make no recommendations or representations in this
regard.
Distributor and Distribution and Servicing Plans
PIMCO Advisors Distribution Company (the "Distributor"), a wholly-owned
subsidiary of the Manager, is the principal underwriter of the Trust's shares
and in that connection makes distribution and servicing payments to
participating brokers in connection with the sale of Class B or Class C
shares and servicing payments for Class A shares. In the case of Class A
shares, participating brokers are compensated based on the amount of the
front-end sales charge reallowed to such brokers, except in cases where Class
A shares are sold without a front-end sales charge. In the case of Class B
shares, participating brokers are compensated by an advance of a sales
commission by the Distributor. In the case of Class C shares, part or all of
the first year's distribution and servicing fee is generally paid at the time
of sale. Pursuant to a Distribution Agreement with the Trust with respect to
each Fund's Class A, Class B and Class C shares, the Distributor bears
various other promotional and sales related expenses, including the cost of
printing and mailing prospectuses to persons other than shareholders.
Class A Servicing Fees
As compensation for services rendered and expenses borne by the Distributor
in connection with personal services rendered to Class A shareholders of the
Trust and the maintenance of Class A shareholder accounts, the Trust pays the
Distributor servicing fees up to the annual rates set forth below (calculated
as a percentage of each Fund's average daily net assets attributable to Class
A shares):
Servicing
Fund Fee
- --------------------------------------------------------------- -----------
Equity Income, Value, Growth, Target, Discovery, Opportunity,
Innovation, International, Emerging Markets, Precious Metals,
Global Income, High Income, Total Return Income, Tax-Exempt,
U.S. Government and Short-Intermediate .25%
Money Market* .10%
*Subject to increase by action of the Trust's Trustees to a rate not
exceeding .25% per annum. Also, subject to increase to a rate not exceeding
0.20% if the Distributor ceases to voluntarily waive any portion of the fee.
Class B Distribution and Servicing Fees:
As compensation for services rendered and expenses borne by the Distributor
in connection with the distribution of Class B shares of each Fund of the
Trust (including the Money Market Fund) and in connection with personal
services rendered to Class B shareholders of the Trust and the maintenance of
Class B shareholder accounts, the Trust pays the Distributor distribution
fees and servicing fees up to the annual rate of .75% and .25% respectively
(calculated as a percentage of each Fund's average daily net assets
attributable to Class B shares).
Class C Distribution and Servicing Fees:
As compensation for services rendered and expenses borne by the Distributor
in connection with the distribution of Class C shares of the Trust and in
connection with personal services rendered to Class C shareholders of the
Trust and the maintenance of Class C shareholder accounts, the Trust pays the
Distributor distribution and servicing fees up to the annual rates set forth
below (calculated as a percentage of each Fund's average daily net assets
attributable to Class C shares):
Distribution Servicing
Fund Fee Fee
- --------------------------------------------------- ------------ -----------
Equity Income, Value, Growth, Target, Discovery,
Opportunity, Innovation, International, Emerging
Markets, Precious Metals, Global Income, High
Income, Total Return Income, Tax Exempt and U.S.
Government .75% .25%
Short-Intermediate* .50% .25%
Money Market* .00% .10%
*Subject to increase by action of the Trust's Trustees to a rate not exceeding
.75% per annum with respect to the distribution fee for the Short Intermediate
and Money Market Funds, and .25% per annum with respect to the servicing fee on
shares of the Money Market Fund. Also, with respect to the servicing fee on
shares of the Money Market Fund, such fee is subject to increase to a rate of
0.20% if the Distributor ceases to voluntarily waive any portion of the fee.
The Class A servicing fees and Class B and C servicing and distribution fees
paid to the Distributor are made under Distribution and Servicing Plans adopted
pursuant to Rule 12b-l under the Investment Company Act of 1940 and are of the
type known as "compensation" plans. This means that, although the Trustees of
the Trust are expected to take into account the expenses of the Distributor and
its predecessors in their periodic review of the Distribution and Servicing
Plans, the fees are payable to compensate the Distributor for services rendered
even if the amount paid exceeds the Distributor's expenses.
<PAGE>
PIMCO Advisors Funds 57
- --------------------------------------------------------------------------------
The distribution fee applicable to Class B and C shares may be spent by the
Distributor on any activities or expenses primarily intended to result in the
sale of Class B or C shares, respectively, including compensation to, and
expenses (including overhead and telephone expenses) of, financial consultants
or other employees of the Distributor or of participating or introducing brokers
who engage in distribution of Class B or C shares, printing of prospectuses and
reports for other than existing Class B or C shareholders, advertising and
preparation, printing and distribution of sales literature. The servicing fee,
applicable to all classes of shares of the Trust, may be spent by the
Distributor on personal services rendered to shareholders of the Trust and the
maintenance of shareholder accounts, including compensation to, and expenses
(including telephone and overhead expenses) of, financial consultants or other
employees of the Distributor or of participating or introducing brokers who aid
in the processing of purchase or redemption requests or the processing of
dividend payments, who provide information periodically to shareholders showing
their positions in a Fund's shares, who forward communications from the Trust to
shareholders, who render ongoing advice concerning the suitability of particular
investment opportunities offered by the Trust in light of the shareholders'
needs, who respond to inquiries from shareholders relating to such services, or
who train personnel in the provision of such services. Distribution and
servicing fees may also be spent on interest relating to unreimbursed
distribution or servicing expenses from prior years.
Many of the Distributor's sales and servicing efforts involve the Trust as a
whole, so that fees paid by any class of shares of any Fund may indirectly
support sales and servicing efforts relating to the other Funds' shares of the
same class. In reporting its expenses to the Trustees, the Distributor itemizes
expenses that relate to the distribution and/or servicing of a single Fund's
shares, and allocates other expenses among the Funds based on their relative net
assets. Expenses allocated to each Fund are further allocated among its classes
of shares annually based on the relative sales of each class, except for any
expenses that relate only to the sale or servicing of a single class. The
Distributor may make payments to brokers of up to the following percentages
annually of the average daily net assets attributable to shares in the accounts
of such brokers' customers:
Class A Shares
Servicing
Fee
------------
All Funds except the
Money Market Fund 0.25%
Money Market Fund 0.10%
Class B Shares
(Payable only with respect
to shares outstanding for
one year or more)
Servicing
Fee
----------
All Funds 0.25%
Class C Shares --
purchased on or after
July 1, 1991
(Payable only with respect to
shares outstanding for one year
or more except in the case of
shares for which no payment is
made to the broker at the
time of sale)
Servicing Distribution
Fee Fee
----------- -------------
All Funds except the
Short-Intermediate
and Money Market Funds 0.25% 0.65%
Short-lntermediate Fund 0.25% 0.45%
Money Market Fund 0.10% --
Class C Shares --
purchased before
July 1, 1991
Servicing
Fee
----------
All Funds except the
Money Market Fund 0.25%
Money Market Fund 0.10%
The Distributor may from time to time pay additional cash bonuses or other
incentives to selected participating brokers in connection with the sale or
servicing of all classes of shares of the Funds. On some occasions, such bonuses
or incentives may be conditioned upon the sale of a specified minimum dollar
amount of the shares of a Fund and/or all of the Funds together or a particular
class of shares, during a specific period of time. The Distributor currently
expects that such additional bonuses or incentives will not exceed .50% of the
amount of any sale.
If in any year the Distributor's expenses incurred in connection with the
distribution of Class B and C shares and, for all classes of shares, in
connection with the servicing of shareholders and the maintenance of shareholder
accounts exceed the distribution and/or servicing fees paid by the Trust, the
Distributor would recover such excess only if the Distribution and Servicing
Plan with respect to such class of shares continues to be in effect in some
later year when the distribution and/or servicing fees exceed the Distributor's
expenses. The Trust is not obligated to repay any unreimbursed expenses that may
exist at such time, if any, as the relevant Distribution and Servicing Plan
terminates.
From time to time, expenses of the Trust's principal underwriters incurred in
connection with the sale of Class B and Class C shares and in connection with
the servicing of Class B and Class C shareholders and the maintenance of
shareholder accounts have exceeded the distribution and servicing fees collected
by the Distributor. As of September 30, 1995, such expenses were approximately $
in excess of payments under the Distribution and Servicing Plan with respect to
Class C shares and $ in excess of payments under the Distribution and
Servicing Plan with respect to Class B shares. The allocation of such excess
among the Funds as of September 30, 1995 was as follows:
<PAGE>
58 PIMCO Advisors Funds
- --------------------------------------------------------------------------------
Excess Expenses
-----------------------------------------------------
Class B* Class C
----------------------- ---------------------------
(as Per- (as Per-
($ in centage of ($ in centage of
Thousands) Net Assets) Thousands Net Assets)
---------- ----------- ---------- -------------
Equity Income Fund
Value Fund
Growth Fund TO BE PROVIDED
Target Fund
Discovery Fund
Opportunity Fund
Innovation Fund
International Fund
Emerging Markets Fund N/A N/A N/A N/A
Precious Metals Fund
Global Income Fund N/A N/A N/A N/A
High Income Fund
Total Return Income Fund
Tax Exempt Fund
U.S. Government Fund
Short-Intermediate Fund
Money Market Fund
*Class B shares were offered beginning May 22, 1995.
HOW NET ASSET VALUE IS DETERMINED
The net asset values of each class of shares of each Fund of the Trust will
be determined once on each day on which the New York Stock Exchange is open
(a "Business Day"), as of the close of regular trading on the Exchange.
Portfolio securities for which market quotations are readily available are
valued at market value. Fixed-income securities are valued on the basis of
valuations furnished by a pricing service, which are based on a variety of
factors, including market transactions for institutional-size trading units
of such securities. Short-term obligations having remaining maturities of 60
days or less are valued at amortized cost, which reflects market value. The
portfolio investments of the Money Market Fund are valued using the amortized
cost method of valuation, in accordance with Rule 2a-7 under the Investment
Company Act of 1940. Exchange-traded options, futures and options on futures
are valued at the settlement price as determined by the appropriate clearing
corporation. All other securities and assets are valued at their fair value
as determined in good faith by the Trustees or by persons acting at their
direction. Fund liabilities are allocated between its classes. The total of
such liabilities allocated to a class plus that class' distribution and/or
servicing fees and any other expenses specially allocated to that class are
then deducted from the class' proportionate interest in the Fund's assets,
and the resulting amount for each class is divided by the number of shares of
that class outstanding to produce the "net asset value" per share. Under
certain circumstances, the per share net asset value of the Class B and Class
C shares of the Funds that do not declare regular income dividends on a daily
basis may be lower than the per share net asset value of the Class A shares
as a result of the daily expense accruals of the distribution fee applicable
to the Class B and Class C shares. Generally, for Funds that pay income
dividends, those dividends are expected to differ over time by approximately
the amount of the expense accrual differential between the three classes.
DISTRIBUTIONS
Each Fund pays out as dividends substantially all of its net investment
income (which comes from dividends and interest it receives from its
investments) and net realized short-term capital gains. For these purposes
and for federal income tax purposes, a portion of the premiums from certain
expired call or put options written by the Fund, net gains from closing
purchase and sale transactions with respect to such options, and net gains
from futures transactions are treated as short-term capital gains. Each Fund
distributes substantially all of its net realized capital gains, if any,
after giving effect to any available capital loss carry-over.
All dividends and/or distributions will be paid in the form of additional shares
of the class of shares of the Fund to which the dividends and/or distributions
relate or, at the election of the shareholder, of another Fund of the Trust as
described below, at net asset value of such Fund, unless the shareholder elects
to receive cash (either paid to shareholders directly or credited to their
account with their participating broker). Dividends paid by each Fund with
respect to each class of shares are calculated in the same manner and at the
same time and will be in the same amount relative to the aggregate net asset
value of the shares in each class, except that dividends on Class B and Class C
shares are expected to be lower than dividends on Class A shares as a result of
the distribution fee applicable to Class B and Class C shares. Currently, the
Global Income, High Income, Total Return Income, Tax Exempt, U.S. Government and
Short-Intermediate Funds declare dividends each Business Day, pay accrued
dividends monthly and distribute capital gains annually; the Equity Income and
Value Funds declare and pay dividends quarterly and distribute capital gains
annually; the Growth, Discovery, Opportunity, Target, Innovation, International,
Emerging Markets and Precious Metals Funds declare and pay dividends and
distribute capital gains annually; and the Money Market Fund declares dividends
each Business Day and pays accrued dividends monthly. Dividends and capital
gains distributions may be declared more or less frequently in the discretion of
the Trustees. There are no charges on reinvested dividends.
<PAGE>
PIMCO Advisors Funds 59
- --------------------------------------------------------------------------------
Shareholders may elect to invest dividends and/or distributions paid by any
Fund in shares of the same class of any other Fund of the Trust at net asset
value. The shareholder must have an account existing in the Fund selected for
investment with the identical registered name and address and must elect this
option on the Account Application, on a form provided for that purpose or by
a telephone request to the Transfer Agent at 800-426-0107. For further
information on this option, contact your broker or call the Distributor at
800-426-0107.
TAXES
Each Fund will be treated as a separate taxable entity for federal income tax
purposes. Each Fund plans to distribute substantially all of its net
investment income and net realized short-term capital gains, if any, to its
shareholders. So long as it does so and otherwise satisfies the requirements
for being taxed as a regulated investment company, the Fund itself does not
pay federal income tax on the amounts distributed. Income dividends and
capital gains distributions are taxable as described below. Shareholders will
receive an annual statement detailing federal tax information about dividends
and distributions paid to shareholders during or with respect to the
preceding calendar year.
Dividends paid to shareholders by the Tax Exempt Fund which are derived from
interest on Tax Exempt Bonds are "exempt-interest dividends," and
shareholders may exclude such dividends from gross income for federal income
tax purposes. However, if a shareholder receives social security or railroad
retirement benefits, the shareholder may be taxed on a portion of those
benefits as a result of receiving tax-exempt income. In addition, certain
exempt-interest dividends could, as discussed below, cause certain
shareholders to become subject to the alternative minimum tax and may
increase the alternative minimum tax liability of shareholders already
subject to this tax.
Other dividends and any short-term capital gains distributions of the Funds,
including the Tax Exempt Fund, are taxable to the shareholder as ordinary
income. Distributions of any long-term capital gains are taxable to
shareholders as such, regardless of how long a shareholder may have owned
shares in the Fund.
Dividends derived from interest on certain U.S. Government securities may be
exempt from state and local taxes, although interest on mortgage-backed U.S.
Government securities (which may constitute a substantial portion of the U.S.
Government Fund's assets) may not be so exempt. The distributions of
"exempt-interest dividends" paid by the Tax Exempt Fund may be exempt from
state and local taxation when received by a shareholder to the extent that
they are derived from interest on Tax Exempt Bonds issued by the state or
political subdivision in which such shareholder resides. The federal
exemption for "exempt-interest dividends" attributable to Tax Exempt Bonds
does not necessarily result in exemption of such dividends from income for
the purpose of state and local taxes. The Trust will report annually on a
state-by-state basis the source of income the Tax Exempt Fund receives on Tax
Exempt Bonds that was paid out as dividends during the preceding year.
Shareholders should consult their tax advisers as to the possible application
of state and local income tax laws to Trust dividends and capital gain
distributions.
If, at the end of its fiscal year, more than 50% of a Fund's total assets is
represented by securities of foreign corporations, such Fund may make an
election which allows shareholders who are U.S. citizens or U.S. corporations
to claim a foreign tax credit or deduction (but not both) on their U.S.
income tax returns. As a result, the amounts of foreign income taxes paid by
such Fund would be treated as additional income to shareholders of such Fund
from non-U.S. sources and as foreign taxes paid by shareholders of such Fund
for purposes of the foreign tax credit. If eligible for this election, the
International and Emerging Markets Funds intend to make such election.
Investors should consult their tax advisers for further information relating
to the foreign tax credit and deduction, which are subject to certain
restrictions and limitations. Shareholders who are not U.S. citizens or which
are foreign corporations may be subject to substantially different tax
treatment of distributions by the Funds.
<PAGE>
60 PIMCO Advisors Funds
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The Internal Revenue Code of 1986, as amended (the "Code"), requires all of
the Funds to distribute prior to calendar year-end virtually all the ordinary
income of each Fund on a calendar year basis, and to distribute virtually all
the capital gain net income each Fund realizes in the one-year period ending
October 31 and has not previously distributed, in order to avoid a 4% excise
tax on undistributed income that would otherwise be imposed on a Fund. It is
each Fund's intention to make distributions sufficient to avoid the excise
tax.
The Code also provides that exempt-interest dividends allocable to interest
received from "private activity bonds" issued after August 7, 1986 will be an
item of tax preference for individual and corporate alternative minimum tax
at the applicable rate for individuals and corporations. Therefore, if the
Tax Exempt Fund invests in such private activity bonds, certain of its
shareholders may become subject to the alternative minimum tax on that part
of its distributions to them that are derived from interest income on such
bonds and certain shareholders already subject to such tax may have
increased liability therefor. However, it is the present policy of the Tax
Exempt Fund to invest no more than 20% of its assets in such bonds. Other
provisions of the Code affect the tax treatment of distributions from the Tax
Exempt Fund for corporations, casualty insurance companies and financial
institutions. In particular, under the Code, for corporations, alternative
minimum taxable income will be increased by a percentage of the amount by
which the corporation's "adjusted current earnings" (which includes various
items of tax-exempt income) exceeds the amount otherwise determined to be
alternative minimum taxable income. Accordingly, an investment in the Tax
Exempt Fund may cause shareholders to be subject to (or result in an
increased liability under) the alternative minimum tax.
Current federal tax law requires the holder of a Treasury or other
fixed-income zero-coupon security to accrue as income each year a portion of
the discount at which the security was purchased, even though the holder
receives no interest payment in cash on the security during the year. In
addition, pay-in-kind securities will give rise to income which is required
to be distributed and is taxable even though the Fund holding the security
receives no interest payment in cash on the security during the year. Also, a
portion of the yield on certain High Yield Securities (including certain
payment-in-kind securities) issued after July 10, 1987 may be treated as
dividends. Accordingly, each Fund that holds the foregoing kinds of
securities may be required to pay out as an income distribution each year an
amount which is greater than the total amount of cash interest the Fund
actually received. Such distributions may be made from the cash assets of the
Fund or by liquidation of portfolio securities, if necessary. The Fund may
realize gains or losses from such liquidations. In the event the Fund
realizes net capital gains from such transactions, its shareholders may
receive a larger capital gain distribution, if any, than they would in the
absence of such transactions.
Distributions will be taxable as described above whether received in cash or
in shares through the reinvestment of distributions. A dividend paid to a
shareholder by a Fund in January of a year generally is deemed to have been
paid by the Fund on December 31 of the preceding year, if the dividend was
declared and payable to shareholders of record on a date in October, November
or December of that preceding year.
MANAGEMENT OF THE TRUST
PIMCO Advisors L.P. (the "Manager") is the investment manager of each of the
PIMCO Advisors Funds. Each of the Funds also has a sub-adviser which, under
the supervision of the Manager and the Trust's trustees, directs the
investment of the Fund's assets. Other than the sub-adviser of the Precious
Metals Fund, all of the sub-advisers are affiliates of PIMCO Advisors L.P. In
addition to overseeing the sub-advisers, the Manager also provides executive
and other personnel for management of the Trust. Pursuant to the Trust's
Agreement and Declaration of Trust, the Trustees supervise the affairs of the
Trust as conducted by the Manager.
THE MANAGER The Manager provides management and investment advisory services to
other mutual funds, investment accounts and pension plans. As of September 30,
1995, the Manager and its affiliates managed approximately $87 billion of
assets.
The Manager is a Delaware limited partnership. The general partner of the
Manager, PIMCO Partners, G.P., has two partners: (i) an indirect wholly-owned
subsidiary of Pacific Mutual Life Insurance Company; and (ii) PIMCO Partners,
L.L.C. ("LLC"), a limited liability company, all of the interests of which are
held directly by the Managing Directors of Pacific Investment Management Company
who are: William H. Gross, Dean S. Meiling, James F. Muzzy, William F. Podlich,
III, Frank B. Rabinovitch, Brent R. Harris, John L. Hague, William S. Thompson,
Jr., William C. Powers and David H. Edington (collectively, the "Managing
Directors"). PIMCO Partners, G.P. has substantially delegated its management and
control of the Manager to an Equity Board and an Operating Board of the Manager.
The activities of the Manager are controlled by its
<PAGE>
PIMCO Advisors Funds 61
- --------------------------------------------------------------------------------
Operating Board except that certain non-routine or extraordinary actions may
not be effected by the Operating Board without the approval of the Manager's
Equity Board. The Operating Board has in turn delegated the authority to
manage day-to-day operations and policies to an Operating Committee. Because
of the ability to designate a majority of the Members of the Operating Board,
Pacific Investment Management Company and the Managing Directors could be
said to control the Manager, although the Managing Directors disclaim such
authority.
COLUMBUS CIRCLE INVESTORS ("CCI") CCI serves as the sub-adviser of the Equity
Income Fund, Growth Fund, Target Fund, Opportunity Fund, Innovation Fund, Tax
Exempt Fund and Money Market Fund. CCI also advises other mutual funds and
private accounts and is registered as an investment adviser with the SEC. CCI is
a general partnership with the Manager and a wholly-owned subsidiary of the
Manager as its only partners.
At the center of CCI's equity investment strategy is its theory of Positive
Momentum & Positive Surprise. This theory asserts that a good company doing
better than generally expected will experience a rise in its stock price, and
conversely, a company falling short of expectations will experience a drop in
its stock price. Based on this theory, CCI attempts to manage the Funds it
sub-advises (except the Tax Exempt and Money Market Funds) with a view to
investing in growing companies that are surprising the market with business
results that are better than anticipated. The investment decisions made by CCI
with respect to these Funds are made by a committee rather than by a single
person acting as portfolio manager. No person is primarily responsible for
making recommendations to that committee.
Norman Seltzer serves as the portfolio manager of the Tax Exempt Fund and the
Money Market Fund.
PACIFIC INVESTMENT MANAGEMENT COMPANY Pacific Investment Management Company
serves as the sub-adviser of the Global Income Fund, High Income Fund, Total
Return Income Fund, U.S. Government Fund and Short-Intermediate Fund. It also
advises other mutual funds and private accounts. Pacific Investment Management
Company is a general partnership with the Manager and a wholly-owned subsidiary
of the Manager as its only partners and is registered as an investment adviser
with the SEC and as a commodity trading advisor with the CFTC.
Subject to the investment objective and policies of the various Funds it
advises, Pacific Investment Management Company's fixed-income investment
strategy attempts to achieve the highest total return for a portfolio. For a
description of this total return strategy, see "Total Return" under "Investment
Objectives and Policies" above. Further, this sub-adviser closely monitors and
actively manages the duration of the portfolios it advises. See "Duration" under
"Investment Objectives and Policies" above. In selecting securities for each of
the Funds it advises, Pacific Investment Management Company utilizes economic
forecasting, interest rate anticipation, credit and call risk analysis, foreign
currency exchange rate forecasting, and other security selection techniques. The
proportion of each Fund's assets committed to investment in securities with
particular characteristics such as maturity, type and coupon rate, will vary
based on this sub-adviser's outlook for the U.S. and foreign economies, the
financial markets, and other factors.
William H. Gross, the portfolio manager of the Total Return Income Fund and a
Managing Director of Pacific Investment Management Company, also oversees the
portfolio managers of the other Funds sub-advised by this sub-adviser.
Information about the portfolio managers of each of the Funds sub-advised by
Pacific Investment Management Company, including their occupations for the past
five years, is provided below.
<PAGE>
62 PIMCO Advisors Funds
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Fund Portfolio Manager and Business Experience
- --------------------------- ----------------------------------------------------------------------------
<S> <C>
GLOBAL INCOME FUND Lee R. Thomas, III, Vice President and Senior International Portfolio
Manager, Pacific Investment Management Company, has managed the Global
Income Fund since its inception on October 1, 1995. A fixed-income
portfolio manager, Mr. Thomas has also managed the Global Fund, a series
of PIMCO Funds (an institutional mutual fund), since July 13, 1995. Prior
to joining Pacific Investment Management Company, Mr. Thomas was
associated with Investcorp, as a member of the management committee
responsible for global securities and foreign exchange trading. Prior to
Investcorp, he was associated with Goldman, Sachs as an Executive Director
in foreign fixed-income.
HIGH INCOME FUND Benjamin Trosky, Executive Vice President, Pacific Investment Management
Company, has managed the High Income Fund since November 15, 1994. A fixed-
income portfolio manager, Mr. Trosky has also managed the High Yield Fund,
a series of PIMCO Funds, since its inception on December 15, 1992. Mr.
Trosky was previously a High Yield Portfolio Manager for Merrill Lynch
Asset Management.
TOTAL RETURN INCOME FUND William H. Gross, Managing Director, Pacific Investment Management Company,
has managed the Total Return Income Fund since December 22, 1994. A
fixed-income portfolio manager, Mr. Gross has also managed the Total
Return Fund, a series of PIMCO Funds, since its inception on May 11, 1987.
U.S. GOVERNMENT FUND Frank B. Rabinovitch, Managing Director, Pacific Investment Management
Company, has managed the U.S. Government Fund since November 15, 1994. A
fixed-income portfolio manager, Mr. Rabinovitch has also managed the
Long-Term U.S. Government Fund, a series of PIMCO Funds, since its
inception on July 1, 1991.
SHORT-INTERMEDIATE FUND David H. Edington, Managing Director, Pacific Investment Management
Company, has managed the Short-Intermediate Fund since November 15, 1994.
A fixed-income portfolio manager, Mr. Edington has also managed the Short-
Term Fund, a series of PIMCO Funds, since its inception on October 7,
1987.
</TABLE>
BLAIRLOGIE CAPITAL MANAGEMENT ("Blairlogie") serves as the sub-adviser of the
International Fund and the Emerging Markets Fund. Blairlogie is a limited
partnership formed under the laws of Scotland in 1994 with the Manager and a
wholly-owned subsidiary of the Manager as its general partners.
Blairlogie also provides investment advice to other mutual funds and to private
clients. Blairlogie is registered as an investment adviser with the SEC. James
G.S. Smith is primarily responsible for the day-to-day management of the
International Fund. Mr. Smith is the Chief Investment Officer of Blairlogie and
is responsible for managing an investment team of seven professionals. He
previously served as a senior portfolio manager at Murray Johnstone in Glasgow,
Scotland, responsible for international investment management for North American
clients and at Schroder Investment Management in London. Mr. Smith received his
bachelor's degree in Economics from London University and his MBA from Edinburgh
University. He is an Associate of the Institute of Investment Management and
Research.
CADENCE CAPITAL MANAGEMENT ("Cadence") serves as the sub-adviser to the
discovery fund. Cadence also advises other mutual funds and private accounts.
Cadence is a general partnership, with the manager and a wholly-owned subsidiary
of the manager as its only partners. Cadence is registered as an investment
adviser with the SEC.
Cadence utilizes a "growth at a price" style of equity management. This means
that Cadence seeks to discover stocks with favorable prospective earnings
growth selling at reasonable valuations. Cadence analyses holdings on a daily
basis for changes in valuation and seeks to keep all of its clients, including
the Discovery Fund, fully invested.
David B. Breed and William B. Bannick are responsible for the overall management
of the Discovery Fund along with a team of investment professionals.
<PAGE>
PIMCO Advisors Funds 63
- --------------------------------------------------------------------------------
Mr. Breed is the Chief Investment Officer and a founding partner of
Cadence, and has 22 years of investment management experience. He has been
the driving force in developing Cadence's growth-oriented stock screening and
selection process.
Mr. Bannick is a Managing Director of Cadence and has 10 years of investment
management experience. He previously served as Executive Vice President of
George D. Bjurman & Associates and as Supervising Portfolio Manager of Trinity
Investment Management Corporation. Mr. Bannick joined Cadence's predecessor in
1992.
NFJ INVESTMENT GROUP ("NFJ") serves as the sub-adviser to the Value Fund. NFJ
also advises other mutual funds and private accounts. NFJ is a general
partnership, with the Manager and a wholly-owned subsidiary of the Manager as
its only partners. NFJ is registered as an investment adviser with the SEC.
NFJ is a value-oriented equity manager specializing in constructing diversified
portfolios consisting of stocks with low P/E ratios. NFJ's philosophy is based
on research concerning the performance of low P/E stocks at all capitalization
levels over extended periods. NFJ's investment style seeks diversification
across numerous industry groups to avoid portfolios heavily concentrated in
particular industries. NFJ has also analyzed the correlation of yield to
historic performance and believes that yield is a maior component to valuation
assessments.
NFJ's investment decisions with respect to the Value Fund are made on a team
basis, by a committee comprised of the Managing Directors of NFJ, rather than by
a single person acting as portfolio manager. No person is primarily responsible
for making recommendations to the team.
VAN ECK ASSOCIATES CORPORATION ("Van Eck") is an unaffiliated investment adviser
which serves as the sub-adviser of the Precious Metals Fund under the
supervision of the Manager. Van Eck is a registered investment adviser which,
together with its affiliates, advises other mutual funds and private accounts.
Van Eck is controlled by John C. Van Eck who, along with members of his
immediate family, owns 100% of the stock of Van Eck. Henry J. Bingham, Executive
Managing Director of Van Eck and President of the International Investors Gold
series of Van Eck Funds, has served as the portfolio manager of the Precious
Metals Funds since the Fund commenced operations.
Management and Sub-adviser Fees
Under the Management Contracts between the Trust and the Manager relating to
each Fund, the Manager is paid at the percentages shown below of the relevant
Fund's average daily net assets for its services to the Trust and the Fund.
Pursuant to Sub-adviser Agreements between the Manager and each of the sub-
advisers with respect to the Funds advised by each, the Manager pays to each
sub-adviser, out of the fee received by the Manager under the relevant
Management Contract, the following percentages of the relevant Fund's
average daily net assets as compensation for the services provided by the
sub-adviser:
<TABLE>
<CAPTION>
Management Fee Sub-adviser Fee Paid By Manager
Fund (as % of net assets) Sub-Adviser (as % of net assets)
------------------------------------------------------------------------------- ---------------------------------
<S> <C> <C> <C>
Equity Income 0.75% of first $200 million Columbus Circle Investors 0.375% of first $200 million
0.70% of amounts over $200 0.350% of amounts over $200
million million
Value 0.70% NFJ Investment Group 0.350%
Growth 0.70% of first $200 million Columbus Circle Investors 0.350% of first $200 million
0.65% of amounts over $200 0.325% of amounts over $200
million million
Target 0.75% of first $200 million Columbus Circle Investors 0.375% of first $200 million
0.70% of amounts over $200 0.350% of amounts over $200
million million
Discovery 0.75% of first $200 million Cadence Capital Management 0.375% of first $200 million
0.70% of amounts over $200 0.350% of amounts over $200
million million
Opportunity 0.75% of first $200 million Columbus Circle Investors 0.375% of first $200 million
0.70% of amounts over $200 0.350% of amounts over $200
million million
Innovation 0.75% of first $200 million Columbus Circle Investors 0.375% of first $200 million
0.70% of amounts over $200 0.350% of amounts over $200
million million
International 0.80% Blairlogie Capital Management 0.400%
Emerging
Markets N/A N/A N/A
Precious 0.75% of first $200 million Van Eck Associates Corporation 0.375% of first $200 million
Metals 0.70% of amounts over $200 0.350% of amounts over $200
million million
Global Income 0.70% of first $250 million Pacific Investment Management 0.350% of first $250 million
0.60% of amounts over $250 Company 0.300% of amounts over $250
million million
High Income 0.60% of first $250 million Pacific Investment Management 0.250%
0.50% of amounts over $250 Company
million
Total Return 0.60% of first $250 million Pacific Investment Management 0.250%
Income 0.50% of amounts over $250 Company
million
Short- 0.50% of first $250 million Pacific Investment Management
Intermediate 0.45% of next $250 million Company 0.250%
0.40% of amounts over S500
million
U.S. 0.60% of first S250 million Pacific Investment Management 0.250%
Government 0.50% of amounts over $250 Company
million
Tax Exempt 0.60% Columbus Circle Investors 0.300%
Money Market* 0.50% of first $250 million Columbus Circle Investors 0.250% of first $250 million
0.40% of amounts over $250 0.200% of amounts over $250
million million
</TABLE>
<PAGE>
64 PIMCO Advisors Funds
- --------------------------------------------------------------------------------
* As of November 15, 1994, the Manager agreed to voluntarily reduce its
Management Fee to .10% of the Money Market Fund's average daily net assets
until further notice. Absent such undertaking, the advisory fee would be .5O%
of the funds average daily net assets.
The Manager previously served as the sole investment adviser (i.e., with no
sub-adviser) to the Equity Income, Growth, Target, Opportunity, High Income,
Short-Intermediate, U.S. Government, Tax Exempt and Money Market Funds. For the
fiscal year ended September 30, 1995, the Manager was paid the following
percentages of each Fund's average daily net assets for advisory services
rendered:
Percentage of
Fund Average Net Assets
- --------------------- ---------------------
Equity Income .75%
Growth .66%
Target .71%
Opportunity .71%
International .80%
Precious Metals .75%
High Income .60%
Short-Intermediate .50%
U.S. Government .58%
Tax Exempt .60%
Money Market .16%
Pursuant to a Sub-adviser Agreement between the Manager and the former
sub-adviser to the International Fund, for the period of October 1, 1994 through
November 15, 1994, the Manager paid the former sub-adviser $159,648 or .40% of
the average daily net assets of the International Fund throughout the period.
Pursuant to a Sub-adviser Agreement between the Manager and Van Eck, for the
fiscal year ended September 30, 1995, the Manager paid Van Eck $217,162 or
.375% of the average daily net assets of the Precious Metals Fund.
The fees payable by the Discovery, Opportunity, Target, Innovation, Equity
Income, International and Precious Metals Funds are higher than those normally
charged by mutual funds with other investment objectives.
In addition to the fee described above, the Trust pays all expenses not assumed
by the Manager. These expenses include, without limitation, fees and expenses of
Trustees who are not interested persons of the Manager or the Trust, interest
charges, taxes, brokerage commissions, expenses of issue or redemption of
shares, distribution and servicing fees pursuant to the Distribution and
Servicing Plans, fees and expenses of registering and qualifying the Trust and
each class of shares of the respective Funds for distribution under federal and
state laws and regulations, charges of custodians, auditing and legal expenses,
expenses of determining net asset value of each class of the Trust's shares,
reports to shareholders, expenses of meetings of shareholders, expenses of
printing and mailing prospectuses, proxy statements and proxies to existing
shareholders, and its proportionate share of insurance premiums and professional
association dues or assessments. All general Trust expenses are allocated among
and charged to the assets of each class of shares of each Fund on a basis that
the Trustees deem fair and equitable.
DESCRIPTION OF THE TRUST
The Trust was established in 1983 as a business trust under Massachusetts law.
The Trust has an unlimited authorized number of shares of beneficial interest
which may, without shareholder approval, be divided into an unlimited number of
series of such shares which, in turn, may be subdivided into an unlimited number
of classes of shares. The Trust currently consists of seventeen series of shares
(of which one is currently inactive), each series of which represents a Fund.
With the exception of the Global Income Fund, each Fund is a "diversified
company" under the Investment Company Act of 1940 (the "1940 Act"). The Global
Income Fund is a "non-diversified company" under the 1940 Act. Each Fund is
further divided into three classes of shares designated Class A shares, Class B
shares and Class C shares. The Class A, Class B and Class C shares of each Fund
represent interests in the assets of that Fund and have identical voting,
dividend, liquidation and other rights and the same terms and conditions except
that certain expenses related to the distribution of Class B and Class C shares
are borne solely by such class and certain expenses related to the servicing of
shareholders and the maintenance of shareholder accounts are borne solely by
each class, and each class of shares has exclusive voting rights with respect to
matters pertaining to the Distribution and Servicing Plan applicable to each
class. These shares are entitled to vote at meetings of shareholders. Matters
submitted to shareholder vote must be approved by each Fund separately except
(i) when required by the 1940 Act shares shall be voted together and (ii) when
the Trustees have determined that the matter does not affect all Funds, then
only shareholders of the Fund or Funds affected shall be entitled to vote on the
matter. All three classes of shares of a Fund will vote together, except with
respect to the Distribution and Servicing Plan applicable to a class of shares
or when a class vote is required by the 1940 Act. Shares are freely
transferable, are entitled to dividends as declared by the Trustees and, in
liquidation of the Trust, are entitled to receive the net assets of their Fund,
but not of the other Funds. The Trust does not generally hold annual meetings of
shareholders and will do so only when required by law. Shareholders may remove
Trustees from office by votes cast in person or by proxy at a meeting of
shareholders or by written consent. Such a meeting will be called at the written
request of the holders of 10% of the Trust's outstanding shares.
<PAGE>
PIMCO Advisors Funds 65
- --------------------------------------------------------------------------------
Mailings to Shareholders
To reduce the volume of mail shareholders receive, it is anticipated that
only one copy of most Trust reports, such as the Trust's annual report, will
be mailed to a shareholder's household (same surname, same address). A
shareholder may call (800) 227-7337 if additional shareholder reports are
desired.
Appendix A
Set forth below is a description of the relevant rating categories used by
each of Moody's Investors Service, Inc. ("Moody's") and Standard & Poor's
Corporation ("S&P"). Other nationally recognized statistical rating
organizations ("NRSROs") may also be utilized with regard to portfolio
investments for the Funds. Descriptions of the rating categories used by
several of the other NRSROs are set forth in the Statement of Additional
Information.
LONG-TERM DEBT RATINGS
(may be assigned, for example, to long-term corporate and municipal bonds)
Moody's (Moody's applies numerical modifiers (1, 2 and 3) in each rating
category to indicate the securities ranking within the category):
Aaa -- Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt-edge." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.
Aa -- Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long-term risks appear somewhat larger than in Aaa securities.
A -- Bonds which are rated A possess many favorable investment attributes and
are to be considered as upper medium grade obligations. Factors giving security
to principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment sometime in the future.
Baa -- Bonds which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present, but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
Ba -- Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well assured. Often the protection of interest
and principal payments may be very moderate and thereby not well safeguarded
during both good and bad times over the future. Uncertainty of position
characterizes bonds in this class.
B -- Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
Caa -- Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal
or interest.
<PAGE>
66 PIMCO Advisors Funds
- --------------------------------------------------------------------------------
Ca -- Bonds which are rated Ca represent obligations which are speculative in a
high degree. Such issues are often in default or have other marked shortcomings.
C -- Bonds which are rated C are the lowest rated class of bonds, and issues so
rated can be regarded as having extremely poor prospects of ever attaining any
real investment standing.
S&P (S&P may apply a plus (+) or a minus (-) to a particular rating
classification to show relative standing within that classification):
AAA -- Bonds rated AAA have the highest rating assigned by Standard & Poor's to
a debt obligation. Capacity to pay interest and repay principal is extremely
strong.
AA -- Bonds rated AA have a very strong capacity to pay interest and repay
principal and differ from the highest rated issues only in small degree.
A -- Bonds rated A have a strong capacity to pay interest and repay principal
although they are somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than bonds in higher rated categories.
BBB -- Bonds rated BBB are regarded as having an adequate capacity to pay
interest and repay principal. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
bonds in this category than for bonds in higher rated categories.
BB, B -- Bonds rated BB and B are regarded, on balance, as predominantly
speculative with respect to the issuer's capacity to pay interest and repay
principal in accordance with the terms of the obligation. While such bonds will
likely have some quality and protective characteristics, these are outweighed by
large uncertainties or major risk exposures to adverse conditions.
CCC -- Bonds rated CCC have a currently identifiable vulnerability to default,
and are dependent upon favorable business, financial, and economic conditions
to meet timely payment of interest and repayment of principal. In the event of
adverse business, financial, or economic conditions, they are not likely to have
the capacity to pay interest and repay principal. The CCC rating category is
also used for debt subordinated to senior debt that is assigned an actual or
implied B or B- rating.
CC -- The rating CC typically is applied to debt subordinated to senior debt
that is assigned an actual or implied CCC rating.
C -- The rating C typically is applied to debt subordinated to senior debt
which is assigned an actual or implied CCC debt rating. The C rating may be used
to cover a situation where a bankruptcy petition has been filed, but debt
service payments are continued.
SHORT-TERM DEBT RATINGS
(may be assigned, for example, to commercial paper, master demand notes, bank
instruments, and letters of credit)
Moody's description of its three highest short-term debt ratings:
Prime-1 Issuers rated Prime-1 (or supporting institutions) have a superior
capacity for repayment of senior short-term promissory obligations.
Prime-1 repayment capacity will normally be evidenced by many of the
following characteristics:
--Leading market positions in well-established industries.
--High rates of return on funds employed.
--Conservative capitalization structures with moderate reliance on debt
and ample asset protection.
--Broad margins in earnings coverage of fixed financial charges and high
internal cash generation.
--Well-established access to a range of financial markets and assured
sources of alternate liquidity.
Prime-2 Issuers rated Prime-2 (or supporting institutions) have a strong
capacity for repayment of senior short-term debt obligations. This will
normally be evidenced by many of the characteristics cited above but to
a lesser degree. Earnings trends and coverage ratios, while sound, may
be more subject to variation. Capitalization characteristics, while
still appropriate, may be more affected by external conditions. Ample
alternate liquidity is maintained.
Prime-3 Issuers rated Prime-3 (or supporting institutions) have an acceptable
ability for repay-
<PAGE>
PIMCO Advisors Funds 67
- --------------------------------------------------------------------------------
ment of senior short-term obligations. The effect of industry
characteristics and market compositions may be more pronounced.
Variability in earnings and profitability may result in changes in the
level of debt protection measurements and may require relatively high
financial leverage. Adequate alternate liquidity is maintained (Global
Income Fund only).
S&P's description of its two highest short-term debt ratings:
A-1 This designation indicates that the degree of safety regarding timely
payment is strong. Those issues determined to have extremely strong
safety characteristics are denoted with a plus sign (+).
A-2 Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as high as
for issues designated "A-1."
A-3 Issues carrying this designation have adequate capacity for timely
payment. They are, however, more vulnerable to the adverse effects of
changes in circumstances than obligations carrying the higher
designations.
SHORT-TERM LOAN/MUNICIPAL NOTE RATINGS
Moody's description of its two highest short-term loan/ municipal note
ratings:
MIG-1/ This designation denotes best quality. There is present strong
VMIG-1 protection by established cash flows, superior liquidity support or dem-
onstrated broad-based access to the market for refinancing.
MIG-2/ This designation denotes high quality. Margins of protection
VMIG-2 are ample although not so large as in the preceding group.
S&P's description of its two highest municipal note ratings:
SP-1 Very strong or strong capacity to pay principal and interest. Those
issues determined to possess overwhelming safety characteristics will be
given a plus (+) designation.
SP-2 Satisfactory capacity to pay principal and interest.
<PAGE>
PIMCO PIMCO Advisors L.P., 2187 Atlantic Street, Stamford, Connecticut
Manager 06902
- --------------------------------------------------------------------------------
Sub-Advisers Columbus Circle Investors, Pacific Investment Management Company,
Blairlogie Capital Management, Cadence Capital Management, NFJ
Investment Group, Van Eck Associates Corporation
- --------------------------------------------------------------------------------
Distributor PIMCO Advisors Distribution Company, 2187 Atlantic Street,
Stamford, Connecticut 06902
- --------------------------------------------------------------------------------
Custodian The Bank of New York, 48 Wall Street, New York, New York 10005
- --------------------------------------------------------------------------------
Shareholder Shareholder Services, Inc,P.O. Box 5866, Denver, Colorado 80217
Servicing
Agent
and Transfer
Agent
- --------------------------------------------------------------------------------
Independent Coopers & Lybrand L.L.P.,1301 Avenue of the Americas, New York,
Accountants New York 10019
- --------------------------------------------------------------------------------
Legal Ropes & Gray, One International Place, Boston,
Counsel Massachusetts 02110
- --------------------------------------------------------------------------------
For further information about the Trust, call 1-800-426-0107
[Recycle logo] Printed on Recycled Paper Using Soy-Based Inks.
<PAGE>
PIMCO Advisors Funds
PIMCO Account Application
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This application may be used to purchase This application may not be used to Mail Application to:
Class A, Class B or Class C shares and establish an IRA. For an IRA application PIMCO Advisors Distribution Company
it must be preceded or accompanied by or for more information, call: P.O. Box 5866
the current Fund prospectus. 1-800-426-0107. Denver, Colorado 80217-5866
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1. Your Account [ ] Individual
Registration -----------------------------------------------------------------------------------------
First Name Middle Initial Last Name Soc. Sec. No. (for first individual)
[ ] Joint Registration
-----------------------------------------------------------------------------------------
First Name Middle Initial Last Name
Joint tenancy with rights of survivorship will be presumed unless otherwise specified.
[ ] Uniform Gift/ --------------------------------------------------------- for
Custodian's Name (only one)
Transfer to Minors
--------------------------------------------------------- under
Minor's Name (only one)
Uniform Gift/Transfer to Minors Act of
------------- -------------------- -----------------
(state) Minor's Soc. Sec. No. Minor's Date
of Birth
[ ] Corporation,
Partnership, -------------------------------------------------------
Trust Exact Name of Organization/Trustee
-------------------------------------------------------------------------------------------
Exact Name of Trust Date of Trust
-------------------------------------------------------------------------------------------
For the Benefit of Tax Identification No.
- ----------------------------------------------------------------------------------------------------------------------------------
2. Your Address, ( )
Telephone -----------------------------------------------------------------------------------------------------------------
Number Street Address Apt. No. Daytime Telephone
and Employer
_____________________________________________ [ ] U.S. Citizen [ ] Other _____________________
City State Zip Code
-----------------------------------------------------------------------------------------------------------------
Name and Address of Employer Occupation
- ----------------------------------------------------------------------------------------------------------------------------------
3. Your Select the Class of shares you are purchasing. See "How to Buy Shares" in the prospectus.
Investment Make checks payable to: PIMCO Advisors Distribution Company
[ ] Class A shares (Initial Sales Charge)
[ ] Class B shares (Contingent Deferred Sales Charge)
[ ] Class C shares (Asset Based Sales Charge)
The Funds you wish to purchase (minimum initial investment $1,000, at least $250 per fund)
[ ] Equity Income Fund $ [ ] High Income Fund $
---------- ---------
[ ] Value Fund $ [ ] Total Return Income Fund $
---------- ---------
[ ] Growth Fund $ [ ] Tax Exempt Fund $
---------- ---------
[ ] Target Fund $ [ ] U.S. Government Fund $
---------- ---------
[ ] Discovery Fund $ [ ] Money Market Fund $
---------- ---------
[ ] Innovation Fund $ [ ] Short-Intermediate Fund $
---------- ---------
[ ] International Fund $ Total Amount Invested $
---------- ---------
[ ] Precious Metals $ Note: The Opportunity Fund is not currently offered to new shareholders.
Fund Money Market Fund B shares are not available for initial purchases.
- ----------------------------------------------------------------------------------------------------------------------------------
4. Dividend Choose the way you want your dividend and capital gain distributions paid.
and Capital Check one box for dividends, one box for capital gains. If not specified,
Gain dividends and distributions will be reinvested in the Fund that pays them.
Distributions
[ ] Dividends [ ] Capital Gains Reinvest in the same Fund that pays them
[ ] Dividends [ ] Capital Gains Reinvest in the following Fund:
-------------------------------
(into established accounts only Fund Name Account No.
[ ] Dividends [ ] Capital Gains Deposit in my bank account through Fund Link (complete Section 6)
[ ] Dividends [ ] Capital Gains Paid by check [ ] To registration address [ ] To third party below:
--------------------------------------------------------------------------------------------------------
Third Party Name Address
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<PAGE>
- -------------------------------------------------------------------------------
5. Telephone
Privileges --
Exchanges and
Redemptions
You will automatically have certain telephone exchange and redemption
privileges described below for yourself and your dealer representative unless
you decline such privileges by marking one or more of the boxes below:
I do not want the following transactions to be initiated by telephone:
Exchanges: [ ] by myself or any person [ ] by my dealer representative
Redemptions: [ ] by myself or any person [ ] by my dealer representative
If you do not decline the telephone privileges above, PIMCO Advisors Funds
may accept telephone instructions from any person identifying himself as the
owner of an account or the owner's dealer representative provided that PIMCO
Advisors Funds follows reasonable procedures and believes the instructions to
be genuine, and thus you risk possible losses in the event of a telephone
request not authorized by you (See Section 12).
Shares of each Class may only be exchanged for shares of the same Class. The
amount of a telephone redemption shall not exceed $50,000 and the proceeds
may be payable only to the shareholder of record and mailed to the address of
record.
- -------------------------------------------------------------------------------
6. Fund Link
Options
A service which "links" your
fund account with your bank
account to conduct a variety
of transactions over the phone.
Check all options you want
on your account.
You must also complete Section 9
of this application.
- -------------------------------------
Fund Name
[ ] Purchase Payments and Redemptions
Purchase payments and redemptions will be automatically debited or credited
to the bank account listed in Section 9 upon written or oral authorization.
Your dealer representative is automatically authorized to exercise Fund Link
privileges unless you check below.
Check any transaction you do not want your dealer to conduct by Fund Link.
[ ] Fund Redemptions via Fund Link [ ] Fund Purchases via Fund Link
[ ] Distributions
Dividend and/or capital gain distributions will be sent to the bank account
listed in Section 9 as marked below.
[ ] Dividends [ ] Capital Gains Distributions
]B% Auto-Invest -- Please also complete Section 7 of this application.
[ ] Automatic Withdrawal -- Please also complete Section 8 of this application.
- -------------------------------------------------------------------------------
7. Auto-
Invest
Authorization to honor
checks or ACH debits for
automatic investment
in the Funds.
Also complete section 9
of this application.
I/We hereby request to automatically invest by check, in the amounts listed
below, on or about the
-----------------------
(Day of Month)
of each [ ] month [ ] quarter, in my/our account in the Fund(s) marked below:
Designate the name of the Fund/s and the amount ($50 minimum for each fund
selected).
[ ] Class A Shares
- ---------------- [ ] Class B Shares -----------------
Fund Name [ ] Class C Shares Amount to Purchase
[ ] Class A Shares
- ---------------- [ ] Class B Shares ----------------
Fund Name [ ] Class C Shares Amount to Purchase
[ ] Class A Shares
- --------------- [ ] Class B Shares -----------------
Fund Name [ ] Class C Shares Amount to Purchase
Note: You must have an existing account in the Opportunity Fund to establish
Auto-Invest in that Fund.
Auto-Invest is not available for Money Market Fund B shares.
Automatic investments are subject to the following conditions:
(bullet) Your account will be charged on or about the date of each investment as
shown above.
(bullet) The privilege of making investments by Auto-Invest may be revoked by
PIMCO Advisors Fund without prior notice if any check is not paid upon
presentation. PIMCO Advisors Funds shall be under no obligation to
notify the undersigned as to the non-payment of any check.
(bullet) Auto-Invest may be discontinued by PIMCO Advisors Funds upon thirty
(30) days written notice prior to any investment date or by the
undersigned at any time by written notice to PIMCO Advisors
Distribution Company, provided such notice is received at least ten
(10) business days prior to the due date of any investment.
<PAGE>
------------------------------------------------------------------------------
8. Automatic
Withdrawal Plan
(Minimum account
balance $10,000)
If withdrawals sent to a
bank, also complete Section
9 of this application.
I (We) hereby request that you establish a Withdrawal Plan by which I(we)
will receive payments
[ ] Monthly [ ] Quarterly
on from for
------------------ --------------------- --------------------------
Day of Month Fund Amount ($100 minimum)
I (We) would like withdrawals to begin: -------------------------. Checks
Day, Month, Year
will be mailed on or about the selected day of each month or quarter.
Please send the Automatic Withdrawal Plan proceeds to (check one):
[ ] Account registration address [ ] Bank account listed in Section 9
[ ] Third part payee as follows:
- -----------------------------------------------------------------------------
Name
- -----------------------------------------------------------------------------
Address City State Zip Code
Withdrawals will be sent to account registration address, or to the bank
account in Section 9 below, unless otherwise specified. If you are
authorizing redemption proceeds to be sent to the bank account, those shares
will normally be redeemed three business days prior to the date you have
selected to have your bank account credited. This plan is subject to the
terms of the prospectus. PIMCO Advisors Distribution Company is hereby
authorized to redeem shares from this account in accordance with the
instructions listed above.
- -----------------------------------------------------------------------
9. Bank Account
Information
Please provide information on the bank you would like to link you PIMCO
Advisors Fund account to:
Type of Account (Select one):
[ ] Checking Account (Please attach a pre-printed voided check)
[ ] Savings Account (Please attach a pre-printed personalized deposit slip with
your account number encoded on it)
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Bank Account Number Bank Account Name(s)(Print title of your bank account exactly as it appears on your bank's records)
- ----------------------------------------------------------------------------------------------------------------------------
Bank Name Bank Address Zip Code
- ------------------------------------- ----------------------------------------------------------------------------------
Signature Date Signature (if joint bank account, both must sign) Date
</TABLE>
--------------------------------------------
Tape your voided check or deposit slip here
--------------------------------------------
<PAGE>
- -------------------------------------------------------------------------------
10. Rights of
Accumulation
(This option available for
Class A shares only)
I own shares in other PIMCO Advisors Funds which may entitle this purchase to
have a reduced sales charge under the provisions in the Fund Prospectus. (See
"Cumulative Quantity Discount" in the Prospectus.)
- ----------------------------------------------------------------------------
Existing Account Name Account No.
- ----------------------------------------------------------------------------
Existing Account Name Account No.
- ----------------------------------------------------------------------------
Existing Account Name Account No.
- -------------------------------------------------------------------------------
11. Letter of Intent
(This option available for
Class A shares only)
I agree to the Letter of Intent conditions stated in the current Prospectus.
I intend to invest, within a 13-month period beginning on -----------------
(initial purchase date), in shares of the Fund(s) purchased with this
application and one or more of the other Funds listed in Section 3 above, an
aggregate amount which, together with the value of shares of any of the Funds
owned by me on the initial purchase date, will be at least equal to:
[ ] $50,000 [ ] $100,000 [ ] $250,000 [ ] $500,000 [ ] $1,000,000
If no date is specified, the initial purchase date will be the date of this
purchase.
- -------------------------------------------------------------------------------
12. Signature and
Certification
I(we) understand that my(our) account will be automatically subject to
certain telephone privileges if I(we) do not check the appropriate box in
Section 5 above and that PIMCO Advisors Funds shall not be liable for any
loss incurred by me(us) by reason of accepting unauthorized telephone
requests for my(our) account provided that PIMCO Advisors Funds follows
reasonable procedures and believes the instructions to be genuine. The
undersigned warrant(s) that I(we) have full authority and, if a natural
person, I(we) am(are) of legal age to purchase shares pursuant to this
application, have received a current Prospectus and agree to be bound by all
the terms, conditions and account features selected in any and all parts of
this Application and the Prospectus. Further, I(we) understand that I(we) may
choose between three share classes. I(we) am(are) aware of the fee structures
for the three share classes and have selected the class best suited to
my(our) investment objectives. I(we) further understand that I(we) may not
exchange from one class to another. Under the penalties of perjury, I certify
that: (i) the number shown in section 1 above is my correct Social Security/
Taxpayer Identification Number or I have applied, or will apply, for such a
number and will provide it within sixty (60) days after signing this
application [if I don't supply such number within sixty (60) days, I am
subject to withholding tax] and (ii) I am not subject to backup withholding
because the IRS (a) has not notified me that I am subject to backup
withholding as a result of failure to report all interest or dividends, or
(b) has rescinded a previously imposed backup withholding requirement. I am
aware that if the Social Security or Tax Identification Number I have
provided is incorrect, I am subject to backup withholding.
If you are subject to backup withholding, please cross out number (ii) above.
Sign exactly as account is to be registered:
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Individual Signature Date Signature of Corporate Officer, Trustee, etc.(if applicable) Date
- --------------------------------------------- ----------------------------------------------------------------------------
Joint Registrant Signature (if any) Date Title of Officer, Trustee, etc.
- ---------------------------------------------------------------------------------------------------------------------------
13. Dealer
Information
- --------------------------------------------------------------------------
(Please be sure to complete Representative first name and middle initial.)
- --------------------------------------------- ----------------------------------------------------------------------------
Dealer Name Representative's Last Name First Name Middle Initial
Dealer Head Office Address: Representative's Branch Office Address:
- --------------------------------------------- ----------------------------------------------------------------------------
Address Address
- --------------------------------------------- -----------------------------------------------------------------------------
City State Zip Code City State Zip Code
( ) ( )
- -------------------------------------------- ------------------------------------- --------------------------------------
Telephone No. Telephone No. Rep.'s A.E. No.
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<PAGE>
PIMCO ADVISORS FUNDS
STATEMENT OF ADDITIONAL INFORMATION
FEBRUARY 1, 1996
This Statement of Additional Information is not a prospectus. This
Statement of Additional Information relates to the Prospectus dated
February 1, 1996, as supplemented from time to time, and should be read in
conjunction therewith. A copy of the Prospectus may be obtained from PIMCO
Advisors Distribution Company, 2187 Atlantic Street, Stamford, Connecticut
06902.
<PAGE>
TABLE OF CONTENTS
- ------------------------------------------------------------------------------
INFORMATION REGARDING FUND INVESTMENTS ...................................... 1
DERIVATIVES ................................................................ 13
INVESTMENT RESTRICTIONS .................................................... 23
CONTINGENT DEFERRED SALES CHARGE AND INITIAL SALES CHARGE .................. 28
DISTRIBUTOR AND DISTRIBUTION AND SERVICING PLANS ........................... 28
EXCHANGE PRIVILEGE ......................................................... 35
HOW TO REDEEM .............................................................. 35
HOW NET ASSET VALUE IS DETERMINED .......................................... 36
CALCULATION OF YIELD AND RETURN ............................................ 38
RECENT PERFORMANCE OF CLASS A SHARES ....................................... 41
RECENT PERFORMANCE OF CLASS B SHARES ....................................... 42
RECENT PERFORMANCE OF CLASS C SHARES ....................................... 43
PERFORMANCE COMPARISONS .................................................... 44
DISTRIBUTIONS .............................................................. 53
TAXES ...................................................................... 54
MANAGEMENT OF THE TRUST .................................................... 58
OTHER SERVICES ............................................................. 63
PORTFOLIO TRANSACTIONS ..................................................... 65
ORGANIZATION AND CAPITALIZATION OF THE TRUST ............................... 68
<PAGE>
CERTAIN OWNERSHIP OF TRUST SHARES .......................................... 70
APPENDIX A ................................................................. 78
APPENDIX B ................................................................. 86
FINANCIAL STATEMENTS ....................................................... 87
<PAGE>
INFORMATION REGARDING FUND INVESTMENTS
--------------------------------------
Debt Securities
- ---------------
Many of the Funds may invest in corporate debt securities of domestic or
foreign issuers that meet minimum ratings criteria set forth for a Fund, or if
unrated, are of comparable quality in the opinion of the Fund's sub-adviser. A
description of the ratings categories used is set forth in Appendix A to this
Statement of Additional Information.
A security is considered to be below "investment grade" quality if it is
either (1) not rated in one of the four highest rating categories by a
Nationally Recognized Statistical Rating Organization ("NRSRO") (i.e., rated Ba
or below by Moody's or BB or below by S&P) or (2) if unrated, determined by the
Manger or relevant sub-adviser to be of comparable quality to obligations so
rated.
Securities rated Baa and BBB are the lowest which are considered
"investment grade" obligations. Moody's describes securities rated Baa as
"medium-grade" obligations; they are "neither highly protected nor poorly
secured... [i]nterest payments and principal security appear adequate for the
present but certain protective elements may be lacking or may be
characteristically unreliable over any great length of time. Such bonds lack
outstanding investment characteristics and in fact have speculative
characteristics as well." S&P describes securities rated BBB as "regarded as
having an adequate capacity to pay interest and repay principal ... whereas it
normally exhibits adequate protection parameters, adverse economic conditions or
changing circumstances are more likely to lead to a weakened capacity than in
higher rated categories."
Investments in securities rated below investment grade that are eligible
for purchase by certain of the Funds, in particular, by the High Income Fund and
Equity Income Fund, are described as "speculative" by both Moody's and S&P.
Investment in lower rated debt securities ("high yield securities") generally
provides greater income and increased opportunity for capital appreciation than
investments in higher quality securities, but they also typically entail greater
price volatility and principal and income risk. These high yield securities are
regarded as predominantly speculative with respect to the issuer's continuing
ability to meet principal and interest payments. The market for these securities
is relatively new, and many of the outstanding high yield securities have not
endured a major business recession. A long-term track record on default rates,
such as that for investment grade corporate bonds, does not exist for this
market. Analysis of the creditworthiness of issuers of debt securities that are
high yield may be more complex than for issuers of higher quality debt
securities.
High yield securities may be more susceptible to real or perceived adverse
economic and competitive industry conditions than investment grade securities.
The prices of high yield securities have been found to be less sensitive to
interest rate changes than higher-rated investments, but more sensitive to
adverse economic downturns or individual corporate developments. A projection of
an economic downturn or of a period of rising interest rates, for example, could
cause a decline in high yield security prices because the advent of a recession
could lessen the ability of a highly leveraged company to make principal and
interest payments on its debt securities. If an issuer of high yield securities
defaults, in addition to risking payment of all or a portion of interest and
principal, the Funds may incur additional expenses to seek recovery. In the case
of high yield securities structured as zero-coupon or pay-in-kind securities,
their market prices are affected to a greater extent by interest rate changes,
and
1
<PAGE>
therefore tend to be more volatile than securities which pay interest
periodically and in cash.
The secondary market on which high yield securities are traded may be less
liquid than the market for higher grade securities. Less liquidity in the
secondary trading market could adversely affect the price at which the Funds
could sell a high yield security, and could adversely affect the daily net asset
value of the shares. Adverse publicity and investor perceptions, whether or not
based on fundamental analysis, may decrease the values and liquidity of high
yield securities especially in a thinly traded market. When secondary markets
for high yield securities are less liquid than the market for higher grade
securities, it may be more difficult to value the securities because such
valuation may require more research, and elements of judgment may play a greater
role in the valuation because there is less reliable, objective data available.
The Manager and the sub-advisers will seek to minimize the risks of investing in
all debt securities through diversification, in-depth credit analysis and
attention to current developments in interest rates and market conditions.
Securities are purchased and sold principally in response to current
assessments of future changes in business conditions and the levels of interest
rates on debt securities of varying maturities, the availability of new
investment opportunities at higher relative yields, and current evaluations of
an issuer's continuing ability to meet its obligations in the future. The
average maturity or duration of the fixed-income securities in the Fund's
portfolio may be varied in response to anticipated changes in interest rates and
to other economic factors, although under normal circumstances the Fund's debt
securities will be primarily those with more than one year remaining to
maturity. Securities may be bought and sold in anticipation of a decline or a
rise in market interest rates. In addition, a security may be sold and another
of comparable quality and maturity (usually, but not always, of a different
issuer) purchased at approximately the same time to take advantage of what are
believed to be short-term differentials in values or yields.
Participation on Creditors Committees
- -------------------------------------
A Fund may from time to time participate on committees formed by creditors
to negotiate with the management of financially troubled issuers of securities
held by the Fund. Such participation may subject the Fund to expenses such as
legal fees and may make the Fund an "insider" of the issuer for purposes of the
federal securities laws, and therefore may restrict the Fund's ability to trade
in or acquire additional positions in a particular security when it might
otherwise desire to do so. Participation by the Fund on such committees also may
expose the Fund to potential liabilities under the federal bankruptcy laws or
other laws governing the rights of creditors and debtors. The Fund would
participate on such committees only when the Manager and the sub-adviser believe
that such participation is necessary or desirable to enforce the Fund's rights
as a creditor or to protect the value of securities held by the Fund.
Mortgage-Related and Other Asset-Backed Securities
- --------------------------------------------------
Mortgage-related securities are interests in pools of mortgage loans made
to residential home buyers, including mortgage loans made by savings and loan
institutions, mortgage bankers, commercial banks and others. Pools of mortgage
loans are assembled as securities for sale to investors by various governmental,
government-related and private organizations (see "Mortgage Pass-Through
Securities"). The Funds may also invest in debt securities which are secured
with collateral consisting of mortgage-related securities (see "Collateralized
Mortgage Obligations"), and in other types of mortgage-related securities.
2
<PAGE>
Mortgage Pass-Through Securities. Interests in pools of mortgage-related
securities differ from other forms of debt securities, which normally provide
for periodic payment of interest in fixed amounts with principal payments at
maturity or specified call dates. Instead, these securities provide a monthly
payment which consists of both interest and principal payments. In effect, these
payments are a "pass-through" of the monthly payments made by the individual
borrowers on their residential or commercial mortgage loans, net of any fees
paid to the issuer or guarantor of such securities. Additional payments are
caused by repayments of principal resulting from the sale of the underlying
property, refinancing or foreclosure, net of fees or costs which may be
incurred. Some mortgage-related securities (such as securities issued by the
Government National Mortgage Association) are described as "modified
pass-through." These securities entitle the holder to receive all interest and
principal payments owed on the mortgage pool, net of certain fees, at the
scheduled payment dates regardless of whether or not the mortgagor actually
makes the payment.
The principal governmental guarantor of mortgage-related securities is the
Government National Mortgage Association ("GNMA"). GNMA is a wholly owned United
States Government corporation within the Department of Housing and Urban
Development. GNMA is authorized to guarantee, with the full faith and credit of
the United States Government, the timely payment of principal and interest on
securities issued by institutions approved by GNMA (such as savings and loan
institutions, commercial banks and mortgage bankers) and backed by pools of
FHA-insured or guaranteed mortgages.
Government-related guarantors (i.e., not backed by the full faith and
credit of the United States Government) include the Federal National Mortgage
Association ("FNMA") and the Federal Home Loan Mortgage Corporation ("FHLMC").
FNMA is a government-sponsored corporation owned entirely by private
stockholders. It is subject to general regulation by the Secretary of Housing
and Urban Development. FNMA purchases conventional (i.e., not insured or
guaranteed by any government agency) residential mortgages from a list of
approved seller/servicers which include state and federally chartered savings
and loan associations, mutual savings banks, commercial banks and credit unions
and mortgage bankers. Pass-through securities issued by FNMA are guaranteed as
to timely payment of principal and interest by FNMA but are not backed by the
full faith and credit of the United States Government.
FHLMC was created by Congress in 1970 for the purpose of increasing the
availability of mortgage credit for residential housing. It is a
government-sponsored corporation formerly owned by the twelve Federal Home Loan
Banks and now owned entirely by private stockholders. FHLMC issues Participation
Certificates ("PCS") which represent interests in conventional mortgages from
FHLMC's national portfolio. FHLMC guarantees the timely payment of interest and
ultimate collection of principal, but PCS are not backed by the full faith and
credit of the United States Government.
Commercial banks, savings and loan institutions, private mortgage
insurance companies, mortgage bankers and other secondary market issuers also
create pass-through pools of conventional residential mortgage loans. Such
issuers may, in addition, be the originators and/or servicers of the underlying
mortgage loans as well as the guarantors of the mortgage-related securities.
Pools created by such non-governmental issuers generally offer a higher rate of
interest than government and government-related pools because there are no
direct or indirect government or agency guarantees of payments in the former
pools. However, timely payment of interest and principal of these pools may be
supported by various forms of insurance or guarantees, including individual
loan, title, pool and hazard insurance and letters of credit. The insurance and
guarantees are issued by governmental entities, private insurers and the
mortgage poolers. Such insurance and guarantees and the creditworthiness of the
issuers
3
<PAGE>
thereof will be considered in determining whether a mortgage-related security
meets a Fund's investment quality standards. There can be no assurance that the
private insurers or guarantors can meet their obligations under the insurance
policies or guarantee arrangements.
Collateralized Mortgage Obligations (CMOs). A CMO is a hybrid between a
mortgage-backed bond and a mortgage pass-through security. Similar to a bond,
interest and prepaid principal is paid, in most cases, semiannually. CMOs may be
collateralized by whole mortgage loans, but are more typically collateralized by
portfolios of mortgage pass-through securities guaranteed by GNMA, FHLMC, or
FNMA, and their income streams.
CMOs are structured into multiple classes, each bearing a different stated
maturity. Actual maturity and average life will depend upon the prepayment
experience of the collateral. CMOs provide for a modified form of call
protection through a de facto breakdown of the underlying pool of mortgages
according to how quickly the loans are repaid. Monthly payment of principal
received from the pool of underlying mortgages, including prepayments, is first
returned to investors holding the shortest maturity class. Investors holding the
longer maturity classes receive principal only after the first class has been
retired. An investor is partially guarded against a sooner than desired return
of principal because of the sequential payments.
In a typical CMO transaction, a corporation ("issuer") issues multiple
series (e.g. A, B, C, Z) of CMO bonds ("Bonds"). Proceeds of the Bond offering
are used to purchase mortgages or mortgage pass-through certificates
("Collateral"). The Collateral is pledged to a third party trustee as security
for the Bonds. Principal and interest payments from the Collateral are used to
pay principal on the Bonds in the order A, B, C, Z. The Series A, B, and C Bonds
all bear current interest. Interest on the Series Z Bond is accrued and added to
principal and a like amount is paid as principal on the Series A, B, or C Bond
currently being paid off. When the Series A, B, and C Bonds are paid in full,
interest and principal on the Series Z Bond begins to be paid currently. With
some CMOS, the issuer serves as a conduit to allow loan originators (primarily
builders or savings and loan associations) to borrow against their loan
portfolios.
FHLMC Collateralized Mortgage Obligations. FHLMC CMOs are debt obligations
of FHLMC issued in multiple classes having different maturity dates which are
secured by the pledge of a pool of conventional mortgage loans purchased by
FHLMC. Unlike FHLMC PCS, payments of principal and interest on the CMOs are made
semiannually as opposed to monthly. The amount of principal payable on each
semiannual payment date is determined in accordance with FHLMC's mandatory
sinking fund schedule, which, in turn, is equal to approximately 100% of FEA
prepayment experience applied to the mortgage collateral pool. All sinking fund
payments in the CMOs are allocated to the retirement of the individual classes
of bonds in the order of their stated maturities. Payment of principal on the
mortgage loans in the collateral pool in excess of the amount of FHLMC's minimum
sinking fund obligation for any payment date are paid to the holders of the CMOs
as additional sinking fund payments. Because of the "pass-through" nature of all
principal payments received on the collateral pool in excess of FHLMC's minimum
sinking fund requirement, the rate at which principal of the CMO is actually
repaid is likely to be such that each class of bonds will be retired in advance
of its scheduled maturity date.
If collection of principal (including prepayments) on the mortgage loans
during any semiannual payment period is not sufficient to meet FHLMC's minimum
sinking fund obligation on the next sinking fund payment date, FHLMC agrees to
make up the deficiency from its general funds.
4
<PAGE>
Criteria for the mortgage loans in the pool backing the FHLMC CMOs are
identical to those of FHLMC PCS. FHLMC has the right to substitute collateral in
the event of delinquencies and/or defaults.
Other Mortgage-Related Securities. Other mortgage-related securities
include securities other than those described above that directly or indirectly
represent a participation in, or are secured by and payable from, mortgage loans
on real property, including CMO residuals or stripped mortgage-backed
securities. Other mortgage-related securities may be equity or debt securities
issued by agencies or instrumentalities of the U.S. Government or by private
originators of, or investors in, mortgage loans, including savings and loan
associations, homebuilders, mortgage banks, commercial banks, investment banks,
partnerships, trusts and special purpose entities of the foregoing.
CMO Residuals. CMO residuals are derivative mortgage securities issued by
agencies or instrumentalities of the U.S. Government or by private originators
of, or investors in, mortgage loans, including savings and loan associations,
homebuilders, mortgage banks, commercial banks, investment banks and special
purpose entities of the foregoing.
The cash flow generated by the mortgage assets underlying a series of CMOs
is applied first to make required payments of principal and interest on the CMOs
and second to pay the related administrative expenses of the issuer. The
residual in a CMO structure generally represents the interest in any excess cash
flow remaining after making the foregoing payments. Each payment of such excess
cash flow to a holder of the related CMO residual represents income and/or a
return of capital. The amount of residual cash flow resulting from a CMO will
depend on, among other things, the characteristics of the mortgage assets, the
coupon rate of each class of CMO, prevailing interest rates, the amount of
administrative expenses and the prepayment experience on the mortgage assets. In
particular, the yield to maturity on CMO residuals is extremely sensitive to
prepayments on the related underlying mortgage assets, in the same manner as an
interest-only ("IO") class of stripped mortgage-backed securities. See "Other
Mortgage-Related Securities-Stripped Mortgage-Backed Securities." In addition,
if a series of a CMO includes a class that bears interest at an adjustable rate,
the yield to maturity on the related CMO residual will also be extremely
sensitive to changes in the level of the index upon which interest rate
adjustments are based. As described below with respect to stripped
mortgage-backed securities, in certain circumstances a Fund may fail to recoup
fully its initial investment in a CMO residual.
CMO residuals are generally purchased and sold by institutional investors
through several investment banking firms acting as brokers or dealers. The CMO
residual market has only very recently developed and CMO residuals currently may
not have the liquidity of other more established securities trading in other
markets. Transactions in CMO residuals are generally completed only after
careful review of the characteristics of the securities in question. In
addition, CMO residuals may or, pursuant to an exemption therefrom, may not have
been registered under the Securities Act of 1933, as amended. CMO residuals,
whether or not registered under such Act, may be subject to certain restrictions
on transferability, and may be deemed "illiquid" and subject to a Fund's
limitations on investment in illiquid securities.
Stripped Mortgage-Backed Securities. Stripped mortgage-backed securities
("SMBS") are derivative multi-class mortgage securities. SMBS may be issued by
agencies or instrumentalities of the U.S. Government, or by private originators
of, or investors in, mortgage loans, including savings and loan associations,
mortgage banks, commercial banks, investment banks and special purpose entities
5
<PAGE>
of the foregoing.
SMBS are usually structured with two classes that receive different
proportions of the interest and principal distributions on a pool of mortgage
assets. A common type of SMBS will have one class receiving some of the interest
and most of the principal from the mortgage assets, while the other class will
receive most of the interest and the remainder of the principal. In the most
extreme case, one class will receive all of the interest (the "IO" class), while
the other class will receive all of the principal (the principal-only or "PO"
class) . The yield to maturity on an IO class is extremely sensitive to the rate
of principal payments (including prepayments) on the related underlying mortgage
assets, and a rapid rate of principal payments may have a material adverse
effect on a Fund's yield to maturity from these securities. If the underlying
mortgage assets experience greater than anticipated prepayments of principal, a
Fund may fail to fully recoup its initial investment in these securities even if
the security is in one of the highest rating categories.
Although SMBS are purchased and sold by institutional investors through
several investment banking firms acting as brokers or dealers, these securities
were only recently developed. As a result, established trading markets have not
yet developed and, accordingly, these securities may be deemed "illiquid" and
subject to a Fund's limitations on investment in illiquid securities.
Depository Receipts
- -------------------
The International and Emerging Markets Funds may invest in foreign
securities in the form of American Depositary Receipts (ADR's), European
Depositary Receipts (EDR's) or other similar securities convertible into
securities of foreign issuers. These securities may not necessarily be
denominated in the same currency as the securities into which they may be
converted. ADR's are receipts typically issued by a United States bank or trust
company evidencing ownership of the underlying foreign securities. EDR's are
receipts typically issued by a European bank or trust company evidencing
ownership of the underlying foreign securities. Generally, ADR's, in registered
form, are designed for use in the United States securities markets and EDR's, in
bearer form, are designed for use in European securities markets.
Warrants
- --------
Each of the Global Income, High Income, Total Return Income,
Short-Intermediate, Equity Income, Value, Growth, Discovery, Opportunity,
Target, Precious Metals, Emerging Markets and International Funds may invest up
to 5% of its net assets in warrants or rights (valued at the lower of cost or
market) which entitle the holder to buy equity securities at a specific price
for a specified period of time, provided that no more than 2% of its net assets
are invested in warrants not listed on the New York or American Stock Exchanges.
Each Fund may invest in warrants or rights acquired by such Fund as part of a
unit or attached to securities at the time of purchase without limitation.
High Yield Securities
- ---------------------
As stated in the Prospectus, many of the Funds may purchase High Yield
Securities (as defined in the Prospectus) rated in either the fifth or (except
for the Tax-Exempt Fund) sixth highest rating categories by any NRSRO or
comparable unrated securities, and the Equity Income Fund may purchase High
Yield Securities rated below the sixth highest rating category by any NRSRO or
comparable unrated securities (but will not purchase any security in default on
the date of acquisition). Each Fund of
6
<PAGE>
the Trust that may purchase High Yield Securities may continue to hold such
securities following a decline in their rating if in the opinion of the Manager
or the Funds' sub-adviser, as the case may be, it would be advantageous to do
so.
Portfolio Turnover
- ------------------
A change in securities held by a Fund is known as "portfolio turnover" and
almost always involves the payment by the Fund of brokerage commissions or
dealer markup and other transaction costs on the sale of securities as well as
on the reinvestment of the proceeds in other securities. As a result of the
investment policies of the Funds, under certain market conditions their
portfolio turnover may be higher than those of many other investment companies.
It is, however, impossible to predict portfolio turnover in future years. For
purposes of reporting portfolio turnover rates, all securities which at the time
of purchase have maturities of one year or less are excluded, so that it is
expected that the policies of the Money Market Fund will result in a reported
portfolio turnover rate of zero for that Fund, although it is anticipated that,
like other funds with similar portfolios, it will change the securities in its
portfolio frequently. As disclosed in the Prospectus, high portfolio turnover
involves correspondingly greater brokerage commissions and other transaction
costs, which will be borne directly by the Funds.
Repurchase Agreements
- ---------------------
Each of the Funds may enter into repurchase agreements with domestic
commercial banks or registered broker/dealers with respect to not more than 25%
of its total assets (taken at current value) (20% of total assets in the case of
the Tax Exempt Fund), except that no such limit applies in the case of the Money
Market Fund or as to the other Funds when they are investing for temporary
defensive purposes. A repurchase agreement is a contract under which a Fund
would acquire a security for a relatively short period (usually not more than
one week) subject to the obligation of the seller to repurchase and the Fund to
resell such security at a fixed time and price (representing the Fund's cost
plus interest). In the case of repurchase agreements with broker-dealers, the
value of the underlying securities (or collateral) will be at least equal at all
times to the total amount of the repurchase obligation, including the interest
factor. The Fund bears a risk of loss in the event that the other party to a
repurchase agreement defaults on its obligations and the Fund is delayed or
prevented from exercising its rights to dispose of the collateral securities.
The Manager and the sub-advisers, as appropriate, will monitor the
creditworthiness of the counterparties.
Securities Loans
- ----------------
Each Fund may make secured loans of its portfolio securities amounting to
no more than 33 1/3% of its total assets. The risks in lending portfolio
securities, as with other extensions of credit, consist of possible delay in
recovery of the securities or possible loss of rights in the collateral should
the borrower fail financially. However, such loans will be made only to
broker-dealers that are believed by the Manager or the sub-adviser to be of
relatively high credit standing. Securities loans are made to broker-dealers
pursuant to agreements requiring that loans be continuously secured by
collateral in cash, U.S. Government securities or other liquid high grade debt
obligations at least equal at all times to the market value of the securities
lent, provided that such loans made by the U.S. Government Fund will only be
secured by cash and U.S. Government securities. The borrower pays to the lending
Fund an amount equal to any dividends or interest received on the securities
lent. The Fund may invest the cash
7
<PAGE>
collateral received in interest-bearing, short-term securities or receive a fee
from the borrower. Although voting rights or rights to consent with respect to
the loaned securities pass to the borrower, the Fund retains the right to call
the loans at any time on reasonable notice, and it will do so in order that the
securities may be voted by the Fund if the holders of such securities are asked
to vote upon or consent to matters materially affecting the investment. The Fund
may also call such loans in order to sell the securities involved.
Forward Commitments and Foreign Currency Transactions
- -----------------------------------------------------
As described in the Prospectus, each Fund may make contracts to purchase
securities for a fixed price at a future date beyond customary settlement time
("forward commitments") if the Fund either (i) holds, and maintains until the
settlement date in a segregated account, cash, U.S. Government securities or
other liquid high grade debt obligations in an amount sufficient to meet the
purchase price or (ii) enters into an offsetting contract for the forward sale
of securities of equal value that it owns. Each Fund (other than the Money
Market Fund, the Tax Exempt Fund and the U.S. Government Fund) may enter into
forward commitments for the purchase or sale of foreign currencies. Forward
commitments may be considered securities in themselves. They involve a risk of
loss if the value of the security to be purchased declines prior to the
settlement date, which risk is in addition to the risk of decline in value of
the Fund's other assets. A Fund may dispose of a commitment prior to settlement
and may realize short-term profits or losses upon such disposition.
Many of the Funds may enter into forward foreign currency exchange
contracts or purchase and sell foreign currency options in order to protect
against uncertainty in the level of future foreign exchange rates. Since
investment in foreign securities will usually involve foreign currencies, and
since a Fund may temporarily hold funds in bank deposits in foreign currencies
during the course of investment programs, the value of the assets of a Fund as
measured in United States dollars may be affected by changes in foreign currency
exchange rates and exchange control regulations, and the Fund may incur costs in
connection with conversion between various currencies. The International,
Emerging Markets, Global Income, High Income, Total Return Income and
Short-Intermediate Funds may also use such instruments to shift exposure to
foreign currency fluctuations from one currency to another.
All Funds other than the International, Emerging Markets, Global Income,
High Income, Total Return Income and Short-Intermediate Funds may enter into
forward contracts only under two circumstances. First, when a Fund enters into a
contract for the purchase or sale of a security, commodity or Metal-Indexed Note
(see below) denominated in a foreign currency, it may desire to "lock in" the
U.S. dollar price of the security. By entering into a forward contract for the
purchase or sale of the amount of foreign currency involved in the transactions
for a fixed amount of dollars, the Fund may be able to protect itself against a
possible loss resulting from an adverse change in the relationship between the
U.S. dollar and the subject foreign currency during the period between the date
on which the investment is purchased or sold and the date on which payment is
made or received.
Second, when management of the Fund believes that the currency of a
particular foreign country may suffer a substantial decline against the U.S.
dollar, it may enter into a forward contract to sell, for a fixed amount of
dollars, the amount of foreign currency approximating the value of some or all
of the Fund's portfolio investments denominated in such foreign currency. The
precise matching of the forward contract amounts and the value of the securities
involved will not generally be possible since the future
8
<PAGE>
value of such securities in foreign currencies will change as a consequence of
market movements in the value of those investments between the date the forward
contract is entered into and the date it matures.
Of course, the Fund is not required to enter into such transactions with
regard to its foreign currency-denominated securities and will not do so unless
deemed appropriate by the Manager or the sub-adviser. The Funds' ability to
engage in forward contracts may be limited by tax considerations.
When-Issued and Delayed Delivery Transactions
- ---------------------------------------------
Each Fund may enter into agreements with banks or broker-dealers for the
purchase or sale of securities at an agreed-upon price on a specified future
date. Such agreements might be entered into, for example, when the relevant Fund
anticipates a decline in interest rates and is able to obtain a more
advantageous yield by committing currently to purchase securities to be issued
later. When the Fund purchases securities on a when-issued or delayed delivery
basis, it is required either (i) to create a segregated account with the Fund's
custodian and to maintain in that account cash, U.S. Government securities or
other liquid high grade debt obligations in an amount equal on a daily basis to
the amount of the Fund's when-issued or delayed delivery commitments or (ii) to
enter into an offsetting forward sale of securities it owns equal in value to
those purchased. The Fund will only make commitments to purchase securities on a
when-issued or delayed-delivery basis with the intention of actually acquiring
the securities. However, the Fund may sell these securities before the
settlement date if it is deemed advisable as a matter of investment strategy.
When the time comes to pay for when-issued or delayed-delivery securities, the
Fund will meet its obligations from then available cash flow or the sale of
securities, or, although it would not normally expect to do so, from the sale of
the when-issued or delayed delivery securities themselves (which may have a
value greater or less than the Fund's payment obligation).
Borrowing
- ---------
Subject to the limitations described under "Investment Restrictions" in
this Statement, a Fund may be permitted to borrow for temporary purposes and/or
for investment purposes. Such a practice will result in leveraging of a Fund's
assets and may cause a Fund to liquidate portfolio positions when it would not
be advantageous to do so. This borrowing may be unsecured. The Investment
Company Act of 1940 (the "1940 Act") requires a Fund to maintain continuous
asset coverage of 300% of the amount borrowed. If the 300% asset coverage should
decline as a result of market fluctuations or other reasons, a Fund may be
required to sell some of its portfolio holdings within three days to reduce the
debt and restore the 300% asset coverage, even though it may be disadvantageous
from an investment standpoint to sell securities at that time. Borrowing will
tend to exaggerate the effect on net asset value of any increase or decrease in
the market value of a Fund's portfolio. Money borrowed will be subject to
interest costs which may or may not be recovered by appreciation of the
securities purchased. A Fund also may be required to maintain minimum average
balances in connection with such borrowing or to pay a commitment or other fee
to maintain a line of credit; either of these requirements would increase the
cost of borrowing over the stated interest rate.
Among the forms of borrowing in which some Funds may engage is the entry
into reverse repurchase agreements. A reverse repurchase agreement involves the
sale of a portfolio-eligible security by a Fund, coupled with its agreement to
repurchase the instrument at a specified time and price. Asset coverage
requirements of the 1940 Act require each Fund to maintain a segregated account
with its custodian consisting of cash, U.S. Government securities or other
liquid high grade debt
9
<PAGE>
obligations equal (on a daily mark-to-market basis) to its obligations under
reverse repurchase agreements with broker-dealers (but not banks). However,
reverse repurchase agreements involve the risk that the market value of
securities retained by the Fund may decline below the repurchase price of the
securities sold by the Fund which it is obligated to repurchase. To the extent
that a Fund collateralizes its obligations under a reverse repurchase agreement,
the asset coverage requirements of the 1940 Act described above will not apply.
Some Funds also may enter into "dollar rolls," such as "mortgage dollar
rolls," which are similar to reverse purchase agreements in certain respects. In
a "dollar role" transaction a Fund sells a mortgage-related security (such as a
GNMA security) to a dealer and simultaneously agrees to repurchase a similar
security (but not the same security) in the future at a pre-determined price. A
"dollar roll" can be viewed, like a reverse repurchase agreement, as a
collateralized borrowing in which a Fund pledges a mortgage-related security to
a dealer to obtain cash. Unlike in the case of reverse repurchase agreements,
the dealer with which a Fund enters into a dollar roll transaction is not
obligated to return the same securities as those originally sold by the Fund,
but only securities which are "substantially identical." To be considered
"substantially identical," the securities returned to a Fund generally must: (1)
be collateralized by the same types of underlying mortgages; (2) be issued by
the same agency and be part of the same program; (3) have a similar original
stated maturity; (4) have identical net coupon rates; (5) have similar market
yields (and therefore price) ; and (6) satisfy "good delivery" requirements,
meaning that the aggregate principal amounts of the securities delivered and
received back must be within 2.5% of the initial amount delivered.
A Fund's obligations under a dollar roll agreement must be covered by
cash, U.S. Government securities or other liquid high grade debt obligations
equal in value to the securities subject to repurchase by the Fund, maintained
in a segregated account. To the extent that a Fund collateralizes its
obligations under a dollar roll agreement, the asset coverage requirements of
the 1940 Act will not apply to such transactions. Furthermore, because dollar
roll transactions may be for terms ranging between one and six months, dollar
roll transactions may be deemed "illiquid" and subject to a Fund's overall
limitations on investments in illiquid securities.
Tax Exempt Bonds
- ----------------
As noted in the Prospectus, it is a policy of the Tax Exempt Fund to have
80% of its net assets invested in debt obligations the interest on which, in the
opinion of bond counsel to the issuer at the time of issuance, is exempt from
federal income tax ("Tax Exempt Bonds") which are rated Baa or higher by Moody's
or BBB or higher by S&P, or in one of the four highest rating categories of any
other NRSRO, or which are unrated and determined by the Manager or the Fund's
sub-adviser to be of quality comparable to obligations so rated. Under such
policy, the Fund may invest up to 20% of its net assets in Tax Exempt Bonds
rated in the fifth highest rating category by any NRSRO, or unrated obligations
determined by the Fund's sub-adviser to be of quality comparable to obligations
so rated. A description of these ratings is set forth in Appendix A hereto. From
time to time, however, the Fund may have less than 80% of its net assets
invested in Tax Exempt Bonds for temporary defensive purposes. The ability of
the Fund to invest in securities other than Tax Exempt Bonds is limited by a
requirement of the Internal Revenue Code that at least 50% of the Fund's total
assets be invested in Tax Exempt Bonds at the end of each calendar quarter. See
"Taxes."
Tax Exempt Bonds share the attributes of debt securities generally
(described elsewhere in this Statement and the Prospectus), but are generally
issued by states, municipalities and other political
10
<PAGE>
subdivisions, agencies, authorities and instrumentalities of states and
multi-state agencies or authorities. The Tax Exempt Bonds which the Tax Exempt
Fund may purchase include general obligation bonds and limited obligation bonds
(or revenue bonds), including industrial development bonds issued pursuant to
former federal tax law. General obligation bonds are obligations involving the
credit of an issuer possessing taxing power and are payable from such issuer's
general revenues and not from any particular source. Limited obligation bonds
are payable only from the revenues derived from a particular facility or class
of facilities or, in some cases, from the proceeds of a special excise or other
specific revenue source. Tax-exempt private activity bonds and industrial
development bonds generally are also revenue bonds and thus are not payable from
the issuer's general revenues. The credit and quality of private activity bonds
and industrial development bonds are usually related to the credit of the
corporate user of the facilities. Payment of interest on and repayment of
principal of such bonds is the responsibility of the corporate user (and/or any
guarantor).
Under the Internal Revenue Code of 1986, certain limited obligation bonds
are considered "private activity bonds" and interest paid on such bonds is
treated as an item of tax preference for purposes of calculating federal
alternative minimum tax liability.
As noted in the Prospectus, Tax Exempt Bonds are subject to credit and
market risk. Generally, prices of higher quality issues tend to fluctuate less
with changes in market interest rates than prices of lower quality issues and
prices of longer maturity issues tend to fluctuate more than prices of shorter
maturity issues.
The Tax Exempt Fund may purchase and sell portfolio investments to take
advantage of changes or anticipated changes in yield relationships, markets or
economic conditions. The Fund may also sell Tax Exempt Bonds due to changes in
the sub-adviser's evaluation of the issuer or cash needs resulting from
redemption requests for Fund shares. The secondary market for Tax Exempt Bonds
typically has been less liquid than that for taxable debt securities, and this
may affect the Fund's ability to sell particular Tax Exempt Bonds at
then-current market prices, especially in periods when other investors are
attempting to sell the same securities.
Prices and yields on Tax Exempt Bonds are dependent on a variety of
factors, including general money market conditions, the financial condition of
the issuer, general conditions of the Tax Exempt Bond market, the size of a
particular offering, the maturity of the obligation and the rating of the issue.
A number of these factors, including the ratings of particular issues, are
subject to change from time to time. Information about the financial condition
of an issuer of Tax Exempt Bonds may not be as extensive as that which is made
available by corporations whose securities are publicly traded.
As noted in the Prospectus, obligations of issuers of Tax Exempt Bonds are
subject to the provisions of bankruptcy, insolvency and other laws, such as the
Federal Bankruptcy Reform Act of 1978, affecting the rights and remedies of
creditors. Congress or state legislatures may seek to extend the time for
payment of principal or interest, or both, or to impose other constraints upon
enforcement of such obligations. There is also the possibility that as a result
of litigation or other conditions the power or ability of issuers to meet their
obligations for the payment of interest and principal on their Tax Exempt Bonds
may be materially affected or their obligations may be found to be invalid or
unenforceable. Such litigation or conditions may from time to time have the
effect of introducing uncertainties in the market for Tax Exempt Bonds or
certain segments thereof, or of materially affecting the credit risk with
respect to particular bonds. Adverse economic, business, legal or political
developments might affect all or a substantial portion of the Fund's Tax Exempt
Bonds in the same
11
<PAGE>
manner.
Metal-Indexed Notes and Precious Metals
- ---------------------------------------
The Precious Metals Fund may invest in notes, the principal amount or
redemption price of which is indexed to and thus varies directly with changes in
the market price of gold bullion or other precious metals ("Metal-Indexed
Notes"). It is expected that the value of Metal-Indexed Notes will be as
volatile as the price of the underlying metal.
The Precious Metals Fund will only purchase Metal-Indexed Notes which are
rated, or are issued by issuers that have outstanding debt obligations rated,
investment grade or commercial paper rated in the top rating category by any
NRSRO or of issuers that the Manager or the sub-adviser has determined to be of
similar creditworthiness. Debt Obligations rated in the fourth highest rating
category by an NRSRO are considered to have some speculative characteristics.
The Metal-Indexed Notes might be backed by a bank letter of credit, performance
bond or might be otherwise secured, and any such security, which would be held
by the Precious Metals Fund's custodian, would be taken into account in
determining the creditworthiness of the securities. The Precious Metals Fund
might purchase unsecured Metal-Indexed Notes if the issuer thereof met the
Fund's credit standards without any such security. While the principal amount or
redemption price of Metal-Indexed Notes would vary with the price of the
resource, such securities would not be secured by a pledge of the resource or
any other security interest in or claim on the resource. In the case of
Metal-Indexed Notes not backed by a performance bond, letter of credit or
similar security, it is expected that such securities generally would not be
secured by any other specific assets.
The Precious Metals Fund anticipates that if Metal-Indexed senior
securities were to be purchased, such securities would be issued by precious
metals or commodity brokers or dealers, by mining companies, by commercial banks
or by other financial institutions. Such issuers would issue notes to hedge
their inventories and reserves of the resource, or to borrow money at a
relatively low cost (which would include the nominal rate of interest paid on
Metal-Indexed Notes, described below, and the cost of hedging the issuer's
Metals exposure). The Precious Metals Fund would not purchase a Metal-Indexed
Note issued by a broker or dealer if as a result of such purchase more than 5%
of the value of the Precious Metals Fund's total assets would be invested in
securities of such issuer. The Precious Metals Fund might purchase Metal-Indexed
Notes from brokers or dealers which are not also securities brokers or dealers.
Precious metals or commodity brokers or dealers are not subject to supervision
or regulation by any governmental authority or self-regulatory organization in
connection with the issuance of Metal-Indexed Notes.
Until recently, there were no Metal-Indexed Notes outstanding and
consequently there is no secondary trading market for such securities. Although
a limited secondary market might develop among institutional traders, there is
no assurance that such a market will develop. No public market is expected to
develop, since the Precious Metals Fund expects that Metal-Indexed Notes will
not be registered under the Securities Act of 1933 and therefore disposition of
such securities, other than to the issuer thereof (as described below), would be
dependent upon the availability of an exemption from such registration.
Any Metal-Indexed Notes which the Precious Metals Fund might purchase
generally will have maturities of one year or less. Such notes, however, will be
subject to being called for redemption by the issuer on relatively short notice.
In addition, it is expected that the Metal-Indexed Notes will be subject
12
<PAGE>
to being put by the Precious Metals Fund to the issuer or to a stand-by broker
meeting the credit standards set forth above, with payments being received by
the Precious Metals Fund on no more than 7 days notice. A stand-by broker might
be a securities broker-dealer, in which case the Precious Metals Fund's
investment will be limited by applicable regulations of the Securities and
Exchange Commission. The put feature of the Metal-Indexed Notes will ensure
liquidity even in the absence of a secondary trading market. The securities will
be repurchased upon exercise of the holder's put at the price determined in the
manner described above, less repurchase fees, if any, which are not expected to
exceed 1% of the redemption or repurchase proceeds. Depending upon the terms of
particular Metal-Indexed Notes, there might be a period as long as five days
between the date upon which the Precious Metals Fund notifies the issuer of the
exercise of the put and determination of the sale price.
It is expected that any Metal-Indexed Notes which the Precious Metals Fund
might purchase will bear interest or pay preferred dividends at relatively
nominal rates under 2% per annum. The Precious Metals Fund's holdings of such
senior securities therefore would not generate appreciable current income, and
the return from such senior securities would be primarily from any profit on the
sale or maturity thereof at a time when the price of the relevant precious metal
is higher than it was when the senior securities were purchased. The Precious
Metals Fund will not invest in Metal-Indexed Notes that are not publicly traded
until it is certain of how the Internal Revenue Service would characterize
income derived from such notes.
DERIVATIVES
-----------
The Prospectus describes the extent to which the Funds may employ
strategies involving the use of derivative instruments such as options and
futures contracts. The following discussion relates to the use of such
strategies by the Funds which are authorized to employ them.
Options Transactions
- --------------------
No Fund will write options that are not "covered." A written call option
is "covered" if the Fund owns the underlying security subject to the call or has
an absolute and immediate right to acquire that security without additional cash
consideration (or for additional cash consideration held in a segregated account
by its custodian) upon conversion or exchange of other securities held in its
portfolio. A call option is also covered if the Fund holds on a share-for-share
basis a call on the same security as the call written where the exercise price
of the call held is equal to or less than the exercise price of the call written
or greater than the exercise price of the call written if the difference is
maintained by the Fund in cash, U.S. Government securities or other liquid high
grade debt obligations in a segregated account with its custodian. A written put
option is "covered" if the Fund maintains cash, U.S. Government securities or
other liquid high grade debt obligations with a value equal to the exercise
price in a segregated account with its custodian, or holds on a share-for-share
basis a put on the same security as the put written where the exercise price of
the put held is equal to or greater than the exercise price of the put written.
The premium paid by the purchaser of an option will reflect, among other things,
the relationship of the exercise price to the market price and volatility of the
underlying security, the remaining term of the option and supply and demand
interest rates.
If the writer of an option wishes to terminate his obligation, he may
effect a "closing purchase transaction." This is accomplished by buying an
option of the same series as the option previously written. The effect of the
purchase is that the writer's position will be canceled by the clearing
corporation. However, a writer may not effect a closing purchase transaction
after he has been notified
13
<PAGE>
of the exercise of an option. Likewise, an investor who is the holder of an
option may liquidate his position by effecting a "closing sale transaction."
This is accomplished by selling an option of the same series as the option
previously purchased. There is no guarantee that a Fund will be able to effect a
closing purchase or a closing sale transaction at any particular time.
Effecting a closing transaction in the case of a written call option will
permit the Fund to write another call option on the underlying security with
either a different exercise price or expiration date or both, or in the case of
a written put option will permit the Fund to write another put option to the
extent that the exercise price thereof is secured by depositing cash or high
grade obligations. Also, effecting a closing transaction will permit the cash or
proceeds from the concurrent sale of any securities subject to the option to be
used for other Fund investments. If the Fund desires to sell a particular
security from its portfolio on which it has written a call option, it will
effect a closing transaction prior to or concurrent with the sale of the
security.
The Fund will realize a profit from a closing transaction if the price of
the transaction is less than the premium received from writing the option or is
more than the premium paid to purchase the option; the Fund will realize a loss
from a closing transaction if the price of the transaction is more than the
premium received from writing the option or is less than the premium paid to
purchase the option. Because increases in the market price of a call option will
generally reflect increases in the market price of the underlying security, any
loss resulting from the repurchase of a call option is likely to be offset in
whole or in part by appreciation of the underlying security owned by the Fund.
The Funds which may write options may do so in connection with
buy-and-write transactions; that is, the Fund will purchase a security and then
write a call option against that security. The exercise price of the call the
Fund determines to write will depend upon the expected price movement of the
underlying security. The exercise price of a call option may be below
("in-the-money"), equal to ("at-the-money") or above ("out-of-the-money") the
current value of the underlying security at the time the option is written.
Buy-and-write transactions using in-the-money call options may be used when it
is expected that the price of the underlying security will remain flat or
decline moderately during the option period. Buy-and-write transactions using
at-the-money call options may be used when it is expected that the price of the
underlying security will remain fixed or advance moderately during the option
period. Buy-and-write transactions using out-of-the-money call options may be
used when it is expected that the premiums received from writing the call option
plus the appreciation in the market price of the underlying security up to the
exercise price will be greater than the appreciation in the price of the
underlying security alone. If the call options are exercised in such
transactions, the Fund's maximum gain will be the premium received by it for
writing the option, adjusted upwards or downwards by the difference between the
Fund's purchase price of the security and the exercise price. If the options are
not exercised and the price of the underlying security declines, the amount of
such decline will be offset in part, or entirely, by the premium received.
The writing of covered put options is similar in terms of risk/return
characteristics to buy-and-write transactions. If the market price of the
underlying security rises or otherwise is above the exercise price, the put
option will expire worthless and the Fund's gain will be limited to the premium
received. If the market price of the underlying security declines or otherwise
is below the exercise price, the Fund may elect to close the position or take
delivery of the security at the exercise price. In that event, the Fund's return
will be the premium received from the put option minus the cost of closing the
position or, if it chooses to take delivery of the security, the premium
received from the put option minus the amount by which the market price of the
security is below the exercise price. Out-of-the-money, at-the-money
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<PAGE>
and in-the-money put options may be used by the Fund in the same market
environments that call options are used in equivalent buy-and-write
transactions.
The extent to which each Fund will be able to write and purchase call and
put options will also be restricted by the Trust's intention to qualify each
Fund as a regulated investment company under the federal income tax law. See
"Taxes."
OTC Options. The Funds will enter into over-the-counter ("OTC") options
transactions only with primary dealers in U.S. Government securities and only
pursuant to agreements that will assure that the relevant Fund will at all times
have the right to repurchase the option written by it from the dealer at a
specified formula price. The Funds will treat the amount by which such formula
price exceeds the intrinsic value of the option (i.e., the amount, if any, by
which the market price of the underlying security exceeds the exercise price of
the option) as an illiquid investment.
It is the present policy of each Fund not to enter into any OTC option
transaction if, as a result, more than 15% of that Fund's net assets would be
invested in (i) OTC options purchased by the Fund, (ii) the illiquid portion
(determined under the foregoing formula) of OTC options written by the Fund, and
(iii) other illiquid investments as set forth below under the heading
"Investment Restrictions."
Futures Transactions
- --------------------
The Funds may sell futures contracts, purchase put options on futures
contracts and write call options on futures contracts for the purpose of hedging
their respective portfolios against the adverse effects of anticipated movements
in interest rates (in the case of fixed-income securities), currency exchange
rates (in the case of foreign securities) or precious metal prices (in the case
of precious metals or securities of precious metal-related companies). The Funds
may purchase futures contracts and call options thereon and write put options
for the purpose of protecting a Fund against an increase in the market price of
securities (or, in the case of the Precious Metals Fund, the commodities) it
intends to acquire. Information concerning futures contracts and options on
futures contracts is set forth below.
Futures Contracts. A futures contract sale creates an obligation by the
seller to deliver the type of commodity or financial instrument called for in
the contract in a specified delivery month for a stated price. A futures
contract purchase creates an obligation by the purchaser to take delivery of the
underlying commodity or financial instrument in a specified delivery month at a
stated price. The specific instruments delivered or taken, respectively, at
settlement date are not determined until at or near that date. The determination
is made in accordance with the rules of the exchange on which the futures
contract sale or purchase was made. An index futures contract is similar except
that the parties agree to take or make delivery of an amount of cash equal to a
specified dollar amount times the difference between the securities index value
at the close of the last trading day of the contract and the price at which the
futures contract is originally struck. Futures contracts are traded only on
commodity exchanges -- known as "contract markets" -- approved for such trading
by the Commodity Futures Trading Commission ("CFTC"), and must be executed
through a futures commission merchant or brokerage firm which is a member of a
contract market.
Although futures contracts by their terms call for actual delivery or
acceptance of commodities or securities, in most cases the contracts are closed
out before the settlement date without the making or taking of delivery. Closing
out a futures contract sale is effected by purchasing a futures contract for the
same aggregate amount of the specific type of financial instrument or commodity
and the same delivery
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<PAGE>
date. If the price of the initial sale of the futures contract exceeds the price
of the offsetting purchase, the seller is paid the difference and realizes a
gain. Conversely, if the price of the offsetting purchase exceeds the price of
the initial sale, the seller realizes a loss. Similarly, the closing out of a
futures contract purchase is effected by the purchaser entering into a futures
contract sale. If the offsetting sale price exceeds the purchase price, the
purchaser realizes a gain, and if the purchase price exceeds the offsetting sale
price, the purchaser realizes a loss.
The purchase (that is, assuming a long position in) or sale (that is,
assuming a short position in) of a futures contract differs from the purchase or
sale of a security, in that no price or premium is paid or received. Instead, an
amount of cash or U.S. Treasury bills generally not exceeding 5% of the contract
amount must be deposited with the broker. This amount is known as initial
margin. Subsequent payments to and from the broker, known as variation margin,
are made on a daily basis as the price of the underlying futures contract
fluctuates making the long and short positions in the futures contract more or
less valuable, a process known as "marking to market." At any time prior to the
settlement date of the futures contract, the position may be closed out by
taking an opposite position which will operate to terminate the position in the
futures contract. A final determination of variation margin is then made,
additional cash is required to be paid to or released by the broker, and the
purchaser realizes a loss or gain. In addition, a commission is paid on each
completed purchase and sale transaction.
The Funds may engage in transactions in futures contracts for the purpose
of hedging against changes in the values of securities (or, in the case of the
Precious Metals Fund, commodities) they own or intend to acquire. The Funds may
sell such futures contracts in anticipation of a decline in the value of its
investments. The risk of such a decline can be reduced without employing futures
as a hedge by selling long-term securities and either reinvesting the proceeds
in securities with shorter maturities or by holding assets in cash. This
strategy, however, entails increased transaction costs in the form of brokerage
commissions and dealer spreads and will typically reduce a Fund's average yield
(with respect to futures on fixed-income securities) as a result of the
shortening of maturities. The sale of futures contracts provides an alternative
means of hedging a Fund against a decline in the value of its investments in
fixed-income securities. As such values decline, the value of a Fund's position
in the futures contracts will tend to increase, thus offsetting all or a portion
of the depreciation in the market value of a Fund's fixed-income securities
which are being hedged. While the Fund will incur commission expenses in
establishing and closing out futures positions, commissions on futures
transactions may be significantly lower than transaction costs incurred in the
purchase and sale of fixed-income securities. Employing futures as a hedge may
also permit a Fund to assume a defensive posture without reducing its yield on
its investments.
Call Options on Futures Contracts. The purchase of a call option on a
futures contract is similar in some respects to the purchase of a call option on
an individual security. Depending on the pricing of the option compared to
either the futures contract upon which it is based, or upon the price of the
underlying debt securities, it may or may not be less risky than ownership of
the futures contract or underlying debt securities. As with the purchase of a
futures contract, the Funds may purchase a call option on a futures contract to
hedge against a market advance when the Fund is not fully invested.
The writing of a call option on a futures contract constitutes a partial
hedge against declining prices of the securities or commodities which are
deliverable upon exercise of the futures contract. If the futures price at
expiration of the option is below the exercise price, the Fund will retain the
full amount of the option premium which provides a partial hedge against any
decline that may have occurred in the Fund's portfolio holdings.
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3031617.05
Put Options on Futures Contracts. The purchase of put options on a futures
contract is similar in some respects to the purchase of protective put options
on portfolio securities. The Funds may purchase put options on futures contracts
to hedge the Fund's portfolio against the risk of rising interest rates or
declines in stock market prices. The Funds may purchase put options on futures
contracts in circumstances where they would sell futures contracts.
The Funds may write a put option on a futures contract as a partial hedge
against increasing prices of the assets which are deliverable upon exercise of
the futures contract. If the futures price at expiration of the option is higher
than the exercise price, the Fund will retain the full amount of the option
premium which provides a partial hedge against any increase in the price of
assets that the Fund intends to purchase.
Currency Futures and Related Options. A currency futures contract sale
creates an obligation by the Fund, as seller, to deliver the amount of currency
called for in the contract at a specified future time for a stated price. A
currency futures contract purchase creates an obligation by the Fund, as
purchaser, to take delivery of an amount of currency at a specified future time
at a stated price. Although the terms of currency futures contracts specify
actual delivery or receipt, in most instances the contracts are closed out
before the settlement date without the making or taking of delivery of the
currency. Closing out of a currency futures contract is effected by entering
into an offsetting purchase or sale transaction.
Unlike a currency futures contract, which requires the parties to buy and
sell currency on a set date, an option on a futures contract entitles its holder
to decide on or before a future date whether to enter into such a contract. If
the holder decides not to enter into the contract, the premium paid for the
option is lost. Since the value of the option is fixed at the point of sale,
there are no daily payments of cash in the nature of "variation" or
"maintenance" margin payments to reflect the change in the value of the
underlying contract as there are by a purchaser or seller of a currency futures
contract. The value of the option does not change and is reflected in the net
asset value of the Fund.
The ability to establish and close out positions on options on futures
will be subject to the development and maintenance of a liquid secondary market.
It is not certain that this market will develop or be maintained.
The Funds will write only covered put and call options on currency
futures. This means that each such Fund will provide for its obligations upon
exercise of the option by segregating sufficient cash or short-term obligations
or by holding an offsetting position in the option or underlying currency
future, or a combination of the foregoing. Set forth below is a description of
methods of providing cover that the Funds currently expect to employ, subject to
applicable exchange and regulatory requirements. If other methods of providing
appropriate cover are developed, the Funds reserve the right to employ them to
the extent consistent with applicable regulatory and exchange requirements.
A Fund will, so long as it is obligated as the writer of a call option on
currency futures, own on a contract-for-contract basis an equal long position in
currency futures with the same delivery date or a call option on currency
futures with the difference, if any, between the market value of the call
written and the market value of the call or long currency futures purchased
maintained by the Fund in cash, Treasury bills, or other high-grade short-term
obligations in a segregated account with its custodian. If at the
17
<PAGE>
close of business on any day the market value of the call purchased by the Fund
falls below 100% of the market value of the call written by the Fund, the Fund
will so segregate an amount of cash, U.S. Government securities or other liquid
high grade debt obligations equal in value to the difference. Alternatively, the
Fund may cover the call option by segregating with its custodian an amount of
the particular foreign currency equal to the amount of foreign currency per
futures contract option times the number of options written by the Fund.
In the case of put options on currency futures written by a Fund, the Fund
will hold the aggregate exercise price in cash, U.S. Government securities or
other liquid high grade debt obligations in a segregated account with its
custodian, or own put options on currency futures or short currency futures,
with the difference, if any, between the market value of the put written and the
market value of the puts purchased or the currency futures sold maintained by
the Fund in cash, U.S. Government securities or other liquid high grade debt
obligations in a segregated account with its custodian. If at the close of
business on any day the market value of the put options purchased or the
currency futures sold by the Fund falls below 100% of the market value of the
put options written by the Fund, the Fund will so segregate an amount of cash,
U.S. Government securities or other liquid high grade debt obligations equal in
value to the difference.
Index Futures. A securities index assigns relative values to the
securities comprising the index. An index futures contract is a bilateral
agreement pursuant to which two parties agree to take or make delivery of an
amount of cash equal to a specified dollar amount times the difference between
the index value at the close of the last trading day of the contract and the
price at which the futures contract is originally struck. No physical delivery
of the underlying securities in the index is made.
The Funds will engage in transactions in index futures contracts only as a
hedge against changes resulting from market conditions in the values of
securities held in the Fund's portfolio or which the Fund intends to purchase.
In connection with its purchase of index futures contracts, each Fund will
deposit an amount of cash and cash equivalents, equal to the market value of the
futures contracts, in a segregated account with its custodian and/or in a margin
account with a broker. Each Fund will cover any options it writes on index
futures in the manner described above with respect to currency futures.
Commodity Futures Contracts and Related Options. The Precious Metals Fund
may purchase or sell precious metals futures contracts as a hedge against
changes in the price of the underlying metal. Such futures contracts are
standardized exchange-traded obligations. In the United States, futures
contracts trade on one or more commodities exchange with respect to gold,
silver, platinum, palladium and other commodities.
A commodity futures contract is an agreement between two parties to buy
and sell the commodity on a future date. Although futures contracts by their
terms require actual delivery and acceptance of the underlying asset, in most
cases the contracts are closed out before the settlement date without the making
or taking of delivery.
As an example of how the Precious Metals Fund might use commodity options,
the Fund might purchase and sell gold futures contracts for the purpose of
hedging its holdings of gold stocks, gold-indexed securities and gold bullion.
For example, when a decline in the price of gold is anticipated, the Precious
Metals Fund might seek to preserve its capital by selling gold futures
contracts, buying put options on gold futures or writing a covered call option
on gold futures.
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<PAGE>
If the Precious Metals Fund were to assume a short position in gold
futures contracts (that is, if it sold gold futures contracts) and the price of
gold decreased, the value of its short position in gold futures contracts would
increase at approximately the same rate, thereby preventing its net asset value
from declining as much as it otherwise would have on account of the decrease in
the price of gold and corresponding decline in the market value of the
gold-related assets in which the Fund invests.
If the Precious Metals Fund believed that gold bullion was undervalued
relative to the price of gold stocks or sought a more rapid exposure to
anticipated increases in the price of gold stocks, gold-indexed securities or
gold bullion than is practical by buying such assets, the Precious Metals Fund
might assume a long position in gold futures contracts (that is, buy gold
futures contracts, purchase call options on gold futures or write a covered put
option on gold futures).
Limitations on the Use of Options and Futures Portfolio Strategies
- ------------------------------------------------------------------
No Fund will "over-hedge," that is, no Fund will maintain open short
positions in futures contracts if, in the aggregate, the value of its open
positions (marked to market) exceeds the current market value of its securities
portfolio plus or minus the unrealized gain or loss on such open positions,
adjusted for the historical volatility relationship between the portfolio and
futures contracts.
In accordance with Commodity Futures Trading Commission Rule 4.5, no Fund
will take positions (other than in bona fide hedging transactions) in futures or
commodity option contracts if the aggregate initial margin and premium required
to establish such positions exceed 5% of the Fund's liquidation value (after
taking into account unrealized profits and losses on any such contracts).
Furthermore, as required by Section 18 of the 1940 Act, no Fund will take a
position in options, futures or other derivative transactions that obligate the
Fund to make future payments unless the position is "covered," or the Fund
segregates cash, U.S. Government securities or other liquid high-grade debt
obligations with a value equal to the Fund's obligation (marked to market
daily).
A Fund's ability to engage in the options and futures strategies described
above will depend on the availability of liquid markets in such instruments.
Markets in certain options and futures are relatively new and still developing.
It is impossible to predict the amount of trading interest that may exist in
various types of options or futures. Therefore no assurance can be given that a
Fund will be able to utilize these instruments effectively for the purposes set
forth above. Furthermore, a Fund's ability to engage in options and futures
transactions may be limited by tax considerations and CFTC rules.
Risk Factors in Options and Futures Transactions
- ------------------------------------------------
Options Transactions. The option writer has no control over when the
underlying securities must be sold, in the case of a call option, or purchased,
in the case of a put option, since the writer may be assigned an exercise notice
at any time prior to the termination of the obligation. If an option expires
unexercised, the writer realizes a gain in the amount of the premium. Such a
gain, of course, may, in the case of a covered call option, be offset by a
decline in the market value of the underlying security during the option period.
If a call option is exercised, the writer realizes a gain or loss from the sale
of the underlying security. If a put option is exercised, the writer must
fulfill the obligation to purchase the underlying security at the exercise
price, which will usually exceed the then market value of the security.
An exchange-traded option may be closed out only on a national securities
exchange (an
19
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"Exchange") which generally provides a liquid secondary market for an option of
the same series. An over-the-counter option may be closed out only with the
other party to the option transaction. If a liquid secondary market for an
exchange-traded option does not exist, it might not be possible to effect a
closing transaction with respect to a particular option with the result that the
Fund would have to exercise the option in order to realize any profit. If the
Fund is unable to effect a closing purchase transaction in a secondary market,
it will not be able to sell the underlying security until the option expires or
until it delivers the underlying security upon exercise. Reasons for the absence
of a liquid secondary market on an Exchange include the following: (i) there may
be insufficient trading interest in certain options; (ii) restrictions may be
imposed by an Exchange on opening transactions or closing transactions or both;
(iii) trading halts, suspensions or other restrictions may be imposed with
respect to particular classes or series of options or underlying securities;
(iv) unusual or unforeseen circumstances may interrupt normal operations on an
Exchange; (v) the facilities of an Exchange or the Options Clearing Corporation
may not at all times be adequate to handle current trading volume; or (vi) one
or more Exchanges could, for economic or other reasons, decide or be compelled
at some future date to discontinue the trading of options (or a particular class
or series of options), in which event the secondary market on that Exchange (or
in that class or series of options) would cease to exist, although outstanding
options on that Exchange that had been issued by the Options Clearing
Corporation as a result of trades on that Exchange would continue to be
exercisable in accordance with their terms.
The Exchanges have established limitations governing the maximum number of
options which may be written by an investor or group of investors acting in
concert. It is possible that the Trust and other clients of the Manager may be
considered to be such a group. These position limits may restrict the Funds'
ability to purchase or sell options on a particular security.
Futures Transactions. Investment by a Fund in futures contracts involves
risk. Some of that risk may be caused by an imperfect correlation between
movements in the price of the futures contract and the price of the security or
other investment being hedged. The hedge will not be fully effective where there
is such imperfect correlation. For example, if the price of the futures contract
moves more than the price of the hedged security, a Fund would experience either
a loss or gain on the future which is not completely offset by movements in the
price of the hedged securities. To compensate for imperfect correlations, a Fund
may purchase or sell futures contracts in a greater dollar amount than the
hedged securities if the volatility of the hedged securities is historically
greater than the volatility of the futures contracts. Conversely, a Fund may
purchase or sell fewer contracts if the volatility of the price of the hedged
securities is historically less than that of the futures contracts. The risk of
imperfect correlation generally tends to diminish as the maturity date of the
futures contract approaches.
Futures contracts on U.S. Government securities historically have reacted
to an increase or decrease in interest rates in a manner similar to that in
which the underlying U.S. Government securities reacted. To the extent, however,
that the Tax Exempt Fund enters into such futures contracts, the value of such
futures will not vary in direct proportion to the value of the Fund's holdings
of Tax Exempt Bonds. Thus, the anticipated spread between the price of the
futures contract and the hedged security may be distorted due to differences in
the nature of the markets. The spread also may be distorted by differences in
initial and variation margin requirements, the liquidity of such markets and the
participation of speculators in such markets.
Futures contracts may be used to hedge against a possible increase in the
price of securities which the Fund anticipates purchasing, or options thereon.
In such instances, it is possible that the
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<PAGE>
market may instead decline. If the Fund does not then invest in such securities
based on concern regarding possible further market decline or for other reasons,
the Fund may realize a loss on the futures contract that is not offset by a
reduction in the price of the securities purchased.
The amount of risk a Fund assumes when it purchases an option on a futures
contract is the premium paid for the option plus related transaction costs. In
addition to the correlation risks discussed above, the purchase of an option
also entails the risk that changes in the value of the underlying futures
contract will not be fully reflected in the value of the option purchased.
The liquidity of a secondary market in a futures contract may be adversely
affected by "daily price fluctuation limits" established by commodity exchanges
which limit the amount of fluctuation in a futures contract price during a
single trading day. Once the daily limit has been reached in the contract, no
trades may be entered into at a price beyond the limit, thus preventing the
liquidation of open futures positions. Prices have in the past exceeded the
daily limit on a number of consecutive trading days.
The successful use of transactions in futures and related options also
depends on the ability of the Manager or the Funds' sub-advisers to forecast
correctly the direction and extent of interest rate movements within a given
time frame. To the extent interest rates remain stable during the period in
which a futures contract or related option is held by a Fund or such rates move
in a direction opposite to that anticipated, a Fund may realize a loss on the
hedging transaction which is not fully or partially offset by an increase in the
value of portfolio securities. As a result, a Fund's total return for such
period may be less than if it had not engaged in the hedging transaction.
Swap Agreements
- ---------------
Certain of the Income Funds may enter into interest rate, index and
currency exchange rate swap agreements for purposes of attempting to obtain a
particular desired return at a lower cost to the Fund than if the Fund had
invested directly in an instrument that yielded that desired return. Swap
agreements are two party contracts entered into primarily by institutional
investors for periods ranging from a few weeks to more than one year. In a
standard "swap" transaction, two parties agree to exchange the returns (or
differentials in rates of return) earned or realized on particular predetermined
investments or instruments. The gross returns to be exchanged or "swapped"
between the parties are calculated with respect to a "notional amount," i.e. the
return on or increase in value of a particular dollar amount invested at a
particular interest rate, in a particular foreign currency, or in a "basket" of
securities representing a particular index. The "notional amount" of the swap
agreement is only a fictional basis on which to calculate the obligations which
the parties to a swap agreement have agreed to exchange. A Fund's obligations
(or rights) under a swap agreement will generally be equal only to the net
amount to be paid or received under the agreement based on the relative values
of the positions held by each party to the agreement (the "net amount"). A
Fund's obligations under a swap agreement will be accrued daily (offset against
any amounts owing to the Fund) and any accrued but unpaid net amounts owed to a
swap counterparty will be covered by the maintenance of a segregated account
consisting of cash, U.S. Government securities, or other liquid high grade debt
obligations to avoid any potential leveraging of the Fund's portfolio. A Fund
will not enter into a swap agreement with any single party if the net amount
owed or to be received under existing contracts with that party (together with
all other securities of that issuer) would exceed 5% of the Fund's assets.
Whether a Fund's use of swap agreements will be successful in furthering
its investment
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objective will depend on the sub-adviser's ability to correctly predict whether
certain types of investments are likely to produce greater returns than other
investments. Because they are two party contracts and because they may have
terms of greater than seven days, swap agreements may be considered to be
illiquid. Moreover, a Fund bears the risk of loss of the amount expected to be
received under a swap agreement in the event of the default or bankruptcy of a
swap agreement counterparty. The sub-adviser will cause a Fund to enter into
swap agreements only with counterparties that would be eligible for
consideration as repurchase agreement counterparties under the Funds' repurchase
agreement guidelines. Certain restrictions imposed on the Funds by the Internal
Revenue Code may limit the Funds' ability to use swap agreements. The swaps
market is a relatively new market and is largely unregulated. It is possible
that developments in the swaps market, including potential government
regulation, could adversely affect a Fund's ability to terminate existing swap
agreements or to realize amounts to be received under such agreements.
Certain swap agreements are exempt from most provisions of the Commodity
Exchange Act ("CEA") and, therefore, are not regulated as futures or commodity
option transactions under the CEA, pursuant to regulations approved by the CFTC
effective February 22, 1993. To qualify for this exemption, a swap agreement
must be entered into by "eligible participants " which includes the following,
provided the participant's total assets exceed established levels: a bank or
trust company, savings association or credit union, insurance company,
investment company subject to regulation under the 1940 Act, commodity pool,
corporation, partnership, proprietorship, organization, trust or other entity,
employee benefit plan, governmental entity, broker-dealer, futures commission
merchant, natural person, or regulated foreign person. To be eligible, natural
persons and most other entities must have total assets exceeding $10 million.
Commodity pools and employee benefit plans must have assets exceeding $5
million. In addition, an eligible swap transaction must meet three conditions.
First, the swap agreement may not be part of a fungible class of agreements that
are standardized as to their material economic terms. Second, the
creditworthiness of parties with actual or potential obligations under the swap
agreement must be a material consideration in entering into or determining the
terms of the swap agreement, including pricing, cost or credit enhancement
terms. Third, swap agreements may not be entered into and traded on or through a
multilateral transaction execution facility.
This exemption is not exclusive, and participants may continue to rely on
existing exclusions for swaps, such as the Policy Statement issued in July 1989
which recognized a safe harbor for swap transactions from regulation as futures
or commodity option transactions under the CEA or its regulations. The Policy
Statement applies to swap transactions settled in cash that (1) have
individually tailored terms, (2) lack exchange-style offset and the use of a
clearing organization or margin system, (3) are undertaken in conjunction with a
line of business, and (4) are not marketed to the public.
Note on Shareholder Approval
- ----------------------------
Unless otherwise indicated, the investment policies and objectives of the
Funds may be changed without shareholder approval.
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INVESTMENT RESTRICTIONS
-----------------------
Fundamental Investment Restrictions
- -----------------------------------
Without a vote of the majority of the outstanding voting securities of a
Fund, the Trust will not take any of the following actions with respect to such
Fund:
(1) Except with respect to the High Income, U.S. Government and
Short-Intermediate Funds, borrow money in excess of 10% of the value
(taken at the lower of cost or current value) of a Fund's total assets
(not including the amount borrowed) at the time the borrowing is made, and
then only from banks as a temporary measure to facilitate the meeting of
redemption requests (not for leverage) which might otherwise require the
untimely disposition of portfolio investments or for extraordinary or
emergency purposes. Such borrowings will be repaid before any additional
investments are purchased. The High Income, U.S. Government and
Short-Intermediate Funds may borrow money from banks, other financial
institutions, or other lenders, and similar investment techniques, so long
as after any such transaction, the net assets of such Fund exceed all
liability and indebtedness by 300%; provided, that each of these Funds may
also borrow an additional 5% of its total assets without regard to the
foregoing limitation for temporary purposes, such as for the clearance and
settlement of portfolio transactions and to meet shareholder redemption
requests.
(2) Pledge, hypothecate, mortgage or otherwise encumber its assets
in excess of 10% of the Fund's total assets (taken at cost) and then only
to secure borrowings permitted by Restriction 1 above. (The deposit of
securities or cash or cash equivalents in escrow in connection with the
writing of covered call or put options, respectively, is not deemed to be
pledges or other encumbrances.) (For the purpose of this restriction,
collateral arrangements with respect to the writing of options, futures
contracts, options on futures contracts, and collateral arrangements with
respect to initial and variation margin are not deemed to be a pledge of
assets and neither such arrangements nor the purchase or sale of futures
or related options are deemed to be the issuance of a senior security.)
(3) Underwrite securities issued by other persons except to the
extent that, in connection with the disposition of its portfolio
investments, it may be deemed to be an underwriter under federal
securities laws.
(4) Purchase or sell real estate, although it may purchase
securities of issuers which deal in real estate, including securities of
real estate investment trusts, and may purchase securities which are
secured by interests in real estate, except that the Precious Metals Fund
may purchase or sell agricultural land.
(5) Except with respect to the Global Income Fund, acquire more than
10% of the voting securities of any issuer, both with respect to any Fund
and to the Trust (with the exception of the Global Income Fund) in the
aggregate.
(6) Concentrate more than 25% of the value of its total assets in
any one
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<PAGE>
industry, or, in the case of the Tax Exempt Fund, in industrial
development revenue bonds based, directly or indirectly, on the credit of
private entities in any one industry; except that the Money Market Fund
may invest up to 100% of its assets in certificates of deposit and
bankers' acceptances issued by domestic banks, the Precious Metals Fund
will concentrate more than 25% of its total assets in securities of
companies principally engaged in the extraction, processing, distribution
or marketing of precious metals and the Innovation Fund will concentrate
more than 25% of its assets in companies which use innovative technology
to gain a strategic, competitive advantage in their industry as well as
companies that provide and service those technologies. With respect to
investments of the Tax Exempt Fund in utilities, gas, electric, water and
telephone companies will be considered as being in separate industries.
Non-Fundamental Investment Restrictions
- ---------------------------------------
It is contrary to the Trust's present policy with respect to any Fund
created under the Trust, which may be changed by the Trustees without
shareholder approval, to:
(1) Invest in (a) securities which at the time of such investment
are not readily marketable, (b) securities the disposition of which is
restricted under federal securities laws, (c) repurchase agreements
maturing in more than seven days (d) OTC options (to the extent described
above), and (e) IO/PO Strips (as defined in the Prospectus) if, as a
result, more than 15% of a Fund's net assets (taken at current value)
would then be invested in securities described in (a), (b), (c), (d) and
(e) above. For the purpose of this restriction securities subject to a
7-day put option or convertible into readily saleable securities or
commodities are not included with subsections (a) or (b).
(2) With respect to the Tax Exempt Fund, invest less than 80% of the
Fund's net assets in Tax Exempt Bonds rated Baa or higher by Moody's or
BBB or higher by Standard & Poor's or which are unrated and determined by
the Fund's sub-adviser to be of comparable quality.
(3) Purchase securities on margin, except such short-term credits as
may be necessary for the clearance of purchases and sales of securities.
(For this purpose, the deposit or payment by a Fund of initial or
variation margin in connection with futures contracts or related options
transactions is not considered the purchase of a security on margin.)
(4) Make short sales of securities or maintain a short position for
the account of a Fund unless at all times when a short position is open
such Fund owns an equal amount of such securities or owns securities
which, without payment of any further consideration, are convertible into
or exchangeable for securities of the same issue as, and equal in amount
to, the securities sold short, except that the Short-Intermediate Fund may
make short sales of securities or maintain a short position for the
account of the Fund, provided that it maintains in a segregated account
cash, U.S. Government securities or other liquid high grade debt
obligations at such a level that (1) the segregated amount plus the amount
of any collateral deposited with a broker in connection with the
transaction at least equals the current market value of the securities
24
<PAGE>
sold short and (2) the segregated amount plus the amount deposited with
the broker at least equals the value of the securities at the time they
were sold short. In addition, the U.S. Government Fund will not make short
sales of securities or maintain a short position unless not more than 10%
of the Fund's net assets (taken at market value) is held as collateral for
such sales at any one time. (It is the present intention of management for
the U.S. Government Fund to make such sales only for the purpose of
deferring realization of gain or loss for federal income tax purposes;
such sales would not be made of securities subject to outstanding
options.)
(5) Purchase or sell commodities or commodity contracts except that
the Funds may purchase and sell financial futures contracts and related
options and the Precious Metals Fund may purchase and sell precious metals
and other commodities and futures thereon.
(6) Make loans, except by purchase of debt obligations or by
entering into repurchase agreements (in the case of the Tax Exempt Fund,
with respect to not more than 20% of its total assets) or through the
lending of the Fund's portfolio securities with respect to not more than
25% of its total assets (33 1/3% in the case of the U.S. Government and
Target Funds).
(7) Invest in securities of any issuer if, to the knowledge of the
Trust, any officers and Trustees of the Trust and officers and directors
of the Manager who individually own beneficially more than 1/2 of 1% of
the securities of that issuer, own beneficially in the aggregate more than
5%.
(8) With the exception of the Global Income Fund, invest in
securities of any issuer if, immediately after such investment, more than
5% of the total assets of the Fund (taken at current value) would be
invested in the securities of such issuer, except that up to 15% of the
Money Market Fund's total assets taken at current value may be invested
(without regard to such 5% limitation) in the obligations of any one bank
and up to 25% of the International Fund's and Target Fund's total assets
taken at current value may be invested (without regard to such 5%
limitation) in the securities of an issuer; and provided that this
limitation does not apply to bank certificates of deposit or to
obligations issued or guaranteed as to interest and principal by the U.S.
government or its agencies or instrumentalities. For the purpose of this
restriction, each state and each separate political subdivision, agency,
authority or instrumentality of such state, each multi-state agency or
authority, and each guarantor, if any, are treated as separate issuers of
Tax Exempt Bonds.
(9) Invest in securities of other investment companies, except by
purchase in the open market involving only customary brokers' commissions
except for the International and Emerging Markets Funds, which may invest
up to 10% of their assets in securities of other investment companies
without regard to this restriction. For purposes of this restriction,
foreign banks and foreign insurance companies or their respective agents
or subsidiaries are not considered investment companies. (Under the 1940
Act no registered investment company may (a) invest more than 10% of its
total assets (taken at current value) in securities of other investment
companies, (b) own securities of any one investment company having a value
in excess of 5% of its total assets (taken at
25
<PAGE>
current value), or (c) own more than 3% of the outstanding voting stock of
any one investment company.)
(10) Purchase securities the disposition of which is restricted
under the federal securities laws (excluding for purposes of this
restriction securities offered and sold pursuant to Rule 144A of the
Securities Act of 1933 and Section 4(2) commercial paper) if, as a result,
such investments would exceed 10% of the value of the net assets of the
relevant Fund; provided, however, that so long as a similar restriction
applies under the Ohio Administrative Code, no Fund will invest more than
15% of its total assets in the securities of issuers which together with
any predecessors have a record of less than three years continuous
operation or securities of issuers which are restricted as to disposition
(including Rule 144A securities and Section 4(2) commercial paper).
(11) With respect to the U.S. Government Fund, invest in any
securities other than U.S. Government securities, repurchase agreements
related thereto and put and call options thereon and futures contracts
with respect to U.S. Government securities and options thereon.
(12) Invest in warrants or rights excluding options (other than
warrants or rights acquired by the Fund as a part of a unit or attached to
securities at the time of purchase) if as a result such investments
(valued at the lower of cost or market) would exceed 5% of the value of a
Fund's net assets; provided that not more than 2% of the Fund's net assets
may be invested in warrants not listed on the New York or American Stock
Exchanges.
(13) Invest in securities of an issuer, which, together with any
predecessors or controlling persons, has been in operation for less than
three consecutive years and in equity securities for which market
quotations are not readily available (excluding restricted securities) if,
as a result, the aggregate of such investments would exceed 5% of the
value of a Fund's net assets; provided, however, that this restriction
shall not apply to any obligation of the U.S. Government or its
instrumentalities or agencies. (Debt securities having equity features are
not considered "equity securities" for purposes of this restriction.)
(14) Write (sell) or purchase options except that (i) each Fund
other than the Tax Exempt Fund and the Money Market Fund may (a) write
covered call options or covered put options on securities that it is
eligible to purchase (and, with respect to the Equity Income, Value,
Growth, Discovery, Opportunity, Target, Innovation, International,
Emerging Markets, Global Income and Precious Metals Funds, on stock
indices) and enter into closing purchase transactions with respect to such
options, and (b) in combination therewith, or separately, purchase put and
call options on securities it is eligible to purchase, and (ii) the Tax
Exempt Fund may purchase put options with respect to all or any part of
its portfolio securities and call options with respect to securities that
it is eligible to purchase; provided that the premiums paid by each Fund
on all outstanding options it has purchased do not exceed 5% of its total
assets. Each Fund may enter into closing sale transactions with respect to
options it has purchased.
26
<PAGE>
(15) Buy or sell oil, gas or other mineral leases, rights or royalty
contracts, except that the Precious Metals Fund may purchase and sell
interests in oil, gas and other natural resources (other than oil, gas or
other mineral leases).
(16) Make investments for the purpose of gaining control of a
company's management.
(17) Invest in certificates of deposit of any bank if, immediately
after such investment, more than 5% of the total assets of the Fund (taken
at current value) would be invested in the securities (including
certificates of deposit) of that bank, except that (i) the Money Market
Fund may, to the extent permitted by Rule 2a-7 under the 1940 Act, invest
more than 5% of its total assets in the securities (including certificates
of deposit) of any bank and (ii) each other Fund may invest up to 25% of
its total assets without regard to this restriction.
(18) With respect to the Money Market Fund only, invest in
obligations of any bank if, immediately after such investment, more than
5% of the total assets of the Money Market Fund (taken at current value)
would be invested in the securities (including certificates of deposit) of
such bank, except as otherwise permitted by Rule 2a-7 under the 1940 Act.
(19) Purchase or sell real estate, including investments in limited
partnerships that invest directly in real estate; provided, however, that
the Trust may invest in readily marketable interests in real estate
investment trusts or readily marketable securities of companies that
invest in real estate.
(20) Make any additional investment if, immediately after such
investment, the Fund's outstanding borrowings of money would exceed 5% of
the current value of the Fund's total assets.
(21) With respect to the Target Fund, invest in commodities or
commodity futures contracts.
(22) Engage in short-term trading as a matter of policy; provided,
however, that in pursuing a Fund's investment objective, the Fund's
sub-adviser will continue to monitor all securities positions of the Fund
and will seek to dispose of any position that it believes is no longer
consistent with achieving optimum performance.
Although Restriction (8) permits the Money Market Fund to invest up to 15%
of its total assets in the obligations of any one bank, federal regulations
applicable to the Fund currently prohibit the Fund (with limited exceptions)
from making any investment that would result in more than 5% of the Fund's
assets being invested in obligations of a single issuer.
All percentage limitations on investments set forth herein and in the
Prospectus will apply at the time of the making of an investment and shall not
be considered violated unless an excess or deficiency occurs or exists
immediately after and as a result of such investment.
27
<PAGE>
The phrase "shareholder approval," as used in the Prospectus, and the
phrase a "vote of a majority of the outstanding voting securities," as used
herein, means the affirmative vote of the lesser of (1) more than 50% of the
outstanding shares of the Fund or the Trust, as the case may be, or (2) 67% or
more of the shares of the Fund or the Trust, as the case may be, present at a
meeting if more than 50% of the outstanding shares are represented at the
meeting in person or by proxy.
CONTINGENT DEFERRED SALES CHARGE
AND INITIAL SALES CHARGE
------------------------
As described in the Prospectus under the caption "How to Redeem," a
contingent deferred sales charge is imposed upon certain redemptions of the
Class A, Class B and Class C shares. Because contingent deferred sales charges
are calculated on a Fund-by-Fund basis, shareholders should consider whether to
exchange shares of one Fund for shares of another Fund prior to redeeming an
investment if such an exchange would reduce the contingent deferred sales charge
applicable to such redemptions.
In certain cases described in the Prospectus, the contingent deferred
sales charge is waived on redemptions of Class A, Class B or Class C shares for
certain classes of individuals or entities on account of (i) the fact that the
Trust's sales-related expenses are lower for certain of such classes than for
classes for which the contingent deferred sales charge is not waived, (ii)
waiver of the contingent deferred sales charge with respect to certain of such
classes is consistent with certain Internal Revenue Code policies concerning the
favored tax treatment of accumulations, and (iii) with respect to certain of
such classes, considerations of fairness, and competitive and administrative
factors.
For the fiscal years ended September 30, 1993, 1994 and 1995, PIMCO
Advisors Distribution Company, the Trust's principal underwriter (the
"Distributor"), received $2,048,185, $1,723,241, and $1,007,285 respectively, in
contingent deferred sales charges on Class C shares. The contingent deferred
sales charge applicable to Class B shares (which were not yet offered) and
certain Class A shares as described in the Prospectus was not in effect through
September 30, 1994. For the fiscal year ended September 30, 1995, the
Distributor received $0 in contingent deferred sales charges on Class A shares
and $13,125 in contingent deferred sales charges on Class B shares.
As described in the Prospectus under the caption "Alternative Purchase
Arrangements -- Initial Sales Charge Alternative - Class A Shares," Class A
shares of the Trust (except with respect to the Money Market Fund) are sold
pursuant to an initial sales charge, which declines as the amount of purchase
reaches certain defined levels. For the fiscal years ended September 30, 1993,
1994 and 1995, the Distributor received $1,004,469, $3,920,611, and $3,708,105
respectively, and retained $242,174, $371,079, and $366,062, respectively, in
initial sales charges.
DISTRIBUTOR AND DISTRIBUTION AND SERVICING PLANS
------------------------------------------------
As stated in the text of the Prospectus under the caption "Distributor and
Distribution and Servicing Plans," shares of the Trust are continuously offered
through firms ("participating brokers") which are members of the National
Association of Securities Dealers, Inc. and which have dealer agreements with
the Distributor, or which have agreed to act as introducing brokers for the
Distributor ("introducing brokers"). Under the Distributor's Contract between
the Trust and the Distributor (the "Distribution Agreement"), the Distributor is
not obligated to sell any specific amount of shares of the Trust and will
purchase shares for resale only against orders for shares.
28
<PAGE>
Pursuant to the Distribution and Servicing Plans described in the
Prospectus, in connection with the distribution of Class B and Class C shares of
the Trust, the Distributor receives certain distribution fees from the Trust,
and in connection with personal services rendered to Class A, Class B and Class
C shareholders of the Trust and the maintenance of shareholder accounts, the
Distributor receives certain servicing fees from the Trust. Subject to the
percentage limitations on these distribution and servicing fees set forth in the
Prospectus, the distribution and servicing fees may be paid in respect of
services rendered and expenses borne in the past with respect to each such class
as to which no distribution and servicing fees were paid on account of such
limitations. As described in the Prospectus, the Distributor pays all or a
portion of the distribution and servicing fees it receives from the Trust to
participating and introducing brokers.
Each Distribution and Servicing Plan may be terminated with respect to the
class of shares of any Fund to which the Plan relates by vote of a majority of
the Trustees who are not interested persons of the Trust (as defined in the 1940
Act) and who have no direct or indirect financial interest in the operation of
the Plan or the Distribution Agreement (the "Independent Trustees"), or by vote
of a majority of the outstanding voting securities of that class. Any change in
any Plan that would materially increase the cost to the class of shares of any
Fund to which the Plan relates requires approval by the affected class of
shareholders of that Fund. The Trustees review quarterly a written report of
such costs and the purposes for which such costs have been incurred. Each Plan
may be amended by vote of the Trustees, including a majority of the Independent
Trustees, cast in person at a meeting called for the purpose. For so long as the
Plans are in effect, selection and nomination of those Trustees who are not
interested persons of the Trust shall be committed to the discretion of such
disinterested persons.
The Distribution Agreement may be terminated with respect to any Fund or
class of shares thereof at any time on 60 days written notice without payment of
any penalty either by the Distributor or by such Fund by vote of a majority of
the outstanding voting securities of that Fund or that class, as the case may
be, or by vote of a majority of the Independent Trustees.
The Distribution Agreement and the Distribution and Servicing Plans will
continue in effect with respect to each Fund and each class of shares thereof
for successive one-year periods, provided that each such continuance is
specifically approved (i) by the vote of a majority of the Independent Trustees
and (ii) by the vote of a majority of the entire Board of Trustees cast in
person at a meeting called for that purpose.
If the Distribution Agreement or the Distribution and Servicing Plans are
terminated (or not renewed) with respect to one or more Funds, they may continue
in effect with respect to any class of any Fund as to which they have not been
terminated (or have been renewed).
For the fiscal years ended September 30, 1993, 1994 and 1995, the Trust
paid the Distributor $25,971,451, $33,696,037, and $34,667,013, respectively,
pursuant to the Distribution and Servicing Plan applicable to the Class C shares
(the "Class C Plan") allocated among the Funds as follows:
29
<PAGE>
Year Ended Year Ended Year Ended
Sept. 30, 1993 Sept. 30, 1994 Sept. 30, 1995
-------------- --------------------------------
Equity Income $ 628,911 $ 1,475,042 $ 1,694,012
Value N/A N/A 9,948
Growth 9,799,698 10,702,536 11,397,447
Target 1,073,001 4,419,960 6,402,149
Discovery N/A N/A 31,233
Opportunity 4,129,361 5,720,431 5,976,316
Innovation N/A N/A 229,411
International 566,091 2,493,832 2,422,761
Emerging Markets N/A N/A N/A
Precious Metals 129,784 455,351 490,116
Global Income N/A N/A N/A
High Income 2,464,991 2,175,184 1,548,152
Total Return Income N/A N/A 173,015
Tax Exempt 640,396 786,687 589,843
U.S. Government Fund 5,430,975 4,516,318 3,085,069
Short-Intermediate 1,009,787 813,722 525,319
Money Market 98,456 136,974 92,222
----------- ----------- ------
Total $25,971,451 $33,696,037 $34,667,013
=========== =========== ===========
30
<PAGE>
3031617.05
During the fiscal year ended September 30, 1995, the amounts collected
pursuant to the Class C Plan and the contingent deferred sales charge imposed on
Class C shares were used as follows: sales commissions and other compensation to
sales personnel, $_______; preparing, printing and distributing sales material
and advertising (including preparing, printing and distributing prospectuses to
non-shareholders), and other expenses (including data processing, legal and
operations), $________. The total, if allocated among the Funds based on the net
assets attributable to their Class C shares at September 30, 1995, would have
been as follows:
Sales Material
and Other
Compensation Expenses Total
------------ -------- -----
Equity Income $ $ $
Value
Growth
Target
Discovery
Opportunity
Innovation
International
Emerging Markets N/A N/A N/A
Precious Metals
Global Income N/A N/A N/A
High Income
Total Return Income
Tax Exempt
U.S. Government
Short-Intermediate
Money Market
Total $ $ $
During the fiscal year ended September 30, 1995, unreimbursed expenses of
the Trust's principal underwriters under the Class C Plan were reduced from
$5,041,000 to $_______.
31
<PAGE>
3031617.05
For the fiscal years ended September 30, 1993, 1994 and 1995, the Trust
paid the Distributor $537,682, $868,789 and $1,064,958, respectively, pursuant
to the Distribution and Servicing Plan applicable to the Class A shares (the
"Class A Plan"):
Year Ended Year Ended Year Ended
Sept. 30, 1993 Sept. 30, 1994 Sept. 30, 1995
-------------- -------------- --------------
Equity Income $ 9,463 $ 28,435 $ 33,249
Value N/A N/A 1,132
Growth 216,014 247,275 289,263
Target 47,625 175,437 251,511
Discovery N/A N/A 3,359
Opportunity 161,347 247,239 255,940
Innovation N/A N/A 28,918
International 8,785 51,731 49,788
Emerging Markets N/A N/A N/A
Precious Metals 5,914 19,794 22,178
Global Income N/A N/A N/A
High Income 12,846 12,638 12,478
Total Return Income N/A N/A 42,334
Tax Exempt 6,213 7,170 6,485
U.S. Government 42,449 47,012 37,643
Short-Intermediate 22,236 16,560 15,482
Money Market 4,700 15,498 15,198
----- ------ ------
Total $537,682 $868,789 $1,064,958
======== ======== ==========
During the fiscal year ended September 30, 1995, the amounts collected
pursuant to the Class A Plan were used as follows: commissions and other
compensation to dealers, $________; preparing, printing and distributing
materials to shareholders, and other expenses (including data processing, legal
and operations), $________. The total, if allocated among the Funds based on the
net assets attributable to their Class A shares at September 30, 1995, would
have been as follows:
Distribution
of Materials
and Other
Compensation Expenses Total
------------ -------- -----
Equity Income $ $ $
Value
Growth
Target
Discovery
Opportunity
Innovation
International
Emerging Markets N/A N/A N/A
32
<PAGE>
Precious Metals
Global Income N/A N/A N/A
High Income
Total Return Income
Tax Exempt
U.S. Government
Short-Intermediate
Money Market
Total $ $ $
====== ====== =====
The Distribution and Servicing Plan applicable to the Class B shares (the
"Class B Plan") was not in effect during the fiscal years ended September 30,
1993, and 1994.
For the fiscal year ended September 30, 1995, the Trust paid the
Distributor $87,552 pursuant to the Distribution and Servicing Plan applicable
to the Class B shares (the "Class B Plan") allocated among the Funds as follows:
Year Ended
Sept. 30, 1995
--------------
Equity Income $ 2,071
Value 6,833
Growth 12,583
Target 11,816
Discovery 17,516
Opportunity N/A
Innovation 9,364
International 555
Emerging Markets N/A
Precious Metals 270
Global Income N/A
High Income 6,688
Total Return Income 15,137
Tax Exempt 745
U.S. Government Fund 1,900
Short-Intermediate 2,038
Money Market 36
-----------
Total $ 87,552
===========
During the fiscal year ended September 30, 1995, the amounts collected
pursuant to the Class B Plan and the contingent deferred sales charge imposed on
Class B shares were used as follows: sales commissions and other compensation to
sales personnel, $_______; preparing, printing and distributing sales material
and advertising (including preparing, printing and distributing prospectuses to
non-shareholders), and other expenses (including data processing, legal and
operations), $________. The total, if allocated among the Funds based on the net
assets
33
<PAGE>
attributable to their Class B shares at September 30, 1995, would have been as
follows:
Sales Material
and Other
Compensation Expenses Total
------------ -------- -----
Equity Income $ $ $
Value
Growth
Target
Discovery
Opportunity
Innovation
International
Emerging Markets
Precious Metals
Global Income
High Income
Total Return Income
Tax Exempt
U.S. Government
Short-Intermediate
Money Market
Total $ $ $
====== ====== =====
The Trustees believe that the Distribution and Servicing Plans have
provided and will provide benefits to the Trust. The Trustees believe that the
Class A, Class B and Class C Plans have resulted in greater sales and/or fewer
redemptions of Trust shares, although it is impossible to know for certain the
level of sales and redemptions of Trust shares that would have occurred in the
absence of the Plans or under alternative distribution schemes. The Trustees
believe that the effect on sales and/or redemptions benefit the Trust by
reducing Fund expense ratios and/or by affording greater flexibility to Fund
managers.
34
<PAGE>
EXCHANGE PRIVILEGE
------------------
As described in the Prospectus under the caption "Exchange Privilege," a
shareholder may exchange Class A, Class B and Class C shares of any Fund for
shares of any other Fund within the same class on the basis of their respective
net asset values. The original purchase date(s) of shares exchanged for purposes
of calculating any contingent deferred sales charge will carry over to the
investment in the new Fund. For example, if a shareholder invests in the Class C
shares of one Fund and 6 months later (when the contingent deferred sales charge
upon redemption would be 1%) exchanges his shares for Class C shares of another
Fund, no sales charge would be imposed upon the exchange but the investment in
the other Fund would be subject to the 1% contingent deferred sales charge until
one year after the date of the shareholder's investment in the first Fund as
described in the Prospectus under "Alternative Purchase Arrangements." With
respect to Class B or Class C shares, or Class A shares subject to a contingent
deferred sales charge only, if less than all of an investment is exchanged out
of a Fund, any portion of the investment attributable to capital appreciation
and/or reinvested dividends or capital gains distributions will be exchanged
first, and thereafter any portions exchanged will be from the earliest
investment made in the Fund from which the exchange was made.
Orders for exchanges accepted by the Distributor prior to the close of
regular trading on the New York Stock Exchange on any day the Trust is open for
business will be executed at the respective net asset values determined as of
the close of business that day. Orders for exchanges received after the close of
regular trading on the Exchange on any business day will be executed at the
respective net asset values determined at the close of the next business day.
An excessive number of exchanges may be disadvantageous to the Trust.
Therefore, the Trust, in addition to its right to reject any exchange, reserves
the right to adopt a policy of terminating the exchange privilege of any
shareholder who makes more than a specified number of exchanges in a 12-month
period or in any calendar quarter; provided, that if such limitation on
exchanges is adopted, exchanges into the Money Market Fund from any other Fund
would not be counted.
The Trust reserves the right to modify or discontinue the exchange
privilege at any time.
HOW TO REDEEM
-------------
The procedures for redemption of Trust shares are summarized in the text
of the Prospectus following the caption "How to Redeem."
The Trust may suspend the right of redemption and may postpone payment
only when the New York Stock Exchange is closed for other than customary
weekends and holidays, or if permitted by the rules of the Securities and
Exchange Commission during periods when trading on the Exchange is restricted or
during any emergency which makes it impracticable for the Trust to dispose of
its securities or to determine fairly the value of its net assets, or during any
other period permitted by order of the Securities and Exchange Commission.
The Trust reserves the right to redeem shares and mail the proceeds to the
shareholder if at any time the net asset value of the shares in the
shareholder's account in any Fund falls below a specified level, currently set
at $250. Shareholders will be notified and will have 30 days to bring the
account up to the required level before any redemption action will be taken by
the Trust. The Trust also reserves the right to redeem shares in a shareholder's
account in excess of an amount set from time to time by the Trustees. No such
limit is presently in effect, but such a limit could be established at any time
and could be applicable to existing as well as future shareholders.
35
<PAGE>
HOW NET ASSET VALUE IS DETERMINED
---------------------------------
As described in the text of the Prospectus following the caption "How Net
Asset Value is Determined," the net asset values of each class of shares of each
Fund of the Trust will be determined once on each day on which the New York
Stock Exchange is open, as of the close of regular trading on the Exchange. The
Trust expects that the days, other than weekend days, that the Exchange will not
be open are New Year's Day, President's Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day. The Funds'
portfolio securities for which market quotations are readily available are
valued at market value, which is determined by using the last reported sale
price, or, if no sales are reported -- and in the case of certain securities
traded over-the-counter -- the mean between the last reported bid and asked
prices. Many debt securities, including U.S. Government securities and Tax
Exempt Bonds, are traded in the over-the-counter market. The Trust believes that
as a general matter it is not appropriate to value such debt securities on the
basis of the last available bid price. Therefore, each Fund's holdings of such
debt securities are valued at fair value by a pricing service. In determining
the fair value of each such debt security, the pricing service relies on one or
more of the following factors: valuations obtained from recognized dealers,
information on transactions for similar securities, general market information,
and matrix comparisons of various characteristics of debt securities, such as
quality, yield and maturity. Options, futures and options on futures which are
traded on exchanges are valued at settlement price as determined by the
appropriate clearing corporation. Over-the-counter options are valued at fair
value, as determined in good faith by the Trustees or by persons acting at their
directions. Obligations having remaining maturities of 60 days or less and
securities held in the Money Market Fund portfolio will be valued at amortized
cost by the Board of Trustees or persons acting pursuant to guidelines
established by the Board of Trustees if the Board of Trustees determine that
amortized cost fairly reflects market-based values. The amortized cost value of
a security is determined by valuing it at cost originally and thereafter
amortizing any discount or premium from its face value at a constant rate until
maturity, regardless of the effect of fluctuating interest rates on the market
value of the instrument. Although the amortized cost method provides certainty
in valuation, it may result at times in determinations of value that are higher
or lower than the price the Fund would receive if the instruments were sold.
Consequently, changes in the market value of portfolio instruments during
periods of rising or falling interest rates will not be reflected either in the
computation of the net asset value of the Fund's portfolio or, in the case of
the Money Market Fund, in the daily computation of net income of each class.
The valuation of the Money Market Fund's portfolio instruments at
amortized cost is permitted in accordance with Rule 2a-7 under the Act. Under
this Rule, the Fund is required to maintain a dollar-weighted average portfolio
maturity of 90 days or less, to purchase only instruments having remaining
maturities of 397 days or less and to invest only in securities determined under
the supervision of the Trustees to present minimal credit risks and which
satisfy certain other quality and diversification tests under Rule 2a-7. The
Fund is further required to establish procedures designed to stabilize, to the
extent reasonably possible, the price per share of each class of the Fund's
shares as computed for the purpose of distribution, redemption and repurchase at
a single value, which the Trustees have determined will be $1.00 per share. Such
procedures will include review of the Fund's portfolio holdings by the Trustees,
at such intervals as they may deem appropriate, to determine whether the net
asset value of any class of the Fund's shares calculated by using readily
available market quotations deviates from $1.00 per share, and, if so, whether
such deviation may result in material dilution or is otherwise unfair to
existing shareholders. In the event the Trustees determine that such a deviation
exists, or in any event if the deviation exceeds .5%, they shall take such
corrective action as they regard as necessary and appropriate, including the
sale of portfolio instruments prior to maturity to realize capital gains or
losses or to shorten average portfolio maturity, withholding dividends,
redemptions of shares in kind, or establishing a net asset value per share for
each class by using readily available market quotations.
36
<PAGE>
As described in the Prospectus, certain securities and assets of the Funds
are valued at fair value as determined in good faith by the Trustees or by
persons acting at their direction. The fair value of any securities from time to
time held by any Fund of the Trust for which no ready market exists is generally
determined by the Manager and/or relevant sub-adviser in accordance with
procedures approved by the Trustees. Such procedures are reviewed periodically
by the Trustees. The fair value of such securities is generally determined as
the amount which the Trust could reasonably expect to realize from an orderly
disposition of such securities over a reasonable period of time. The valuation
procedures applied in any specific instance are likely to vary from case to
case. However, consideration is generally given to the financial position of the
issuer and other fundamental analytical data relating to the investment and to
the nature of the restrictions on disposition of the securities (including any
registration expenses that might be borne by the Trust in connection with such
disposition). In addition, such specific factors are also generally considered
as the cost of the investment, the size of the holding, the prices of any recent
transactions or offers with respect to such securities and any available
analysts' reports regarding the issuer.
Market quotations are not considered to be readily available for certain
debt securities; such investments are stated at fair value on the basis of
valuations furnished by a pricing service approved by the Trustees, which
determines valuations for normal, institutional-size trading units of such
securities using methods based on market transactions for comparable securities,
evaluated mean between bid and asked prices and various relationships between
securities which are generally recognized by institutional traders.
There are certain debt securities in which the Trust may invest, however,
for which prices from pricing services or agents are generally not available.
The daily fair value of some of such securities may be determined by the Manager
and/or the relevant sub-adviser using the following procedure: At the time of
purchase, the duration of the security is determined, and a U.S. Treasury
security of similar duration is selected to serve as a proxy for the price
movements of the purchased security. The price of the purchased security will be
adjusted with any fluctuation in the price of the U.S. Treasury security, while
maintaining the differential in price between the purchased security and the
proxy U.S. Treasury security that existed at the time of purchase. The Manager
and/or sub-adviser will review the duration of the purchased security at any
time it believes there may have been a significant change in the security's
duration and, in any case, no less frequently than monthly. If the duration of
the security changes, a new U.S. Treasury security (with appropriate duration)
will be selected as the proxy. Also, the Manager and/or the sub-adviser will
monitor the validity of this pricing procedure by (i) comparing the actual sales
proceeds for the security when sold to the price determined by the method
described here, and (ii) periodically obtaining actual market quotes for the
security.
Generally, trading in foreign securities, as well as corporate bonds, U.S.
Government securities and money market instruments is substantially completed
each day at various times prior to the close of the Exchange. The values of such
securities used in determining the net asset value of each class of a Fund's
shares are computed as of such times. Foreign currency exchange rates are also
generally determined prior to the close of the Exchange. Occasionally, events
affecting the value of such securities may occur between such times and the
close of the Exchange and such change in value will not be reflected in the
computation of the Fund's net asset value. If events materially affecting the
value of a Fund's securities occur during such period, then such securities will
be valued at their fair value as determined in good faith by the Trustees.
Expenses of the Trust directly charged or attributable to any Fund will be
paid from the assets of that Fund. Expenses for shareholder service arrangements
and the distribution of securities of a particular class of shares will be paid
from the assets of that class. Each class may pay a
37
<PAGE>
different share of other expenses, not including advisory or custodial fees or
other expenses related to the management of a Fund's assets, if these expenses
are actually incurred in a different amount by that class, or if the class
receives services of a different kind or to a different degree than the other
classes. General expenses of the Trust will be allocated among and charged to
the assets of each Fund and each class on a basis that the Trustees deem fair
and equitable, which may be based on the relative net assets of each Fund and
each class or the nature of the services performed and relative applicability to
each Fund or class.
CALCULATION OF YIELD AND RETURN
-------------------------------
Yield of the Money Market Fund
- ------------------------------
As summarized in the Prospectus under the heading "Performance
Information," the "Yield" of each class of shares of the Money Market Fund for a
seven-day period (the "base period") will be computed by determining the "net
change in value" of each class (calculated as set forth below) of a hypothetical
account having a balance of one share at the beginning of the period, dividing
the net change in account value by the value of the account at the beginning of
the base period to obtain the base period return, and multiplying the base
period return by 365/7 with the resulting yield figure carried to the nearest
hundredth of one percent. Net changes in value of each class of a hypothetical
account will include the value of additional shares purchased with dividends
from the original share and dividends declared on both the original share and
any such additional shares, but will not include realized gains or losses or
unrealized appreciation or depreciation on portfolio investments. Yield may also
be calculated on a compound basis (the "Effective Yield") which assumes that net
income is reinvested in each class of Fund shares at the same rate as net income
is earned by each class for the base period.
The Money Market Fund's Yield and Effective Yield of each class of its
shares will vary in response to fluctuations in interest rates and in the
expenses of each class of the Money Market Fund. For comparative purposes the
current and Effective Yields of each class should be compared to current and
effective yields offered by competing financial institutions for that base
period only and calculated by the methods described above. In addition,
investors should recognize that unlike typical money market funds, the Money
Market Fund is specifically intended as a temporary investment for investors who
are considering in which of the other Funds of the Trust to invest or whose
investment objectives have changed so that investment in the Money Market Fund
is suitable. The Money Market Fund's Yield and Effective Yield do not take into
account any applicable contingent deferred sales charges.
Yields of the Equity Income, Global Income, High Income, Total Return Income,
- -----------------------------------------------------------------------------
Tax Exempt, U.S. Government and Short-Intermediate Funds
- --------------------------------------------------------
As summarized in the Prospectus under the heading "Performance
Information," Yields of each class of shares of the Equity Income, Global
Income, High Income, Total Return Income, Tax Exempt, U.S. Government and
Short-Intermediate Funds will be computed by annualizing net investment income
for each class for a recent 30-day period and dividing that amount by the
maximum offering price of each class (reduced by any undeclared earned income of
each class expected to be paid shortly as a dividend) on the last trading day of
that period. Net investment income for each class will reflect amortization of
any market value premium or discount of fixed income securities (except for
obligations backed by mortgages or other assets) and may include recognition of
a pro rata portion of the stated dividend rate of dividend paying portfolio
securities. The Yields of these Funds will vary from time to time depending upon
market conditions, the composition of the Funds' portfolios and operating
expenses of the Trust allocated to each Fund or each class of shares. These
factors, possible differences in the methods used in calculating yield and (in
the case of the Tax Exempt Fund) the tax exempt status
38
<PAGE>
of distributions should be considered when comparing a Fund's Yield to yields
published for other investment companies and other investment vehicles. Yield
should also be considered relative to changes in the value of the Funds' various
classes of shares and to the relative risks associated with the investment
objectives and policies of the various Income Funds. These Yields do not take
into account any applicable contingent deferred sales charges.
The Tax Exempt Fund may also advertise a Tax Equivalent Yield of each
class of its shares, calculated as described above except that, for any given
tax bracket, net investment income of each class will be calculated using as
gross investment income an amount equal to the sum of (i) any taxable income of
each class of the Fund plus (ii) the tax exempt income of each class of the Fund
divided by the difference between 1 and the effective federal income tax rates
for taxpayers in that tax bracket. For example, taxpayers with the marginal
federal income tax rates indicated in the following table, which reflects the
changes in marginal tax rates and income tax brackets in effect for 1995, would
have to earn the Tax Equivalent Yields shown in order to realize an after-tax
return equal to the corresponding tax free yield shown.
<TABLE>
<CAPTION>
Filing Status Marginal A tax-exempt yield of
Single Married filing jointly tax rate* 3% 4% 5% 6% 7%
is equivalent to a taxable yield of
Taxable income
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$22,750 or less $38,000 or less % % % % % %
Over $22,750 but Over $38,000 but % % % % % %
not over $55,000 not over $91,850
Over $55,000 but Over $91,850 but % % % % % %
not over $115,000 not over $140,000
Over $115,000 but Over $140,000 but % % % % % %
not over $250,000 not over $250,000
Over $250,000 Over $250,000 % % % % % %
</TABLE>
* These marginal tax rates do not take into account the effect of the phaseout
of itemized deductions and personal exemptions. For 1995, marginal tax rates
increased on account of the phaseout of itemized deductions for taxpayers
whose adjusted gross income exceeds $_____. For 1995, marginal tax rates
increased on account of the phaseout of personal exemptions for taxpayers
whose adjusted gross income exceeds $_______ (single returns) or $_____
(joint returns).
As is shown in the above table, the advantage of tax-free investing
becomes more advantageous to an investor as his or her marginal tax rate
increases.
The Trust, in its advertisements, may refer to pending legislation from
time to time and the possible impact of such legislation on investors,
investment strategy and related matters. This would include any tax proposals
and their effect on marginal tax rates and tax-equivalent yields.
At any time in the future, yields and total return may be higher or lower
than past yields and there can be no assurance that any historical results will
continue.
Investors in the Income Funds are specifically advised that the net asset
values per share of each class will vary just as Yields for each class will
vary. For example, during the twelve months ended December 31, 1994, the net
asset value per share of Class C shares of the U.S. Government Fund was as high
as $9.60 and as low as $8.40. An investor's focus on the Yield of a class of
shares of an Income Fund to the exclusion of the consideration of the share
value of a class of shares of that Fund may result in the investor's
misunderstanding the Total Return he or she may derive from that Fund.
Calculation of Total Return
- ---------------------------
As summarized in the Prospectus under the heading "Performance
Information", Total Return with respect to a Fund's Class A, Class B and Class C
shares is a measure of the change in value of an investment in a class of shares
of a Fund over the period covered (in the case of Class A shares, giving
39
<PAGE>
effect to the maximum initial sales charge), which assumes any dividends or
capital gains distributions are reinvested in that class of the Fund's shares
immediately rather than paid to the investor in cash. The formula for Total
Return used herein includes four steps: (1) adding to the total number of shares
purchased by a hypothetical $1,000 investment in the class (deducting in the
case of Class A shares the maximum applicable initial sales charge) all
additional shares which would have been purchased if all dividends and
distributions paid or distributed during the period had been immediately
reinvested; (2) calculating the value of the hypothetical initial investment of
$1,000 as of the end of the period by multiplying the total number of shares in
the class owned at the end of the period by the net asset value per share of the
class on the last trading day of the period; (3) assuming redemption at the end
of the period (deducting any applicable contingent deferred sales charge); and
(4) dividing this account value for the hypothetical investor by the initial
$1,000 investment and annualizing the result for periods of less than one year.
The manner in which Total Return and Yield of the Class A, Class B and
Class C shares will be calculated for public use is described above. The
following tables summarize the calculation of Total Return and Yield for the
Class A, Class B and Class C shares of each Fund, where applicable, through
September 30, 1995.
40
<PAGE>
3031617.05
PIMCO ADVISORS FUNDS
RECENT PERFORMANCE OF CLASS A SHARES
(based on maximum offering price)
As of September 30, 1995
<TABLE>
<CAPTION>
Average Annual Total Return
- ---------------------------------------------------------------------------------------------------
Inception Current Inception Year 5 Years 10 Years Lipper
Fund Date SEC to Ended Ended Ended Rank -
Yield at 9/30/95* 9/30/95* 9/30/95* 9/30/95* Year
9/30/95* Ended
9/30/95*
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Equity Income** 02/01/91 1.84 14.52 9.71 NA NA 100/119
Value 6/27/95 2.43 6.11 NA NA NA NA
Growth 10/26/90 NA 15.46 16.88 NA NA 357/550
Target 12/17/92 NA 17.97 19.55 NA NA 46/92
Discovery 6/27/95 NA 11.75 NA NA NA NA
Opportunity 12/17/90 NA 32.81 31.98 NA NA 10/153
Innovation 12/22/94 NA 53.60 NA NA NA NA
International** 02/01/91 NA 7.20 (9.00) NA NA 201/222
Precious Metals** 02/01/91 NA 10.91 (17.60) NA NA 26/38
High Income** 02/06/91 8.08 6.56 9.02 NA NA NA
Total Return Income 12/22/94 4.73 7.59 NA NA NA NA
Tax Exempt 03/14/91 4.18 6.13 5.69 NA NA 40/213
US Government 01/03/91 6.01 6.21 7.24 NA NA 25/90
Short-Intermediate** 08/16/91 5.54 4.00 6.00 NA NA 20/136
Money Market 03/05/91 5.34 NA NA NA NA 39/251
</TABLE>
More recently updated performance figures can be obtained from the
Distributor.
* Assumes payment of current maximum sales charge at time of purchase.
** The investment objective and policies of the Equity Income Fund and
International Fund were changed effective February 1, 1992 and September 1,
1992, respectively. The investment objective and policies of the Precious
Metals, High Income and Short-Intermediate Funds were changed effective on
November 15, 1994. Performance information for prior periods does not
necessarily represent results that would have been obtained had the current
investment objective and policies then been in effect.
41
<PAGE>
PIMCO ADVISORS FUNDS
--------------------
RECENT PERFORMANCE OF CLASS B SHARES
As of September 30, 1995
<TABLE>
<CAPTION>
Average Annual Total Return
- ------------------------------------------------------------------------------------
Inception Current Inception Year 5 Years 10 Years
Fund Date SEC to Ended Ended Ended
Yield at 9/30/95 9/30/95 9/30/95 9/30/95
9/30/95
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Equity Income 5/22/95 1.23 13.25 NA NA NA
Value 6/27/95 1.83 7.25 NA NA NA
Growth 5/23/95 NA 10.21 NA NA NA
Target 5/22/95 NA 15.29 NA NA NA
Discovery 6/27/95 NA 8.60 NA NA NA
Innovation 5/22/95 NA 24.13 NA NA NA
International 5/22/95 NA 3.98 NA NA NA
Precious Metals 6/15/95 NA 2.50 NA NA NA
High Income 5/22/95 7.71 4.87 NA NA NA
Total Return Income 5/22/95 4.19 3.84 NA NA NA
Tax Exempt 5/30/95 3.62 0.79 NA NA NA
US Government 6/2/95 5.54 1.57 NA NA NA
Short-Intermediate 5/22/95 4.96 3.29 NA NA NA
Money Market 7/17/95 4.40 NA NA NA NA
</TABLE>
More recently updated performance figures can be obtained from the Distributor.
42
<PAGE>
3031617.05
PIMCO ADVISORS FUNDS
RECENT PERFORMANCE OF CLASS C SHARES
As of September 30, 1995
<TABLE>
<CAPTION>
Average Annual Total Return
- ------------------------------------------------------------------------------------
Current Inception Year 5 Years 10 Years
Fund Inception SEC to Ended Ended Ended
Date Yield at 9/30/95 9/30/95 9/30/95 9/30/95
9/30/95
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Equity Income* 04/18/88 1.21 9.55 15.15 14.91 NA
Value 6/27/95 1.84 31.13 NA NA NA
Growth 02/24/84 NA 16.24 22.79 15.80 16.32
Target 12/17/92 NA 19.47 25.55 NA NA
Discovery 6/27/95 NA 37.63 NA NA NA
Opportunity 02/24/84 NA 20.34 38.63 32.26 21.26
Innovation 12/22/94 NA 63.97 NA NA NA
International* 08/25/86 NA 6.86 (4.46) 8.61 NA
Precious Metals* 10/10/88 NA 2.54 (13.46) 4.83 NA
High Income* 02/24/84 7.74 7.81 13.52 6.97 7.19
Total Return Income 12/22/94 4.20 13.79 NA NA NA
Tax Exempt 11/01/85 3.64 7.96 10.05 7.02 NA
US Government 09/16/85 5.55 7.36 11.77 7.32 7.36
Short-Intermediate* 08/16/91 5.20 4.22 8.25 NA NA
Money Market 02/24/84 5.35 NA NA NA NA
Indexes
S&P 500 29.75 17.23 16.04
Russell 2000 23.04 21.60 12.73
Index
Lehman 13.57 9.56 9.66
Government
Index
</TABLE>
More recently updated performance figures can be obtained from the Distributor.
* The investment objective and policies of the Equity Income Fund and
International Fund were changed effective February 1, 1992 and September 1,
1992, respectively. The investment objective and policies of the Precious
Metals, High Income and Short-Intermediate Funds were changed effective on
November 15, 1994. Performance information for prior periods does not
necessarily represent results that would have been obtained had the current
investment objective and policies then been in effect.
43
<PAGE>
PERFORMANCE COMPARISONS
-----------------------
Yield and Total Return
- ----------------------
Performance information is computed separately for each class of a Fund's
shares. Each Fund may from time to time include the Total Return of each class
of its shares in advertisements or in information furnished to present or
prospective shareholders. Each Income Fund may from time to time include the
Yield and Total Return of each class of its shares in advertisements or
information furnished to present or prospective shareholders. Each Fund may from
time to time include in advertisements the Total Return of each class (and Yield
of each class in the case of the Income Funds) and the ranking of those
performance figures relative to such figures for groups of mutual funds
categorized by Lipper Analytical Services as having the same investment
objectives.
Information provided to any newspaper or similar listing of the Fund's net
asset values and public offering prices will separately present each class of
shares.
The Total Return of each class (and Yield of each class in the case of the
Income Funds) may also be used to compare the performance of each class of a
Fund's shares against certain widely acknowledged standards or indices for stock
and bond market performance, against interest rates on certificates of deposit
and bank accounts, against the yield on money market funds, against the cost of
living (inflation) index, and against hypothetical results based on a fixed rate
of return.
The Standard & Poor's Composite Index of 500 Stocks (the "S&P 500") is a
market value-weighted and unmanaged index showing the changes in the aggregate
market value of 500 stocks relative to the base period 1941-43. The S&P 500 is
composed almost entirely of common stocks of companies listed on the New York
Stock Exchange, although the common stocks of a few companies listed on the
American Stock Exchange or traded over-the-counter are included. The 500
companies represented include 385 industrial, 15 transportation, 45 utilities
and 55 financial services concerns. The S&P 500 represents about 77% of the
market value of all issues traded on the New York Stock Exchange.
The Standard & Poor's 400 Mid-Cap Index (the "S&P 400 Mid-Cap Index") is a
market value-weighted and unmanaged index showing the changes in the aggregate
market value of 400 stocks of companies whose capitalization range from $100
million to over $5 billion and which represent a wide range of industries. As of
March 8, 1995, approximately 26% of the 400 stocks were stocks listed on the
National Association of Securities Dealers Automated Quotations ("NASDAQ")
system, 72% were stocks listed on the New York Stock Exchange and 2% were stocks
listed on the American Stock Exchange. The Standard & Poor's Midcap 400 Index
P/TR consists of 400 domestic stocks chosen for market size (median market
capitalization of $676 million), liquidity and industry group representation. It
is a market-value weighted index (stock price times shares outstanding), with
each stock affecting the index in proportion to its market value. The index is
comprised of industrials, utilities, financials and transportation, in size
order.
The NASDAQ-OTC Price Index (the "NASDAQ Index") is a market value-weighted
and unmanaged index showing the changes in the aggregate market value of
approximately 3,500 stocks relative to the base measure of 100.00 on February 5,
1971. The NASDAQ Index is composed entirely of common stocks of companies traded
over-the-counter and often through the National Association of Securities
Dealers Automated Quotations ("NASDAQ") system. Only those over-the-counter
stocks having only one market
44
<PAGE>
maker or traded on exchanges are excluded.
The Russell 2000 Small Stock Index is an unmanaged index of the 2000
smallest securities in the Russell 3000 Index, representing approximately 7% of
the Russell 3000 Index. The Russell 3000 Index represents approximately 98% of
the U.S. equity market by capitalization. The Russell 1000 Index is composed of
the 1,000 largest companies in the Russell 3000 Index. The Russell 1000 Index
represents the universe of stocks from which most active money managers
typically select. This large cap index is highly correlated with the S&P 500
Index. The Russell 1000 Value Index contains stocks from the Russell 1000 Index
with a less-than-average growth orientation. It represents the universe of
stocks from which value managers typically select.
The Lehman Government Bond Index (the "SL Government Index") is a measure
of the market value of all public obligations of the U.S. Treasury; all publicly
issued debt of all agencies of the U.S. Government and all quasi-federal
corporations; and all corporate debt guaranteed by the U.S. Government. Mortgage
backed securities, flower bonds and foreign targeted issues are not included in
the SL Government Index.
The Lehman Government/Corporate Bond Index (the "SL Government/Corporate
Index") is a measure of the market value of approximately 5,000 bonds. To be
included in the SL Government/Corporate Index, an issue must have amounts
outstanding in excess of $1 million, have at least one year to maturity and be
rated "Baa" or higher ("investment grade") by a nationally recognized rating
agency.
The Merrill Lynch U.S. Treasury Intermediate-term Index is an unmanaged
index of ten U.S. Treasury securities with maturities ranging from 10 to 14.99
years. Over the ten year period from December 31, 1984 to December 31, 1994,
according to the Merrill Lynch U.S. Treasury Intermediate-term Index, 24% of
Total Return was derived from price appreciation and 76% of Total Return was
derived from income.
BanXquote Money Market, a service of Masterfund Inc., provides the average
rate of return paid on 3 month certificates of deposit offered by major banks
and the average rate paid by major banks on bank money market funds. The
Donoghue Organization, Inc. a subsidiary of IBC USA Inc., publishes the Money
Fund Report which lists the 7 day average yield paid on money market funds.
From time to time, the Trust may use, in its advertisements or information
furnished to present or prospective shareholders, data concerning the
performance and ranking of certain countries' stock markets, including
performance and ranking data based on annualized returns over one, three, five
and ten-year periods. The Trust may also use data about the portion of world
equity capitalization represented by U.S. securities. As of December 31, 1994,
the U.S. equity market capitalization represented approximately 33% of the
equity market capitalization of all the world's markets. This compares with 52%
in 1980 and 70% in 1972.
From time to time, the Trust may use, in its advertisements and other
information relating to the Equity Income, Value, Growth, Target, Discovery,
Opportunity, Innovation, International and Emerging Markets Funds, data
concerning the performance of stocks relative to that of fixed income
investments and relative to the cost of living over various periods of time. The
table below sets forth the annual returns for each calendar year from 1970
through 1994 (as well as a cumulative return and average annual return for that
25 year period) for the Standard & Poor's 500 Stock Index (the "S&P 500 Index")
and Treasury bills (using the formula set forth after the table) as well as the
rates of inflation (based on the Consumer Price Index) during such periods.
45
<PAGE>
S&P 500
Consumer Price
Period Index Treasury Bills Index
- ------ ----- -------------- -----
1970 4.0% 6.5% 5.5%
1971 14.3 4.4 3.4
1972 18.9 3.8 3.4
1973 -14.7 6.9 8.8
1974 -26.5 8.0 12.2
1975 37.2 5.8 7.0
1976 23.8 5.0 4.8
1977 -7.2 5.1 6.8
1978 6.5 7.2 9.0
1979 18.4 10.4 13.3
1980 32.4 11.2 12.4
1981 -4.9 14.7 8.9
1982 21.4 10.5 3.8
1983 22.5 8.8 3.8
1984 6.3 9.9 3.9
1985 32.2 7.7 3.8
1986 18.5 6.1 1.1
1987 5.2 5.5 4.4
1988 16.8 6.3 4.4
1989 31.5 8.4 4.6
1990 -3.2 7.8 6.1
1991 30.5 5.6 3.1
1992 7.7 3.5 2.9
1993 10.1 2.9 2.7
1994 1.3 3.9 2.7
- --------------------------------------------------------------------------------
Cumulative Return
1970-1994 1249.6% 444.3% 297.2%
- --------------------------------------------------------------------------------
Average Annual Return
1970-1994 11.0% 7.0% 5.7%
- --------------------------------------------------------------------------------
46
<PAGE>
The average returns for Treasury bills were computed using the following
method. For each month during a period, the Treasury bill having the shortest
remaining maturity (but not less than one month) was selected. (Only the
remaining maturity was considered; the bill's original maturity was not
considered). The return for the selected Treasury bill was computed based on the
price of the bill as of the last trading day of the previous month and the price
on the last trading day of the current month. The price of the bill (P) at each
time (t) is given by
P = 1- rd
t [ ---]
360
where,
r = decimal yield on the bill at time t (the average of bid and ask
quotes); and
d = the number of days to maturity as of time t.
Advertisements and information relating to the Target Fund may use data
comparing the performance of stocks of medium-sized companies to that of other
companies. The following table sets forth the annual returns for each year from
March 1981 (inception of Mid-Cap Index) through 1994 (as well as a cumulative
return and average annual return for this period) for stocks of medium-sized
companies (based on the Standard & Poor's Mid-Cap Index), stocks of small
companies (based on the Russell 2000 Index) and stocks of larger companies
(based on the S&P 500 Index).
Small Mid-Sized Large
Period Companies Companies Companies
- ------ --------- --------- ---------
1981 (2/28 -12/31) 1.8 10.6 -2.5
1982 25.0 22.7 21.4
1983 29.1 26.1 22.5
1984 -7.3 1.2 6.3
1985 31.1 36.0 32.2
1986 5.7 16.2 18.5
1987 -8.8 -2.0 5.2
1988 24.9 20.9 16.8
1989 16.2 35.6 31.5
1990 -19.5 -5.1 -3.2
1991 46.1 50.1 30.5
1992 18.4 11.9 7.7
1993 18.9 14.0 10.1
1994 -1.8 -3.6 1.3
- --------------------------------------------------------------------------------
Cumulative Return
2/28/81-12/31/94 353.8% 666.3% 491.8%
- --------------------------------------------------------------------------------
Average Annual Return
2/28/81-12/31/94 11.6% 15.9% 13.7%
- --------------------------------------------------------------------------------
47
<PAGE>
From time to time, the Trust may use, in its advertisements and other
information relating to the Precious Metals Fund, data concerning the relevant
performance and volatility of portfolios consisting of all stocks, portfolios
consisting of all bonds and portfolios consisting of stocks and bonds blended
with stocks of companies engaged in the extraction, processing, distribution or
marketing of gold and other precious metals. The following table shows the
annual returns for each calendar year from 1970 through 1994 (as well as
cumulative return and average annual return for that 25 year period) for an
all-stock portfolio (using the S&P 500 Index), an all-bond portfolio (using the
Salomon Brothers Long Term Corporate Bond Index), and for a hypothetical
portfolio with 45% of its assets in stocks comprising the S&P 500 Index, 45% in
bonds comprising the Salomon Brothers Long Term Corporate Bond Index and 10% in
stocks comprising the Morgan Stanley Capital International Gold Mining Index.
Stocks 45%
All All Bonds 45%
Period Stocks Bonds Gold Stocks 10%
- ------ ------ ----- ---------------
1970 4.0 18.4 12.7
1971 14.3 11.0 10.4
1972 19.0 7.3 15.5
1973 -14.7 1.1 4.2
1974 -26.5 -3.1 -10.9
1975 37.5 14.6 20.4
1976 23.8 18.6 15.0
1977 -7.2 1.7 .5
1978 6.5 0.00 3.4
1979 18.4 -4.2 21.3
1980 32.4 -2.6 19.3
1981 -4.9 -0.1 -6.0
1982 21.4 43.8 33.9
1983 22.5 4.7 12.0
1984 6.3 16.4 7.2
1985 32.2 30.9 26.2
1986 18.5 19.8 18.5
1987 5.2 -.02 6.6
1988 16.8 10.7 9.1
1989 31.5 16.2 26.4
1990 -3.2 6.8 -1.0
1991 30.5 19.9 21.8
1992 7.7 9.4 4.9
1993 10.1 13.2 23.5
1994 1.3 -5.8 -3.1
- --------------------------------------------------------------------------------
Cumulative Return
1970-1994 1249.6% 830.3% 1294.4%
- --------------------------------------------------------------------------------
Average Annual Return
1970-1994 11.0% 9.3% 11.1%
- --------------------------------------------------------------------------------
48
<PAGE>
The Trust may use, in its advertisements and other information, data
concerning the projected cost of a college education in future years based on
1993/1994 costs of college and an assumed rate of increase for such costs. For
example, the table below sets forth the projected cost of four years of college
at a public college and a private college assuming a steady increase in both
cases of 7% per year. In presenting this information, the Trust is making no
prediction regarding what will be the actual growth rate in the cost of a
college education, which may be greater or less than 7% per year and may vary
significantly from year to year. The Trust makes no representation that an
investment in any of the Funds will grow at or above the rate of growth of the
cost of a college education.
Potential College Cost Table
Start Public Private Start Public Private
Year College College Year College College
- ---- ------- ------- ---- ------- -------
1996 $33,761 $ 86,035 2004 $58,007 $147,817
1997 $36,124 $ 92,057 2005 $62,067 $158,165
1998 $38,653 $ 98,501 2006 $66,412 $169,237
1999 $41,358 $105,396 2007 $71,061 $181,084
2000 $44,253 $112,774 2008 $76,035 $193,761
2001 $47,351 $120,668 2009 $81,357 $207,325
2002 $50,665 $129,115 2010 $87,051 $221,838
2003 $54,212 $138,146 2011 $93,143 $237,367
Costs assume a steady increase in the annual cost of college of 7% per year from
a 1993-94 base year amount. Actual rates of increase may be more or less than 7%
and may vary.
In its advertisements and other materials, the Trust may compare the
returns over periods of time of investments in stocks, bonds and treasury bills
to each other and to the general rate of inflation. For example, the average
annual return of each during the 25 years from 1970 to 1994 was:
*Stocks: 11.0%
Bonds: 9.3%
T-Bills: 7.0%
Inflation: 5.7%
* Returns of unmanaged indices do not reflect past or future performance
of any of the Funds of PIMCO Advisors Funds. Stocks is represented by Ibbotson's
Common Stock Total Return Index. Bonds are represented by Ibbotson's Long-term
Corporate Bond Index. T-bills are represented by Ibbotson's Treasury Bill Index
and Inflation is represented by the Cost of Living Index. These are all
unmanaged indices, which can not be invested in directly. While Treasury bills
are insured and offer a fixed rate of return, both the principal and yield of
investment securities will fluctuate with changes in market conditions. Source:
Ibbotson, Roger G., and Rex A. Sinquefiled, Stocks, Bonds, Bill and Inflation
(SBBI), 1989, updated in Stocks, Bonds, Bills and Inflation 1994 Yearbook,
Ibbotson Associates, Chicago. All rights reserved.
49
<PAGE>
The Trust may also compare the relative historic returns and range of
returns for an investment in each of common stocks, bonds and treasury bills to
a portfolio that blends all three investments. For example, over the 25 years
from 1970-1994, the average annual return of stocks comprising the Ibbotson's
Common Stock Total Return Index ranged from -26.5% to 37.2% while the annual
return of a hypothetical portfolio comprised 40% of such common stocks, 40% of
bonds comprising the Ibbotson's Long-term Corporate bond Index and 20% of
Treasury bills comprising the Ibbottson's Treasury Bill Index (a "mixed
portfolio") would have ranged from -10.2% to 28.2% over the same period. The
average annual returns of each investment for each of the years from 1970
through 1994 is set forth in the following table:
MIXED
YEAR STOCKS BONDS T-BILLS INFLATION PORTFOLIO
- ---- ------ ----- ------- --------- ---------
1970 4.01% 18.95% 6.53% 5.49% 10.49%
1971 14.31% 11.01% 4.39% 3.36% 11.01%
1972 18.98% 7.26% 3.84% 3.41% 11.26%
1973 -14.66% 1.14% 6.93% 8.80% -4.02%
1974 -26.47% -3.06% 8.00% 12.26% -10.21%
1975 37.20% 14.64% 5.80% 7.01% 21.90%
1976 23.84% 18.65% 5.08% 4.81% 18.01%
1977 -7.18% 1.71% 5.12% 6.77% -1.17%
1978 6.56% -0.07% 7.18% 9.03% 4.03%
1979 18.44% -4.18% 10.38% 13.31% 7.78%
1980 32.42% 2.61% 11.24% 12.40% 14.17%
1981 -4.91% -0.96% 14.71% 8.94% 0.59%
1982 21.41% 43.79% 10.54% 3.87% 28.19%
1983 22.51% 4.70% 8.80% 3.80% 12.64%
1984 6.27% 16.39% 9.85% 3.95% 11.03%
1985 32.16% 30.90% 7.72% 3.77% 26.77%
1986 18.47% 19.85% 6.16% 1.13% 16.56%
1987 5.23% -0.27% 5.46% 4.41% 3.08%
1988 16.81% 10.70% 6.35% 4.42% 12.28%
1989 31.49% 16.23% 8.37% 4.65% 20.76%
1990 -3.17% 6.87% 7.52% 6.11% 2.98%
1991 30.55% 19.79% 5.88% 3.06% 21.31%
1992 7.67% 9.39% 3.51% 2.90% 7.53%
1993 10.06% 13.17% 2.89% 2.75% 9.84%
1994 1.31% -5.76% 3.90% 2.67% -1.00%
Returns of unmanaged indices do not reflect past or future performance of
any of the Funds of PIMCO Advisors Funds. Stocks is represented by
Ibbotson's Common Stock Total Return Index. Bonds are represented by
Ibbotson's Long-term Corporate Bond Index. T'bills are represented by
Ibbotson's Treasury Bill Index and Inflation is represented by the Cost of
Living Index. These
50
<PAGE>
are all unmanaged indices, which can not be invested in directly. While
Treasury bills are insured and offer a fixed rate of return, both the
principal and yield of investment securities will fluctuate with changes
in market conditions. Source: Ibbotson, Roger G., and Rex A. Sinquefiled,
Stocks, Bonds, Bill and Inflation (SBBI), 1989, updated in Stocks, Bonds,
Bills and Inflation 1994 Yearbook, Ibbotson Associates, Chicago. All
rights reserved.
The Trust may use in its advertisement and other materials examples
designed to demonstrate the effect of compounding when an investment is
maintained over several or many years. For example, the following table shows
the annual and total contributions necessary to accumulate $200,000 of savings
(assuming a fixed rate of return) over various periods of time:
Investment Annual Total Total
Period Contribution Contribution Saved
------ ------------ ------------ -----
30 Years $1,979 $59,370 $200,000
25 Years $2,955 $73,875 $200,000
20 Years $4,559 $91,180 $200,000
15 Years $7,438 $111,570 $200,000
10 Years $13,529 $135,290 $200,000
This hypothetical example assumes a fixed 7% return compounded annually
and a guaranteed return of principal. The example is intended to show the
benefits of a long-term, regular investment program, and is in no way
representative of any past or future performance of a PIMCO Advisors Fund.
There can be no guarantee that you will be able to find an investment that
would provide such a return at the times you invest and an investor in any
of the PIMCO Advisors Funds should be aware that certain of the PIMCO
Advisors Funds have experienced periods of negative growth in the past and
may again in the future.
The Trust may set forth in its advertisements and other materials
information regarding the relative reliance in recent years on personal savings
for retirement income versus reliance on Social Security benefits and company
sponsored retirement plans. For example, the following table offers such
information for 1990:
% of Income for Individuals
Aged 65 Years and Older in 1990*
--------------------------------
Social Security
Year and Pension Plans Other
---- ----------------- -----
1990 38% 62%
* For individuals with an annual income of at least $51,000. Other
includes personal savings, earnings and other undisclosed sources of
income. Source: Social Security Administration.
Rankings of the various PIMCO Advisors Funds in terms of their relative
risk and/or aggressiveness as investments may from time to time appear in
advertisements or other materials describing the Funds.
51
<PAGE>
Articles or reports which include information relating to performance,
rankings and other characteristics of the Funds may appear in various national
publications and services including, but not limited to: The Wall Street
Journal, Barron's, Pensions and Investments, Forbes, Smart Money, Mutual Fund
Magazine, The New York Times, Kiplinger's Personal Finance, Fortune, Money
Magazine, Morningstar's Mutual Fund Values, CDA Investment Technologies and The
Donoghue Organization. Some or all of these publications or reports may publish
their own rankings or performance reviews of mutual funds, including the Funds,
and may provide information relating to the Manager and the Funds' sub-advisers,
including descriptions of assets under management and client base, and opinions
of the author(s) regarding the skills of personnel and employees of the Manager
or the Funds' sub-advisers who have portfolio management responsibility. From
time to time, the Trust may include references to or reprints of such
publications or reports in its advertisements and other information relating to
the Funds.
From time to time, the Trust may set forth in its advertisements and other
materials information about the growth of a certain dollar-amount invested in
one or more of the Funds over a specified period of time and may use charts and
graphs to display that growth.
Ibbotson Associates ("Ibbotson") has analyzed the risk and returns of the Funds
and relevant benchmark market indices in a variety of market conditions. Based
on its independent research and analysis, Ibbotson has developed model
portfolios of the Funds which indicate how, in Ibbotson's opinion, a
hypothetical investor with a 5+ year investment horizon might allocate his or
her assets among the Funds. Ibbotson bases its model portfolios on five levels
of investor risk tolerance which it developed and defines as ranging from "Very
Conservative" (low volatility; emphasis on capital preservation, with some
growth potential) to "Very Aggressive" (high volatility; emphasis on long-term
growth potential). For instance, Ibbotson developed the following model
portfolios for the Funds: (1) "Very Conservative" -- 10% in Equity Income Fund,
5% in Value Fund, 5% in Growth Fund, 5% in International Fund, 15% in U.S.
Government Fund and 60% in Short-Intermediate Fund; (2) "Conservative" -- 10% in
Value Fund, 5% in Growth Fund, 15% in Target Fund, 10% in International Fund,
25% in U.S. Government Fund and 35% in Short-Intermediate Fund; (3) "Moderate"
- -- 20% in Value Fund, 10% in Growth Fund, 15% in Target Fund, 15% in
International Fund, 15% in Total Return Income Fund and 25% in Short-
Intermediate Fund; (4) "Aggressive" -- 15% in Value Fund, 10% in Growth Fund,
15% in Target Fund, 15% in Discovery Fund, 20% in International Fund, 15% in
Total Return Income Fund and 10% in Short-Intermediate Fund; and (5) "Very
Aggressive" -- 10% in Value Fund, 10% in Growth Fund, 15% in Target Fund, 30% in
Discovery Fund, 25% in International Fund and 10% in Total Return Income Fund.
From time to time, the Trust may include model portfolios developed by Ibbotson
in its advertisements and other materials relating to the Funds. However,
neither Ibbotson nor the Trust offers Ibbotson's model portfolios as
investments. Moreover, neither the Trust, the Manager, the Funds' sub-advisers
nor Ibbotson represent or guarantee that investors who allocate their assets
according to Ibbotson's models will achieve their desired investment results.
52
<PAGE>
DISTRIBUTIONS
-------------
Distributions from Net Investment Income
- ----------------------------------------
As described in the Prospectus under the caption "Distributions," each
Fund pays out substantially all of its net investment income, dividends and
interest it receives from its investments. It is the current policy of the Trust
to declare distributions from net investment income of the U.S. Government,
Short-Intermediate, High Income, Global Income, Total Return Income, Tax Exempt
and Money Market Funds daily and pay such distributions monthly. If a
shareholder redeems shares before a monthly dividend is paid, redemption
proceeds will include daily dividends which have been declared but not paid. It
is the current policy of the Trust to declare and pay distributions from net
investment income of the Equity Income and Value Funds quarterly, and of the
Growth, Discovery, Opportunity, Target, Innovation, Precious Metals and
International and Emerging Markets Funds annually.
Distributions of Net Short-Term Capital Gains
- ---------------------------------------------
As described in the Prospectus, it is the Trust's policy to distribute
substantially all the net realized short-term capital gains, if any, of each
Fund. The U.S. Government, Short-Intermediate, High Income, Global Income, Total
Return Income, Equity Income, Tax Exempt, Value, Growth, International, Emerging
Markets, Precious Metals, Innovation, Discovery, Opportunity, and Target Funds
will distribute their net short-term capital gains annually. The Money Market
Fund will distribute any net realized short-term capital gains annually but may
distribute such gains more frequently if necessary in order to maintain a net
asset value of $1.00 per share for the shares of that Fund.
Distributions from Net Realized Capital Gains.
- ----------------------------------------------
As described in the Prospectus, the Trust's policy is to distribute
substantially all of the net realized capital gain, if any, of each Fund, after
giving effect to any available capital loss carryover. Net realized capital gain
for any Fund is the excess of net realized long-term capital gain over net
realized short-term capital loss. Each Fund of the Trust is treated as a
separate entity for federal income tax purposes and accordingly its net realized
gains or losses will be determined separately, and its capital loss carryovers
will be determined and applied on a separate Fund basis. Each of the Funds
distributes its net realized capital gains annually, although the Money Market
Fund may distribute any net realized long-term capital gains more frequently if
necessary in order to maintain a net asset value of $1.00 per share for the
shares of that Fund.
Sixty percent of any gain or loss realized by any Fund (i) from net
premiums from expired listed options and from closing purchase transactions,
(ii) with respect to listed options upon the exercise thereof, and (iii) from
transactions in futures contracts and listed options thereon generally will
constitute long-term capital gains or losses and the balance will be short-term
gains or losses. Distributions of long-term capital gains, if designated as such
by the Trust, are taxable to shareholders as long-term capital gain, regardless
of how long a shareholder has held shares.
Since Funds which invest in "pay-in-kind" securities or zero coupon
securities will not receive
53
<PAGE>
cash interest payments thereon, to the extent shareholders of these Funds elect
to take their distributions in cash, the relevant Fund may have to generate the
required cash from the disposition of non-zero coupon securities, or possibly
from the disposition of some of its zero coupon securities.
TAXES
-----
The tax status of the Trust and the distributions which it may make are
summarized in the text of the Prospectus immediately following the caption
"Taxes." Except for exempt-interest dividends paid by the Tax Exempt Fund, as
described in the Prospectus, all dividends and distributions of a Fund, whether
received in shares or cash, are taxable and must be reported by each shareholder
on his federal income tax return. A dividend or capital gains distribution
received after the purchase of a Fund's shares reduces the net asset value of
the shares by the amount of the dividend or distribution and will be subject to
federal income taxes.
Each Fund intends to qualify each year as a "regulated investment company"
under Subchapter M of the Internal Revenue Code (the "Code"). In order so to
qualify, each Fund must, among other things, (a) derive at least 90% of its
gross income from dividends, interest, payments with respect to certain
securities loans, and gains from the sale of stock, securities and foreign
currencies, or other income (including but not limited to gains from options,
futures or forward contracts) derived with respect to its business of investing
in such stock, securities or currencies; (b) derive less than 30% of its gross
income from gains from the sale or other disposition of certain assets held for
less than three months; (c) each year distribute at least 90% of its dividend,
interest (including tax-exempt interest), certain other income and the excess,
if any, of its net short-term capital gains over its net long-term capital
losses; and (d) diversify its holdings so that, at the end of each fiscal
quarter (i) at least 50% of the market value of the Fund's assets is represented
by cash items, U.S. Government securities, securities of other regulated
investment companies, and other securities, limited in respect of any one issuer
to a value not greater than 5% of the value of the Fund's total assets and 10%
of the outstanding voting securities of such issuer, and (ii) not more than 25%
of the value of its assets is invested in the securities (other than those of
the U.S. Government or other regulated investment companies) of any one issuer
or of two or more issuers which the Fund controls and which are engaged in the
same, similar or related trades or businesses. Under the 30% of gross income
test described above, the Fund will be restricted from selling certain assets
held (or considered under Code rules to have been held) for less than three
months, and in engaging in certain hedging transactions (including hedging
transactions in futures and options) that in some circumstances could cause
certain Fund assets to be treated as held for less than three months. By so
qualifying, each Fund will not be subject to federal income taxes to the extent
that its net investment income, net realized short-term capital gains and net
realized long-term capital gains are distributed.
The Tax Exempt Fund must have at least 50% of its total assets invested in
Tax Exempt Bonds at the end of each calendar quarter so that dividends derived
from its net interest income on Tax Exempt Bonds and so designated by the Fund
will be "exempt-interest dividends," which are exempt from federal income tax
when received by an investor. Certain exempt-interest dividends, as described in
the Prospectus, may be treated as income for purposes of determining a
shareholder's
54
<PAGE>
liability for the alternative minimum tax. In addition, exempt-interest
dividends allocable to interest from certain "private activity bonds" will not
be tax exempt for purposes of the regular income tax to shareholders who are
"substantial users" of the facilities financed by such obligations or "related
persons" of such "substantial users." The tax-exempt portion of dividends paid
for a calendar year constituting "exempt-interest dividends" will be designated
after the end of that year and will be based upon the ratio of net tax-exempt
income to total net income earned by the Fund during the entire year. That ratio
may be substantially different than the ratio of net tax-exempt income to total
net income earned during a portion of the year. Thus, an investor who holds
shares for only a part of the year may be allocated more or less tax-exempt
interest dividends than would be the case if the allocation were based on the
ratio of net tax-exempt income to total net income actually earned by the Fund
while the investor was a shareholder. All or a portion of interest on
indebtedness incurred or continued by a shareholder to purchase or carry shares
of the Tax Exempt Fund will not be deductible by the shareholder. The portion of
interest that is not deductible is equal to the total interest paid or accrued
on the indebtedness multiplied by the percentage of the Fund's total
distributions (not including distributions of the excess of net long-term
capital gains over net short-term capital losses) paid to the shareholder that
are exempt-interest dividends. Under rules used by the Internal Revenue Service
for determining when borrowed funds are considered used for the purpose of
purchasing or carrying particular assets, the purchase of shares may be
considered to have been made with borrowed funds even though such funds are not
directly traceable to the purchase of shares.
Shareholders of the Tax Exempt Fund receiving social security or railroad
retirement benefits may be taxed on a portion of those benefits as a result of
receiving tax exempt income (including exempt-interest dividends distributed by
the Fund). The tax may be imposed on up to 50% of a recipient's benefits in
cases where the sum of the recipient's adjusted gross income (with certain
adjustments, including tax-exempt interest), exceeds a base amount ($25,000 for
individuals and $32,000 for individuals filing a joint return). In addition,
beginning in 1994, up to 85% of a recipient's benefits may be subject to tax if
the recipient's adjusted gross income (with certain adjustments, including
tax-exempt interest), exceeds a higher base amount ($34,000 for a single
individual and $44,000 for married individuals filing a joint return).
Shareholders receiving social security or railroad retirement benefits should
consult with their tax advisors.
In years when a Fund distributes amounts in excess of its earnings and
profits, such distributions may be treated in part as a return of capital. A
return of capital is not taxable to a shareholder and has the effect of reducing
the shareholder's basis in the shares. Since certain of the Tax Exempt Fund's
expenses attributable to earning tax-exempt income do not reduce such Fund's
current earnings and profits, it is possible that distributions, if any, in
excess of such Fund's net tax-exempt and taxable income will be treated as
taxable dividends to the extent of such Fund's remaining earnings and profits
(i.e., the amount of such expenses).
The proper tax treatment of income or loss realized by the Precious Metals
Fund from the retirement or sale of a Resource-Indexed Note is unclear. The
Precious Metals Fund will report such income or loss as capital or ordinary
income or loss in a manner consistent with any Internal Revenue Service position
on the subject following the publication of such a position. Gain or loss from
the sale
55
<PAGE>
or exchange of preferred stock indexed to the price of a natural resource is
expected to be capital gain or loss to the Precious Metals Fund.
Hedging Transactions
- --------------------
If a Fund engages in transactions, including hedging transactions, in
options, futures contracts, and straddles, or other similar transactions, it
will be subject to special tax rules (including mark-to-market, straddle, wash
sale, and short sale rules), the effect of which may be to accelerate income to
the Fund, defer losses to the Fund, cause adjustments in the holding periods of
the Fund's securities, and convert short-term capital losses into long-term
capital losses. These rules could therefore affect the amount, timing and
character of distributions of shareholders. A Fund engaging in such transactions
will endeavor to make any available elections pertaining to such transactions in
a manner believed to be in the best interests of the Fund.
Certain of a Fund's hedging activities (including its transactions in
foreign currencies) are likely to produce a difference between its book income
and its taxable income. If a Fund's book income exceeds its taxable income, the
distribution (if any) of such excess will be treated as a dividend to the extent
of the Fund's remaining earnings and profits, and thereafter as a return of
capital or as gain from the sale or exchange of a capital asset, as the case may
be. If the Fund's book income is less than its taxable income, the Fund could be
required to make distributions exceeding book income to qualify as a regulated
investment company that is accorded special tax treatment.
Under the 30% of gross income test described above, a Fund will be
restricted in selling assets held or considered under Code rules to have been
held for less than three months, and in engaging in certain hedging transactions
(including hedging transactions in options and futures) that in some
circumstances could cause certain Fund assets to be treated as held for less
than three months.
Foreign Currency-Denominated Securities and Related Hedging Transactions
- ------------------------------------------------------------------------
A Fund's transactions in foreign currency-denominated debt securities,
certain foreign currency options, futures contracts and forward contracts may
give rise to ordinary income or loss to the extent such income or loss results
from fluctuations in the value of the foreign currency concerned.
For federal income tax purposes, distributions paid from net investment
income and from any net realized short-term capital gain (including premiums
from expired options and gains from any closing purchase transactions with
respect to options written by the Trust for any Fund) are taxable to
shareholders as ordinary income, whether received in cash or in additional
shares.
It is not expected that any of the distributions from the Tax Exempt, U.S.
Government or Money Market Funds will qualify for the dividends-received
deduction for corporations. A portion of the dividends paid by the Value,
Growth, International, Emerging Markets, Innovation, Global Income, High Income,
Total Return Income, Short Intermediate, Precious Metals, Equity Income,
Discovery, Opportunity, and Target Funds may qualify for the dividends-received
deduction for corporations to the extent
56
<PAGE>
that each such Fund's gross income (exclusive of net realized capital gains) was
derived from qualifying dividends from domestic corporations and meets the
applicable holding period requirements.
Annually, shareholders will receive information as to the tax status of
distributions made by the Trust in each calendar year.
In general, any gain or loss realized upon a taxable disposition of Fund
shares by a shareholder will be treated as long-term capital gain or loss if the
shares have been held for more than twelve months, and otherwise as short-term
capital gain or loss. However, if a shareholder buys Fund shares and redeems
them at a loss within six months, any loss will be disallowed for federal income
tax purposes to the extent of any exempt-interest dividends received on such
shares. In addition, any loss (not already disallowed as provided in the
preceding sentence) realized upon a taxable disposition of shares held for six
months or less will be treated as long-term, rather than short-term, capital
loss to the extent of any long-term capital gain distributions received by the
shareholder with respect to those shares. All or a portion of any loss realized
upon a taxable disposition of Fund shares will be disallowed if other Fund
shares are purchased within 30 days before or after the disposition. In such a
case, the basis of the newly purchased shares will be adjusted to reflect the
disallowed loss.
The Trust is required to withhold and remit to the U.S. Treasury 31% of
all dividend income earned by any shareholder account for which an incorrect or
no taxpayer identification number has been provided or where the Trust is
notified that the shareholder has under-reported income in the past (or the
shareholder fails to certify that he is not subject to such withholding). In
addition, the Trust will be required to withhold and remit to the U.S. Treasury
31% of the amount of the proceeds of any redemption of shares of a shareholder
account for which an incorrect or no taxpayer identification number has been
provided. However, a Fund will not have to withhold any such amount if it can
reasonably estimate that 95% or more of its income for that year will be
tax-exempt.
The foregoing relates to federal income taxation. Distributions from
investment income and capital gains may also be subject to state and local
taxes. The Trust is organized as a Massachusetts business trust. Under current
law, so long as each Fund qualifies for the federal income tax treatment
described above, it is believed that neither the Trust nor any Fund will be
liable for any income or franchise tax imposed by Massachusetts.
MANAGEMENT OF THE TRUST
- -----------------------
Trustees and Officers
- ---------------------
Trustees and officers of the Trust and their principal occupations during
the past five years are as follows:
E. Philip Cannon. Trustee of the Trust. Trustee of Cash Accumulation
Trust. Headmaster, St. John's School, Houston, Texas. Formerly General
Partner, J.B. Poindexter & Co., Houston, Texas (private investment
partnership) and Partner, Iberia Petroleum Company (oil and gas
production).
Donald P. Carter. Trustee of the Trust. Trustee of Cash Accumulation
Trust. Retired Chairman of Cunningham & Walsh, Inc., Chicago (advertising
agency).
57
<PAGE>
Gary A. Childress. Trustee of the Trust. Trustee of Cash Accumulation
Trust. Chairman and Director, Bellefonte Lime Company, Inc. Director,
Woodings & Verona Toolworks Inc.
Gary L. Light. Trustee of the Trust. Trustee of Cash Accumulation Trust.
President, E.V.A. Investors (private investments).
Joel Segall. Trustee of the Trust. Trustee of Cash Accumulation Trust.
Former President, Bernard M. Baruch College, The City University of New
York. Formerly, Deputy Under Secretary for International Affairs, United
States Department of Labor and Professor of Finance, University of
Chicago. Board of Managers, Coffee, Sugar and Cocoa Exchange.
W. Bryant Stooks. Trustee of the Trust. Trustee of Cash Accumulation
Trust. Retired President, Director and CEO, Archirodon Group Inc. Former
Partner, Arthur Andersen & Co.
Gerald M. Thorne. Trustee of the Trust. Trustee of Cash Accumulation
Trust. Retired President and Director, Firstar National Bank of Milwaukee.
Formerly President and Director, Firstar Corporation and Chairman, Firstar
National Bank of Sheboygan.
* Robert A. Prindiville. Trustee and President of the Trust. Trustee and
President of Cash Accumulation Trust . Executive Vice President, PIMCO
Advisors, L.P. Director and Chairman, PIMCO Advisors Distribution Company
("PADCO"). Formerly, President, Thomson Advisory Group L.P., President and
Director, Thomson Advisory Group Inc., Director and Chairman, Thomson
Investor Services Inc., Director and Executive Vice President, Thomson
McKinnon Securities Inc.
* William D. Cvengros. Trustee of the Trust. Trustee of Cash Accumulation
Trust. President and CEO of PIMCO Advisors L.P. and Member of the Equity
and Operating Boards (and Chairman of its Operating Committee) of PIMCO
Advisors L.P. Director, PADCO. Trustee and Chairman, PIMCO Advisors
Institutional Funds. Director, Furon Corporation. Formerly, Vice Chairman,
Chief Investment Officer and Director, Pacific Mutual Life Insurance
Company; Director and Chairman, Pacific Financial Asset Management
Company; Director, Mutual Service Corporation; Director, Pacific Equities
Network; Director, PFAMCo UK Limited; Non-Executive Director, Blairlogie
Capital Management Limited; Trustee and Vice President, PFAMCo Funds;
Chairman and Director, Parametric Portfolio Associates, Inc.; President,
Chairman, Chief Executive Officer, Director and Trustee of various realty
group trusts, and PMRealty Advisors, Inc.; President, Chief Executive
Officer and Director, NFJ Investment Group, Inc.; Vice President and
Trustee, Pacific Select Fund; and Director, Cadence Capital Management
Corporation.
Newton B. Schott, Jr. Vice President and Clerk of the Trust and of Cash
Accumulation Trust. Senior Vice President and Secretary of PIMCO Advisors
L.P.; Director, Senior Vice President and Secretary of PADCO. Formerly,
Executive Vice President, Secretary and General Counsel, Thomson Advisory
Group L.P. and Thomson Advisory Group Inc., Executive Vice President and
Secretary, Thomson Investor Services Inc., Director, Executive Vice
President, Secretary and General Counsel, Thomson McKinnon Inc.
John O. Leasure. Vice President of the Trust and of Cash Accumulation
Trust. Senior Vice President
58
<PAGE>
of PIMCO Advisors L.P. Director, President and Chief Executive Officer of
PADCO. Formerly, Executive Vice President of Thomson Advisory Group L.P.
and President and Director of Thomson Investor Services Inc.
Samuel C. Newman. Vice President and Assistant Clerk of the Trust and of
Cash Accumulation Trust. Vice President of PIMCO Advisors L.P. Senior Vice
President and Assistant Secretary of PADCO. Formerly, Vice President of
Thomson Advisory Group L.P. and Senior Vice President and Assistant
Secretary of Thomson Investor Services, Inc.
Brian C. Molloy. Treasurer of the Trust and of Cash Accumulation Trust.
Vice President of PIMCO Advisors L.P.
- ---------------
* Trustees who are "interested persons" (as defined in the Act) of the
Trust or the Manager.
The mailing address of each of the officers and Trustees is c/o the Trust,
2187 Atlantic Street, Stamford, Connecticut 06902.
Except as stated above, the principal occupations of the officers and
Trustees for the last five years have been with the employers as shown above,
although in some cases they have held different positions with such employers.
As noted, each of the Trustees is also a Trustee of Cash Accumulation Trust, a
registered investment company for which PIMCO Advisors L.P. serves as manager
and PIMCO Advisors Distribution Company serves as principal underwriter.
Messrs. Prindiville, Cvengros, Schott, Leasure, Molloy and Newman, as
directors, officers or security holders of the Manager, the Distributor or their
affiliates, benefitted and will benefit from the management and distribution
fees and contingent deferred sales charges paid or allowed by the Trust but
receive no direct compensation from the Trust or Cash Accumulation Trust.
The Trust's Agreement and Declaration of Trust provides that the Trust
will indemnify its Trustees and officers against liabilities and expenses
incurred in connection with the litigation in which they may be involved because
of their offices with the Trust, except if it is determined in the manner
specified in the Agreement and Declaration of Trust that they have not acted in
good faith in the reasonable belief that their actions were in the best
interests of the Trust or that such indemnification would relieve any officer or
Trustee of any liability to the Trust or its shareholders by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of his or her
duties. The Trust, at its expense, will provide liability insurance for the
benefit of its Trustees and officers.
Board Compensation
- ------------------
The Trust does not pay any remuneration to Trustees who are interested
persons of the Trust or the Manager. Disinterested Trustees receive an annual
fee of $________, plus $______ for each Trustees' meeting attended. In addition,
the Chairman of the Contract Committee of the Board of Trustees receives an
annual retainer of $3,000 and the Chairman of the Audit Committee of the Board
of Trustees receives an annual fee of $1,000. The other members of the Audit
Committee, all of whom are
59
<PAGE>
disinterested trustees, receive an annual fee of $500.
During the fiscal year ended September 30, 1995, fees paid to the
disinterested Trustees for their services as Trustees aggregated $______. The
following table sets forth information concerning fees paid and retirement
benefits accrued during the fiscal year ended September 30, 1995 to persons who
served as disinterested Trustees during such year.
<TABLE>
<CAPTION>
COMPENSATION TABLE
- ------------------------------------------------------------------------------------------------
(1) (2) (3) (4) (5)
Pension or
Aggregate Retirement Estimated Annual Total Compensation
Name of Compensation Benefits Accrued Benefits Upon from Trust and
Trustee from Trust** as Part of Fund Retirement Fund Complex Paid to
Expenses Trustees
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
E. Philip Cannon $24,650 $ 8,260 $ 12,000 $ 36,400
- ------------------------------------------------------------------------------------------------
Gerald M. Thorne 24,650 8,260 12,000 36,400
- ------------------------------------------------------------------------------------------------
Donald P. Carter 25,250 8,260 12,000 37,400
- ------------------------------------------------------------------------------------------------
Gary A. Childress 24,650 8,260 12,000 36,400
- ------------------------------------------------------------------------------------------------
Gary L. Light 26,100 8,260 12,000 38,650
- ------------------------------------------------------------------------------------------------
Joel Segall 29,100 8,260 12,000 43,650
- ------------------------------------------------------------------------------------------------
W. Bryant Stooks 25,250 8,260 12,000 37,400
- ------------------------------------------------------------------------------------------------
</TABLE>
* All compensation earned by Messrs. Cannon and Thorne for the fiscal year ended
September 30, 1995 was deferred at their election.
** Through September 30, 1995, the following amounts of deferred compensation
had been accrued for the following persons (including amounts accrued in prior
years): E. Philip Cannon -- $58,950; Gerald M. Thorne -- $74,350; Donald P.
Carter -- $82,150; Gary L. Light -- $70,159; Joel Segall -- $37,497.
60
<PAGE>
The Manager and the Sub-Advisers
- --------------------------------
PIMCO Advisors L.P. is the investment manager of each Fund. Under written
management contracts between the Trust and the Manager, subject to such policies
as the Trustees of the Trust may determine, the Manager, at its expense, will
furnish continuously an investment program for the Trust and will make
investment decisions on behalf of the Funds and place all orders for the
purchase and sale of portfolio securities subject always to applicable
investment objectives, policies and restrictions; provided that, so long as a
sub-adviser serves as the sub-adviser for a Fund, the Manager's obligation under
the Management Contract with respect to that Fund is, subject always to the
control of the Trustees, to determine and review with the sub-adviser the
investment policies of the Fund.
Subject to the control of the Trustees, the Manager also manages,
supervises and conducts the other affairs and business of the Trust, furnishes
office space and equipment, provides bookkeeping and certain clerical services
(excluding determination of the net asset value of each class of shares of each
Fund, shareholder accounting services and the accounting services for all Funds
of the Trust being provided by The Bank of New York) and pays all salaries, fees
and expenses of officers and Trustees of the Trust who are affiliated with the
Manager. As indicated under "Portfolio Transactions -- Brokerage and Research
Services", the Trust's portfolio transactions may be placed with broker-dealers
which furnish the Manager and the sub-advisers, without cost, certain research,
statistical and quotation services of value to them or their respective
affiliates in advising the Trust or their other clients. In so doing, a Fund may
incur greater brokerage commissions than it might otherwise pay.
The Manager's compensation under the management contracts with respect to
each Fund is subject to reduction to the extent that in any year the expenses of
such Fund exceed the limits on investment company expenses imposed by any
statute or regulatory authority of any jurisdiction in which shares of such Fund
are qualified for offer and sale. The term "expenses" is subject to
interpretation by each of such jurisdictions, and, generally speaking, excludes
brokerage commissions, taxes, interest, distribution-related expenses and
extraordinary expenses. Generally, this means that the distribution fees payable
to the Distributor under the Distribution Agreement would be excluded from
expenses. The most restrictive of such limitations as of the date of this
Statement is believed to be 2 1/2% of the first $30 million, 2% of the next $70
million, and 1 1/2% of any excess over $100 million.
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<PAGE>
Until November 1, 1994, there were sub-advisers for only the International
and Precious Metals Funds. For the fiscal years ended September 30, 1993, 1994
and 1995, the Manager received the following amounts from the Funds for its
services as the investment manager:
Fund 1993 1994 1995
- ---- ---- ---- ----
Equity Income $ 500,073 $1,191,587 $1,371,809
Value N/A N/A 14,916
Growth 7,031,439 7,699,562 8,268,603
Target 938,756 3,685,196 5,294,008
Discovery N/A N/A 46,638
Opportunity 3,442,307 4,796,571 5,000,057
Innovation N/A N/A 265,836
International 480,988 2,160,604 2,097,974
Emerging Markets N/A N/A N/A
Precious Metals 115,085 400,895 434,323
Global Income N/A N/A N/A
High Income 1,504,881 1,334,363 962,851
Total Return N/A N/A 214,491
Tax-Exempt 399,148 489,220 369,918
U.S. Government 3,050,385 2,602,182 1,868,771
Short-Intermediate 717,843 575,600 382,196
Money Market 97,419* 238,845* 146,684
--------- ---------- -------
Total $18,278,334 $25,174,625 $26,739,075
=========== =========== ===========
- ----------
* Excluding a $160,471 and $142,336 waiver with respect to the fiscal
years ended September 30, 1993 and 1994, respectively.
For the fiscal years ended September 30, 1993 and 1994, and for the period
from October 1, 1994 through November 15, 1994, the Manager paid the former
sub-adviser to the International Fund (the sub-adviser served from August 1,
1992 to November 15, 1994) $240,499, $1,080,302 and $159,648, respectively, for
its services with respect to the International Fund. For the fiscal years ended
September 30, 1993, 1994 and 1995, the Manager paid Van Eck (the sub-adviser to
the Precious Metals Fund) $57,543, $200,448, and $217,162 respectively, for Van
Eck's services with respect to the Precious Metals Fund.
As of November 15, 1994, in connection with a transaction that involved
the combining of the investment advisory businesses of Thomson Advisory Group
L.P., Pacific Investment Management Company and subsidiaries of Pacific
Financial Asset Management Company, the investment advisory arrangements for the
Funds were restructured. PIMCO Advisors L.P. (the "Manager") serves as the
investment manager of all of the Funds. Each of the Funds also has a
sub-adviser, each of which (except for the sub-adviser of the Precious Metals
Fund) is an affiliate of the Manager. The sub-advisers are: Columbus Circle
Investors ("CCI") for the Equity Income,
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<PAGE>
Growth, Target, Opportunity, Innovation, Tax Exempt and Money Market Funds;
Pacific Investment Management Company for the Global Income, High Income, Total
Return Income, U.S. Government and Short-Intermediate Funds; Blairlogie Capital
Management ("Blairlogie") for the International and Emerging Markets Funds; Van
Eck Associates Corporation ("Van Eck") for the Precious Metals Fund; Cadence
Capital Management ("Cadence") for the Discovery Fund; and NFJ Investment Group
("NFJ") for the Value Fund. CCI, Pacific Investment Management Company,
Blairlogie, Van Eck, Cadence and NFJ are each referred to herein as a
"Sub-Adviser" and collectively as the "Sub-Advisers." Each Sub-Adviser serves
pursuant to a Sub-Adviser Agreement between the Manager and the Sub-Adviser.
With the exception of Van Eck, none of the Sub-Advisers received advisory
fees from the Manager for services performed with respect to the
above-referenced Funds during the fiscal years ended September 30, 1993 and
1994. For the fiscal year ended September 30, 1995, the Sub-Advisers other than
Van Eck received the following amounts from the Manager for services performed
with respect to the above-referenced funds:
Columbus Circle Investors
-------------------------
Fund 1995
---- ----
Equity Income $ 595,500
Growth 3,634,403
Target 2,353,106
Opportunity 2,205,293
Innovation 132,918
Tax Exempt 159,370
Money Market 52,002
Pacific Investment Management Company
-------------------------------------
Fund 1995
---- ----
Global Income $ NA
High Income 346,427
Total Return Income 72,024
U.S. Government 695,195
Short-Intermediate 147,687
Blairlogie Capital Management
-----------------------------
Fund 1995
---- ----
International $ 889,339
Emerging Markets NA
63
<PAGE>
Cadence Capital Management
--------------------------
Fund 1995
---- ----
Discovery $ 23,319
NFJ Investment Group
--------------------
Fund 1995
---- ----
Value $ 7,458
Under each Sub-Adviser Agreement, subject always to the control of the
Trustees of the Trust, the Sub-Adviser's obligation is to furnish continuously
an investment program for the relevant Fund, to make investment decisions on
behalf of the relevant Fund and to place all orders for the purchase and sale of
portfolio securities and all other investments for the relevant Fund. Each
Sub-Adviser performs its duties under the relevant Sub-Adviser Agreement subject
to the control of the Trustees, the policies determined by the Trustees, the
provisions of the Trust's Agreement and Declaration of Trust, its By-Laws and
the relevant investment objectives, policies and restrictions stated in the
Prospectus.
The management contracts for all of the Funds and the Sub-Adviser
Agreements were approved by the Trustees of the Trust (including all of the
Trustees who are not "interested persons" of the Manager or the Sub-Advisers).
The management contracts for the Funds and the Sub-Adviser Agreements continue
in force with respect to the relevant Fund for two years from their respective
dates, and from year to year thereafter, but only so long as their continuance
is approved at least annually by (i) vote, cast in person at a meeting called
for that purpose, of a majority of those Trustees who are not "interested
persons" of the Manager, the Sub-Advisers or the Trust, and by (ii) the majority
vote of either the full Board of Trustees or the vote of a majority of the
outstanding shares of all classes of that Fund. Each of the management contracts
and the Sub-Adviser Agreements automatically terminates on assignment. The
management contracts may be terminated on not more than 60 days' notice by the
Manager to the Trust or by the Trust to the Manager. Each Sub-Adviser Agreement
with Pacific Investment Management Company, CCI, Van Eck, Cadence and NFJ is
terminable upon notice by the Trust, may be terminated by the Manager on not
less than 60 days' notice to the Sub-Adviser and may be terminated by the
Sub-Adviser on not less than 180 days' notice to the Manager. The Sub-Adviser
Agreements with Blairlogie may be terminated upon notice by the Trust, may be
terminated by the Manager on not less than 45 days notice to the Sub-Adviser and
may be terminated by the Sub-Adviser on not less than 180 days' notice to the
Manager. The management fees and Sub-Adviser fees payable under the management
contracts and the Sub-Adviser Agreements is set forth in the Prospectus.
As described in the text of the Prospectus under the caption "Management
of the Trust," the Trust pays, in addition to the management fee described
above, all expenses not assumed by the Manager, including, without limitation,
fees and expenses of Trustees who are not "interested persons" of the Manager or
the Trust, interest charges, taxes, brokerage commissions, expenses of issue or
redemption of shares, distribution and servicing fees pursuant to the
Distribution and Servicing Plans, fees and expenses of registering and
qualifying the Trust and all three classes of shares of the respective Funds for
distribution under federal and state laws and regulations, charges of
custodians, auditing and legal
64
<PAGE>
expenses, expenses of determining net asset value of all three classes of the
Trust's shares, reports to shareholders, expenses of meetings of shareholders,
expenses of printing and mailing prospectuses, proxy statements and proxies to
existing shareholders, and its proportionate share of insurance premiums and
professional association dues or assessments. The Trust is also responsible for
such nonrecurring expenses as may arise, including litigation in which the Trust
may be a party, and other expenses as determined by the Trustees. The Trust may
have an obligation to indemnify its officers and Trustees with respect to such
litigation. The general Trust expenses are allocated among and charged to the
assets of each class of shares of each Fund on a basis that the Trustees deem
fair and equitable, which may be based on the relative net assets of the classes
or the Funds or the nature of the services performed and relative applicability
to each class or each Fund.
Each management contract provides that the Manager shall not be subject to
any liability in connection with the performance of its services thereunder in
the absence of willful misfeasance, bad faith, gross negligence or reckless
disregard of its obligations and duties.
OTHER SERVICES
--------------
Custodial Arrangements
- ----------------------
The Bank of New York, 48 Wall Street, New York, New York 10005, is the
custodian for the Trust. As such, The Bank of New York holds in safekeeping
certificated securities and cash belonging to the Trust and, in such capacity,
is the registered owner of securities in book-entry form belonging to the Trust.
Upon instruction, The Bank of New York receives and delivers cash and securities
of the Trust in connection with Fund transactions and collects all dividends and
other distributions made with respect to Fund portfolio securities. The Bank of
New York also maintains certain accounts and records of the Trust. The Bank of
New York has contracted with various foreign banks and depositories to hold
Trust portfolio securities outside of the United States.
Accounting Services
- -------------------
Pursuant to an agreement between The Bank of New York and the Trust, The
Bank of New York calculates the total net asset value, total net income and net
asset value per share of each class on a daily basis (and as otherwise may be
required by the 1940 Act) and performs certain accounting services for the
Trust.
Independent Accountants
The Trust's independent accountants are Coopers & Lybrand L.L.P., 1301
Avenue of the Americas, New York, New York 10019. Coopers & Lybrand L.L.P.,
conducts an annual audit of the Trust, assists in the preparation of each Fund's
federal and state income tax returns and consults with the Trust as to matters
of accounting and federal and state income taxation.
PORTFOLIO TRANSACTIONS
----------------------
Investment Decisions
- --------------------
Investment decisions for the Trust and for the other investment advisory
clients of the Manager and the Sub-Advisers are made with a view to achieving
their respective investment objectives. The Manager and the Sub-Advisers operate
independently in providing services to their respective clients.
65
<PAGE>
Investment decisions are the product of many factors in addition to basic
suitability for the particular client involved. Thus, for example, a particular
security may be bought or sold for certain clients of the Manager or the
Sub-Advisers even though it could have been bought or sold for other clients at
the same time. Likewise, a particular security may be bought for one or more
clients when one or more other clients are selling the security. In some
instances, one client may sell a particular security to another client. It also
happens that two or more clients may simultaneously buy or sell the same
security, in which event each day's transactions in such security are, insofar
as possible, averaged as to price and allocated between such clients in a manner
which in the opinion of the Manager or a Sub-Adviser is equitable to each and in
accordance with the amount being purchased or sold by each. There may be
circumstances when purchases or sales of portfolio securities for one or more
clients will have an adverse effect on other clients.
Brokerage and Research Services
- -------------------------------
Transactions on stock exchanges and other agency transactions involve the
payment by the Trust of negotiated brokerage commissions. Such commissions vary
among different brokers. Also, a particular broker may charge different
commissions according to such factors as the difficulty and size of the
transaction. There is generally no stated commission in the case of securities,
such as U.S. Government securities and Tax Exempt Bonds, traded in the
over-the-counter markets or in the case of gold bullion but the price paid by
the Trust usually includes an undisclosed dealer commission or mark-up. It is
anticipated that most purchases and sales of portfolio securities for the Money
Market Fund will be with the issuer or with major dealers in money market
instruments acting as principals. Accordingly, it is not anticipated that the
Global Income, High Income, Total Return Income, U.S. Government,
Short-Intermediate, Tax Exempt or Money Market Funds will pay significant
brokerage commissions. In underwritten offerings, the price paid includes a
disclosed, fixed commission or discount retained by the underwriter or dealer.
Securities firms may receive brokerage commissions on transactions involving
options, futures and options on futures and the purchase and sale of underlying
securities upon exercise of options. The brokerage commissions associated with
buying and selling options may be proportionately higher than those associated
with general securities transactions.
Where the Manager or a Sub-Adviser places orders for the purchase and sale
of portfolio securities for a particular Fund and buys and sells securities for
such Fund it is anticipated that such transactions will be effected through a
number of brokers and dealers. In so doing, the Manager or the relevant
Sub-Adviser, as the case may be, intends to use its best efforts to obtain for
each Fund the most favorable price and execution available, except to the extent
that it may be permitted to pay higher brokerage commissions as described below.
In seeking the most favorable price and execution, the Manager or the relevant
Sub-Adviser, as the case may be, considers all factors it deems relevant,
including, by way of illustration, price, the size of the transaction, the
nature of the market for the security, the amount of commission, the timing of
the transaction taking into account market prices and trends, the reputation,
experience and financial stability of the broker-dealer involved and the quality
of service rendered by the broker-dealer in other transactions.
It has for many years been a common practice in the investment advisory
business for advisers of investment companies and other institutional investors
to receive research, statistical and quotation services from broker-dealers
which execute portfolio transactions for the clients of such advisers.
Consistent with this practice, the Manager and the Sub-Advisers may receive
research, statistical and quotation services from many broker-dealers with which
the Trust's portfolio transactions are placed. These services, which in some
instances could also be purchased for cash, include such matters as general
economic and security market reviews, industry and company reviews, evaluations
of securities and
66
<PAGE>
recommendations as to the purchase and sale of securities. Some of these
services may be of value to the Manager or the Sub-Advisers in advising various
of its clients (including the Trust), although not all of these services are
necessarily useful and of value in managing the Trust or any particular Fund.
The fees paid to the Manager and the Sub-Advisers are not reduced because they
receive such services.
As permitted by Section 28(e) of the Securities Exchange Act of 1934, the
management contracts and the Sub-Adviser Agreements, the Manager and the
Sub-Advisers may cause a Fund to pay a broker-dealer which provides "brokerage
and research services" (as defined in the Act) to the Manager or the
Sub-Advisers an amount of disclosed commission for effecting a securities
transaction for a Fund in excess of the commission which another broker-dealer
would have charged for effecting that transaction. The authority of the Manager
and the Sub-Advisers to cause the Funds to pay any such greater commissions is
subject to such policies as the Trustees may adopt from time to time.
Under the 1940 Act, persons affiliated with the Trust are prohibited from
dealing with the Trust as a principal in the purchase and sale of securities.
Since transactions in the over-the-counter market usually involve transactions
with dealers acting as principals for their own accounts, affiliated persons of
the Trust may not serve as the Trust's dealer in connection with such
transaction. However, the Distributor and any other affiliates of the Manager or
the Sub-Advisers may receive and retain compensation for effecting portfolio
transactions for the Trust on a national securities exchange provided that
commissions paid to the principal underwriter of the Trust or its affiliates by
the Trust for exchange transactions not exceed "usual and customary" brokerage
commissions. The rules define "usual and customary" commissions to include
amounts which are "reasonable and fair compared to the commission, fee or other
remuneration received or to be received by other brokers in connection with
comparable transactions involving similar securities being purchased or sold on
a securities exchange during a comparable period of time." The Trustees,
including those who are not "interested persons" of the Trust, have adopted
procedures for evaluating the reasonableness of commissions paid to the
principal underwriter of the Trust or its affiliates and will review these
procedures periodically.
For the fiscal years ended September 30, 1993, 1994 and 1995, the Trust
paid $6,085,920, $8,489,573 and $11,116,176 in brokerage commissions,
respectively, as follows:
Year Ended Year Ended Year Ended
Sept. 30, Sept. 30, Sept. 30,
1993 1994 1995
---- ---- ----
Total
Brokerage Commissions
- ---------------------
Equity Income $173,880 $420,738 $605,124
67
<PAGE>
Value N/A N/A 17,864
Growth 3,187,508 3,317,272 3,500,524
Target 660,091 2,156,801 2,289,076
Discovery N/A N/A 42,608
Opportunity 1,143,037 1,130,760 1,728,282
Innovation N/A N/A 84,173
International 782,300 1,277,327 2,727,326
Emerging Markets N/A N/A N/A
Precious Metals 49,144 124,474 48,592
Global Income N/A N/A N/A
High Income 22,475 19,507 12,500
Total Return Income N/A N/A 10,028
Tax-Exempt 0 0 0
U.S. Government 30,866 19,651 41,009
Short-Intermediate 36,619 23,043 9,070
------ ------ -----
Total $6,085,920 $8,489,573 $11,116,176
========== ========== ==========
Pursuant to conditions set forth in rules of the Securities and Exchange
Commission, the Trust may purchase securities from an underwriting syndicate of
which the principal underwriter of the Trust or its affiliates are members (but
not from the principal underwriter itself). Such conditions relate to the price
and amount of the securities purchased, the commission or spread paid, and the
quality of the issuer. The rules further require that such purchases take place
in accordance with procedures adopted and reviewed periodically by the Trustees,
particularly those Trustees who are not "interested persons" of the Trust.
Investments by other clients of the Manager and the Sub-Advisers may limit the
ability of the Trust to purchase securities from such a syndicate.
The Distributor does not currently effect securities transactions for
customers and does not participate in underwriting syndicates. In light of the
foregoing, the Trust does not expect to place purchase or sales orders with or
purchase securities from the Distributor or its affiliates.
ORGANIZATION AND CAPITALIZATION OF THE TRUST
--------------------------------------------
The Trust was established as a Massachusetts business trust by an
Agreement and Declaration of Trust dated October 14, 1983. A copy of the
Agreement and Declaration of Trust is on file with the Secretary of The
Commonwealth of Massachusetts. The Trust's fiscal year ends on September 30.
As described in the text of the Prospectus following the caption
"Description of the Trust," each class of shares of the Trust is entitled to one
vote per share (with proportional voting for fractional shares) on such matters
as shareholders are entitled to vote. Shareholders for each class vote by
individual Fund on all matters except (i) when required by the Investment
Company Act, shares shall be voted as a single class, and (ii) when the Trustees
have determined that the matter affects only the interests of one or more Funds
or a class of shares thereof, then only shareholders of such Fund or such class
affected shall be entitled to vote thereon. There will normally be no meetings
of shareholders for the purpose of electing Trustees unless and until such time
as less than a majority of the Trustees have been elected by the shareholders,
at which time the Trustees then in office will call a shareholders' meeting for
the election of Trustees. In addition, Trustees may be removed from office by a
written consent signed by the holders of two-thirds of each class of the
outstanding shares of the Trust and filed with the Trust's custodian or by a
vote of the holders of two-thirds of each class of the outstanding shares of the
Trust at a
68
<PAGE>
meeting duly called for the purpose, which meeting shall be held upon the
written request of the holders of not less than 10% of each class of the
outstanding shares. Upon written request by ten or more shareholders, who have
been such for at least six months, and who hold shares constituting 1% of the
outstanding shares, stating that such shareholders wish to communicate with the
other shareholders for the purpose of obtaining the signatures necessary to
demand a meeting to consider removal of a Trustee, the Trust has undertaken to
provide a list of shareholders or to disseminate appropriate materials (at the
expense of the requesting shareholders). The Trustees may also remove a Trustee
with or without cause. Except as set forth above, the Trustees shall continue to
hold office and may appoint their successors.
Shareholder Liability
- ---------------------
Under Massachusetts law, shareholders could, under certain circumstances,
be held liable for the obligations of the Trust. However, the Agreement and
Declaration of Trust disclaims shareholder liability for acts or obligations of
the Trust and requires that notice of such disclaimer be given in each
agreement, obligation or instrument entered into or executed by the Trust or the
Trustees. The Agreement and Declaration of Trust provides for indemnification
out of a Fund's property for all loss and expense of any shareholder of that
Fund held liable on account of being or having been a shareholder. Thus, the
risk of a shareholder incurring financial loss on account of shareholder
liability is limited to circumstances in which the Fund of which he or she is or
was a shareholder would be unable to meet its obligations.
69
<PAGE>
CERTAIN OWNERSHIP OF TRUST SHARES
---------------------------------
As of October 31, 1995, the Trustees and officers of the Trust owned the
following amounts of the Class A Shares, Class B Shares and Class C Shares of
each Fund:
CLASS A CLASS B CLASS C
Fund No. of Shares No. of Shares No. of Shares
---- ------------- ------------- -------------
Equity Income 33,159.606 0 0
Value 15,485.433 0 0
Growth 56,675.579 0 921.844
Target 77,815.301 0 0
Discovery 12,500.000 0 0
Opportunity 27,150.540 0 777.441
Innovation 20,101.010 0 0
International 26,888.693 0 0
Global Income 0 0 0
Precious Metals 0 0 0
Emerging Markets - - -
High Income 15,096.312 0 0
Total Return Income 12,569.797 0 0
Tax Exempt 39.624 0 0
U.S. Government 5,254.318 0 0
Short-Intermediate 37.062 0 0
Money Market 83,636.120 0 404.880
Except as set forth below, the Trust believes that no person as of October
31, 1995 owned beneficially or of record 5% or more of the shares of any class
of the Funds:
- -------------------------------------------------------------------------------
Fund Class Name and Address No. of Shares Percent
- -------------------------------------------------------------------------------
Target A Merrill Lynch Pierce Fenner & 1,574,434.799 20.97
Smith Inc.
Attn: Book Entry Department
4800 Deer Lake Drive E., fl. 3
Jacksonville, FL 32246-6484
- -------------------------------------------------------------------------------
B Merrill Lynch Pierce Fenner & 225,984.000 42.05
Smith Inc.
(see above)
- -------------------------------------------------------------------------------
C Merrill Lynch Pierce Fenner & 15,132,815.072 30.86
Smith Inc.
(see above)
- -------------------------------------------------------------------------------
Value A Merrill Lynch Pierce Fenner & 29,170.000 11.10
Smith Inc.
(see above)
- -------------------------------------------------------------------------------
70
<PAGE>
- -------------------------------------------------------------------------------
B Merrill Lynch Pierce Fenner & 134,829.000 29.57
Smith Inc.
(see above)
- -------------------------------------------------------------------------------
C Merrill Lynch Pierce Fenner & 96,157.000 12.14
Smith Inc.
(see above)
- -------------------------------------------------------------------------------
Discovery A Merrill Lynch Pierce Fenner & 143,618.000 19.13
Smith Inc.
(see above)
- -------------------------------------------------------------------------------
B Merrill Lynch Pierce Fenner & 407,518.000 35.40
Smith Inc.
(see above)
- -------------------------------------------------------------------------------
C Merrill Lynch Pierce Fenner & 418,216.280 19.58
Smith Inc.
(see above)
- -------------------------------------------------------------------------------
Precious Metals A Paine Webber / FBO 32,885.000 5.33
Victor G. Warren Jr.
UAD 07/14/93 for the Victor
G. Warren Trust
724 S. Garfield
Hinsdale, IL 60521-4425
Merrill Lynch Pierce Fenner & 112,624.000 18.28
Smith Inc.
(see above)
- -------------------------------------------------------------------------------
B Merrill Lynch Pierce Fenner & 12,793.000 51.25
Smith Inc.
(see above)
2,188.000 8.76
Smith Barney Inc.
00145819198
388 Greenwich Street
New York, NY 10013
1,711.000 6.85
Smith Barney Inc.
00145866496
388 Greenwich Street
New York, NY 10013
- -------------------------------------------------------------------------------
C Merrill Lynch Pierce Fenner & 765,155.000 22.47
Smith Inc.
(see above)
- -------------------------------------------------------------------------------
Equity Income A Merrill Lynch Pierce Fenner & 161,454.000 17.60
Smith Inc.
(see above)
- -------------------------------------------------------------------------------
B Merrill Lynch Pierce Fenner & 21,612.000 14.86
Smith Inc.
(see above)
- -------------------------------------------------------------------------------
C Merrill Lynch Pierce 2,150,956.874 17.47
Fenner & Smith Inc.
(see above)
- -------------------------------------------------------------------------------
71
<PAGE>
- -------------------------------------------------------------------------------
U.S. Government A Merrill Lynch Pierce Fenner & 760,669.000 42.50
Smith Inc.
(see above)
Donaldson Lufkin Jenrette 121,317,662 6.77
Securities Corporation, Inc.
P.O. Box 2052
Jersey City, NJ 07303-9998
- -------------------------------------------------------------------------------
B Merrill Lynch Pierce Fenner & 85,523.000 35.97
Smith Inc.
(see above)
NFSC FEBO # OKS-614432 16,610,906 6.98
Reida Longanecker
1075 Old Harrisburg Rd.
Gettysburg, PA 17325
14,007.000 5.89
Prudential-Bache Securities
ABT08634
New York, NY 10292
- -------------------------------------------------------------------------------
C Merrill Lynch Pierce 7,293,677.423 23.48
Fenner & Smith Inc.
(see above)
- -------------------------------------------------------------------------------
Tax Exempt A Merrill Lynch Pierce Fenner & 95,403.000 39.84
Smith Inc.
(see above)
12,306.000 5.13
Smith Barney Inc.
(see above)
- -------------------------------------------------------------------------------
B Prudential-Bache Securities 14,909.045 27.13
New York, NY 10292
Prudential-Bache Securities 5,005.000 9.10
New York, NY 10292
Prudential-Bache Securities 5,005.000 9.10
New York, NY 10292
Prudential-Bache Securities 3,472.019 6.31
New York, NY 10292
Donaldson Lufkin Jenrette 6,732.082 12.25
Securities Corporation, Inc.
P.O. Box 2052
Jersey City, NJ 07303-9998
Leroy Scott 8,431.703 15.34
213 Bunch Street
Corinth, MS 38834-4702
Wheat First FBO A/C 8677-3450 3,015.545 5.48
Eugene H. Zimmer
P.O. Box 495
Parkersburg, WV 26102-0495
- -------------------------------------------------------------------------------
72
<PAGE>
- -------------------------------------------------------------------------------
C Merrill Lynch Pierce 655,885.000 14.41
Fenner & Smith Inc.
(see above)
- -------------------------------------------------------------------------------
Global Income A Pacific Asset Management Co. 500,000.000 100
Attn: Russell F. Murdock
700 Newport Center Dr.
Newport Beach, CA 92660-6307
- -------------------------------------------------------------------------------
B PIMCO Advisors Group, L.P. 1,002.566 100
Attn: Jaishree Kemraj
2187 Atlantic Street
Stamford, CT 06902-6880
- -------------------------------------------------------------------------------
C PIMCO Advisors Group, L.P. 1,002.566 100
Attn: Jaishree Kemraj
2187 Atlantic Street
Stamford, CT 06902-6880
- -------------------------------------------------------------------------------
High Income A Merrill Lynch Pierce 232,380.000 21.97
Fenner & Smith Inc.
(see above)
- -------------------------------------------------------------------------------
B Merrill Lynch Pierce 297,141.000 41.03
Fenner & Smith Inc.
(see above)
Smith Barney Inc. 49,618.000 6.85
00114904921
388 Greenwich Street
New York, NY 10013
- -------------------------------------------------------------------------------
C Merrill Lynch Pierce 2,003,754.336 9.96
Fenner & Smith Inc.
(see above)
- -------------------------------------------------------------------------------
73
<PAGE>
- -------------------------------------------------------------------------------
Total Return A Merrill Lynch Pierce 423,111.000 11.42
Income Fenner & Smith Inc.
(see above)
605,599.088 16.35
Trust Co. Bank Tr
FBO City of Spartanburg
Retirement Plan
P.O. Box 4655
Atlanta, GA 30302-4655
307,931.504 8.31
Nationsbank VA TR
FBO Louise OBICI Hospital
40-90-900-6515001
P.O. Box 831575
Dallas, TX 75283-1575
Tops Appliance City Inc. 261,309.184 7.05
401K Retirement Plan
45 Brunswick Avenue
Edison, NJ 08817-2576
Paine Webber FBO 189,488.638 5.11
L&L Products Inc.
Profit Sharing Plan & Trust
Attn: Peggy Domenick Muscat
160 McClean Drive
Romeo, MI 48
- -------------------------------------------------------------------------------
B Merrill Lynch Pierce 263,601.000 24.95
Fenner & Smith Inc.
(see above)
- -------------------------------------------------------------------------------
C Merrill Lynch Pierce 561,791.461 11.91
Fenner & Smith Inc.
(see above)
- -------------------------------------------------------------------------------
Growth A Merrill Lynch Pierce 431,678.000 8.22
Fenner & Smith Inc.
(see above)
- -------------------------------------------------------------------------------
B Merrill Lynch Pierce 118,468.000 33.04
Fenner & Smith Inc.
(see above)
- -------------------------------------------------------------------------------
C Merrill Lynch Pierce 6,572,464.444 12.77
Fenner & Smith Inc.
(see above)
- -------------------------------------------------------------------------------
Opportunity A Boston Safe Deposit & 672,765.374 21.86
Trust Co.
TWA Pilots Directed Account
Plan UA January 1, 1986
1 Cabot Road
Medford, MA 02155-5158
456,433.000 14.83
Merrill Lynch Pierce
Fenner & Smith Inc.
(see above)
- -------------------------------------------------------------------------------
B None
- -------------------------------------------------------------------------------
C Merrill Lynch Pierce 5,093,077.303 26.75
Fenner & Smith Inc.
(see above)
- -------------------------------------------------------------------------------
74
<PAGE>
- -------------------------------------------------------------------------------
Innovation A Merrill Lynch Pierce 254,859.000 13.76
Fenner & Smith Inc.
(see above)
- -------------------------------------------------------------------------------
B Merrill Lynch Pierce 127,417.076 24.72
Fenner & Smith Inc.
(see above)
- -------------------------------------------------------------------------------
C Merrill Lynch Pierce 579,848.547 13.59
Fenner & Smith Inc.
(see above)
- -------------------------------------------------------------------------------
Money Market A JC Bradford & Co. Cust FBO 1,474,861.840 10.78
DCIP Limited Partners II
330 Commerce Street
Nashville, TN 37201-1899
RPSS TR Rollover IRA 2,084,141.230 15.24
FBO James J. Maguire
42 Western Drive
Short Hills, NJ 07078-1910
Trustees of Amherst 1,785,953.060 13.06
College Corp.
U/A June 14, 1985
Donald S. Cohan Charitable
Remainder Unitrust
P.O. Box 2221
Amherst, MA 01004-2221
Chemical Bank Trust 1,097,281.780 8.02
PIMCO Advisors Group 401K
Savings: Investment Plan Trust
ATTN: Jerry Capri
4 New York Plaza, Fl. 4
New York, NY 10004-2413
1,046,086.360 7.65
Prudential-Bache Securities
Edward F. Goodman &
Judith Goodman JTTEN
234 Worthen Rd. E
Lexington, MA 02173
Oxford Realty Financial Group 904,514.126 6.61
401K Plan
7200 Wisconsin Ave.,
Suite 1100
Bethesda, MD 20814-4815
- -------------------------------------------------------------------------------
75
<PAGE>
- -------------------------------------------------------------------------------
B Donaldson Lufkin Jenrette 16,935.230 10.90
Securities Corporation, Inc.
P.O. Box 2052
Jersey City, NJ 07303-9998
Smith Barney Inc. 26,175.000 16.85
00116563043
388 Greenwhich Street
New York, NY 10013
Prudential-Bache Securities 73,070.560 47.05
New York, NY 10292
A.G. Edwards & Sons Inc. COF 25,759.880 16.58
Christopher Christopher
IRA Account
P.O. Box 86
Sherborn, MA 01770-0086
A.G. Edwards & Sons Inc. COF 9,102.330 5.86
Stephen S.J. Hall
Rollover IRA Account
C/O Peggy Rauch
8742 Misty Creek Drive
Sarasota, FL 34241-9561
- -------------------------------------------------------------------------------
C None
- -------------------------------------------------------------------------------
International A Merrill Lynch Pierce 221,829.000 14.26
Fenner & Smith Inc.
(see above)
Society National Bank TR. 173,313.998 11.14
FBO RPM Retirement Plan
P.O. Box 6147
Cleveland, OH 44101-1147
Resources Trust Company 103,335.054 6.64
FBO IMS Clients
P.O. Box 3865
Englewood, CO 80155-3865
- -------------------------------------------------------------------------------
B Merrill Lynch Pierce 18,786.000 30.87
Fenner & Smith Inc.
(see above)
4,909.000 8.06
Prudential-Bache Securities
New York, NY 10292
4,288.165 7.04
Prudential-Bache Securities
New York, NY 10292
- -------------------------------------------------------------------------------
C Merrill Lynch Pierce 4,012,628,695 22.53
Fenner & Smith Inc.
(see above)
- -------------------------------------------------------------------------------
76
<PAGE>
- -------------------------------------------------------------------------------
Short- A Bank of California Trust 57,429.097 6.65
Intermediate UA Dec 31, 1981
Wholesale Beer Multi
Employee Trust
A/C 23161622
475 Sansome Street, Fl. 11
San Francisco, CA 94111-3103
Prudential-Bache Securities 250,879.375 29.08
(Transmission Account)
160,402.000 18.59
Merrill Lynch Pierce
Fenner & Smith Inc.
(see above)
- -------------------------------------------------------------------------------
B NFSC FEBO # 0KS-614432 25,480.780 20.27
Reida Longanecker
1075 Old Harrisburg Rd.
Gettysburg, PA 17325
Paine Weber FBO 12,987.501 10.33
Paine Weber CDN FBO
Robert M. Kwass - IRA Rollover
P.O. Box 3321
Weehawken, NJ 07087-8154
Merrill Lynch Pierce 12,501.000 9.94
Fenner & Smith Inc.
(see above)
- -------------------------------------------------------------------------------
C Merrill Lynch Pierce 1,743,969.301 25.27
Fenner & Smith Inc.
(see above)
- -------------------------------------------------------------------------------
77
<PAGE>
APPENDIX A
----------
The nationally recognized statistical rating organizations (individually,
an "NRSRO") that may be utilized with regard to portfolio investments for the
Funds include Moody's Investors Service, Inc. ("Moody's"), Standard & Poor's
Corporation ("S&P"), Duff & Phelps, Inc. ("Duff"), Fitch Investors Service, Inc.
("Fitch"), IBCA Limited and its affiliate, IBCA Inc. (collectively, "IBCA"), and
Thomson BankWatch, Inc. ("Thomson"). Set forth below is a description of the
relevant ratings of each such NRSRO. The NRSROs that may be utilized and the
description of each NRSRO's ratings is as of the date of this Statement of
Additional Information, and may subsequently change.
LONG-TERM DEBT RATINGS (may be assigned, for example, to long-term corporate and
municipal bonds)
Moody's (Moody's applies numerical modifiers (1, 2 and 3) in each rating
- ------------------------------------------------------------------------
category to indicate the securities ranking within the category):
- -----------------------------------------------------------------
Aaa -- Bonds which are rated Aaa are judged to be of the best quality.
They carry the smallest degree of investment risk and are generally referred to
as "gilt-edge". Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized are
most unlikely to impair the fundamentally strong position of such issues.
Aa -- Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long-term risks appear somewhat larger than in Aaa securities.
A -- Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium grade obligations. Factors giving
security to principal and interest are considered adequate, but elements may be
present which suggest a susceptibility to impairment sometime in the future.
Baa -- Bonds which are rated Baa are considered as medium grade
obligations, i.e., they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present, but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as well.
Ba -- Bonds which are rated Ba are judged to have speculative elements;
their future cannot be considered as well assured. Often the protection of
interest and principal payments may be very moderate and thereby not well
safeguarded during both good and bad times over the future. Uncertainty of
position characterizes bonds in this class.
B -- Bonds which are rated B generally lack characteristics of the
desirable investment. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time may be
small.
78
<PAGE>
Caa -- Bonds which are rated Caa are of poor standing. Such issues may be
in default or there may be present elements of danger with respect to principal
or interest.
Ca -- Bonds which are rated Ca represent obligations which are speculative
in a high degree. Such issues are often in default or have other marked
shortcomings.
C -- Bonds which are rated C are the lowest rated class of bonds, and
issues so rated can be regarded as having extremely poor prospects of ever
attaining any real investment standing.
S&P (S&P may apply a plus (+) or a minus (-) to a particular rating
classification to show relative standing within that classification):
- ---------------------------------------------------------------------
AAA -- Bonds rated AAA have the highest rating assigned by Standard &
Poor's to a debt obligation. Capacity to pay interest and repay principal is
extremely strong.
AA -- Bonds rated AA have a very strong capacity to pay interest and repay
principal and differ from the highest rated issues only in small degree.
A -- Bonds rated A have a strong capacity to pay interest and repay
principal although they are somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than bonds in higher rated
categories.
BBB -- Bonds rated BBB are regarded as having an adequate capacity to pay
interest and repay principal. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
bonds in this category than for bonds in higher rated categories.
BB, B -- Bonds rated BB and B are regarded, on balance, as predominately
speculative with respect to the issuer's capacity to pay interest and repay
principal in accordance with the terms of the obligation. While such bonds will
likely have some quality and protective characteristics, these are outweighed by
large uncertainties or major risk exposures to adverse conditions.
CCC -- Bonds rated CCC have a currently identifiable vulnerability to
default, and are dependent upon favorable business, financial, and economic
conditions to meet timely payment of interest and repayment of principal. In the
event of adverse business, financial, or economic conditions, they are not
likely to have the capacity to pay interest and repay principal. The CCC rating
category is also used for debt subordinated to senior debt that is assigned an
actual or implied B or B- rating.
CC -- The rating CC typically is applied to debt subordinated to senior
debt that is assigned an actual or implied CCC rating.
C -- The rating C typically is applied to debt subordinated to senior debt
which is assigned an actual or implied CCC debt rating. The C rating may be used
to cover a situation where a bankruptcy petition has been filed, but debt
service payments are continued.
Duff:
- -----
AAA Highest credit quality. The risk factors are negligible being
79
<PAGE>
only slightly more than for risk-free U.S. Treasury debt.
AA+ High credit quality Protection factors are strong.
AA Risk is modest but may vary slightly from time to time
AA- because of economic conditions.
A+ Protection factors are average but adequate. However,
A risk factors are more variable and greater in periods
A- of economic stress. (Global Income Fund only)
BBB+ Below average protection factors but still considered sufficient
BBB for prudent investment. Considerable variability in risk during
BBB- economic cycles.
BB+ Below investment grade but deemed likely to meet obligations when
BB due. Present or prospective financial protection factors
BB- fluctuate according to industry conditions or company fortunes.
Overall quality may move up or down frequently within this category.
B+ Below investment grade and possessing risk that obligations will not
B be met when due. Financial protection factors will fluctuate
B- widely according to economic cycles, industry conditions and/or
company fortunes. Potential exists for frequent changes in the
rating within this category or into a higher or lower rating grade.
CCC Well below investment grade securities. Considerable uncertainty
exists as to timely payment of principal, interest or preferred
dividends. Protection factors are narrow and risk can be substantial
with unfavorable economic/industry conditions, and/or with
unfavorable company developments.
Fitch (plus or minus signs are used with a rating symbol to indicate the
relative position of the credit within the rating category):
- ------------------------------------------------------------
AAA Bonds considered to be investment grade and of the highest credit
quality. The obligor has an exceptionally strong ability to pay
interest and repay principal, which is unlikely to be affected by
reasonably foreseeable events.
AA Bonds considered to be investment grade and of very high credit
quality. The obligor's ability to pay interest and repay principal
is very strong, although not quite as strong as bonds
80
<PAGE>
rated "AAA." Because bonds rated in the "AAA" and "AA" categories
are not significantly vulnerable to foreseeable future developments,
short-term debt of these issues is generally rated "F-1+."
A Bonds considered to be investment grade and of high credit quality.
The obligor's ability to pay interest and repay principal is
considered to be strong, but may be more vulnerable to adverse
changes in economic conditions and circumstances than bonds with
higher ratings.
BBB Bonds considered to be investment grade and of satisfactory credit
quality. The obligor's ability to pay interest and repay principal
is considered to be adequate. Adverse changes in economic conditions
and circumstances, however, are more likely to have adverse impact
on these bonds, and therefore impair timely payment. The likelihood
that the ratings of these bonds will fall below investment grade is
higher than for bonds with higher ratings.
BB Bonds are considered speculative. The obligor's ability to pay
interest and repay principal may be affected over time by adverse
economic changes. However, business and financial alternatives can
be identified which could assist the obligor in satisfying its debt
service requirements.
B Bonds are considered highly speculative. While bonds in this class
are currently meeting debt service requirements, the probability of
continued timely payment of principal and interest reflects the
obligor's limited margin of safety and the need for reasonable
business and economic activity throughout the life of the issue.
CCC Bonds have certain identifiable characteristics which, if not
remedied, may lead to default. The ability to meet obligations
requires an advantageous business and economic environment.
CC Bonds are minimally protected. Default in payment of interest and/or
principal seems probable over time.
C Bonds are an imminent default in payment of interest or principal.
IBCA:
- -----
AAA Obligations for which there is the lowest expectation of investment
risk. Capacity for timely repayment of principal and interest is
substantial such that adverse changes in business, economic or
financial conditions are unlikely to increase investment risk
81
<PAGE>
significantly.
AA Obligations for which there is a very low expectation of investment
risk. Capacity for timely repayment of principal and interest is
substantial. Adverse changes in business, economic, or financial
conditions may increase investment risk albeit not very
significantly.
A Obligations for which there is a low expectation of investment risk.
Capacity for timely repayment of principal and interest is strong,
although adverse changes in business, economic, or financial
conditions may lead to increased investment risk.
BBB Obligations for which there is currently a low expectation of
investment risk. Capacity for timely repayment of principal and
interest is adequate, although adverse changes in business,
economic, or financial conditions are more likely to lead to
increased investment risk than for obligations in higher categories.
BB Obligations for which there is a possibility of investment risk
developing. Capacity for timely repayment of principal and interest
exists, but is susceptible over time to adverse changes in business,
economic, or financial conditions.
B Obligations for which investment risk exists. Timely repayment of
principal and interest is not sufficiently protected against adverse
changes in business, economic, or financial conditions.
CCC Obligations for which there is a current, perceived possibility of
default. Timely repayment of principal and interest is dependent on
favorable business, economic, or financial conditions.
CC Obligations which are highly speculative or which have a high risk
of default.
Thomson:
- --------
AAA The highest category; indicates ability to repay principal and
interest on a timely basis is very high.
AA The second highest category; indicates a superior ability to repay
principal and interest on a timely basis with limited incremental
risk versus issues rated in the highest category.
A The third highest category; indicates the ability to repay principal
and interest is strong. Issues rated "A" could be more vulnerable to
adverse developments (both internal and external) than obligations
with higher ratings.
BBB The lowest investment grade category; indicates an acceptable
capacity to repay principal and interest. Issues rated "BBB" are,
however, more vulnerable to adverse developments (both internal and
external) than obligations with higher ratings.
BB While not investment grade, the "BB" rating suggests the likelihood
of default is considerably less than for lower rated issues.
However, there are significant uncertainties which could impact the
ability to adequately service debt obligations.
82
<PAGE>
B Issues rated "B" show a higher degree of uncertainty and therefore
greater likelihood of default than better rated issues. Adverse
developments could well affect the payment of interest and principal
on a timely basis.
CCC Issues rated "CCC" clearly have a high degree of likelihood of
default with little capacity to address further adverse changes in
financial circumstances.
CC "CC" is applied to issues that are subordinate to other obligations
rated "CCC" and are afforded less protection in the event of
bankruptcy or reorganization.
SHORT-TERM DEBT RATINGS (may be assigned, for example, to commercial paper,
master demand notes, bank instruments, and letters of credit)
Moody's description of its three highest short-term debt ratings:
- -----------------------------------------------------------------
Prime-1 Issuers rated Prime-1 (or supporting institutions) have a superior
capacity for repayment of senior short-term promissory obligations.
Prime-1 repayment capacity will normally be evidenced by many of the
following characteristics:
-Leading market positions in well-established industries.
-High rates of return on funds employed.
-Conservative capitalization structures with moderate reliance
on debt and ample asset protection.
-Broad margins in earnings coverage of fixed financial charges
and high internal cash generation.
-Well-established access to a range of financial markets and
assured sources of alternate liquidity.
Prime-2 Issuers rated Prime-2 (or supporting institutions) have a strong
capacity for repayment of senior short-term debt obligations. This
will normally be evidenced by many of the characteristics cited
above but to a lesser degree. Earnings trends and coverage ratios,
while sound, may be more subject to variation. Capitalization
characteristics, while still appropriate, may be more affected by
external conditions. Ample alternate liquidity is maintained.
Prime-3 Issuers rated Prime-3 (or supporting institutions) have an
acceptable ability for repayment of senior short-term obligations.
The effect of industry characteristics and market compositions may
be more pronounced. Variability in earnings and profitability may
result in changes in the level of debt protection measurements and
may require relatively high financial leverage. Adequate alternate
liquidity is maintained.
83
<PAGE>
S&P's description of its two highest short-term debt ratings:
- -------------------------------------------------------------
A-1 This designation indicates that the degree of safety regarding
timely payment is strong. Those issues determined to have extremely
strong safety characteristics are denoted with a plus sign (+).
A-2 Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as high
as for issues designated "A-1."
A-3 Issues carrying this designation have adequate capacity for timely
payment. They are, however, more vulnerable to the adverse effects
of changes in circumstances than obligations carrying the higher
designations.
Duff's description of its two highest short-term debt ratings (Duff incorporates
gradations of "1+" (one plus) and "1-" (one minus) to assist investors in
recognizing quality differences within the highest rating category):
- --------------------------------------------------------------------
Duff 1+ Highest certainty of timely payment. Short-term liquidity, including
internal operating factors and/or access to alternative sources of
funds, is outstanding, and safety is just below risk-free U.S.
Treasury short-term obligations.
Duff 1 Very high certainty of timely payment. Liquidity factors are
excellent and supported by good fundamental protection factors. Risk
factors are minor.
Duff 1- High certainty of timely payment. Liquidity factors are strong and
supported by good fundamental protection factors. Risk factors are
very small.
Duff 2 Good certainty of timely payment. Liquidity factors and company
fundamentals are sound. Although ongoing funding needs may enlarge
total financing requirements, access to capital markets is good.
Risk factors are small.
Fitch's description of its two highest short-term debt ratings:
- ---------------------------------------------------------------
F-1+ Exceptionally Strong Credit Quality. Issues assigned this rating are
regarded as having the strongest degree of assurance for timely
payment.
F-1 Very Strong Credit Quality. Issues assigned this rating reflect an
assurance of timely payment only slightly less in degree than issues
rated F-1+.
F-2 Good Credit Quality. Issues assigned this rating have a satisfactory
degree of assurance for timely payment, but the margin of safety is
not as great as for issues assigned F-1+ or F-1 ratings.
IBCA's description of its two highest short-term debt ratings:
- --------------------------------------------------------------
A+ Obligations supported by the highest capacity for timely repayment.
A1 Obligations supported by a very strong capacity for timely
repayment.
84
<PAGE>
SHORT-TERM LOAN/MUNICIPAL NOTE RATINGS
- --------------------------------------
Moody's description of its two highest short-term loan/municipal note ratings:
- ------------------------------------------------------------------------------
MIG-1/VMIG-1 This designation denotes best quality. There is present strong
protection by established cash flows, superior liquidity support
or demonstrated broad-based access to the market for refinancing.
MIG-2/VMIG-2 This designation denotes high quality. Margins of protection are
ample although not so large as in the preceding group.
S&P's description of its two highest municipal note ratings:
- ------------------------------------------------------------
SP-1 Very strong or strong capacity to pay principal and interest.
Those issues determined to possess overwhelming safety
characteristics will be given a plus (+) designation.
SP-2 Satisfactory capacity to pay principal and interest.
Thomson's description of its two highest short-term ratings:
- ------------------------------------------------------------
TBW-1 The highest category; indicates the degree of safety regarding
timely repayment of principal and interest is very strong.
TBW-2 The second highest category; while the degree of safety regarding
timely repayment of principal and interest is strong, the relative
degree of safety is not as high as for issues rated "TBW-1".
85
<PAGE>
APPENDIX B
----------
DESCRIPTION OF MONEY MARKET FUND INVESTMENTS
Obligations Backed by Full Faith and Credit of the U.S. Government -- are
bills, certificates of indebtedness, notes and bonds issued by (i) the U.S.
Treasury or (ii) agencies, authorities and instrumentalities of the U.S.
Government or other entities and backed by the full faith and credit of the U.S.
Government. Such obligations include, but are not limited to, obligations issued
by the Government National Mortgage Association, Farmers' Home Administration
and the Small Business Administration.
Other U.S. Government Obligations -- are bills, certificates of
indebtedness, notes, and bonds issued by agencies, authorities and
instrumentalities of the U.S. Government which are supported by the right of the
issuer to borrow from the U.S. Treasury or by the credit of the agency,
authority or instrumentality itself. Such obligations include, but are not
limited to, obligations issued by the Tennessee Valley Authority, the Bank for
Cooperatives, Federal Home Loan Banks, Federal Intermediate Credit Banks,
Federal Land Banks, and the Federal National Mortgage Association.
Repurchase Agreements -- are agreements by which a Fund purchases a U.S.
Treasury or agency obligation and obtains a simultaneous commitment from the
seller (a domestic commercial bank or, to the extent permitted by the Investment
Company Act of 1940, a recognized securities dealer) to repurchase the security
at an agreed upon price and date. The resale price is in excess of the purchase
price and reflects an agreed upon market rate unrelated to the coupon rate on
the purchased security. Such transactions afford an opportunity for the Fund to
earn a return on temporarily available cash at no market risk, although the Fund
may be subject to various delays and risks of loss if the seller is unable to
meet its obligation to repurchase.
Certificates of Deposit -- are certificates issued against funds deposited
in a bank, are for a definite period of time, earn a specified rate of return,
and are normally negotiable.
Bankers' Acceptances -- are short-term credit instruments used to finance
the import, export, transfer or storage of goods. They are term "accepted" when
a bank guarantees their payment at maturity.
Eurodollar Obligations -- obligations of foreign branches of U.S. banks.
Yankeedollar Obligations -- obligations of domestic branches of foreign
banks.
Commercial Paper -- refers to promissory notes issued by corporations in
order to finance their short-term credit needs.
Corporate Obligations -- include bonds and notes issued by corporations in
order to finance longer term credit needs.
86
<PAGE>
FINANCIAL STATEMENTS
--------------------
87
<PAGE>
PIMCO Advisors Funds
P I M C O Annual Report
September 30, 1995
EQUITY FUNDS
Equity Income Fund
Value Fund
Growth Fund
Target Fund
Discovery Fund
Opportunity Fund
Innovation Fund
International Fund
Precious Metals Fund
INCOME FUNDS
High Income Fund
Total Return Income Fund
Tax Exempt Fund
U.S. Government Fund
Short-Intermediate Fund
Money Market Fund
<PAGE>
PIMCO ADVISORS EQUITY INCOME FUND 17
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
September 30, 1995
ASSETS:
Securities owned, at value
(Cost of $168,020,013) (Note
2a) $ 192,428,080
Cash 173,572
Dividends receivable 639,229
Interest receivable 348,228
Receivable for investments
sold 3,474,819
Receivable for Fund shares
sold 413,569
Other assets 21,856
--------------
Total assets 197,499,353
LIABILITIES:
Payable for investments
purchased $ 7,188,612
Payable for Fund shares
redeemed 844,181
Dividends payable 8,245
Accrued expenses:
Investment advisory fee 116,004
Distribution fee 108,042
Servicing fee 38,668
Other 186,591
--------
Total liabilities 8,490,343
--------------
NET ASSETS $ 189,009,010
==============
COMPOSITION OF NET ASSETS:
Capital $ 156,814,031
Undistributed net investment
income 570,020
Undistributed net realized
gain on investments 7,216,892
Net unrealized appreciation on
securities 24,408,067
--------------
Total net assets $ 189,009,010
==============
CALCULATION OF MAXIMUM OFFERING
PRICE
CLASS A SHARES
Net asset value and redemption
price per share ($12,933,161
DIVIDED BY 914,725 shares) $14.14
Sales charge--5.50% of public
offering price 0.82
---------
Maximum offering price $14.96
=========
CLASS B SHARES
Net asset value and offering
price per share ($1,759,597
DIVIDED BY 124,502 shares) $14.13
=========
Redemption price per share *
=========
CLASS C SHARES
Net asset value and offering
price per share ($174,316,252
DIVIDED BY 12,367,471 shares) $14.09
=========
Redemption price per share *
=========
- ------------------
* Varies by length of time shares are held (Note 3d)
STATEMENT OF OPERATIONS
For the Year Ended September 30, 1995
INVESTMENT INCOME:
Interest $ 2,750,840
Dividends (including $173,239
in dividends from foreign
securities less $18,163 in
foreign taxes withheld at
source) 4,893,976
--------------
Total investment income 7,644,816
EXPENSES:
Investment advisory fee (Note
3a) $ 1,371,809
Distribution fee (Class B)
(Note 3b) 1,553
Distribution fee (Class C)
(Note 3b) 1,270,509
Servicing fee (Class A) (Note
3b) 33,249
Servicing fee (Class B) (Note
3b) 518
Servicing fee (Class C) (Note
3b) 423,503
Transfer agent and custody
fees 332,000
Professional fees 61,000
Trustees' fees and expenses
(Note 3c) 15,000
Shareholder reports and
notices 105,000
Miscellaneous 71,015
--------
Total expenses 3,685,156
--------------
Net investment income 3,959,660
--------------
REALIZED AND UNREALIZED GAIN
ON INVESTMENTS:
Net realized gain on security
transactions 7,637,491
Net realized gain on options
written 63,613
Net unrealized appreciation on
securities 13,910,233
Net unrealized appreciation on
options written 1,393
--------------
Net realized and unrealized
gain on investments 21,612,730
--------------
Net increase in net assets
resulting from operations $ 25,572,390
==============
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED SEPTEMBER 30,
-----------------------------------------
1995 1994
----------- --------------
OPERATIONS:
Net investment income $ 3,959,660 $ 3,201,384
Net realized gain on security
transactions 7,637,491 580,367
Net realized gain on options
written 63,613 42,386
Net unrealized appreciation
(depreciation) on securities 13,910,233 (3,119,826)
Net unrealized appreciation
(depreciation) on options
written 1,393 (1,393)
----------- --------------
Net increase in net assets
resulting from operations 25,572,390 702,918
Dividends paid from net
investment income
Class A (343,825) (309,331)
Class B (6,134) --
Class C (3,190,633) (2,978,345)
Distributions paid from net
realized gain on investments
Class A -- (145,600)
Class C -- (2,046,029)
Net equalization credits
(debits)
(Note 2g) (108,468) 212,929
Net increase (decrease) from
Fund share transactions
(Note 5) (26,748,176) 97,822,458
----------- --------------
Net increase (decrease) in
net assets (4,824,846) 93,259,000
NET ASSETS:
Beginning of year 193,833,856 100,574,856
----------- --------------
End of year (including
undistributed net investment
income of $570,020 and
$213,610, respectively) $189,009,010 $ 193,833,856
=========== ==============
PIMCO Advisors Funds SEE ACCOMPANYING NOTES
<PAGE>
18
PIMCO ADVISORS EQUITY INCOME FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
September 30, 1995
PRINCIPAL VALUE
AMOUNT (NOTE 2)
- -------------- --------------
SHORT-TERM NOTES--5.4%
$ 1,700,000 Cooperative Association
of Tractor Dealers,
Inc., 5.72%, 10/6/95 $ 1,698,649
2,500,000 Corporate Asset Funding
Co., Inc., 5.77%,
10/13/95 2,495,192
1,000,000 Dresdner U.S. Finance
Inc., 5.73%, 10/3/95 999,682
2,300,000 Goldman Sachs & Co.,
5.77%, 10/4/95 2,298,894
2,000,000 Preferred Receivables
Funding Corp., 5.74%,
10/6/95 1,998,406
800,000 Sheffield Receivables
Corp., 6.55%, 10/2/95 799,854
--------------
TOTAL SHORT-TERM NOTES
(Cost $10,290,677) 10,290,677
--------------
CONVERTIBLE BONDS AND
NOTES--22.0%
CHEMICALS--1.0%
1,300,000 Altera Corp., 5.75%,
6/15/02 1,808,625
--------------
COMMUNICATION
EQUIPMENT--1.4%
2,050,000 Network Equipment
Technologies, Inc.,
7.25%, 5/15/14 2,708,562
--------------
ELECTRONICS--5.0%
2,250,000 Integrated Device
Technology, Inc.,
5.50%, 6/1/02 2,500,313
5,500,000 Motorola, Inc., 0.00%,
9/27/13 5,005,000
1,850,000 VLSI Technology, Inc.,
8.25%, 10/1/05 1,887,000
--------------
9,392,313
--------------
FINANCIAL SERVICES--1.5%
2,050,000 First Financial
Management Corp.,
5.00%, 12/15/99 2,911,000
--------------
HEALTH MANAGEMENT--1.5%
2,100,000 HEALTHSOUTH
Rehabilitation Corp.,
5.00%, 4/1/01 2,919,000
--------------
LODGING--1.9%
2,500,000 HFS, Inc., 4.50%, 10/1/99 3,640,625
--------------
RESTAURANTS--1.6%
11,950,000 Boston Chicken Inc.,
0.00%, 6/1/15 2,957,625
--------------
RETAIL--4.3%
1,960,000 Baby Superstore, Inc.,
4.875%, 10/1/00 1,969,800
2,000,000 Federated Department
Stores, Inc., 5.00%,
10/1/03 2,050,000
6,040,000 Office Depot Inc., 0.00%,
11/1/08 4,107,200
--------------
8,127,000
--------------
TELECOMMUNICATIONS--2.2%
4,000,000 WorldCom, Inc., 5.00%,
8/15/03 4,090,000
--------------
PRINCIPAL VALUE
AMOUNT (NOTE 2)
- -------------- --------------
UTILITIES: ELECTRIC--1.6%
$ 2,900,000 Synoptics Communications,
Inc., 5.25%, 5/15/03 $ 2,997,875
--------------
TOTAL CONVERTIBLE BONDS
AND NOTES
(Cost $37,068,596) 41,552,625
--------------
EXCHANGEABLE NOTES--4.2%
94,275 Allstate Corp.,
Exchangeable into
shares of common stock
of PMI Group Inc.,
6.7647%, 4/15/98 4,018,472
73,500 American Express Co.,
Exchangeable into
shares of common stock
of First Data Corp.,
6.25%, 10/15/96 3,822,000
--------------
TOTAL EXCHANGEABLE NOTES
(Cost $6,525,180) 7,840,472
--------------
SHARES
- --------------
COMMON STOCKS--54.6%
APPAREL--1.6%
118,700 Liz Claiborne, Inc. 2,997,175
--------------
BANKS--4.1%
84,400 Bank of New York Co.,
Inc. 3,924,600
55,000 Bankers Trust Co. (N.Y.) 3,863,750
--------------
7,788,350
--------------
BEVERAGE--2.8%
102,700 Pepsico, Inc. 5,237,700
--------------
FINANCIAL SERVICES--4.5%
130,300 American Express Co. 5,782,062
52,200 Student Loan Marketing
Association 2,818,800
--------------
8,600,862
--------------
FOREST AND PAPER
PRODUCTS--8.6%
47,400 Federal Paper Board Co.,
Inc. 1,818,975
22,600 Georgia-Pacific Corp. 1,977,500
71,300 Kimberly-Clark Corp. 4,786,012
102,100 Sonoco Products Co. 2,833,275
122,800 Williams Cos., Inc. (The) 4,789,200
--------------
16,204,962
--------------
INSURANCE--3.7%
47,600 Cigna Corp. 4,956,350
60,900 Mid Ocean Limited 2,101,050
--------------
7,057,400
--------------
MEDIA--1.4%
89,700 Times Mirror Co., Class A 2,578,875
--------------
MEDICAL SUPPLIES--6.8%
44,900 Bausch & Lomb, Inc. 1,857,737
145,300 Baxter International,
Inc. 5,975,463
68,800 Johnson & Johnson 5,099,800
--------------
12,933,000
--------------
MISCELLANEOUS
MANUFACTURING--1.5%
68,200 Shared Medical Systems
Corp. 2,830,300
--------------
OIL AND GAS--2.0%
59,700 Amoco Corp. 3,828,263
--------------
OIL AND GAS
SERVICES--2.3%
104,100 Halliburton Co. 4,346,175
--------------
PIMCO Advisors Funds SEE ACCOMPANYING NOTES
<PAGE>
PIMCO ADVISORS EQUITY INCOME FUND 19
- --------------------------------------------------------------------------------
VALUE
SHARES (NOTE 2)
- -------------- --------------
PHARMACEUTICALS--7.5%
82,300 Merck & Co., Inc. $ 4,608,800
150,700 Smithkline Beecham PLC
ADR 7,629,188
41,600 Upjohn Co. 1,856,400
--------------
14,094,388
--------------
PUBLISHING--1.9%
149,720 Jostens, Inc. 3,518,420
--------------
UTILITIES: ELECTRIC--1.5%
102,800 Illinova Corp. 2,788,450
--------------
UTILITIES: GAS--0.9%
99,600 Washington Energy Co. 1,705,650
--------------
UTILITIES: TELEPHONE
SYSTEMS--3.5%
42,900 AT&T Corp. 2,820,675
146,900 MCI Communications Corp. 3,828,581
--------------
6,649,256
--------------
TOTAL COMMON STOCKS
(Cost $90,446,926) 103,159,226
--------------
CONVERTIBLE PREFERRED
STOCKS--15.6%
COMPUTER SERVICES AND
SOFTWARE--3.2%
92,550 General Motors Corp.,
Class E, Series C,
$3.25 6,004,181
--------------
FOREST AND PAPER
PRODUCTS--1.9%
116,550 James River Corp., Series
P, 9.00% 3,554,775
--------------
MACHINERY AND
ENGINEERING--2.2%
44,010 Case Corp., Series A,
$4.50 4,175,449
--------------
VALUE
SHARES (NOTE 2)
- -------------- --------------
OFFICE EQUIPMENT--2.8%
87,250 United Companies
Financial Corp., 6.75% $ 5,365,875
--------------
TELECOMMUNICATIONS--5.5%
88,300 LCI International Inc.,
$1.25 4,558,487
44,500 MFS Communications Co.,
Inc., 8.00% 1,852,313
97,000 Mobile Telecommunications
Technologies Corp.,
$2.25 4,074,000
--------------
10,484,800
--------------
TOTAL CONVERTIBLE
PREFERRED STOCKS
(Cost $23,688,634) 29,585,080
--------------
TOTAL INVESTMENTS
(Cost $168,020,013+) 101.8% 192,428,080
OTHER ASSETS AND
LIABILITIES, NET (1.8%) (3,419,070)
------- --------------
TOTAL NET ASSETS 100.0% $ 189,009,010
======= ==============
+ The cost of investments for federal income tax
purposes is $168,020,013. At September 30, 1995,
net unrealized appreciation was $24,408,067. This
consisted of aggregate gross unrealized
appreciation for all investments on which there was
an excess of market value over tax cost of
$24,628,112 and aggregate gross unrealized
depreciation of all investments on which there was
an excess of tax cost over market value of
$220,045.
PIMCO Advisors Funds SEE ACCOMPANYING NOTES
<PAGE>
20
PIMCO ADVISORS VALUE FUND
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
September 30, 1995
ASSETS:
Securities owned, at value
(Cost of $11,109,534) (Note
2a) $ 11,594,313
Cash 1,202,664
Dividends receivable 28,298
Interest receivable 5,481
Receivable for Fund shares
sold 449,114
Unamortized organization costs
(Note 2j) 47,395
--------------
Total assets 13,327,265
LIABILITIES:
Payable for investments
purchased $ 149,644
Payable for Fund shares
redeemed 1,316
Accrued expenses:
Investment advisory fee 6,457
Distribution fee 5,538
Servicing fee 2,306
Organization expense 50,000
Other 2,274
-------
Total liabilities 217,535
--------------
NET ASSETS $ 13,109,730
==============
COMPOSITION OF NET ASSETS:
Capital $ 12,603,390
Undistributed net investment
income 21,561
Net unrealized appreciation on
securities 484,779
--------------
Total net assets $ 13,109,730
==============
CALCULATION OF MAXIMUM OFFERING
PRICE
CLASS A SHARES
Net asset value and redemption
price per share ($2,491,813
DIVIDED BY 233,349 shares) $10.68
Sales charge--5.50% of public
offering price 0.62
---------
Maximum offering price $11.30
=========
CLASS B SHARES
Net asset value and offering
price per share ($3,974,939
DIVIDED BY 372,239 shares) $10.68
=========
Redemption price per share *
=========
CLASS C SHARES
Net asset value and offering
price per share ($6,642,978
DIVIDED BY 622,096 shares) $10.68
=========
Redemption price per share *
=========
- ------------------
* Varies by length of time shares are held (Note 3d)
STATEMENT OF OPERATIONS
For the Period Ended September 30, 1995*
INVESTMENT INCOME:
Interest $15,508
Dividends (including $403 in
dividends from foreign
securities less $102 in
foreign taxes withheld at
source) 70,143
-------
Total investment income 85,651
EXPENSES:
Investment advisory fee (Note
3a) $ 14,916
Distribution fee (Class B)
(Note 3b) 5,125
Distribution fee (Class C)
(Note 3b) 7,461
Servicing fee (Class A) (Note
3b) 1,132
Servicing fee (Class B) (Note
3b) 1,708
Servicing fee (Class C) (Note
3b) 2,487
Transfer agent and custody
fees 3,853
Professional fees 600
Organization costs 2,605
Miscellaneous 856
------
Total expenses 40,743
-------
Net investment income 44,908
-------
REALIZED AND UNREALIZED GAIN
ON INVESTMENTS:
Net realized gain on security
transactions 1,147
Net unrealized appreciation on
securities 484,779
-------
Net realized and unrealized
gain on investments 485,926
-------
Net increase in net assets
resulting from operations $530,834
========
- ------------------
* The Fund commenced operations on June 27, 1995.
STATEMENT OF CHANGES IN NET ASSETS
PERIOD ENDED
SEPTEMBER
30,
1995*
------------
OPERATIONS:
Net investment income $ 44,908
Net realized gain on security
transactions 1,147
Net unrealized appreciation on
securities 484,779
------------
Net increase in net assets
resulting from operations 530,834
Dividends paid from net
investment income
Class A (12,109)
Class B (12,461)
Class C (21,485)
Return of Capital
Class A (2,772)
Class B (2,852)
Class C (4,919)
Net equalization credits (Note
2g) 21,561
Net increase from Fund share
transactions (Note 5) 12,613,933
------------
Net increase in net assets 13,109,730
NET ASSETS:
Beginning of period --
------------
End of period (Including
undistributed net investment
income of $21,561) $13,109,730
============
- ------------------
* The Fund commenced operations on June 27, 1995.
PIMCO Advisors Funds SEE ACCOMPANYING NOTES
<PAGE>
PIMCO ADVISORS VALUE FUND 21
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
September 30, 1995
VALUE
SHARES (NOTE 2)
- ------ --------------
COMMON STOCKS--88.4%
ADVERTISING--0.3%
700 Omnicom Group, Inc. $ 45,587
--------------
AEROSPACE--4.0%
6,800 Northrop Grumman Corp. 413,950
1,300 Raytheon Co. 110,500
--------------
524,450
--------------
APPAREL--0.3%
1,000 Reebok International Ltd. 34,375
--------------
APPLIANCES--2.5%
13,000 Maytag Corp. 227,500
2,000 Premark International,
Inc. 101,750
--------------
329,250
--------------
AUTOMOTIVE
MANUFACTURING--2.6%
4,400 Chrysler Corp. 233,200
3,500 Ford Motor Co. 108,937
--------------
342,137
--------------
BANKS--6.6%
1,500 Bankers Trust Co. (N.Y.) 105,375
4,800 Chase Manhattan Corp. 293,400
5,400 Mellon Bank Corp. 240,975
4,000 PNC Bancorp 111,500
2,800 Standard Federal
Bancorporation 109,200
--------------
860,450
--------------
BEVERAGE--2.2%
4,600 Anheuser-Busch Cos., Inc. 286,925
--------------
BUILDING MATERIALS AND
CONSTRUCTION--0.4%
2,300 Lennar Corp. 50,025
--------------
CHEMICALS--1.7%
1,800 Olin Corp. 123,750
1,300 Union Carbide Corp. 51,675
1,800 Wellman, Inc. 44,100
--------------
219,525
--------------
COMMERCIAL SERVICES--2.3%
6,600 PHH Corp. 297,000
--------------
COMPUTER SERVICES AND
SOFTWARE--0.9%
2,500 Sterling Software Inc.* 113,750
--------------
COMPUTERS--0.8%
2,400 Seagate Technology* 101,100
--------------
COPPER--2.8%
5,900 Phelps Dodge Corp. 369,487
--------------
COPYING--0.8%
800 Xerox Corp. 107,500
--------------
ELECTRONICS--1.4%
3,800 Advanced Micro Devices,
Inc.* 110,675
3,600 EG&G Inc. 70,200
--------------
180,875
--------------
FINANCIAL SERVICES--1.5%
5,000 Bear Stearns Companies,
Inc. 107,500
4,900 Paine Webber Group Inc. 96,775
--------------
204,275
--------------
FOOD--0.9%
2,200 IBP, Inc. 117,425
--------------
VALUE
SHARES (NOTE 2)
- ------ --------------
FOREST AND PAPER
PRODUCTS--1.2%
2,700 Federal Paper Board Co.,
Inc. $ 103,612
800 Willamette Industries,
Inc. 53,400
--------------
157,012
--------------
HEALTH MANAGEMENT--0.4%
2,800 Tenet Healthcare Corp.* 48,650
--------------
INSURANCE--3.8%
1,600 Aetna Life & Casualty Co. 117,400
741 Allstate Corp. 26,213
800 Loews Corp. 116,400
8,600 Provident Life & Accident
Insurance Co. of
America, Class B 233,275
--------------
493,288
--------------
LEISURE--1.7%
11,200 Brunswick Corp. 226,800
--------------
MACHINERY AND
ENGINEERING--3.6%
5,900 Briggs & Stratton Corp. 237,475
2,900 Deere & Co. 235,987
--------------
473,462
--------------
MEDICAL SUPPLIES--1.2%
2,800 Baxter International,
Inc. 115,150
1,500 Beckman Instruments, Inc. 45,375
--------------
160,525
--------------
MULTI-INDUSTRY--1.6%
1,400 Textron Incorporated 95,550
900 Unilever N.V. ADR 117,000
--------------
212,550
--------------
OIL AND GAS--8.0%
2,700 Atlantic Richfield Co. 289,912
1,600 Repsol, S.A. ADR 50,800
4,600 Texaco Inc. 297,275
17,600 Ultramar Corp. 418,000
--------------
1,055,987
--------------
PHARMACEUTICALS--5.0%
3,500 American Home Products
Corp. 297,062
1,600 Bristol-Myers Squibb Co. 116,600
5,300 Upjohn Co. 236,512
--------------
650,174
--------------
PRINTING--2.5%
4,900 Harland (John H.) Co. 108,412
4,100 Harris Corp. 224,988
--------------
333,400
--------------
REAL ESTATE--0.8%
3,200 Meditrust Corp. 110,800
--------------
RETAIL--5.0%
3,500 Fleming Cos., Inc. 84,000
7,400 K mart Corp. 107,300
10,200 Melville Corp. 351,900
2,900 Sears, Roebuck & Co. 106,938
--------------
650,138
--------------
PIMCO Advisors Funds SEE ACCOMPANYING NOTES
<PAGE>
22
PIMCO ADVISORS VALUE FUND
- --------------------------------------------------------------------------------
VALUE
SHARES (NOTE 2)
- ------ --------------
TELECOMMUNICATIONS--4.1%
10,100 Comsat Corp. $ 227,250
6,700 Pacific Telesis Group 206,025
3,100 Southern New England
Telecommunications
Corp. 109,663
--------------
542,938
--------------
TEXTILES--0.8%
2,800 Springs Industries, Inc. 109,900
--------------
TIRE AND RUBBER--0.8%
2,700 Goodyear Tire & Rubber
Co. (The) 106,313
--------------
TOBACCO--2.6%
2,500 American Brands, Inc. 105,625
2,800 Phillip Morris Cos. 233,800
--------------
339,425
--------------
TRANSPORTATION: AIR--0.9%
1,700 AMR Corp.* 122,613
--------------
TRANSPORTATION:
RAIL--1.7%
1,600 Conrail Inc. 110,000
2,100 GATX Corp. 108,675
--------------
218,675
--------------
UTILITIES: ELECTRIC--6.2%
9,100 Detroit Edison Co. 293,475
9,700 Pacific Gas & Electric
Co. 289,788
3,300 Texas Utilities Co. 115,088
7,100 Washington Water Power
Co. 114,488
--------------
812,839
--------------
VALUE
SHARES (NOTE 2)
- ------ --------------
UTILITIES: GAS--2.7%
8,500 NICOR Inc. $ 231,625
4,400 Peoples Energy Corp. 121,000
--------------
352,625
--------------
WHOLESALE--1.8%
7,900 Supervalu, Inc. 232,063
--------------
TOTAL COMMON STOCKS
(Cost $11,109,534) 11,594,313
--------------
TOTAL INVESTMENTS
(Cost $11,109,534+) 88.4% 11,594,313
OTHER ASSETS AND LIABILITIES,
NET 11.6% 1,515,417
------- --------------
TOTAL NET ASSETS 100.0% $ 13,109,730
======== ==============
+ The cost of investments for federal income tax
purposes is $11,109,534. At September 30, 1995, net
unrealized appreciation was $484,779. This
consisted of aggregate gross unrealized
appreciation for all investments on which there was
an excess of market value over tax cost of $597,079
and aggregate gross unrealized depreciation of all
investments on which there was an excess of tax
cost over market value of $112,300.
* Non-income producing security.
PIMCO Advisors Funds SEE ACCOMPANYING NOTES
<PAGE>
PIMCO ADVISORS GROWTH FUND 23
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
September 30, 1995
ASSETS:
Securities owned, at value
(Cost of $1,211,567,135)
(Note 2a) $1,455,535,238
Cash 194,711
Dividends receivable 1,547,742
Receivable for investments
sold 16,007,712
Receivable for Fund shares
sold 2,473,666
Other assets 134,944
--------------
Total assets 1,475,894,013
LIABILITIES:
Payable for investments
purchased $ 34,110,310
Payable for Fund shares
redeemed 3,187,669
Outstanding options written,
at value (premiums received
$3,166,613) (Notes 2c and 6) 3,332,275
Accrued expenses:
Investment advisory fee 767,457
Distribution fee 793,625
Servicing fee 292,014
Other 768,630
----------
Total liabilities 43,251,980
--------------
NET ASSETS $1,432,642,033
==============
COMPOSITION OF NET ASSETS:
Capital $1,037,587,773
Undistributed net realized
gain on investments 151,251,819
Net unrealized appreciation on
securities 243,968,103
Net unrealized depreciation on
options written (165,662)
--------------
Total net assets $1,432,642,033
==============
CALCULATION OF MAXIMUM OFFERING
PRICE
CLASS A SHARES
Net asset value and redemption
price per share ($134,818,843
DIVIDED BY 5,239,354 shares) $25.73
Sales charge--5.50% of public
offering price 1.50
---------
Maximum offering price $27.23
---------
---------
CLASS B SHARES
Net asset value and offering
price per share ($7,671,110
DIVIDED BY 307,623 shares) $24.94
---------
---------
Redemption price per share *
---------
---------
CLASS C SHARES
Net asset value and offering
price per share ($1,290,152,080
DIVIDED BY 51,739,024 shares) $24.94
=========
Redemption price per share *
=========
- ------------------
* Varies by length of time shares are held (Note 3d)
STATEMENT OF OPERATIONS
For the Year Ended September 30, 1995
INVESTMENT INCOME:
Interest $ 5,539,259
Dividends (including
$1,889,732 in dividends from
foreign securities less
$187,918 in foreign taxes
withheld at source) 15,544,493
--------------
Total investment income 21,083,752
EXPENSES:
Investment advisory fee (Note
3a) $ 8,268,603
Distribution fee (Class B)
(Note 3b) 9,437
Distribution fee (Class C)
(Note 3b) 8,548,085
Servicing fee (Class A) (Note
3b) 289,263
Servicing fee (Class B) (Note
3b) 3,146
Servicing fee (Class C) (Note
3b) 2,849,362
Transfer agent and custody
fees 1,678,998
Professional fees 135,999
Trustees' fees and expenses
(Note 3c) 85,000
Shareholder reports and
notices 649,999
Miscellaneous 257,993
--------
Total expenses 22,775,885
--------------
Net investment loss (1,692,133)
--------------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain on security
transactions 170,814,216
Net realized loss on options
written (10,517,641)
Net unrealized appreciation on
securities 107,005,178
Net unrealized depreciation on
options written (1,232,651)
--------------
Net realized and unrealized
gain on investments 266,069,102
--------------
Net increase in net assets
resulting from operations $ 264,376,969
==============
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED SEPTEMBER 30,
-----------------------------------------
1995 1994
------------- --------------
OPERATIONS:
Net investment loss $ (1,692,133) $ (1,510,561)
Net realized gain on security
transactions 170,814,216 61,977,601
Net realized gain (loss) on
options written (10,517,641) 16,170,895
Net unrealized appreciation
(depreciation) on securities 107,005,178 (70,142,685)
Net unrealized appreciation
(depreciation) on options
written (1,232,651) 62,164
------------- --------------
Net increase in net assets
resulting from operations 264,376,969 6,557,414
Distributions paid from net
realized gain on investments
Class A (5,788,261) (7,856,845)
Class C (59,479,234) (86,123,172)
Net increase from Fund share
transactions (Note 5) 40,836,714 105,119,489
------------- --------------
Net increase in net assets 239,946,188 17,696,886
NET ASSETS:
Beginning of year 1,192,695,845 1,174,998,959
------------- --------------
End of year $1,432,642,033 $1,192,695,845
============= ==============
PIMCO Advisors Funds SEE ACCOMPANYING NOTES
<PAGE>
24
PIMCO ADVISORS GROWTH FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
September 30, 1995
PRINCIPAL VALUE
AMOUNT (NOTE 2)
- -------------- --------------
COMMERCIAL PAPER
GUARANTEED
BY LETTERS OF
CREDIT--0.3%
$ 3,600,000 Matterhorn Capital Corp.,
5.71%, 10/27/95
guaranteed by Union
Bank of Switzerland
(Cost $3,585,154) $ 3,585,154
--------------
SHORT-TERM NOTES--7.3%
10,000,000 Asset Securitization
Corp., 5.73%, 10/10/95 9,985,675
9,400,000 Bell Atlantic Network
Funding, 5.71%,
10/12/95 9,383,600
2,700,000 Ciesco, L.P., 5.77%,
10/23/95 2,690,479
5,000,000 Commonwealth Bank of
Australia, 6.45%,
10/3/95 4,998,208
4,000,000 Cooperative Association
of Tractor Dealers,
Inc., 5.73%, 10/3/95 3,998,727
10,800,000 Corporate Asset Funding
Co., Inc., 5.77%,
10/12/95 10,780,959
10,500,000 Corporate Receivables
Corp., 5.72%, 10/18/95 10,471,638
7,500,000 CXC, Inc., 5.77%,
10/27/95 7,468,746
12,000,000 Golden Managers
Acceptance Corp.,
5.76%, 10/4/95 11,994,240
6,250,000 Preferred Receivables
Funding Corp., 5.74%,
10/5/95 6,246,014
6,000,000 Reed Elsevier Capital
Inc., 5.69%, 10/11/95 5,990,517
10,000,000 Sheffield Receivables
Corp., 5.80%, 10/5/95 9,993,555
10,000,000 USL Capital Corp., 5.70%,
10/26/95 9,960,417
--------------
TOTAL SHORT-TERM NOTES
(Cost $103,962,775) 103,962,775
--------------
U.S. GOVERNMENT AGENCY
OBLIGATIONS--0.3%
5,000,000 FNMA, Discount Notes,
5.75%, 10/3/95
(Cost $4,998,403) 4,998,403
--------------
SHARES
- --------------
COMMON STOCKS--93.7%
APPLIANCES--2.3%
975,000 Black & Decker Corp. 33,271,875
--------------
BANKS--6.9%
470,000 Bank of New York Co.,
Inc. 21,855,000
480,000 Chemical Banking Corp. 29,220,000
675,000 Citicorp 47,756,250
--------------
98,831,250
--------------
BEVERAGE--3.1%
860,000 Pepsico, Inc. 43,860,000
--------------
COMMUNICATION
EQUIPMENT--1.0%
200,000 Nokia Corporation ADR 13,950,000
--------------
COMPUTER SERVICES AND
SOFTWARE--14.4%
585,000(a) Cisco Systems, Inc.* 40,365,000
600,000 Computer Associates
International, Inc. 25,350,000
500,000 Computer Sciences Corp.* 32,187,500
VALUE
SHARES (NOTE 2)
- -------------- --------------
570,000(a) Electronic Arts Inc.* $ 20,947,500
250,000 First Data Corp. 15,500,000
650,000(a) Informix Corp.* 21,125,000
375,000 Microsoft Corp.* 33,937,500
450,000 Oracle Systems Corp.* 17,268,750
--------------
206,681,250
--------------
COMPUTERS--1.0%
170,000 Hewlett-Packard Co. 14,173,750
--------------
ELECTRONICS--6.4%
200,000 Applied Materials, Inc.* 20,450,000
825,000 Loral Corp. 47,025,000
425,000(a) LSI Logic Corp.* 24,543,750
--------------
92,018,750
--------------
ENTERTAINMENT AND
LEISURE--4.3%
440,000 Disney (Walt) Company
(The) 25,245,000
730,000 Viacom, Inc., Class B* 36,317,500
--------------
61,562,500
--------------
FINANCIAL SERVICES--5.1%
680,000 American Express Co. 30,175,000
417,000 Green Tree Financial
Corp. 25,437,000
290,000 MGIC Investment Corp. 16,602,500
--------------
72,214,500
--------------
FOREST AND PAPER
PRODUCTS--5.9%
425,000 Bowater Inc. 19,815,625
320,000 Georgia-Pacific Corp. 28,000,000
550,000 Kimberly-Clark Corp. 36,918,750
--------------
84,734,375
--------------
HEALTH MANAGEMENT--2.6%
780,000 Columbia HCA Healthcare
Corp. 37,927,500
--------------
INSURANCE--4.3%
365,000 American International
Group Inc. 31,025,000
290,000 Cigna Corp. 30,196,250
--------------
61,221,250
--------------
MACHINERY AND
ENGINEERING--1.5%
260,000 Deere & Co. 21,157,500
--------------
MEDIA--3.7%
1,265,000 Comcast Corp. Class A 25,300,000
410,000 Infinity Broadcasting
Corp. Class A* 13,427,500
540,000 Liberty Media
Group-Series A* 14,445,000
--------------
53,172,500
--------------
MEDICAL SUPPLIES--8.2%
520,000 Guidant Corp. 15,210,000
525,000 Heart Technology, Inc.* 14,634,375
600,000 Johnson & Johnson 44,475,000
800,000 Medtronic, Inc. 43,000,000
--------------
117,319,375
--------------
OIL AND GAS--3.4%
500,000 Amoco Corp. 32,062,500
180,000 British Petroleum Co. PLC
ADR 16,177,500
--------------
48,240,000
--------------
OIL AND GAS
SERVICES--2.4%
540,000 Schlumberger Ltd. 35,235,000
--------------
PIMCO Advisors Funds SEE ACCOMPANYING NOTES
<PAGE>
PIMCO ADVISORS GROWTH FUND 25
- --------------------------------------------------------------------------------
VALUE
SHARES (NOTE 2)
- -------------- --------------
PHARMACEUTICALS--9.3%
1,000,000 Amgen Inc.* $ 49,875,000
750,000 Merck & Co., Inc. 42,000,000
520,000 Smithkline Beecham PLC
ADR 26,325,000
340,000 Upjohn Co. 15,172,500
--------------
133,372,500
--------------
RETAIL--2.8%
760,000 Federated Department
Stores, Inc.* 21,565,000
600,000 Office Depot Inc.* 18,075,000
--------------
39,640,000
--------------
TELECOMMUNICATIONS--2.0%
700,000 Vodafone Group PLC ADR 28,700,000
--------------
UTILITIES: TELEPHONE
SYSTEMS--3.1%
324,000 AT&T Corp. 21,303,000
875,000 MCI Communications Corp. 22,804,687
--------------
44,107,687
--------------
TOTAL COMMON STOCKS
(Cost $1,096,434,198) 1,341,391,562
--------------
CONTRACTS
- --------------
PURCHASED PUT
OPTIONS--0.1%
937 Standard & Poor's 500
Index, expiring October
'95 @ $570 169,831
1,578 Standard & Poor's 500
Index, expiring October
'95 @ $575 384,638
1,545 Standard & Poor's 500
Index, expiring
December '95 @ $575 1,042,875
--------------
TOTAL PURCHASED PUT
OPTIONS
(Cost $2,586,605) 1,597,344
--------------
TOTAL SECURITIES OWNED
(Cost
$1,211,567,135+) 1,455,535,238
--------------
OUTSTANDING PUT OPTIONS WRITTEN--(0.1%)
2,515 Standard & Poor's 500 Index,
expiring October '95 @ $545 (125,750)
1,545 Standard & Poor's 500 Index,
expiring December '95 @ $540 (424,875)
--------------
TOTAL OUTSTANDING PUT OPTIONS
WRITTEN
(Premiums Received $708,074) (550,625)
--------------
VALUE
CONTRACTS (NOTE 2)
- ------------ --------------
OUTSTANDING CALL OPTIONS
WRITTEN--(0.2%)
350 Cisco Systems, Inc.,
expiring October '95 @
$70 $ (67,812)
2,000 Electronic Arts, Inc.,
expiring October '95 @
$40 (150,000)
700 Informix Corp., expiring
November '95 @ $35 (109,375)
500 LSI Logic Corp., expiring
November '95 @ $65 (125,000)
1,545 Standard & Poor's 500
Index, expiring
December '95 @ $590 (1,757,438)
1,578 Standard & Poor's 500
Index, expiring October
'95 @ $590 (572,025)
--------------
TOTAL OUTSTANDING CALL
OPTIONS WRITTEN
(Premiums Received
$2,458,539) (2,781,650)
--------------
TOTAL INVESTMENTS, NET
OF OUTSTANDING
OPTIONS WRITTEN
(Cost $1,214,733,748) 101.4% 1,452,202,963
OTHER ASSETS AND
LIABILITIES, NET (1.4%) (19,560,930)
------- --------------
TOTAL NET ASSETS 100.0% $1,432,642,033
======== =============
+ The cost of investments for federal income tax
purposes is $1,211,567,135. At September 30, 1995,
net unrealized appreciation was $243,968,103. This
consisted of aggregate gross unrealized
appreciation for all investments on which there was
an excess of market value over tax cost of
$251,951,868 and aggregate gross unrealized
depreciation of all investments on which there was
an excess of tax cost over market value of
$7,983,765
(a) See Outstanding Call Options Written
* Non-income producing securities
PIMCO Advisors Funds SEE ACCOMPANYING NOTES
<PAGE>
26
PIMCO ADVISORS TARGET FUND
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
September 30, 1995
ASSETS:
Securities owned, at value
(Cost of $784,970,763) (Note
2a) $ 930,078,268
Cash 16,452,116
Dividends receivable 347,272
Receivable for investments
sold 8,452,783
Receivable for Fund shares
sold 2,887,634
Unamortized organization costs
(Note 2j) 22,150
Other assets 73,463
--------------
Total assets 958,313,686
LIABILITIES:
Payable for investments
purchased $ 43,392,247
Payable for Fund shares
redeemed 3,271,971
Outstanding options written,
at value (premiums received
$164,097) (Notes 2c and 6) 61,725
Accrued expenses:
Investment advisory fee 531,470
Distribution fee 486,321
Servicing fee 186,875
Other 558,169
----------
Total liabilities 48,488,778
--------------
NET ASSETS $ 909,824,908
--------------
--------------
COMPOSITION OF NET ASSETS:
Capital $ 666,384,565
Undistributed net realized
gain on investments 98,230,466
Net unrealized appreciation on
securities 145,107,505
Net unrealized appreciation on
options written 102,372
--------------
Total net assets $ 909,824,908
==============
CALCULATION OF MAXIMUM OFFERING
PRICE
CLASS A SHARES
Net asset value and redemption
price per share ($121,915,099
DIVIDED BY 7,432,771 shares) $16.40
Sales charge--5.50% of public
offering price 0.95
---------
Maximum offering price $17.35
---------
---------
CLASS B SHARES
Net asset value and offering
price per share ($7,554,310
DIVIDED BY 470,488 shares) $16.06
---------
---------
Redemption price per share *
---------
---------
CLASS C SHARES
Net asset value and offering
price per share ($780,355,499
DIVIDED BY 48,606,379 shares) $16.05
---------
---------
Redemption price per share *
---------
---------
- ------------------
* Varies by length of time shares are held (Note 3d)
STATEMENT OF OPERATIONS
For the Year Ended September 30, 1995
INVESTMENT INCOME:
Interest $ 3,959,769
Dividends (including $376,424
in dividends from foreign
securities less $56,281 in
foreign taxes withheld at
source) 4,232,580
--------------
Total investment income 8,192,349
EXPENSES:
Investment advisory fee (Note
3a) $ 5,294,008
Distribution fee (Class B)
(Note 3b) 8,862
Distribution fee (Class C)
(Note 3b) 4,801,612
Servicing fee (Class A) (Note
3b) 251,511
Servicing fee (Class B) (Note
3b) 2,954
Servicing fee (Class C) (Note
3b) 1,600,537
Transfer agent and custody
fees 1,239,000
Professional fees 101,000
Trustees' fees and expenses
(Note 3c) 40,000
Shareholder reports and
notices 470,000
Miscellaneous 219,221
--------
Total expenses 14,028,705
--------------
Net investment loss (5,836,356)
--------------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain on security
transactions 109,353,427
Net realized gain on options
written 416,535
Net unrealized appreciation on
securities 76,693,775
Net unrealized depreciation on
options written (133,389)
--------------
Net realized and unrealized
gain on investments 186,330,348
--------------
Net increase in net assets
resulting from operations $ 180,493,992
==============
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED SEPTEMBER 30,
-----------------------------------------
1995 1994
----------- --------------
OPERATIONS:
Net investment loss $ (5,836,356) $ (5,077,201)
Net realized gain on security
transactions 109,353,427 3,802,971
Net realized gain on options
written 416,535 2,633,738
Net unrealized appreciation on
securities 76,693,775 21,546,914
Net unrealized appreciation
(depreciation) on options
written (133,389) 235,761
----------- --------------
Net increase in net assets
resulting from operations 180,493,992 23,142,183
Distributions paid from net
realized gain on investments
Class A (1,095,474) (557,437)
Class C (7,061,265) (3,425,673)
Net increase from Fund share
transactions (Note 5) 90,917,353 280,386,122
----------- --------------
Net increase in net assets 263,254,606 299,545,195
NET ASSETS:
Beginning of year 646,570,302 347,025,107
----------- --------------
End of year $909,824,908 $ 646,570,302
============ ==============
PIMCO Advisors Funds SEE ACCOMPANYING NOTES
<PAGE>
PIMCO ADVISORS TARGET FUND 27
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
September 30, 1995
PRINCIPAL VALUE
AMOUNT (NOTE 2)
- -------------- --------------
SHORT-TERM NOTES--11.1%
$ 7,000,000 Bass Financial (C.I)
Ltd., 5.80%,11/1/95 $ 6,965,039
7,800,000 Bell Atlantic Network
Funding Corp., 5.85%,
10/25/95 7,769,580
6,500,000 Ciesco, L.P., 5.70%,
10/20/95 6,480,446
6,300,000 Cooperative Association
of Tractor Dealers,
Inc., 5.78%, 10/11/95 6,289,885
6,000,000 Corporate Asset Funding
Co., Inc., 5.77%,
10/13/95 5,988,460
5,000,000 Corporate Receivables
Corp., 5.80%, 11/14/95 4,964,555
7,200,000 CSW Credit Inc., 5.72%,
10/24/95 7,173,688
7,100,000 CXC, Inc., 5.77%,
10/27/95 7,070,413
1,600,000 Dresdner U.S. Finance
Inc., 5.72%, 10/3/95 1,599,492
5,000,000 Eiger Capital Corp.,
5.72%, 10/17/95 4,987,289
4,400,000 Falcon Asset
Securitization Corp.,
5.72%, 10/13/95 4,391,611
4,900,000 Golden Managers
Acceptance Corp.,
5.76%, 10/4/95 4,897,648
5,500,000 Goldman Sachs & Co.,
5.77%, 10/4/95 5,497,355
6,000,000 Koch Industries Inc.,
6.05%, 10/6/95 5,994,958
3,100,000 McKenna Triangle National
Corp., 5.71%, 10/18/95 3,091,641
500,000 National Rural Utilities
Cooperative Finance
Corp., 5.73%, 10/4/95 499,761
5,000,000 Preferred Receivables
Funding Corp., 5.74%,
10/5/95 4,996,811
5,700,000 Sheffield Receivables
Corp., 5.80%, 10/5/95 5,696,327
6,800,000 USL Capital Corp.,
5.74%-5.75%,
10/3/95-10/19/95 6,791,451
--------------
TOTAL SHORT-TERM NOTES
(Cost $101,146,410) 101,146,410
--------------
SHARES
- --------------
COMMON STOCKS AND
WARRANTS--91.1%
APPAREL--2.0%
361,500 Liz Claiborne, Inc. 9,127,875
391,800 Warnaco Group Inc., Class
A* 9,403,200
--------------
18,531,075
--------------
AUTOMOTIVE
MANUFACTURING--2.7%
1,009,000 Harley-Davidson, Inc. 24,594,375
--------------
CHEMICALS--2.9%
243,800 Potash Corporation of
Saskatchewan, Inc. 15,176,550
405,600 Praxair, Inc. 10,849,800
--------------
26,026,350
--------------
COMPUTER SERVICES AND
SOFTWARE--7.1%
184,500 Broderbund Software,
Inc.* 14,045,062
332,200 Ceridian Corp.* 14,741,375
559,400 FIserv, Inc.* 16,152,675
211,800 Peoplesoft, Inc.* 19,247,325
--------------
64,186,437
--------------
COMPUTERS--2.4%
251,000 Dell Computer Corp.* 21,335,000
--------------
ELECTRONICS--11.6%
220,600 AVX Corp.* 7,390,100
547,500 Diebold, Inc. 25,390,312
215,100 KLA Instruments Corp.* 17,261,775
VALUE
SHARES (NOTE 2)
- -------------- --------------
295,300 MEMC Electronic
Materials, Inc.* $ 8,010,012
410,000(a) Teradyne, Inc.* 14,760,000
309,800 UCAR International Inc.* 8,442,050
582,570 Vishay Intertechnology,
Inc.* 24,467,940
--------------
105,722,189
--------------
ENTERTAINMENT AND
LEISURE--1.7%
523,000 GTECH Holdings Corp.* 15,755,375
--------------
FINANCIAL SERVICES--3.2%
886,600 Countrywide Credit
Industries Inc. 20,835,100
350,500 Mercury Finance Corp. 8,543,437
--------------
29,378,537
--------------
FOREST AND PAPER
PRODUCTS--4.7%
386,900 Bowater Inc. 18,039,212
770,500 James River Corp. of
Virginia 24,656,000
--------------
42,695,212
--------------
HEALTH CARE--1.2%
436,800 Lincare Holdings, Inc.* 11,247,600
--------------
HEALTH MANAGEMENT--1.0%
351,700 HEALTHSOUTH
Rehabilitation Corp.* 8,968,350
--------------
HEAVY MACHINERY--1.7%
412,200 Case Corp. 15,148,350
--------------
INSURANCE--6.5%
850,100 Alexander & Alexander
Services Inc. 20,614,925
306,100 American Re Corp. 11,784,850
290,400 Mid Ocean Limited 10,018,800
354,900 PMI Group, Inc. 16,813,388
--------------
59,231,963
--------------
LODGING--3.5%
609,300 HFS, Inc.* 31,912,088
--------------
MEDIA--4.1%
166,900 Clear Channel
Communications, Inc.* 12,642,675
427,300 Gartner Group, Inc.,
Class A* 13,994,075
172,355 Scholastic Corp.* 10,815,276
--------------
37,452,026
--------------
MEDICAL SUPPLIES--5.7%
247,000 Bausch & Lomb, Inc. 10,219,625
1,415,800 Guidant Corp. 41,412,150
--------------
51,631,775
--------------
MISCELLANEOUS
MANUFACTURING--1.3%
308,700 Millipore Corp. 11,576,250
--------------
PHARMACEUTICALS--3.1%
261,700 Genzyme Corp.* 15,178,600
661,800 Mylan Laboratories Inc. 13,236,000
--------------
28,414,600
--------------
RESTAURANTS--4.7%
1,143,100 Boston Chicken, Inc.* 29,863,488
339,400 Starbucks Corp.* 12,854,775
--------------
42,718,263
--------------
RETAIL--9.5%
153,200 Baby Superstore, Inc.* 6,913,150
108,300 CompUSA, Inc.* 4,656,900
577,700 General Nutrition Cos.
Inc.* 26,285,350
264,500 Gymboree Corp.* 7,968,063
PIMCO Advisors Funds SEE ACCOMPANYING NOTES
<PAGE>
28
PIMCO ADVISORS TARGET FUND
- --------------------------------------------------------------------------------
VALUE
SHARES (NOTE 2)
- -------------- --------------
909,500 OfficeMax, Inc.* $ 22,055,375
554,300 PetSmart, Inc.* 18,707,625
--------------
86,586,463
--------------
TELECOMMUNICATIONS--9.3%
53,250 American Satellite
Network Inc.
(warrants expire
6/30/99)* 0
258,550 Andrew Corp.* 15,803,870
202,300 MFS Communications Co.* 8,850,625
443,440 Millicom International
Cellular SA* 14,245,510
292,500 Paging Network, Inc.* 14,040,000
244,000 Qualcomm, Inc.* 11,193,500
487,800 Tellabs, Inc.* 20,548,575
--------------
84,682,080
--------------
UTILITIES: GAS--1.2%
675,000 ENSERCH Corp. 11,137,500
--------------
TOTAL COMMON STOCKS AND
WARRANTS
(Cost $683,824,353) 828,931,858
--------------
TOTAL SECURITIES OWNED
(Cost $784,970,763+) 930,078,268
--------------
VALUE
CONTRACTS (NOTE 2)
- -------- --------------
OUTSTANDING CALL OPTIONS
WRITTEN--(0.0%)
823 Teradyne, Inc., expiring
October'95 @ $40
(Premiums Received
$164,097) $ (61,725)
--------------
TOTAL INVESTMENTS, NET OF
OUTSTANDING OPTIONS
WRITTEN
(Cost $784,806,665) 102.2% 930,016,543
OTHER ASSETS AND
LIABILITIES, NET (2.2%) (20,191,635)
------- --------------
TOTAL NET ASSETS 100.0% $ 909,824,908
======= ==============
+ The cost of investments for federal income tax
purposes is $784,970,763. At September 30, 1995,
net unrealized appreciation was $145,107,505. This
consisted of aggregate gross unrealized
appreciation for all investments on which there was
an excess of market value over tax cost of
$150,710,170 and aggregate gross unrealized
depreciation of all investments on which there was
an excess of tax cost over market value of
$5,602,665.
(a) See Outstanding Call Options Written
* Non-income producing securities
PIMCO Advisors Funds SEE ACCOMPANYING NOTES
<PAGE>
PIMCO ADVISORS DISCOVERY FUND 29
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
September 30, 1995
ASSETS:
Securities owned, at value
(Cost of $33,613,807) (Note
2a) $ 35,269,270
Cash 5,200,062
Dividends receivable 14,142
Interest receivable 17,880
Receivable for investments
sold 61,595
Receivable for Fund shares
sold 1,088,841
Unamortized organization costs
(Note 2j) 47,395
--------------
Total assets 41,699,185
LIABILITIES:
Payable for investments
purchased $ 2,815,166
Payable for Fund shares
redeemed 28,174
Accrued expenses:
Investment advisory fee 21,243
Distribution fee 16,905
Servicing fee 7,081
Organization expense 50,000
Other 9,720
--------
Total liabilities 2,948,289
--------------
NET ASSETS $ 38,750,896
==============
COMPOSITION OF NET ASSETS:
Capital $ 37,609,798
Accumulated net realized loss
on investments (514,365)
Net unrealized appreciation on
securities 1,655,463
--------------
Total net assets $ 38,750,896
==============
CALCULATION OF MAXIMUM OFFERING
PRICE
CLASS A SHARES
Net asset value and redemption
price per share ($7,658,324
DIVIDED BY 703,423 shares) $10.89
Sales charge--5.50% of public
offering price 0.63
---------
Maximum offering price $11.52
=========
CLASS B SHARES
Net asset value and offering
price per share ($10,832,452
DIVIDED BY 997,019 shares) $10.86
=========
Redemption price per share *
=========
CLASS C SHARES
Net asset value and offering
price per share ($20,260,120
DIVIDED BY 1,864,790 shares) $10.86
=========
Redemption price per share *
=========
- ------------------
* Varies by length of time shares are held (Note 3d)
STATEMENT OF OPERATIONS
For the Period Ended September 30, 1995*
INVESTMENT INCOME:
Interest $ 55,841
Dividends 38,278
--------------
Total investment income 94,119
EXPENSES:
Investment advisory fee (Note
3a) $ 46,638
Distribution fee (Class B)
(Note 3b) 13,137
Distribution fee (Class C)
(Note 3b) 23,425
Servicing fee (Class A) (Note
3b) 3,359
Servicing fee (Class B) (Note
3b) 4,379
Servicing fee (Class C) (Note
3b) 7,808
Transfer agent and custody
fees 9,825
Professional fees 3,100
Miscellaneous 5,225
------
Total expenses 116,896
--------------
Net investment loss (22,777)
--------------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized loss on security
transactions (514,365)
Net unrealized appreciation on
securities 1,655,463
--------------
Net realized and unrealized
gain on investments 1,141,098
--------------
Net increase in net assets
resulting from operations $ 1,118,321
==============
- ------------------
* The Fund commenced operations on June 27, 1995.
STATEMENT OF CHANGES IN NET ASSETS
PERIOD ENDED
SEPTEMBER
30,
1995*
------------
OPERATIONS:
Net investment loss $ (22,777)
Net realized loss on security
transactions (514,365)
Net unrealized appreciation on
securities 1,655,463
------------
Net increase in net assets
resulting from operations 1,118,321
Net increase from Fund share
transactions (Note 5) 37,632,575
------------
Net increase in net assets 38,750,896
NET ASSETS:
Beginning of period --
------------
End of period $38,750,896
============
- ------------------
* The Fund commenced operations on June 27, 1995.
PIMCO Advisors Funds SEE ACCOMPANYING NOTES
<PAGE>
30
PIMCO ADVISORS DISCOVERY FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
September 30, 1995
VALUE
SHARES (NOTE 2)
- ------ --------------
COMMON STOCKS--91.0%
BANKS--8.4%
17,500 Associated Banc-Corp $ 643,125
18,900 Centura Banks Inc. 628,425
42,500 City National Corp. 563,125
11,800 Midlantic Corp. 640,150
24,000 Summit Bancorporation 669,000
2,600 Union Bank/San Francisco,
CA 137,800
--------------
3,281,625
--------------
BEVERAGE--1.6%
12,800 Canandaigua Wine Co.,
Class A* 622,400
--------------
CHEMICALS--1.4%
10,100 Cabot Corp. 536,562
--------------
COMMERCIAL SERVICES--1.2%
16,700 Manpower, Inc. 484,300
--------------
COMMUNICATION
EQUIPMENT--1.9%
18,100 Network Equipment
Technologies, Inc.* 753,413
--------------
COMPUTER SERVICES AND
SOFTWARE--7.7%
15,200 Cadence Design Systems
Inc.* 596,600
22,800 NetManage, Inc.* 541,500
10,900 Parametric Technology
Corp.* 670,350
13,900 Read-Rite Corp.* 507,350
14,900 Softkey International,
Inc.* 659,325
--------------
2,975,125
--------------
CONTAINERS--0.2%
2,100 Ball Corp. 62,213
--------------
ELECTRONICS--20.6%
18,500 Atmel Corp.* 624,375
19,500 Belden, Inc. 511,875
17,500 Credence Systems Corp.* 634,375
18,400 FSI International Inc.* 611,800
13,130 Harman International
Industries, Inc. 643,370
6,800 KLA Instruments Corp.* 545,700
15,700 Kulicke & Soffa
Industries, Inc.* 573,050
12,700 Lattice Semiconductor
Corp.* 515,938
16,900 Methode Electronics Inc.,
Class A 388,700
15,400 S3 Inc.* 537,075
7,200 Sierra Semiconductor
Corp.* 353,700
14,100 Silicon Valley Group
Inc.* 544,613
13,700 Tencor Instruments* 606,225
15,000 Teradyne, Inc.* 540,000
8,300 Wyle Electronics 372,462
--------------
8,003,258
--------------
ENVIRONMENTAL
CONTROL--0.9%
8,800 United Waste Systems,
Inc. 367,400
--------------
FINANCIAL SERVICES--5.6%
13,900 Finova Group Inc. 618,550
10,400 Green Tree Financial
Corp. 634,400
18,950 Money Store, Inc. (The) 897,755
--------------
2,150,705
--------------
FOREST AND PAPER
PRODUCTS--2.6%
11,100 Bowater Inc. 517,537
51,100 Domtar Inc.* 472,675
--------------
990,212
--------------
HEALTH CARE--1.3%
19,400 Lincare Holdings, Inc.* 499,550
--------------
HEALTH MANAGEMENT--5.1%
17,000 Health Management
Associates, Inc.* 546,125
30,100 Ornda HealthCorp* 639,625
11,400 Physician Reliance
Network, Inc.* 421,800
10,500 Universal Health
Services, Inc., Class
B* 359,625
--------------
1,967,175
--------------
VALUE
SHARES (NOTE 2)
- ------ --------------
INDUSTRIAL
COMPONENTS--3.0%
14,200 IDEX Corp. $ 507,650
16,600 Roper Industries Corp. 643,250
--------------
1,150,900
--------------
INSURANCE--9.5%
21,100 Citizens Corp. 400,900
17,800 Mid Ocean Limited 614,100
16,100 National Re Corp. 569,538
16,800 Penncorp Financial Group,
Inc. 401,100
19,100 Protective Life Corp. 558,675
10,900 Reinsurance Group of
America 384,225
10,300 Selective Insurance Group 375,950
9,600 Vesta Insurance Group,
Inc. 372,000
--------------
3,676,488
--------------
MACHINERY AND
ENGINEERING--1.3%
11,100 AGCO Corp. 505,050
--------------
MEDIA--3.2%
7,400 United Television Inc. 660,450
19,400 United Video Satellite
Group, Inc.* 577,150
--------------
1,237,600
--------------
MEDICAL SUPPLIES--4.5%
29,100 Amsco International,
Inc.* 578,363
21,300 Guidant Corp. 623,025
13,500 Sybron International
Corp.* 543,375
--------------
1,744,763
--------------
MISCELLANEOUS
MANUFACTURING--2.0%
16,200 Smith (A.O.) Corp. 419,175
10,200 Standex International
Corp. 371,025
--------------
790,200
--------------
MULTI-INDUSTRY--1.5%
12,700 First Brands Corp. 571,500
--------------
PHARMACEUTICALS--1.6%
15,400 Watson Pharmaceuticals
Inc.* 631,400
--------------
RETAIL--1.2%
21,500 Hollywood Entertainment
Corp.* 460,906
--------------
TELECOMMUNICATIONS--1.5%
21,400 Frontier Corp. 569,775
--------------
TRANSPORTATION:
RAIL--3.2%
11,000 GATX Corp. 569,250
10,000 Wisconsin Central
Transportation Corp.* 667,500
--------------
1,236,750
--------------
TOTAL COMMON STOCKS
(Cost $33,613,807) 35,269,270
--------------
TOTAL INVESTMENTS
(Cost $33,613,807+) 91.0% 35,269,270
OTHER ASSETS AND LIABILITIES,
NET 9.0% 3,481,626
------- --------------
TOTAL NET ASSETS 100.0% $ 38,750,896
======= ==============
+ The cost of investments for federal income tax
purposes is $33,613,807. At September 30, 1995, net
unrealized appreciation was $1,655,463. This
consisted of aggregate gross unrealized
appreciation for all investments on which there was
an excess of market value over tax cost of
$2,213,176 and aggregate gross unrealized
depreciation of all investments on which there was
an excess of tax cost over market value of
$557,713.
* Non-income producing securities
PIMCO Advisors Funds SEE ACCOMPANYING NOTES
<PAGE>
PIMCO ADVISORS OPPORTUNITY FUND 31
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
September 30, 1995
ASSETS:
Securities owned, at value
(Cost of $635,128,805) (Note
2a) $ 858,779,919
Cash 2,696,665
Dividends receivable 70,860
Receivable for investments
sold 4,154,635
Receivable for Fund shares
sold 809,178
Other assets 68,004
--------------
Total assets 866,579,261
LIABILITIES:
Payable for investments
purchased $ 21,732,274
Payable for Fund shares
redeemed 3,411,396
Outstanding options written,
at value (premiums received
$4,970,483) (Notes 2c and 6) 3,898,206
Accrued expenses:
Investment advisory fee 489,764
Distribution fee 441,557
Servicing fee 171,980
Other 413,212
----------
Total liabilities 30,558,389
--------------
NET ASSETS $ 836,020,872
==============
COMPOSITION OF NET ASSETS:
Capital $ 442,701,703
Undistributed net realized
gain on investments 168,595,778
Net unrealized appreciation on
securities 223,651,114
Net unrealized appreciation on
options written 1,072,277
--------------
Total net assets $ 836,020,872
==============
CALCULATION OF MAXIMUM OFFERING
PRICE
CLASS A SHARES
Net asset value and redemption
price per share ($120,829,628
DIVIDED BY 3,091,945 shares) $39.08
Sales charge--5.50% of public
offering price 2.27
---------
Maximum offering price $41.35
=========
CLASS C SHARES
Net asset value and offering
price per share ($715,191,244
DIVIDED BY 19,001,617 shares) $37.64
=========
Redemption price per share *
=========
- ------------------
* Varies by length of time shares are held (Note 3d)
STATEMENT OF OPERATIONS
For the Year Ended September 30, 1995
INVESTMENT INCOME:
Interest $ 4,177,221
Dividends 1,456,491
--------------
Total investment income 5,633,712
EXPENSES:
Investment advisory fee (Note
3a) $ 5,000,057
Distribution fee (Class C)
(Note 3b) 4,482,237
Servicing fee (Class A) (Note
3b) 255,940
Servicing fee (Class C) (Note
3b) 1,494,079
Transfer agent and custody
fees 736,999
Professional fees 84,999
Trustees' fees and expenses
(Note 3c) 65,000
Shareholder reports and
notices 289,999
Miscellaneous 144,490
--------
Total expenses 12,553,800
--------------
Net investment loss (6,920,088)
--------------
REALIZED AND UNREALIZED GAIN
ON INVESTMENTS:
Net realized gain on security
transactions 194,820,436
Net realized gain on options
written 359,905
Net unrealized appreciation on
securities 45,692,855
Net unrealized appreciation on
options written 3,281,809
--------------
Net realized and unrealized
gain on investments 244,155,005
--------------
Net increase in net assets
resulting from operations $ 237,234,917
==============
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED SEPTEMBER 30,
-----------------------------------------
1995 1994
----------- --------------
OPERATIONS:
Net investment loss $ (6,920,088) $ (8,278,826)
Net realized gain on security
transactions 194,820,436 3,975,164
Net realized gain on options
written 359,905 2,956,958
Net unrealized appreciation
(depreciation) on securities 45,692,855 (51,705,843)
Net unrealized appreciation
(depreciation) on options
written 3,281,809 (2,209,532)
----------- --------------
Net increase (decrease) in net
assets resulting from
operations 237,234,917 (55,262,079)
Distributions paid from net
realized gain on investments
Class A (2,828,016) (7,362,399)
Class C (16,835,116) (42,854,271)
Return of Capital
Class A -- (371,797)
Class C -- (2,164,189)
Net increase (decrease) from
Fund share transactions
(Note 5) (30,272,461) 31,877,215
----------- --------------
Net increase (decrease) in
net assets 187,299,324 (76,137,520)
NET ASSETS:
Beginning of year 648,721,548 724,859,068
----------- --------------
End of year $ 836,020,872 $ 648,721,548
=========== ==============
PIMCO Advisors Funds SEE ACCOMPANYING NOTES
<PAGE>
32
PIMCO ADVISORS OPPORTUNITY FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
September 30, 1995
PRINCIPAL VALUE
AMOUNT (NOTE 2)
- -------------- --------------
COMMERCIAL PAPER
GUARANTEED BY
LETTERS OF CREDIT--0.3%
$ 2,000,000 Matterhorn Capital Corp.,
5.71%, 10/27/95
guaranteed by Union
Bank of Switzerland
(Cost $1,991,752) $ 1,991,752
--------------
SHORT-TERM NOTES--8.1%
1,000,000 Canadian Wheat Board,
5.70%,10/6/95 999,208
7,300,000 Cooperative Association
of Tractor Dealers,
Inc., 5.78%, 10/16/95 7,282,419
8,800,000 CSW Credit Inc.,
5.72%-5.73%,
10/23/95-10/24/95 8,768,880
5,700,000 CXC, Inc., 5.77%,
10/27/95 5,676,247
1,400,000 Dresdner U.S. Finance
Inc., 5.72%, 10/3/95 1,399,555
4,200,000 Eiger Capital Corp.,
5.72%, 10/17/95 4,189,323
7,200,000 Goldman Sachs & Co.,
5.77%, 10/4/95 7,196,538
6,500,000 Preferred Receivables
Funding Corp., 5.74%,
10/5/95 6,495,854
3,300,000 Redland Finance Inc.,
5.74%, 10/25/95 3,287,372
10,000,000 Sheffield Receivables
Corp., 6.55%, 10/2/95 9,998,181
2,500,000 Tiger Managers Acceptance
Corp., 5.75%, 10/24/95 2,490,816
10,000,000 USL Capital Corp., 5.74%,
10/19/95 9,971,300
--------------
TOTAL SHORT-TERM NOTES
(Cost $67,755,693) 67,755,693
--------------
SHARES
- --------------
COMMON STOCKS--94.4%
APPAREL--3.1%
800,000 Tommy Hilfiger Corp.* 26,000,000
--------------
AUTOMOTIVE
MANUFACTURING--2.1%
500,050 Wabash National Corp. 17,689,269
--------------
BANKS--4.9%
207,900 BayBanks, Inc. 15,774,412
1,000,000 Glendale Federal Bank
FSB* 16,500,000
540,000 Life Bancorp, Inc. 8,640,000
--------------
40,914,412
--------------
BEVERAGE--3.3%
325,000 Canandaigua Wine Co.* 15,803,125
470,000 Robert Mondavi Corp.
Class A* 11,985,000
--------------
27,788,125
--------------
BUILDING MATERIALS AND
CONSTRUCTION--6.8%
650,000 Centex Construction
Products, Inc.* 8,531,250
435,000 Champion Enterprises,
Inc.* 8,645,625
500,000 Oakwood Homes Corp. 17,625,000
400,000 Pulte Corp. 11,350,000
425,000 U.S. Home Corp.* 10,625,000
--------------
56,776,875
--------------
CHEMICALS--1.3%
400,000 Airgas Inc.* 10,650,000
--------------
COMMERCIAL SERVICES--2.8%
445,000 Norrell Corp. 14,462,500
620,000 Sotheby's Holdings, Inc. 8,680,000
--------------
23,142,500
--------------
VALUE
SHARES (NOTE 2)
- -------------- --------------
COMMUNICATION
EQUIPMENT--9.9%
265,000 Glenayre Technologies,
Inc.* $ 19,080,000
315,000 Spectrian Corp.* 10,749,375
570,000(a) StrataCom, Inc.* 31,492,500
250,000(a) U.S. Robotics Corp.* 21,312,500
--------------
82,634,375
--------------
COMPUTER SERVICES AND
SOFTWARE--9.3%
200,000 Avid Technology Inc.* 8,600,000
325,000(a) Electronics for Imaging,
Inc.* 23,278,125
350,000 Hyperion Software Corp.* 19,862,500
298,000 Sierra On-Line, Inc.* 11,696,500
350,000(a) System Software
Associates Inc. 14,043,750
--------------
77,480,875
--------------
COMPUTERS--4.5%
400,000(a) Boca Research, Inc.* 9,700,000
140,000 Hutchinson Technology
Inc.* 8,715,000
300,000(a) Komag, Inc.* 19,612,500
--------------
38,027,500
--------------
CONTAINERS--0.7%
600,000 Gaylord Container Corp.* 5,662,500
--------------
COSMETICS--1.2%
500,000(a) Thermolase Corp.* 10,187,500
--------------
ELECTRONICS--15.5%
570,000(a) Altera Corp.* 35,553,750
280,000(a) C-Cube Microsystems,
Inc.* 12,810,000
472,500 Harman International
Industries, Inc. 23,152,500
665,600 Integrated Device
Technology, Inc.* 16,640,000
350,000 Integrated Process
Equipment Corp.* 13,934,375
315,000(a) Macromedia Inc.* 17,994,375
300,000 Symbol Technologies,
Inc.* 9,937,500
--------------
130,022,500
--------------
ENTERTAINMENT AND
LEISURE--1.5%
265,000 First Team Sports, Inc.* 4,240,000
221,000(a) Scientific Games Holdings
Corp.* 8,259,875
--------------
12,499,875
--------------
ENVIRONMENTAL
CONTROL--0.5%
250,000 ICC Technologies, Inc.* 3,937,500
--------------
FOREST AND PAPER
PRODUCTS--2.5%
700,000 Fort Howard Corp.* 10,762,500
1,600,000 Repap Enterprises, Inc.* 10,549,920
--------------
21,312,420
--------------
HEALTH CARE--2.3%
550,000 PhyCor, Inc.* 18,837,500
--------------
INSURANCE--1.9%
300,000 CMAC Investment Corp. 15,787,500
--------------
MACHINERY AND
ENGINEERING--1.0%
250,000 Harnischfeger Industries,
Inc. 8,343,750
--------------
MEDIA--1.0%
300,000 Evergreen Media Corp.,
Class A* 8,550,000
--------------
OIL AND GAS--1.4%
500,000 Pogo Producing Co. 11,375,000
--------------
OIL AND GAS
EQUIPMENT--2.3%
600,000 Smith International,
Inc.* 10,425,000
700,000 Weatherford
International, Inc.* 9,100,000
--------------
19,525,000
--------------
PIMCO Advisors Funds SEE ACCOMPANYING NOTES
<PAGE>
PIMCO ADVISORS OPPORTUNITY FUND 33
- --------------------------------------------------------------------------------
VALUE
SHARES (NOTE 2)
- -------------- --------------
OIL AND GAS
SERVICES--3.0%
2,100,000 Global Marine Inc.* $ 14,962,500
300,000 Sonat Offshore Drilling
Inc. 9,787,500
--------------
24,750,000
--------------
RESTAURANTS--1.6%
500,000 Applebee's International,
Inc. 13,625,000
--------------
RETAIL--1.4%
375,000 Just For Feet, Inc.* 11,531,250
--------------
TELECOMMUNICATIONS--7.2%
699,700 Colonial Data
Technologies Corp.* 12,944,450
495,466 International Cabletel,
Inc.* 13,873,048
350,000 LCI International Inc.* 13,737,500
985,000 WinStar Communications,
Inc.* 19,700,000
--------------
60,254,998
--------------
TRANSPORTATION: AIR--1.4%
442,500 Comair Holdings, Inc. 11,726,250
--------------
TOTAL COMMON STOCKS
(Cost $565,381,360) 789,032,474
--------------
TOTAL SECURITIES OWNED
(Cost $635,128,805+) 858,779,919
--------------
CONTRACTS
- ----------
OUTSTANDING CALL OPTIONS
WRITTEN (0.5%)
2,000 Altera Corp., expiring
October '95 @ $70 (300,000)
1,000 Boca Research, Inc.,
expiring December '95 @
$30 (137,500)
2,800 C-Cube Microsystems,
Inc., expiring October
'95 @ $45 (840,000)
1,296 Electronics for Imaging,
Inc., expiring October
'95 @ $65 (972,000)
956 Komag, Inc., expiring
October '95 @ $75 (59,750)
1,351 Macromedia, Inc.,
expiring October '95 @
$60 (194,206)
VALUE
CONTRACTS (NOTE 2)
- -------------- --------------
250 Scientific Games Holdings
Corp., expiring October
'95 @ $40 $ (25,000)
774 StrataCom, Inc., expiring
October '95 @ $55 (193,500)
1,000 System Software
Associates Inc.,
expiring October '95 @
$40 (256,250)
2,900 Thermolase Corp.,
expiring October '95 @
$22.50 (145,000)
1,000 U.S. Robotics Corp.,
expiring October '95 @
$80 (775,000)
--------------
TOTAL OUTSTANDING CALL
OPTIONS WRITTEN
(Premiums Received
$4,970,483) (3,898,206)
--------------
TOTAL INVESTMENTS, NET OF
OUTSTANDING OPTIONS
WRITTEN
(Cost $630,158,322) 102.3% 854,881,713
OTHER ASSETS AND
LIABILITIES, NET (2.3%) (18,860,841)
------- --------------
TOTAL NET ASSETS 100.0% $ 836,020,872
======= ==============
+ The cost of investments for federal income tax
purposes is $635,128,805. At September 30, 1995,
net unrealized appreciation was $223,651,114. This
consisted of aggregate gross unrealized
appreciation for all investments on which there was
an excess of market value over tax cost of
$234,561,359 and aggregate gross unrealized
depreciation of all investments on which there was
an excess of tax cost over market value of
$10,910,245.
(a) See Outstanding Call Options Written
* Non-income producing securities
PIMCO Advisors Funds SEE ACCOMPANYING NOTES
<PAGE>
34
PIMCO ADVISORS INNOVATION FUND
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
September 30, 1995
ASSETS:
Securities owned, at value
(Cost of $82,745,808) (Note
2a) $ 99,292,209
Receivable for investments
sold 978,303
Receivable for Fund shares
sold 1,508,191
Unamortized organization costs
(Note 2j) 42,279
Other assets 40,166
--------------
Total assets 101,861,148
LIABILITIES:
Payable for investments
purchased $ 1,297,846
Cash overdraft 963,528
Payable for Fund shares
redeemed 713,691
Accrued expenses:
Investment advisory fee 57,589
Distribution fee 40,852
Servicing fee 19,196
Other 67,702
--------
Total liabilities 3,160,404
--------------
NET ASSETS $ 98,700,744
==============
COMPOSITION OF NET ASSETS:
Capital $ 80,259,900
Undistributed net realized
gain on investments 1,894,443
Net unrealized appreciation on
securities 16,546,401
--------------
Total net assets $ 98,700,744
==============
CALCULATION OF MAXIMUM OFFERING
PRICE
CLASS A SHARES
Net asset value and redemption
price per share ($28,239,136
DIVIDED BY 1,916,268 shares) $14.74
Sales charge--5.50% of public
offering price 0.86
---------
Maximum offering price $15.60
=========
CLASS B SHARES
Net asset value and offering
price per share ($6,509,360
DIVIDED BY 444,103 shares) $14.66
=========
Redemption price per share *
=========
CLASS C SHARES
Net asset value and offering
price per share ($63,952,248
DIVIDED BY 4,363,887 shares) $14.65
=========
Redemption price per share *
=========
- ------------------
* Varies by length of time shares are held (Note 3d)
STATEMENT OF OPERATIONS
For the Period Ended September 30, 1995*
INVESTMENT INCOME:
Interest $ 197,373
Dividends (including $24,453
in dividends from foreign
securities less $3,647 in
foreign taxes withheld at
source) 90,606
--------------
Total investment income 287,979
EXPENSES:
Investment advisory fee (Note
3a) $ 265,836
Distribution fee (Class B)
(Note 3b) 7,023
Distribution fee (Class C)
(Note 3b) 172,058
Servicing fee (Class A) (Note
3b) 28,918
Servicing fee (Class B) (Note
3b) 2,341
Servicing fee (Class C) (Note
3b) 57,353
Transfer agent and custody
fees 64,064
Professional fees 26,500
Trustees' fees and expenses
(Note 3c) 3,500
Shareholder reports and
notices 34,369
Miscellaneous 29,014
-------
Total expenses before waiver
of investment advisory fee 690,976
Waived investment advisory fee
(Note 3a) (4,666)
-------
Total expenses 686,310
--------------
Net investment loss (398,331)
--------------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain on security
transactions 2,391,796
Net realized loss on options
written (99,022)
Net unrealized appreciation on
securities 16,546,401
--------------
Net realized and unrealized
gain on investments 18,839,175
--------------
Net increase in net assets
resulting from operations $ 18,440,844
==============
- ------------------
* The Fund commenced operations on December 22, 1994.
STATEMENT OF CHANGES IN NET ASSETS
PERIOD ENDED
SEPTEMBER
30,
1995*
------------
OPERATIONS:
Net investment loss $ (398,331)
Net realized gain on security
transactions 2,391,796
Net realized loss on options
written (99,022)
Net unrealized appreciation on
securities 16,546,401
------------
Net increase in net assets
resulting from operations 18,440,844
Net increase from Fund share
transactions (Note 5) 80,259,900
-
------------
Net increase in net assets 98,700,744
NET ASSETS:
Beginning of period --
------------
End of period $98,700,744
============
- ------------------
* The Fund commenced operations on December 22, 1994.
PIMCO Advisors Funds SEE ACCOMPANYING NOTES
<PAGE>
PIMCO ADVISORS INNOVATION FUND 35
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
September 30, 1995
PRINCIPAL VALUE
AMOUNT (NOTE 2)
- -------------- --------------
COMMERCIAL PAPER
GUARANTEED
BY LETTERS OF
CREDIT--0.7%
$ 685,000 Matterhorn Capital Corp.,
5.95%,10/2/95
guaranteed by Union
Bank of Switzerland
(Cost $684,887) $ 684,887
--------------
SHORT-TERM NOTES--9.7%
600,000 Bell Atlantic Network
Funding Corp., 5.85%,
10/25/95 597,660
1,000,000 Ciesco, L.P., 5.77%,
10/23/95 996,474
1,800,000 Cooperative Association
of Tractor Dealers,
Inc., 5.72%,10/6/95 1,798,570
1,700,000 CXC, Inc., 5.77%,
10/27/95 1,692,916
500,000 New South Wales Treasury
Corp., 5.71%, 10/12/95 499,127
1,500,000 PepsiCo Inc., 5.75%,
10/23/95 1,494,729
1,000,000 Preferred Receivables
Funding Corp., 5.74%,
10/5/95 999,362
1,500,000 Redland Finance Inc.,
5.73%, 10/4/95 1,499,284
--------------
TOTAL SHORT-TERM NOTES
(Cost $9,578,122) 9,578,122
--------------
SHARES
- --------------
COMMON STOCKS AND
RIGHTS--90.2%
COMMUNICATION
EQUIPMENT--10.7%
40,000 DSC Communications Corp.* 2,370,000
125,000 Ericsson (L.M.) Telephone
Co. ADR, Class B 3,062,500
125,000 Ericsson (L.M.) Telephone
Co. ADR rights expire
10/25/95 0
22,000 Nokia Corp. ADR 1,534,500
24,600 Spectrian Corp.* 839,475
50,000 StrataCom, Inc.* 2,762,500
--------------
10,568,975
--------------
COMPUTER SERVICES AND
SOFTWARE--19.3%
40,000 Computer Associates
International, Inc. 1,690,000
45,000 Computer Sciences Corp.* 2,896,875
110,000 Data Translation, Inc.* 1,952,500
40,000 Davidson and Associates,
Inc.* 1,390,000
37,000 General Motors Corp.,
Class E 1,683,500
90,000 Informix Corp.* 2,925,000
31,000 Learning Company (The)* 1,875,500
46,050 Oracle Systems Corp.* 1,767,169
70,000 PRI Automation, Inc.* 2,870,000
--------------
19,050,544
--------------
COMPUTERS--9.6%
80,000 Bay Networks, Inc.* 4,270,000
20,000 Cabletron Systems, Inc.* 1,317,500
20,000 Compaq Computer Corp.* 967,500
34,000 Dell Computer Corp.* 2,890,000
--------------
9,445,000
--------------
VALUE
SHARES (NOTE 2)
- -------------- --------------
COSMETICS--0.8%
41,000 Thermolase Corp.* $ 835,375
--------------
ELECTRONICS--25.5%
38,000 Altera Corp.* 2,370,250
68,000 ANADIGICS, Inc.* 1,887,000
26,000 Applied Materials, Inc.* 2,658,500
32,000 Diebold, Inc. 1,484,000
63,000 GaSonics International
Corp.* 2,346,750
105,000 Integrated Device
Technology, Inc.* 2,625,000
70,000 Integrated Process
Equipment Corp.* 2,786,875
32,000 KLA Instruments Corp.* 2,568,000
41,000 LSI Logic Corp.* 2,367,750
98,000 Triquint Semiconductor,
Inc.* 2,241,750
44,000 Vishay Intertechnology,
Inc.* 1,848,000
--------------
25,183,875
--------------
MEDICAL SUPPLIES--11.0%
60,000 Boston Scientific Corp.* 2,557,500
55,000 Circon Corp.* 1,106,875
154,500 Guidant Corp. 4,519,125
49,200 Medtronic, Inc. 2,644,500
--------------
10,828,000
--------------
PHARMACEUTICALS--4.8%
58,000 Amgen Inc.* 2,892,750
31,000 Genzyme Corp.* 1,798,000
--------------
4,690,750
--------------
TELECOMMUNICATIONS--8.5%
32,050 Andrew Corp.* 1,959,056
27,000 Qualcomm, Inc.* 1,238,625
56,000 Tellabs, Inc.* 2,359,000
70,000 Vodafone Group PLC ADR 2,870,000
--------------
8,426,681
--------------
TOTAL COMMON STOCKS AND
RIGHTS
(Cost $72,482,799) 89,029,200
--------------
TOTAL INVESTMENTS
(Cost $82,745,808+) 100.6% 99,292,209
OTHER ASSETS AND
LIABILITIES, NET (0.6%) (591,465)
------- --------------
TOTAL NET ASSETS 100.0% $ 98,700,744
======= ==============
+ The cost of investments for federal income tax
purposes is $82,745,808. At September 30, 1995, net
unrealized appreciation was $16,546,401. This
consisted of aggregate gross unrealized
appreciation for all investments on which there was
an excess of market value over tax cost of
$16,720,024 and aggregate gross unrealized
depreciation of all investments on which there was
an excess of tax cost over market value of
$173,623.
* Non-income producing securities
PIMCO Advisors Funds SEE ACCOMPANYING NOTES
<PAGE>
36
PIMCO ADVISORS INTERNATIONAL FUND
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
September 30, 1995
ASSETS:
Securities owned, at value
(Cost of $210,511,070) (Note
2a) $ 217,061,449
Foreign currency holdings, at
value (Cost of $6,284,401)
(Note 2b) 6,355,023
Forward foreign currency
contracts purchased (Cost of
$36,844,738) (Notes 2e and
7) 38,973,524
Cash 6,028,296
Dividends receivable 825,410
Interest receivable 27,929
Receivable for investments
sold 11,944,623
Receivable for Fund shares
sold 537,199
Receivable for forward foreign
currency contracts sold
(Notes 2e and 7) 37,841,054
Other assets 38,431
--------------
Total assets 319,632,938
LIABILITIES:
Payable for investments
purchased $ 8,393,344
Payable for forward foreign
currency contracts purchased
(Notes 2e and 7) 36,844,738
Payable for Fund shares
redeemed 1,032,013
Forward foreign currency
contracts sold, at value
(Cost of $37,841,054) (Notes
2e
and 7) 38,940,533
Accrued expenses:
Investment advisory fee 154,343
Distribution fee 133,373
Servicing fee 48,232
Other 282,920
----------
Total liabilities 85,829,496
--------------
NET ASSETS $ 233,803,442
==============
COMPOSITION OF NET ASSETS:
Capital $ 231,396,470
Accumulated net investment
loss (1,318,261)
Accumulated net realized loss
on investments (3,925,075)
Net unrealized appreciation on
securities 6,550,379
Net unrealized appreciation on
foreign currency holdings 70,622
Net unrealized appreciation on
forward foreign currency
contracts 1,029,307
--------------
Total net assets $ 233,803,442
==============
CALCULATION OF MAXIMUM OFFERING
PRICE
CLASS A SHARES
Net asset value and redemption
price per share ($17,950,770
DIVIDED BY 1,473,104 shares) $12.19
Sales charge--5.50% of public
offering price 0.71
---------
Maximum offering price $12.90
=========
CLASS B SHARES
Net asset value and offering
price per share ($503,405
DIVIDED BY 42,828 shares) $11.75
=========
Redemption price per share *
=========
CLASS C SHARES
Net asset value and offering
price per share ($215,349,267
DIVIDED BY 18,332,103 shares) $11.75
=========
Redemption price per share *
=========
- ------------------
* Varies by length of time shares are held (Note 3d)
STATEMENT OF OPERATIONS
For the Year Ended September 30, 1995
INVESTMENT INCOME:
Interest $ 383,070
Dividends (including
$5,561,662 in dividends from
foreign securities less
$632,598 in foreign taxes
withheld at source) 4,929,064
--------------
Total investment income 5,312,134
EXPENSES:
Investment advisory fee (Note
3a) $2,097,974
Distribution fee (Class B)
(Note 3b) 416
Distribution fee (Class C)
(Note 3b) 1,817,071
Servicing fee (Class A) (Note
3b) 49,788
Servicing fee (Class B) (Note
3b) 139
Servicing fee (Class C) (Note
3b) 605,690
Transfer agent and custody
fees 715,000
Professional fees 70,000
Trustees' fees and expenses
(Note 3c) 24,000
Shareholder reports and
notices 176,000
Miscellaneous 92,205
--------
Total expenses 5,648,283
--------------
Net investment loss (336,149)
--------------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized loss on security
and foreign currency
transactions (9,232,300)
Net realized gain on forward
foreign currency
transactions 4,763,607
Net realized loss on futures
transactions (356,925)
Net unrealized depreciation on
securities (12,734,674)
Net unrealized appreciation on
foreign currency holdings 70,410
Net unrealized depreciation on
forward foreign currency
contracts 758,965
--------------
Net realized and unrealized
loss on investments (16,730,917)
--------------
Net decrease in net assets
resulting from operations $ (17,067,066)
==============
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED SEPTEMBER 30,
-----------------------------------------
1995 1994
----------- --------------
OPERATIONS:
Net investment loss $ (336,149) $ (1,061,938)
Net realized gain (loss) on
security and foreign
currency transactions (9,232,300) 7,900,288
Net realized gain on forward
foreign currency contracts 5,759,923 --
Net realized loss on futures
transactions (356,925) --
Net unrealized appreciation
(depreciation) on securities (12,734,674) 7,759,843
Net unrealized appreciation on
foreign currency holdings 70,410 212
Net unrealized appreciation
(depreciation) on forward
foreign currency contracts (237,351) 270,342
----------- --------------
Net increase (decrease) in net
assets resulting from
operations (17,067,066) 14,868,747
Distributions paid from net
realized gain on investments
Class A (428,186) (309,469)
Class C (5,582,804) (3,745,155)
Net increase (decrease) from
Fund share transactions
(Note 5) (60,899,155) 147,780,440
----------- --------------
Net increase (decrease) in
net assets (83,977,211) 158,594,563
NET ASSETS:
Beginning of year 317,780,653 159,186,090
----------- --------------
End of year (including
accumulated net investment
loss of $1,318,261 and
$169,448, respectively) $233,803,442 $ 317,780,653
=========== ==============
PIMCO Advisors Funds SEE ACCOMPANYING NOTES
<PAGE>
PIMCO ADVISORS INTERNATIONAL FUND 37
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
September 30, 1995
VALUE
SHARES (NOTE 2) COUNTRY
- -------------- ----------------
COMMON STOCKS--92.8%
AUTOMOTIVE
MANUFACTURING--3.4%
32,000 Bajaj Auto Ltd. GDR $ 972,160 (IN)
864 Bayerische Motoren Werke
AG 476,644 (GC)
165,900 Fiat SpA 621,793 (IT)
687,000 Mazda Motor Corp. 2,507,000 (JA)
9,800 PSA Peugeot 1,343,216 (FR)
53,500 Tata Engineering &
Locomotive Company Ltd.
GDR 1,224,080 (IN)
2,610 Volkswagen AG 849,244 (GC)
----------
7,994,137
----------
AUTOMOTIVE PARTS--0.4%
434,000 PT Astra International 861,837 (ID)
----------
BANKS--10.3%
13,900 ABN AMRO Holdings N.V. 577,671 (NL)
1,452,000 Akbank T.A.S. 376,068 (TK)
72,000 Allied Irish Bank PLC 357,739 (IR)
62,690,000 Banco Bradesco S.A. 595,555 (BR)
579,000 Banco de Credito del Peru 1,082,209 (PR)
33,800 Banco de Galicia SA* 153,131 (AR)
7,070 Banco Popular Espanol SA 1,103,054 (SP)
124,200 Bangkok Bank Co. Ltd. 1,396,492 (TH)
73,000 Bank of Ireland 458,411 (IR)
3,605 Commerzbank AG 822,618 (GC)
17,000 Corporacion Bancaria de
Espana SA (ARGENTARIA) 607,191 (SP)
401,200 Den Norske Bank AS* 1,109,438 (NO)
2,090 Generale de Banque SA 657,816 (BE)
146,200 Hang Seng Bank 1,205,477 (HK)
289,300 Krung Thai Bank Ltd. 1,153,497 (TH)
116,000 Lloyd's Bank PLC 1,266,790 (UK)
294,000 Malayan Banking Berhad 2,377,255 (MY)
74,000 Overseas Union Bank Ltd. 473,889 (SN)
241,000 PT Bank Internasional
Indonesia* 829,546 (ID)
196,000 Sumitomo Bank 3,814,689 (JA)
250,000 Sumitomo Trust & Banking 3,446,525 (JA)
--------------
23,865,061
--------------
BEVERAGE--0.9%
678,000 Erciyas Biracilik Ve Malt
Sanayii 420,021 (TK)
153,700 Guinness PLC 1,260,079 (UK)
12,800 South African Breweries
Ltd. 403,151 (SF)
--------------
2,083,251
--------------
BUILDING MATERIALS--4.4%
1,117,000 Adana Cimento Sanayii 635,238 (TK)
50,500 Cementos Diamante SA ADR 934,250 (CO)
121,600 Corimon C.A. ADR 668,800 (VZ)
102,000 CRH PLC 699,955 (IR)
3,460 Glaverbel S.A. 447,443 (BE)
18,915 Lafarge Coppee 1,247,348 (FR)
391,000 Pilkington PLC 1,231,454 (UK)
360,000 PT Semen Gresik 1,016,748 (ID)
340,000 Sungei Way Holdings
Berhad 1,157,904 (MY)
55,000 Unicem SpA 354,948 (IT)
61,000 Uralita SA 651,144 (SP)
200,000 Wolseley PLC 1,168,020 (UK)
---------------
10,213,252
---------------
CHEMICALS--3.9%
6,700 Akzo Nobel 807,999 (NL)
1,219,000 Bagfas Bandirma
GubreFabrikalari A.S. 507,592 (TK)
2,815 Bayer AG 721,877 (GC)
304,000 Metacorp Berhad 835,514 (MY)
725,000 Mitsubishi Chemical Corp. 3,527,560 (JA)
58,700 Reliance Industries Ltd.
GDS 1,071,275 (IN)
VALUE
SHARES (NOTE 2) COUNTRY
- -------------- ----------------
27,700 Sociedad Quimica Y Minera
De Chile ADR $ 1,211,875 (CH)
1,000 Solvay SA 534,553 (BE)
---------------
9,218,245
---------------
COMMERCIAL SERVICES--0.3%
21,900 Royal PTT Nederland NV 776,784 (NL)
---------------
COMMUNICATION
EQUIPMENT--0.4%
12,330 Alcatel Alshtom 1,039,855 (FR)
---------------
CONSTRUCTION--2.4%
67,300 Amur-Autopistas del Mare
Nostrum SA 808,535 (SP)
418,000 Obayashi Corp. 3,305,001 (JA)
236,000 United Engineers Ltd. 1,513,468 (MY)
---------------
5,627,004
---------------
CONTAINERS--0.3%
44,900 Amcor Ltd. 336,184 (AS)
128,000 Jefferson Smurfitt Group 381,171 (IR)
---------------
717,355
---------------
ELECTRICAL
EQUIPMENT--4.0%
354,000 Matsushita Electric Works 3,696,079 (JA)
47,000 Sony Corp. 2,448,855 (JA)
64,000 TDK Corp. 3,308,666 (JA)
---------------
9,453,600
---------------
ELECTRONICS--2.1%
353,000 Hitachi Ltd. 3,864,538 (JA)
20,100 Philips Electronics NV 984,235 (NL)
---------------
4,848,773
---------------
ENTERTAINMENT AND
LEISURE--0.7%
11,372 Polygram NV 742,469 (NL)
1,800 Salomon SA* 952,760 (FR)
---------------
1,695,229
---------------
FINANCIAL SERVICES--5.9%
151,000 Abbey National PLC 1,295,308 (UK)
190,000 Amalgamated Banks of
South Africa 819,584 (SF)
25,200 Banco Frances del Rio de
la Plata S.A. 180,203 (AR)
82,100 Banco Ganadero S.A. 1,149,400 (CO)
16,400 Credit Local de France 1,322,980 (FR)
580,000 Credito Italiano 688,460 (IT)
318,000 Daiwa Securities Co. Ltd. 4,029,378 (JA)
14,616 Fortis Amev NV 856,088 (NL)
89,700 HSBC Holdings PLC 1,273,453 (UK)
93,400 Industrial Finance
Corporation of Thailand
(The) 286,747 (TH)
123,400 United Overseas Bank Ltd. 1,068,138 (SN)
92,200 Westpac Banking Corp.
Ltd. 373,004 (AS)
124,000 Wing Hang Bank Ltd. 419,393 (HK)
---------------
13,762,136
---------------
FOOD--3.5%
72,720 Carulla & Cia SA ADR 700,294 (CO)
93,400 Cerebos Pacific Ltd. 558,691 (SN)
6,900 Groupe Danone 1,118,580 (FR)
53,000 Kerry Group PLC 400,585 (IR)
23,887 Koninklijke Ahold NV 901,247 (NL)
267,200 Mavesa SA ADR 944,231 (VZ)
621,000 Migros Turk 668,569 (TK)
23,500 Molinos Rio de la Plata 143,366 (AR)
850,000 Parmalat Finanziaria SpA 699,380 (IT)
97,000 PT Indofood Sukses Makmur 467,656 (ID)
301,000 Tesco PLC 1,491,094 (UK)
---------------
8,093,693
---------------
PIMCO Advisors Funds SEE ACCOMPANYING NOTES
<PAGE>
38
PIMCO ADVISORS INTERNATIONAL FUND
- --------------------------------------------------------------------------------
VALUE
SHARES (NOTE 2) COUNTRY
- -------------- ----------------
FOREST AND PAPER
PRODUCTS--1.3%
253,795 Aracruz Celulose S.A. $ 521,929 (BR)
81,000 Enso-Gutzeit Oy 688,257 (FI)
478,500 Land & General Berhad 1,257,929 (MY)
560,228 PT Indah Pulp & Paper
Corp. 673,674 (ID)
--------------
3,141,789
--------------
HOLDING
COMPANIES--DIVERSIFIED--3.6%
55,000 Barlow Ltd. 621,363 (SF)
245,000 BTR PLC 1,266,038 (UK)
109,000 C.G. Smith Ltd. 683,626 (SF)
249,130 Hutchison Whampoa Ltd. 1,350,110 (HK)
55,700 Indian Rayon & Industries
Ltd. 793,725 (IN)
534,000 Road Builders (M)
Holdings Berhad 1,701,591 (MY)
468,000 Technology Resources
Industries Berhad* 1,221,012 (MY)
26,100 Valmet Corp. 851,554 (FI)
--------------
8,489,019
--------------
HOME FURNISHINGS AND
APPLIANCES--0.5%
3,025,000 Arcelik A.S. 473,110 (TK)
2,393,000 Brasmotor S.A. 612,608 (BR)
--------------
1,085,718
--------------
INSURANCE--1.0%
406 Allianz AG 736,704 (GC)
22,060 AXA 1,166,762 (FR)
205 Muenchener
Rueckversicherungs-
Gesellschaft 422,117 (GC)
--------------
2,325,583
--------------
LODGING--0.7%
10,330 Club Mediterranee* 1,003,514 (FR)
37,800 East India Hotels ltd.
GDR 737,100 (IN)
--------------
1,740,614
--------------
MACHINERY AND
ENGINEERING--2.9%
61,800 Larsen & Toubro Ltd. GDR 1,244,034 (IN)
3,550 Mannesmann AG 1,165,829 (GC)
1,596,000 Mitsui Engineering
&Shipbuilding 3,850,350 (JA)
16,000 Rauma Oy 386,826 (FI)
--------------
6,647,039
--------------
MEDIA--0.5%
214,000 British Sky Broadcasting
Group PLC 1,293,823 (UK)
--------------
MEDICAL SUPPLIES--0.2%
15,400 Hafslund Nycomed 401,253 (NO)
--------------
METALS AND MINING--3.6%
5,500 Anglo American Gold
Investment Co. Ltd. 497,093 (SF)
24,100 Broken Hill Proprietary
Co. Ltd. 331,790 (AS)
68,800 Comalco Ltd. 340,133 (AS)
29,000 De Beers Centenary AG 784,322 (SF)
26,850 Hindalco Industries Ltd.* 896,253 (IN)
40,305,000 Paranapanema S.A. 628,758 (BR)
88,000 RTZ Corp. 1,291,101 (UK)
415,000 Sumitomo Metal Mining Co. 3,390,633 (JA)
52,300 Western Mining Corp.
Holding Ltd 341,854 (AS)
--------------
8,501,937
--------------
MISCELLANEOUS
MANUFACTURING--1.7%
24,200 Grasim Industries Ltd.
GDR 502,150 (IN)
53,200 Madeco SA ADR 1,250,200 (CH)
16,800 Orkla Borregaard A.S. 765,358 (NO)
133,000 Sasib SpA 346,625 (IT)
2,390 Siemens A.G. 1,206,801 (GC)
--------------
4,071,134
--------------
VALUE
SHARES (NOTE 2) COUNTRY
- -------------- ----------------
OIL AND GAS--1.7%
22,000 Compagnie Francaise di
Petroleum Class B $ 1,335,191 (FR)
29,100 Compania Naviera Perez
Company SA ADR 254,366 (AR)
12,248,000 Petroleo Brasileiro
SA-Petrobras 1,297,063 (BR)
14,625 Repsol SA 461,223 (SP)
31,420 YPF Sociedad Anonima ADR 565,560 (AR)
--------------
3,913,403
--------------
OIL AND GAS
SERVICES--1.2%
105,000 Astra CIA Argentina De
Petro 182,721 (AR)
198,000 British Petroleum Co. PLC 1,488,524 (UK)
27,500 VEBA AG 1,094,822 (GC)
--------------
2,766,067
--------------
OIL PIPELINE--0.4%
66,100 Saga Petroleum A.S. 855,843 (NO)
--------------
PHARMACEUTICALS--3.6%
373,000 Fujisawa Pharmaceutical 3,705,419 (JA)
7,535 Roussel-Uclaf 1,172,415 (FR)
199,400 Zeneca Group PLC 3,613,507 (UK)
--------------
8,491,341
--------------
PUBLISHING--1.1%
69,797 Elsevier NV 898,252 (NL)
4,000 VNU-Verenigde Nederlandse
Uitgevbedri Verigd
Bezit 532,358 (NL)
13,500 Werner Soderstrom
Osakeyhtio 1,219,980 (FI)
--------------
2,650,590
--------------
REAL ESTATE--4.0%
160,000 Cheung Kong (Holdings)
Ltd. 871,232 (HK)
209,000 City Developments Ltd. 1,294,295 (SN)
312,000 DBS Land 926,546 (SN)
20,000 IRSA, Inveriones Y
Representaciones S.A. 480,000 (AR)
255,000 Mitsui Fudosan Co. Ltd. 3,076,014 (JA)
223,182 Sun Hung Kai Properties
Ltd. 1,811,367 (HK)
276,000 Wharf (Holdings) Ltd. 860,320 (HK)
--------------
9,319,774
--------------
RETAIL--3.3%
110,000 Boots Company PLC 987,129 (UK)
2,500 Carrefour 1,471,441 (FR)
13,030 G.I.B. Holdings Ltd. 552,759 (BE)
1,900 Karstadt AG 849,223 (GC)
23,013,000 Lojas Americanas S.A. 545,408 (BR)
226,000 Takashimaya Co. 3,321,838 (JA)
--------------
7,727,798
--------------
STEEL AND IRON--4.6%
9,686,000 Companhia Vale Do Rio
Doce 1,620,468 (BR)
1,482,000 NKK Corp. 3,980,948 (JA)
192,000 SA Iron & Steel
Industrial Corp. Ltd. 207,706 (SF)
500,000 Siderurgica Venezolana
Sivensa SA 1,018,900 (VZ)
171,000 Toyko Steel Manufacturing 3,310,782 (JA)
585,540,000 Usinas Siderurgicas de
Minas Gerais
S.A.--USIMINAS 651,243 (BR)
--------------
10,790,047
--------------
TELECOMMUNICATIONS--4.2%
562,000 CPT Telefonica del Peru
S.A. 1,075,443 (PR)
233,600 Hong Kong
Telecommunications Ltd. 424,498 (HK)
1,482,000 Netas Telekomunik 571,904 (TK)
427 Nippon Telegraph &
Telephone Corp. 3,692,153 (JA)
PIMCO Advisors Funds SEE ACCOMPANYING NOTES
<PAGE>
PIMCO ADVISORS INTERNATIONAL FUND 39
- --------------------------------------------------------------------------------
VALUE
SHARES (NOTE 2) COUNTRY
- -------------- ----------------
281,000 STET-Societa Finanziaria
Telefonica $ 854,409 (IT)
605,000 Telebras S.A. 28,798 (BR)
45,988 Telebras SA ADR 2,193,108 (BR)
142,000 Telekom Malaysia Berhad 1,069,019 (MY)
--------------
9,909,332
--------------
TEXTILES--0.3%
3,024,500 Akal Tekstil Sanayii 349,935 (TK)
17,900 Raymond Ltd. 290,875 (IN)
--------------
640,810
--------------
TIRE AND RUBBER--0.2%
1,396,000 Brisa Bridgestone Sabanci
Lastik San Ve Tic A.S. 396,883 (TK)
--------------
TOBACCO--0.4%
500,000 RJ Reynolds Berhad 1,055,550 (MY)
--------------
TRANSPORTATION: AIR--1.8%
188,000 BAA PLC 1,487,738 (UK)
89,000 Finnair Oy 699,825 (FI)
71,000 Singapore International
Airlines 659,540 (SN)
159,948 Swire Pacific Ltd., Class
A 1,267,124 (HK)
--------------
4,114,227
--------------
TRANSPORTATION:
MARINE--0.3%
16,621 Kvaerner AS 706,723 (NO)
--------------
TRANSPORTATION:
RAIL--1.3%
437,000 Tokyu Corp. 2,959,102 (JA)
--------------
UTILITIES: ELECTRIC--3.3%
6,460,000 Centrais Electricas
Brasileiras
S/A--Electrobras 1,992,264 (BR)
42,000 Central Puerto S.A. 138,617 (AR)
24,528,000 Companhia Paulista de
Forca-e Luz--CPFL 1,400,549 (BR)
17,463 Empresa Nacional de
Electridad SA 898,735 (SP)
36,000 Empresa Nacional de
Electridad SA ADR 724,500 (CH)
20,000 Enersis S.A. ADR 505,000 (CH)
87,000 Iberdrola I SA 659,608 (SP)
175,000 Seeboard PLC 1,362,690 (UK)
--------------
7,681,963
--------------
UTILITIES: GAS--0.4%
3,930 Electrabel 864,517 (BE)
--------------
UTILITIES: TELEPHONE
SYSTEMS--1.4%
200,000 British
Telecommunications PLC $ 1,253,480 (UK)
15,750 Compania Telecomunicacion
Chile ADR 1,088,719 (CH)
19,040 Telefonica De Argentina
ADR 454,580 (AR)
42,000 Telefonica de Espana 579,592 (SP)
--------------
3,376,371
--------------
VALUE
SHARES (NOTE 2) COUNTRY
- -------------- ----------------
UTILITIES: WATER--0.4%
9,270 Compagnie Generale des
Eaux 892,987 (FR)
--------------
TOTAL COMMON STOCKS
(Cost $210,511,070) 217,061,449
--------------
TOTAL INVESTMENTS
(Cost $210,511,070+) 92.8% 217,061,449
OTHER ASSETS AND
LIABILITIES, NET 7.2% 16,741,993
------- --------------
TOTAL NET ASSETS 100.0% $ 233,803,442
======= ==============
+ The cost of investments for federal income tax
purposes is $210,511,070. At September 30, 1995,
net unrealized appreciation was $6,550,379. This
consisted of aggregate gross unrealized
appreciation for all investments on which there was
an excess of market value over tax cost of
$17,974,811 and aggregate gross unrealized
depreciation of all investments on which there was
an excess of tax cost over market value of
$11,424,432.
COUNTRY COMPOSITION
Argentina (AR) 1.09%
Australia (AS) 0.78%
Belgium (BE) 1.31%
Brazil (BR) 5.16%
Chile (CH) 2.04%
Columbia (CO) 1.19%
Finland (FI) 1.65%
France (FR) 6.17%
Germany (GC) 1.92%
Hong Kong (HK) 3.53%
India (IN) 3.31%
Indonesia (ID) 1.90%
Ireland (IR) 1.24%
Italy (IT) 1.53%
Japan (JA) 28.82%
Malaysia (MY) 5.21%
The Netherlands (NL) 3.03%
Norway (NO) 1.64%
Peru (PR) 0.92%
Singapore (SN) 2.13%
South Africa (SF) 1.72%
Spain (SP) 2.47%
Switzerland (SZ) 1.70%
Thailand (TH) 1.21%
Turkey (TK) 1.88%
United Kingdom (UK) 10.21%
United States (US) 5.11%
Venezuela (VZ) 1.13%
-------
Total 100.00%
-------
-------
PIMCO Advisors Funds SEE ACCOMPANYING NOTES
<PAGE>
40
PIMCO ADVISORS PRECIOUS METALS FUND
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
September 30, 1995
ASSETS:
Securities owned, at value
(Cost of $46,815,076) (Note
2a) $ 50,564,733
Cash 167,443
Dividends receivable 173,806
Receivable for Fund shares
sold 67,105
Other assets 8,263
--------------
Total assets 50,981,350
LIABILITIES:
Payable for investments
purchased $ 302,675
Payable for Fund shares
redeemed 258,122
Accrued expenses:
Investment advisory fee 32,465
Distribution fee 27,213
Servicing fee 10,821
Other 88,233
-------
Total liabilities 719,529
--------------
NET ASSETS $ 50,261,821
--------------
--------------
COMPOSITION OF NET ASSETS:
Capital $ 47,053,918
Accumulated net realized loss
on investments (541,754)
Net unrealized appreciation on
securities 3,749,657
--------------
Total net assets $ 50,261,821
--------------
--------------
CALCULATION OF MAXIMUM OFFERING
PRICE
CLASS A SHARES
Net asset value and redemption
price per share
($7,669,899 DIVIDED BY 622,078
shares) $12.33
Sales charge--5.50% of public
offering price 0.72
---------
Maximum offering price $13.05
---------
---------
CLASS B SHARES
Net asset value and offering
price per share
($250,651 DIVIDED BY 21,059
shares) $11.90
---------
---------
Redemption price per share *
---------
---------
CLASS C SHARES
Net asset value and offering
price per share
($42,341,271 DIVIDED BY 3,558,960
shares) $11.90
---------
---------
Redemption price per share *
---------
---------
- ------------------
* Varies by length of time shares are held (Note 3d)
STATEMENT OF OPERATIONS
For the Year Ended September 30, 1995
INVESTMENT INCOME:
Interest $ 185,916
Dividends (including $998,198
in dividends from foreign
securities less $164,018 in
foreign taxes withheld at
source) 955,399
--------------
Total investment income 1,141,315
--------------
EXPENSES:
Investment advisory fee (Note
3a) $ 434,323
Distribution fee (Class B)
(Note 3b) 202
Distribution fee (Class C)
(Note 3b) 367,587
Servicing fee (Class A) (Note
3b) 22,178
Servicing fee (Class B) (Note
3b) 68
Servicing fee (Class C) (Note
3b) 122,529
Transfer agent and custody
fees 126,000
Professional fees 29,000
Trustees' fees and expenses
(Note 3c) 10,000
Shareholder reports and
notices 42,000
Miscellaneous 24,308
-------
Total expenses 1,178,195
--------------
Net investment loss (36,880)
--------------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain on security
and foreign currency
transactions 814,658
Net unrealized depreciation on
securities (10,774,192)
--------------
Net realized and unrealized
loss on investments (9,959,534)
--------------
Net decrease in net assets
resulting from operations $ (9,996,414)
--------------
--------------
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED SEPTEMBER 30,
-----------------------------------------
1995 1994
----------- --------------
OPERATIONS:
Net investment loss $ (36,880) $ (18,427)
Net realized gain on security
and foreign currency
transactions 814,658 1,046,243
Net unrealized appreciation
(depreciation) on securities (10,774,192) 11,826,750
----------- --------------
Net increase (decrease) in net
assets resulting from
operations (9,996,414) 12,854,566
Net increase (decrease) from
Fund share transactions
(Note 5) (13,795,302) 33,889,902
----------- --------------
Net increase (decrease) in
net assets (23,791,716) 46,744,468
NET ASSETS:
Beginning of year 74,053,537 27,309,069
----------- --------------
End of year $ 50,261,821 $ 74,053,537
=========== ==============
PIMCO Advisors Funds SEE ACCOMPANYING NOTES
<PAGE>
PIMCO ADVISORS PRECIOUS METALS FUND 41
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
September 30, 1995
PRINCIPAL VALUE
AMOUNT (NOTE 2)
- -------------- --------------
SHORT-TERM NOTES--2.2%
$ 1,100,000 General Electric Co.,
5.85%, 10/2/95
(Cost $1,099,821) $ 1,099,821
--------------
SHARES COUNTRY
- -------------- --
COMMON STOCKS--97.8%
MINING SHARES:
LARGE
CAPITALIZATION--61.9%
110,000 Barrick Gold Corp. 2,846,250 (CA)
90,000 Battle Mountain Gold Co. 888,750 (US)
110,000 Driefontein Consolidated
Ltd. ADR* 1,498,750 (SA)
80,030 Echo Bay Mines Ltd. 870,326 (CA)
210,000 Elandsrand Gold Mining
Co., Ltd. ADR 1,207,773 (SA)
140,000 Free State Consolidated
Gold Mines Ltd. ADR 1,592,500 (SA)
1,000,000 Gold Mines of Kalgoorlie
Ltd. 898,100 (AS)
35,000 Goldfields of South
Africa Ltd. ADR 949,375 (SA)
190,000 Hemlo Gold Mines, Inc. 1,900,000 (CA)
150,000 Homestake Mining Co. 2,550,000 (US)
140,000 Kloof Gold Mining Co.,
Ltd. ADR 1,557,500 (SA)
360,000 Newcrest Mining Ltd. 1,575,972 (AS)
70,000 Newmont Mining Corp. 2,975,000 (US)
110,000 Placer Dome Inc. 2,887,500 (CA)
330,000 Placer Pacific Ltd. 692,406 (AS)
120,000 Santa Fe Pacific Gold
Corp.* 1,515,000 (US)
290,000 Sons of Gwalia Ltd. 1,466,530 (AS)
150,000 TVX Gold Inc.* 1,050,000 (CA)
120,000 Vaal Reefs Exploration &
Mining Co. Ltd. ADR 787,500 (SA)
40,000 Western Deep Levels Ltd.
ADR 1,415,000 (SA)
--------------
31,124,232
--------------
MINING SHARES:
MEDIUM
CAPITALIZATION--16.0%
10,000 Ashanti Goldfields Co.,
Ltd. GDR 200,625 (GH)
500,000 Australian Resources Ltd. 449,050 (AS)
160,000 Beatrix Mines Ltd. ADR 1,533,728 (SA)
70,000 Cambior Inc. 740,565 (CA)
50,000 Coeur D'Alene Mines Corp. 1,012,500 (US)
300,000 Deelkraal Gold Mining
Ltd. ADR* 303,960 (SA)
101,000 Great Central Mines N.L. 216,494 (AS)
50,000 Hecla Mining Co.* 606,250 (US)
950,000 Homestake Gold of
Australia Ltd* 1,426,900 (AS)
85,000 Pegasus Gold Inc. 1,158,125 (US)
200,000 Resolute Samantha Ltd. 377,380 (AS)
--------------
8,025,577
--------------
VALUE
SHARES (NOTE 2) COUNTRY
- -------------- ----------------
MINING SHARES:
SMALL
CAPITALIZATION--19.9%
70,000 Agnico-Eagle Mines Ltd. $ 971,250 (CA)
200,000 Delta Gold N.L. Corp.* 440,780 (AS)
380,000 Eagle Mining Corp. 616,626 (AS)
200,000 Emperor Mines Ltd.* 317,000 (AS)
10,000 Firstmiss Gold Inc. 218,750 (US)
205,000 Herald Resources Ltd.* 181,015 (AS)
100,000 Kidston Gold Mines Ltd. 135,860 (AS)
130,000 Macraes Mining Co. Ltd. 150,124 (AS)
100,000 Miramar Mining Corp.* 593,750 (CA)
200,000 Namibian Minerals Corp.* 225,680 (CA)
100,000 North Flinders Mines Ltd. 596,270 (AS)
340,000 Plutonic Resources Ltd. 1,757,868 (AS)
310,000 Randgold & Exploration
Co. Ltd.* 1,209,837 (SA)
150,000 Richmont Mines, Inc.* 334,080 (CA)
600,000 St. Barbara Mines Ltd.* 425,640 (AS)
105,000 St. Helena Gold Mines
Ltd. ADR 892,500 (SA)
25,000 Stillwater Mining Company 518,750 (US)
100,000 Viceroy Resources Corp.* 436,170 (CA)
--------------
10,021,950
--------------
TOTAL COMMON STOCKS
(Cost $45,357,098) 49,171,759
--------------
PREFERRED STOCKS--0.6%
MINING SHARES:
LARGE
CAPITALIZATION--0.6%
9,090 Echo Bay Finance Corp.
$1.75, Series A
(Cost $358,157) 293,153 (CA)
--------------
TOTAL INVESTMENTS
(Cost $46,815,076+) 100.6% 50,564,733
OTHER ASSETS AND
LIABILITIES, NET (0.6%) (302,912)
------- --------------
TOTAL NET ASSETS 100.0% $ 50,261,821
======= ==============
+ The cost of investments for federal income tax
purposes is $46,815,076. At September 30, 1995, net
unrealized appreciation was $3,749,657. This
consisted of aggregate gross unrealized
appreciation for all investments on which there was
an excess of market value over tax cost of
$7,208,019 and aggregate gross unrealized
depreciation of all investments on which there was
an excess of tax cost over market value of
$3,458,362.
COUNTRY COMPOSITION
Australia (AS) 23.33%
Canada (CA) 26.16%
Ghana (GH) 0.40%
South Africa (SA) 25.76%
United States (US) 22.77%
Net Other 1.58%
-------
Total 100.00%
=======
PIMCO Advisors Funds SEE ACCOMPANYING NOTES
<PAGE>
42
PIMCO ADVISORS HIGH INCOME FUND
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
September 30, 1995
ASSETS:
Securities owned, at value
(Cost of $157,028,714) (Note
2a) $ 164,813,228
Cash 1,107,555
Dividends receivable 71,803
Interest receivable 3,723,826
Receivable for investments
sold 5,800,396
Receivable for Fund shares
sold 709,851
Other assets 38,363
--------------
Total assets 176,265,022
LIABILITIES:
Payable for investments
purchased $ 5,420,105
Payable for Fund shares
redeemed 269,278
Outstanding options written,
at value (premiums received
$7,000)
(Notes 2c and 6) 7,125
Dividends payable 283,431
Accrued expenses:
Investment advisory fee 82,460
Distribution fee 98,637
Servicing fee 34,358
Other 219,633
--------
Total liabilities 6,415,027
--------------
NET ASSETS $ 169,849,995
--------------
--------------
COMPOSITION OF NET ASSETS:
Capital $ 277,119,972
Undistributed net investment
income 282,818
Accumulated net realized loss
on investments (115,337,184)
Net unrealized appreciation on
securities 7,784,514
Net unrealized depreciation on
options written (125)
--------------
Total net assets $ 169,849,995
--------------
--------------
CALCULATION OF MAXIMUM OFFERING
PRICE
CLASS A SHARES
Net asset value and redemption
price per share ($7,790,604
DIVIDED BY 981,339 shares) $7.94
Sales charge--4.75% of public
offering price 0.40
---
Maximum offering price $8.34
---
---
CLASS B SHARES
Net asset value and offering
price per share ($4,551,913
DIVIDED BY 574,818 shares) $7.92
---
---
Redemption price per share *
---
---
CLASS C SHARES
Net asset value and offering
price per share ($157,507,478
DIVIDED BY 19.980,092 shares) $7.88
---
---
Redemption price per share *
---
---
- ------------------
* Varies by length of time shares are held (Note 3d)
STATEMENT OF OPERATIONS
For the Year Ended September 30, 1995
INVESTMENT INCOME:
Interest $ 14,724,400
Dividends 594,492
--------------
Total investment income 15,318,892
EXPENSES:
Investment advisory fee (Note
3a) $ 962,851
Distribution fee (Class B)
(Note 3b) 5,016
Distribution fee (Class C)
(Note 3b) 1,161,114
Servicing fee (Class A) (Note
3b) 12,478
Servicing fee (Class B) (Note
3b) 1,672
Servicing fee (Class C) (Note
3b) 387,038
Transfer agent and custody
fees 219,000
Professional fees 57,000
Trustees' fees and expenses
(Note 3c) 28,000
Shareholder reports and
notices 95,000
Miscellaneous 49,497
--------
Total expenses 2,978,666
--------------
Net investment income 12,340,226
--------------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized loss on security
transactions (50,482,353)
Net realized gain on options
written 85,875
Net unrealized appreciation on
securities 57,887,846
Net unrealized depreciation on
options written (125)
--------------
Net realized and unrealized
gain on investments 7,491,243
--------------
Net increase in net assets
resulting from operations $ 19,831,469
--------------
--------------
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED SEPTEMBER 30,
-----------------------------------------
1995 1994
----------- --------------
OPERATIONS:
Net investment income $ 12,340,226 $ 17,102,378
Net realized loss on security
transactions (50,482,353) (4,958,352)
Net realized gain on options
written 85,875 --
Net realized loss on futures
transactions -- (185,398)
Net unrealized appreciation
(depreciation) on securities 57,887,846 (30,020,739)
Net unrealized depreciation on
futures contracts -- (339,625)
Net unrealized depreciation on
options written (125) --
----------- --------------
Net increase (decrease) in net
assets resulting from
operations 19,831,469 (18,401,736)
Dividends paid from net
investment income
Class A (428,115) (419,430)
Class B (50,434) --
Class C (12,256,029) (16,458,390)
Net increase (decrease) from
Fund share transactions
(Note 5) (20,856,837) (42,052,298)
----------- --------------
Net decrease in net assets (13,759,946) (77,331,854)
NET ASSETS:
Beginning of year 183,609,941 260,941,795
----------- --------------
End of year (including
undistributed net investment
income of $282,818 and
$538,138, respectively) $169,849,995 $ 183,609,941
=========== ==============
PIMCO Advisors Funds SEE ACCOMPANYING NOTES
<PAGE>
PIMCO ADVISORS HIGH INCOME FUND 43
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
September 30, 1995
PRINCIPAL VALUE
AMOUNT (NOTE 2)
- -------------- --------------
SHORT-TERM NOTES--4.4%
$ 700,000 Associates Corp. of North
America, 5.69%,
11/16/95 $ 694,911
3,300,000 AT&T Corp., 5.65%-5.72%,
10/20/95-12/8/95 3,280,108
1,700,000 Hewlett-Packard Co.,
5.625%-5.70%,
10/17/95-1/9/96 1,681,609
200,000 Rockwell International
Corp., 5.73%, 10/10/95 199,713
1,600,000 Wal-Mart Stores, Inc.,
5.71%, 10/4/95 1,599,239
--------------
TOTAL SHORT-TERM NOTES
(Cost $7,456,640) 7,455,580
--------------
U.S. GOVERNMENT AGENCY
OBLIGATIONS--3.8%
FEDERAL NATIONAL MORTGAGE
ASSOCIATION
(FNMA)--0.6%
400,000 FNMA, 5.605%, Discount
Notes, 10/26/95 398,443
4,765,496 FNMA, REMIC 93-126, Class
PH, Interest Only,
7/25/08 691,755
--------------
1,090,198
--------------
RESOLUTION TRUST
CORPORATION (RTC)--3.2%
1,908,268 RTC, Series 95-C1, Class
F, 6.90%, 2/25/27 1,669,735
1,277,621 RTC, Series 92-C3, Class
B, 9.05%, 8/25/23 1,316,350
2,823,597 RTC, Series 94-C1, Class
E, 8.00%, 6/25/26 2,478,145
--------------
5,464,230
--------------
TOTAL U.S. GOVERNMENT
AGENCY OBLIGATIONS
(Cost $6,505,467) 6,554,428
--------------
CORPORATE BONDS AND
NOTES--81.6%
BUILDING MATERIALS--1.3%
2,000,000 Schuller International
Group, Inc., 10.875%,
12/15/04 2,215,000
--------------
CHEMICALS--1.6%
250,000 Acetex Corp., 9.75%,
10/1/03 249,220
3,500,000 G-I Holdings Inc., 0.00%,
10/1/98 2,537,500
--------------
2,786,720
--------------
CONTAINERS--4.6%
3,000,000 Owens-Illinois Inc.,
11.00%, 12/1/03 3,296,250
2,000,000 Stone Container Corp.,
11.50%, 10/1/04 2,100,000
2,500,000 Sweetheart Cup, Inc.,
9.625%, 9/1/00 2,487,500
--------------
7,883,750
--------------
COSMETICS--0.9%
1,500,000 Revlon Inc., 9.50%,
6/1/99 1,500,000
--------------
DEFENSE--1.0%
1,500,000 Alliant Techsystems Inc.,
11.75%, 3/1/03 1,638,750
--------------
ELECTRONICS--0.9%
1,500,000 Ametek, Inc., 9.75%,
3/15/04 1,597,500
--------------
ENTERTAINMENT AND
LEISURE--4.8%
3,000,000 Bally's Grand, Inc.,
10.375%, 12/15/03 2,955,000
750,000 Bally's Park Place, Inc.,
9.25%, 3/15/04 733,125
3,500,000 Coleman Holdings Inc.,
0.00%, 5/27/98 2,730,000
1,750,000 Showboat, Inc., 9.25%,
5/1/08 1,653,750
--------------
8,071,875
--------------
PRINCIPAL VALUE
AMOUNT (NOTE 2)
- -------------- --------------
FINANCIAL SERVICES--1.2%
$ 2,000,000 Navistar Financial Corp.,
8.875%, 11/15/98 $ 2,010,000
--------------
FOOD--1.2%
2,000,000 Doskocil Companies Inc.,
9.75%, 7/15/00 1,965,000
--------------
FOREST AND PAPER
PRODUCTS--2.8%
3,000,000 Repap Wisconsin, Inc.,
9.25%, 2/1/02 2,887,500
1,750,000 Stone Consolidated Corp.,
10.25% 12/15/00 1,846,250
--------------
4,733,750
--------------
HEALTH MANAGEMENT--3.5%
2,750,000 Abbey Healthcare Group
Inc., 9.50%, 11/1/02 2,866,875
2,000,000 Genesis Health Ventures,
Inc., 9.75%, 6/15/05 2,090,000
1,000,000 Tenet Healthcare Corp.,
9.625%, 9/1/02 1,060,000
--------------
6,016,875
--------------
INSURANCE--2.1%
2,000,000 Phoenix Re Corp., 9.75%,
8/15/03 2,080,000
1,500,000 Reliance Group Holdings,
Inc. 9.00%, 11/15/00 1,498,125
--------------
3,578,125
--------------
LODGING--2.5%
3,500,000 Hammons, (J.Q.) Hotels
L.P., 8.875%, 2/15/04 3,272,500
1,000,000 HMH Properties, Inc.,
9.50%, 5/15/05 985,000
--------------
4,257,500
--------------
MEDIA--19.2%
3,500,000 Act III Broadcasting
Inc., 9.625%, 12/15/03 3,552,500
2,000,000 Benedek Broadcasting
Corp., 11.875%, 3/1/05 2,115,000
4,000,000 Cablevision Systems
Corp., 9.875%-10.75%,
4/1/04-4/1/23 4,197,500
2,750,000 Century Communications
Corp., 11.875%,
10/15/03 2,921,875
1,500,000 CF Cable TV Inc., 9.125%,
7/15/07 1,515,000
2,500,000 Continental Cablevision,
Inc., 11.00%, 6/1/07 2,762,500
1,500,000 Granite Broadcasting
Corp., 10.375%, 5/15/05 1,530,000
1,500,000 Infinity Broadcasting
Corp., 10.375%, 3/15/02 1,612,500
1,000,000 Jones Intercable, Inc.,
9.625%, 3/15/02 1,045,000
2,500,000 K-III Communications
Inc., 10.25%, 6/1/04 2,662,500
2,000,000 Rogers Cablesystems of
America, Inc., 10.00%,
3/15/05 2,067,506
3,100,000 SCI Television, Inc.,
11.00%, 6/30/05 3,278,250
750,000 Sinclair Broadcast Group,
Inc., 10.00%, 9/30/05 766,875
2,500,000 TeleWest Communications
PLC, 9.625%, 10/1/06 2,537,500
--------------
32,564,506
--------------
MISCELLANEOUS
MANUFACTURING--4.9%
2,500,000 American Standard Inc.,
11.375%, 5/15/04 2,750,000
2,750,000 Figgie International
Inc., 9.875%, 10/1/99 2,773,053
2,750,000 Sequa Corp.,
8.75%-10.00%,
5/14/01-12/15/01 2,782,590
--------------
8,305,643
--------------
PIMCO Advisors Funds SEE ACCOMPANYING NOTES
<PAGE>
44
PIMCO ADVISORS HIGH INCOME FUND
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT (NOTE 2)
- -------------- --------------
OIL AND GAS--8.9%
$ 3,000,000 Ferrellgas, Inc., 10.00%,
8/1/01 $ 3,120,000
3,575,000 Gulf Canada Resources
Ltd., 9.25%, 1/15/04 3,539,250
3,395,000 HS Resources, Inc.,
9.875%, 12/1/03 3,339,831
1,500,000 Nuevo Energy Co., 12.50%,
6/15/02 1,627,500
4,000,000 Triton Energy Corp.,
0.00%, 11/1/97 3,425,000
--------------
15,051,581
--------------
PRIVATE ASSET BACKED:
MORTGAGES--1.9%
1,376,350 MBLAC-NY REO Associates
L.P., Loan
Participation, 9.375%,
2/1/98 1,376,350
1,000,000 Nationsbanc Mortgage
Capital Corp., Multi-
Family Trust
Certificate, 95-M2,
Class UC, 8.195%,
5/25/25 687,656
1,350,000 Uniprop, REMIC 93-1,
Class C, 8.43%,
12/15/25 1,220,906
--------------
3,284,912
--------------
PUBLISHING--2.3%
4,000,000 World Color Press, Inc.,
9.125%, 3/15/03 3,990,000
--------------
RETAIL--1.8%
1,000,000 Pathmark Stores, Inc.,
0.00%, until 11/1/99
(10.75% to 11/1/03) 655,000
2,500,000 Pathmark Stores, Inc.,
9.625%, 5/1/03 2,481,250
--------------
3,136,250
--------------
TELECOMMUNICATIONS--3.5%
1,000,000 Metrocall, Inc., 10.375%,
10/1/07 1,015,000
2,000,000 Paging Network, Inc.,
8.875%-10.125%,
2/1/06-8/1/07 2,015,000
2,750,000 Rogers Cantel Mobile
Communications, Inc.,
10.75%, 11/1/01 2,887,500
--------------
5,917,500
--------------
TEXTILES--1.8%
3,000,000 WestPoint Stevens, Inc.,
8.75%, 12/15/01 2,977,500
--------------
UTILITIES: ELECTRIC--7.8%
3,500,000 AES Corp., 9.75%, 6/15/00 3,574,375
2,000,000 California Energy Co.,
9.875%, 6/30/03 2,040,000
1,900,000 California Energy Co.,
Inc., 0.00%, until
1/15/97 (10.25% to
1/15/04) 1,676,750
3,000,000 CTC Mansfield Funding
Corp., 11.125%, 9/30/16 3,080,220
3,000,000 Long Island Lighting Co.,
7.125%, 6/1/05 2,833,938
--------------
13,205,283
--------------
UTILITIES: GAS--1.1%
1,750,000 AmeriGas Partners, L.P.,
10.125%, 4/15/07 1,863,750
--------------
TOTAL CORPORATE BONDS AND
NOTES
(Cost $130,801,160) 138,551,770
--------------
PRINCIPAL VALUE
AMOUNT (NOTE 2)
- -------------- --------------
SOVEREIGN ISSUES--3.6%
$ 4,750,000(a) Republic of Argentina,
Floating Rate Note,
6.812%, 3/31/05 $ 2,945,000
1,000,000 Republic of Argentina,
Floating Rate Note,
5.00%, 3/31/23 480,000
1,500,000 United Mexican States
Tesobonos, 0.00%,
1/18/96 1,464,000
2,000,000 United Mexican States,
Value Recovery Rights,
12/31/19 0
2,000,000 United Mexican States,
Series B, 6.25%,
12/31/19 1,207,500
--------------
TOTAL SOVEREIGN ISSUES
(Cost $6,243,672) 6,096,500
--------------
SHARES
- --------------
PREFERRED STOCKS--3.6%
BANKS--1.6%
25,000 First Nationwide Bank
FSB, 11.50% 2,775,000
--------------
MEDIA--2.0%
133,200 Newscorp. Overseas Ltd.,
8.625%, Series A 3,379,950
--------------
TOTAL PREFERRED STOCKS
(Cost $6,021,775) 6,154,950
--------------
TOTAL SECURITIES OWNED
(Cost $157,028,714+) 164,813,228
--------------
CONTRACTS
- --------
OUTSTANDING CALL OPTIONS
WRITTEN--(0.0%)
50 Republic of Argentina,
Floating Rate Note,
6.812%, 3/31/05,
expiring November '95 @
$65.125
(Premium Received $7,000) (7,125)
--------------
TOTAL INVESTMENTS, NET OF
OUTSTANDING OPTIONS
WRITTEN
(Cost $157,021,714) 97.0% 164,806,103
OTHER ASSETS AND
LIABILITIES, NET 3.0% 5,043,894
------- --------------
TOTAL NET ASSETS 100.0% $ 169,849,995
======= ==============
+ The cost of investments for federal income tax
purposes is $157,028,714. At September 30, 1995,
net unrealized appreciation was $7,784,514. This
consisted of aggregate gross unrealized
appreciation for all investments on which there was
an excess of market value over tax cost of
$8,204,790 and aggregate gross unrealized
depreciation of all investments on which there was
an excess of tax cost over market value of
$420,276.
(a) See Outstanding Call Options Written.
PIMCO Advisors Funds SEE ACCOMPANYING NOTES
<PAGE>
PIMCO ADVISORS TOTAL RETURN INCOME FUND 45
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
September 30, 1995
ASSETS:
Securities owned, at value
(Cost of $86,403,605) (Note
2a) $ 87,119,928
Foreign currency holdings, at
value
(Cost of $33,534) (Note 2b) 34,365
Cash 1,944,474
Variation margin on open
futures contracts (Note 2d) 446,170
Interest receivable 544,884
Receivable for investments
sold 661,538
Receivable for Fund shares
sold 1,724,201
Receivable for forward foreign
currency contracts sold
(Notes 2e and 7) 3,048,315
Unamortized organization costs
(Note 2j) 42,279
Other 40,504
--------------
Total assets 95,606,658
LIABILITIES:
Payable for investments
purchased $ 8,383
Payable for Fund shares
redeemed 58,301
Forward foreign currency
contracts sold, at value
(Cost $3,048,315) (Notes 2e
and 7) 3,172,416
Outstanding options written,
at value (premiums received
$31,571)
(Notes 2c and 6) 28,000
Dividends payable 34,204
Accrued expenses:
Investment advisory fee 41,238
Distribution fee 30,143
Servicing fee 17,182
Other 66,418
--------
Total liabilities 3,456,285
--------------
NET ASSETS $ 92,150,373
--------------
--------------
COMPOSITION OF NET ASSETS:
Capital $ 89,529,908
Undistributed net investment
income 66,840
Undistributed net realized
gain on investments 1,816,227
Net unrealized appreciation on
securities 716,323
Net unrealized appreciation on
foreign currency holdings 831
Net unrealized depreciation on
forward foreign currency
contracts (124,101)
Net unrealized appreciation on
options written 3,571
Net unrealized appreciation on
futures contracts (Note 2d) 140,774
--------------
Total net assets $ 92,150,373
--------------
--------------
CALCULATION OF MAXIMUM OFFERING
PRICE
CLASS A SHARES
Net asset value and redemption
price per share ($37,714,002
DIVIDED BY 3,524,056 shares) $10.70
Sales charge--4.75% of public
offering price 0.53
---------
Maximum offering price $11.23
---------
---------
CLASS B SHARES
Net asset value and offering
price per share ($8,805,374
DIVIDED BY 820,736 shares) $10.73
---------
---------
Redemption price per share *
---------
---------
CLASS C SHARES
Net asset value and offering
price per share ($45,630,997
DIVIDED BY 4,264,605 shares) $10.70
---------
---------
Redemption price per share *
---------
---------
- ------------------
* Varies by length of time shares are held (Note 3d)
STATEMENT OF OPERATIONS
For the Period Ended September 30, 1995*
INVESTMENT INCOME:
Interest $ 2,266,473
EXPENSES:
Investment advisory fee (Note
3a) $ 214,491
Distribution fee (Class B)
(Note 3b) 11,353
Distribution fee (Class C)
(Note 3b) 129,761
Servicing fee (Class A) (Note
3b) 42,334
Servicing fee (Class B) (Note
3b) 3,784
Servicing fee (Class C) (Note
3b) 43,254
Transfer agent and custody
fees 57,640
Professional fees 30,000
Trustees' fees and expenses
(Note 3c) 4,500
Shareholder reports and
notices 15,000
Miscellaneous 31,109
-------
Total expenses 583,226
--------------
Net investment income 1,683,247
--------------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain on security
transactions and foreign
currency holdings 173,032
Net realized gain on forward
foreign currency contracts 206,743
Net realized gain on options
written 225,852
Net realized gain on futures
transactions 1,235,669
Net unrealized appreciation on
securities 716,323
Net unrealized appreciation on
foreign currency holdings 831
Net unrealized depreciation on
forward foreign currency
contracts (124,101)
Net unrealized appreciation on
options written 3,571
Net unrealized appreciation on
futures contracts 140,774
--------------
Net realized and unrealized
gain on investments 2,578,694
--------------
Net increase in net assets
resulting from operations $ 4,261,941
--------------
--------------
- ------------------
* The Fund commenced operations on December 22, 1994.
STATEMENT OF CHANGES IN NET ASSETS
PERIOD ENDED
SEPTEMBER
30,
1995*
------------
OPERATIONS:
Net investment income $1,683,247
Net realized gain on security
transactions and foreign
currency transactions 173,032
Net realized gain on forward
foreign currency contracts 206,743
Net realized gain on options
written 225,852
Net realized gain on futures
transactions 1,235,669
Net unrealized appreciation on
securities 716,323
Net unrealized appreciation on
foreign currency holdings 831
Net unrealized depreciation on
forward foreign currency
contracts (124,101)
Net unrealized appreciation on
options written 3,571
Net unrealized appreciation on
futures contracts 140,774
-
------------
Net increase in net assets
resulting from operations 4,261,941
Dividends paid from net
investment income
Class A (848,158)
Class B (59,051)
Class C (734,267)
Net increase from Fund share
transactions (Note 5) 89,529,908
-
------------
Net increase in net assets 92,150,373
NET ASSETS:
Beginning of period --
------------
End of period (including
undistributed net investment
income of $66,840) $92,150,373
-
-
------------
------------
- ------------------
* The Fund commenced operations on December 22, 1994.
PIMCO Advisors Funds SEE ACCOMPANYING NOTES
<PAGE>
46
PIMCO ADVISORS TOTAL RETURN INCOME FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
September 30, 1995
PRINCIPAL VALUE
AMOUNT (NOTE 2)
- -------------- --------------
SHORT-TERM NOTES--46.7%
$ 4,000,000 Abbott Laboratories,
5.69%,10/11/95* $ 3,993,678
3,800,000 Associates Corp. of North
America, 5.68%-5.69%,
11/16/95-11/27/95* 3,769,615
3,700,000 AT&T Corp., 5.64%-5.69%,
10/20/95-11/21/95* 3,681,290
1,500,000 Coca-Cola Co.,
5.63%-6.07%,
10/11/95-12/4/95* 1,488,577
1,500,000 Commonwealth Bank of
Australia, 5.63%,
10/13/95* 1,497,185
3,000,000 DuPont (E.I.) De Nemours
& Co., 5.66%-6.03%,
10/3/95-11/9/95* 2,987,402
3,400,000 General Electric Capital
Corp., 5.73%-6.50%,
10/2/95-11/10/95* 3,392,510
3,900,000 Hewlett-Packard Co.,
5.59%-5.67%,
10/17/95-1/9/96* 3,870,533
4,000,000 Kellogg Co., 5.70%,
10/25/95* 3,984,800
300,000 Minnesota Mining &
Manufacturing Co.,
5.73%, 11/14/95* 297,899
2,100,000 National Rural Utilities
Cooperative Finance
Corp., 5.72%,
10/10/95-10/12/95* 2,096,679
1,000,000 Ontario Hydro, 5.66%,
12/8/95* 988,780
4,000,000 US West Communications
Inc., 5.72%-5.89%,
10/5/95-10/24/95* 3,991,203
3,500,000 Wal-Mart Stores, Inc.,
5.71%,10/6/95* 3,497,224
3,500,000 Western Australian
Treasury Corp., 5.70%,
10/24/95-11/15/95* 3,485,513
--------------
TOTAL SHORT-TERM NOTES
(Cost $43,024,538) 43,022,888
--------------
U.S. TREASURY
OBLIGATIONS--1.6%
1,455,000 U.S. Treasury Bills,
5.34%-5.76%,
10/26/95-2/8/96*
(Cost $1,436,446) 1,436,761
--------------
U.S. GOVERNMENT AGENCY
OBLIGATIONS--31.4%
FEDERAL HOME LOAN
MORTGAGE CORP.
(FHLMC)--6.6%
5,932,075 FHLMC, 30-Year Adjustable
Rate Mortgages,
5.88%-7.061%,
1/1/24-8/1/24* 6,054,925
--------------
FEDERAL NATIONAL MORTGAGE
ASSOCIATION
(FNMA)--14.1%
6,483,576 FNMA, 30-Year Adjustable
Rate Mortgages,
6.126%-7.476%,
10/1/23-3/1/25* 6,635,230
4,000,000 FNMA, 5.60%, Discount
Notes,
10/26/95-11/2/95* 3,982,650
2,400,420 FNMA, REMIC 91-113, Class
ZC, 8.50%, 11/25/18* 2,407,403
--------------
13,025,283
--------------
GOVERNMENT NATIONAL
MORTGAGE ASSOCIATION
(GNMA)--10.7%
9,736,662 GNMA, 30-Year Adjustable
Rate Mortgages, 6.50%,
3/20/23-1/20/25* 9,871,429
--------------
TOTAL U.S. GOVERNMENT
AGENCY OBLIGATIONS
(Cost $28,370,166) 28,951,637
--------------
CORPORATE BONDS AND
NOTES--7.1%
FINANCIAL SERVICES--1.8%
1,000,000 General Motors Acceptance
Corp., Medium-Term
Note, 7.75%, 7/18/96 1,012,510
625,000 Morgan Stanley Group
Inc., 7.79%, 2/3/97 637,725
--------------
1,650,235
--------------
PRINCIPAL VALUE
AMOUNT (NOTE 2)
- -------------- --------------
MEDIA--1.1%
$ 1,000,000 Time Warner Inc., 7.45%,
2/1/98 $ 1,017,040
--------------
OIL AND GAS--0.9%
800,000 Maxus Energy Corp.,
Medium-Term Note,
10.10%, 10/18/95 800,576
--------------
PRIVATE ASSET BACKED:
MORTGAGES--2.1%
859,826 DLJ Mortgage Acceptance
Corp., REMIC, 94-10,
Class 1A, Floating
Rate, 6.6197%, 5/25/24* 874,605
1,080,938 Ryland Mortgage
Securities Corp.,
REMIC, 93-8, Class A,
Floating Rate, 7.855%,
9/25/23* 1,097,152
--------------
1,971,757
--------------
TRANSPORTATION: AIR--1.2%
1,000,000 Delta Air Lines, Inc.,
10.14%, 8/14/12 1,143,370
--------------
TOTAL CORPORATE BONDS AND
NOTES
(Cost $6,394,490) 6,582,978
--------------
SOVEREIGN ISSUES--7.7%
3,303,002 Deutschland Republic,
6.25%, 1/04/24 2,843,881
2,598,484 Government of Canada,
8.75%, 12/1/05 2,782,171
1,000,000 Republic of Argentina,
Floating Rate Note,
6.812%, 3/31/05 620,000
900,000 United Mexican States
Tesobonos, .00%,
1/18/96 878,400
--------------
TOTAL SOVEREIGN ISSUES
(Cost $7,176,629) 7,124,452
--------------
CONTRACTS
- --------------
PURCHASED PUT
OPTIONS--0.0%
23 Euro Dollar Futures,
expiring June '96 @
$90.75
(Cost $411) 287
--------------
OTC INTEREST RATE
CAPS--0.0%
37 OTC Interest Rate Cap 3
Month LIBOR, expiring
March '96 @ $88
(Cost $925) 925
--------------
TOTAL SECURITIES OWNED
(Cost $86,403,605+) 87,119,928
--------------
OUTSTANDING PUT OPTIONS WRITTEN--(0.0%)
80 Eurodollar Futures, expiring
March '96 @ $94 (Premium
Received $31,571) (28,000)
--------------
TOTAL INVESTMENTS, NET OF
OUTSTANDING OPTIONS
WRITTEN
(Cost $86,372,034) 94.5% 87,091,928
OTHER ASSETS AND
LIABILITIES, NET 5.5% 5,058,445
------- --------------
TOTAL NET ASSETS 100.0% $ 92,150,373
======= ==============
+ The cost of investments for federal income tax
purposes is $86,403,605. At September 30, 1995, net
unrealized appreciation was $716,323. This
consisted of aggregate gross unrealized
appreciation for all investments on which there was
an excess of market value over tax cost of $861,224
and aggregate gross unrealized depreciation of all
investments on which there was an excess of tax
cost over market value of $144,901.
* Either all or a portion of these securities have
been segregated with the custodian to cover forward
foreign currency contracts, futures contracts, and
written options on futures contracts.
PIMCO Advisors Funds SEE ACCOMPANYING NOTES
<PAGE>
PIMCO ADVISORS TAX EXEMPT FUND 47
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
September 30, 1995
ASSETS:
Securities owned, at value
(Cost of $53,283,012) (Note
2a) $ 56,273,825
Cash 346,604
Interest receivable 948,306
Receivable for Fund shares
sold 2,663
Other assets 10,502
--------------
Total assets 57,581,900
LIABILITIES:
Payable for Fund shares
redeemed $ 181,646
Dividends payable 36,173
Accrued expenses:
Investment advisory fee 28,571
Distribution fee 34,036
Servicing fee 11,904
Other 76,414
----------
Total liabilities 368,744
--------------
NET ASSETS $ 57,213,156
--------------
--------------
COMPOSITION OF NET ASSETS:
Capital $ 55,408,658
Accumulated net investment
loss (131,752)
Accumulated net realized loss
on investments (1,054,563)
Net unrealized appreciation on
securities 2,990,813
--------------
Total net assets $ 57,213,156
--------------
--------------
CALCULATION OF MAXIMUM OFFERING
PRICE
CLASS A SHARES
Net asset value and redemption
price per share ($2,700,838
DIVIDED BY 228,256 shares) $11.83
Sales charge--4.75% of public
offering price 0.59
---------
Maximum offering price $12.42
---------
---------
CLASS B SHARES
Net asset value and offering
price per share ($288,258
DIVIDED BY 24,349 shares) $11.84
---------
---------
REDEMPTION PRICE PER SHARE *
---------
---------
CLASS C SHARES
Net asset value and offering
price per share ($54,224,060
DIVIDED BY 4,586,079 shares) $11.82
---------
---------
REDEMPTION PRICE PER SHARE *
---------
---------
- ------------------
* Varies by length of time shares are held (Note 3d)
STATEMENT OF OPERATIONS
For the Year Ended September 30, 1995
INVESTMENT INCOME:
Interest $ 3,742,211
EXPENSES:
Investment advisory fee (Note
3a) $ 369,918
Distribution fee (Class B)
(Note 3b) 559
Distribution fee (Class C)
(Note 3b) 442,382
Servicing fee (Class A) (Note
3b) 6,485
Servicing fee (Class B) (Note
3b) 186
Servicing fee (Class C) (Note
3b) 147,461
Transfer agent and custody
fees 64,000
Professional fees 34,000
Trustees' fees and expenses 9,000
Shareholder reports and
notices 21,000
Miscellaneous 18,888
-------
Total expenses 1,113,879
--------------
Net investment income 2,628,332
--------------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized loss on security
transactions (507,989)
Net unrealized appreciation on
securities 3,556,291
--------------
Net realized and unrealized
gain on investments 3,048,302
--------------
Net increase in net assets
resulting from operations $ 5,676,634
--------------
--------------
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED SEPTEMBER 30,
-----------------------------------------
1995 1994
---------- --------------
OPERATIONS:
Net investment income $ 2,628,332 $ 3,251,256
Net realized gain (loss) on
security transactions (507,989) 191,890
Net unrealized appreciation
(depreciation) on securities 3,556,291 (9,271,830)
---------- --------------
Net increase (decrease) in net
assets resulting from
operations 5,676,634 (5,828,684)
Dividends paid from net
investment income
Class A (130,153) (139,595)
Class B (2,846) --
Class C (2,539,832) (3,234,994)
Distributions paid from net
realized gain on investments
Class A -- (46,605)
Class C -- (1,353,726)
Net decrease from Fund share
transactions (Note 5) (16,730,623) (2,783,860)
---------- --------------
Net decrease in net assets (13,726,820) (13,387,464)
NET ASSETS:
Beginning of year 70,939,976 84,327,440
---------- --------------
End of year (including
accumulated net investment
loss of $131,752 and
$153,448, respectively) $ 57,213,156 $ 70,939,976
========== =============
PIMCO Advisors Funds SEE ACCOMPANYING NOTES
<PAGE>
48
PIMCO ADVISORS TAX EXEMPT FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
September 30, 1995
PRINCIPAL VALUE
AMOUNT (NOTE 2)
- -------------- --------------
MUNICIPAL BONDS AND
NOTES--98.4%
ARIZONA--4.9%
$ 3,000,000 Salt River Agricultural
Improvement and Power
District, Electric
Revenue Bonds, Series
1992 D and 1993 B,
5.25%-5.50%,
1/1/13-1/1/25 $ 2,827,500
--------------
CALIFORNIA--9.7%
500,000 City of San Jose,
Redevelopment Agency,
Merged Area
Redevelopment Project,
Tax Allocation Bonds,
(MBIA Insured). Series
1993, 6.00%, 8/1/15 509,375
3,000,000 Los Angeles Convention
and Exhibition Center
Authority, Certificates
of Participation,
Series 1985,
(Prerefunded 12/1/05),
9.00%, 12/1/10-12/1/20 3,978,749
1,000,000 Los Angeles County
Transportation
Commission, Sales Tax
Revenue Refunding
Bonds, Series 1991 B,
6.50%, 7/1/13 1,033,750
--------------
5,521,874
--------------
DISTRICT OF
COLUMBIA--1.8%
1,000,000 Metropolitan Washington
Airports Authority
System Revenue Bond,
(MBIA Insured), Series
1992 A, 6.625%, 10/1/19 1,040,000
--------------
FLORIDA--3.6%
1,000,000 Jacksonville Electric
Authority, Bulk Power
Supply System Revenue
Bonds, (Prerefunded
10/01/00) (Scherer 4
Project, Issue One,
Series 1991 A), 6.75%,
10/1/21 1,116,250
1,000,000 Jacksonville Electric
Authority, St. Johns
River System Revenue
Bonds, Issue Two,
Series 11, 5.375%,
10/1/13 956,250
--------------
2,072,500
--------------
GEORGIA--3.4%
2,000,000 Atlanta, Georgia, General
Obligation Bonds,
5.60%, 12/1/18 1,937,500
--------------
HAWAII--1.9%
1,000,000 State of Hawaii, Airport
System Revenue Bonds,
Second Series of 1991,
6.90%, 7/1/12 1,098,750
--------------
ILLINOIS--9.1%
1,000,000 Illinois, Educational
Facility Authority,
Northwestern University
Revenue Bonds,
(Prerefunded 12/1/01),
Series 1985, 6.90%,
12/1/21 1,133,750
1,000,000 State of Illinois,
General Obligation
Bonds, Series of March
1992, 6.25%, 10/1/12 1,032,500
1,000,000 State of Illinois,
Highway Authority,
Highway Revenue Bonds,
Series 1992 A, 6.375%,
1/1/15 1,025,000
1,000,000 State of Illinois, Sales
Tax Revenue Refunding
Bonds, Series Q, 6.00%,
6/15/12 1,037,500
1,000,000 University of Illinois
Board of Trustees,
Auxiliary Facility
System Revenue Bonds,
Series 1991, 5.75%,
4/1/22 967,500
--------------
5,196,250
--------------
PRINCIPAL VALUE
AMOUNT (NOTE 2)
- -------------- --------------
INDIANA--6.0%
$ 1,000,000 Indiana Municipal Power
Agency, Power Supply
System Revenue Bonds,
(Prerefunded 1/1/00),
Series 1989 A, 7.10%,
1/1/15 $ 1,113,750
1,300,000 Indianapolis, Local
Public Improvement Bond
Bank, Transportation
Revenue Bond, Series
1992 and 1992 D,
6.00%-6.75%,
7/1/10-2/1/14 1,385,625
1,000,000 Petersburg County
Pollution Control
Revenue Refunding
Bonds, Indianapolis
Power & Light, Series
1993 B, 5.40%, 8/1/17 941,250
--------------
3,440,625
--------------
MASSACHUSETTS--1.6%
1,000,000 Massachusetts Water
Resources Authority,
Revenue Bonds, Series
1993 B, 5.50%, 3/1/17 942,500
--------------
MISSISSIPPI--4.4%
2,670,000 State of Mississippi,
General Obligation
Bonds, Series 1994 A,
5.10%,
11/15/11-11/15/12 2,541,669
--------------
NEVADA--1.9%
1,000,000 State of Nevada, General
Purpose Revenue Bonds,
6.50%, 10/1/09 1,061,250
--------------
NEW HAMPSHIRE--1.9%
1,000,000 New Hampshire Turnpike
System, Refunding
Revenue Bonds, (FGIC
Insured), Series 1991
A, 6.75%, 11/1/11 1,096,250
--------------
NEW JERSEY--3.8%
2,000,000 New Jersey Turnpike
Authority, Turnpike
Revenue Bonds, Series
1992 C, 6.50%, 1/1/16 2,162,500
--------------
NEW YORK--11.9%
1,000,000 New York City Municipal
Water Finance
Authority, Series 1992
C, Water & Sewer System
Revenue Bonds, (FGIC
Insured), 4.60%,
6/15/22 1,000,000
1,000,000 New York City Municipal
Water Finance
Authority, Water and
Sewer System Revenue
Bonds, (Prerefunded
6/15/01), Series 1991
C, 7.375%, 6/15/13 1,155,000
1,000,000 New York City, General
Obligation Bonds, (MBIA
Insured), Series B,
4.60%, 8/15/04 1,000,000
650,000 State of New York, Local
Government Assistance
Corp., Sales Tax
Revenue Bonds, Series
1992 C, 6.00%, 4/1/12 663,813
1,500,000 State of New York,
Medical Care Facility
Finance Agency, Revenue
Bonds, (FHA Insured),
Series 1995 A, 6.125%,
2/15/15 1,500,000
1,000,000 State of New York,
Thruway Authority,
Revenue Bonds, (MBIA
Insured), Series 1995
A, 5.50%, 4/1/15 962,500
PIMCO Advisors Funds SEE ACCOMPANYING NOTES
<PAGE>
PIMCO ADVISORS TAX EXEMPT FUND 49
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT (NOTE 2)
- -------------- --------------
$ 500,000 Triborough Bridge &
Tunnel Authority,
General Purpose Revenue
Bonds, Series Y, 6.00%,
1/1/12 $ 518,125
--------------
6,799,438
--------------
NORTH DAKOTA--1.9%
1,000,000 Mercer County Pollution
Control Revenue Bonds,
Series 1991, 6.90%,
2/1/19 1,070,000
--------------
OHIO--1.7%
1,000,000 Cleveland Water and Sewer
Revenue Refunding and
Improvement Revenue
Bonds, (MBIA Insured),
Series 1993 G, Number
1, 5.50%, 1/1/21 971,250
--------------
PENNSYLVANIA--4.3%
1,525,000 City of Pittsburgh,
General Obligation
Bonds, (AMBAC Insured)
Series 1993 A, 5.50%,
9/1/14 1,500,219
1,000,000 State of Pennsylvania,
Industrial Development
Authority Revenue
Bonds, (AMBAC Insured),
5.50%, 1/1/14 960,000
--------------
2,460,219
--------------
SOUTH CAROLINA--3.4%
1,750,000 Charleston County,
Resource Recovery
Revenue Bonds, (Foster
Wheeler Charleston
Resource Recovery
Project), Series 1987
A, 9.25%, 1/1/10 1,925,000
--------------
TEXAS--14.3%
1,000,000 Board of Regents of the
University of Texas
System, Revenue
Financing System
Refunding Bonds, Series
1991 B, 6.75%, 8/15/13 1,076,250
750,000 City of Austin, Public
Improvement Refunding
Bonds, Series 1993 A,
4.80%, 9/1/08 716,250
1,000,000 Dallas Water and Sewer
System Revenue Bonds,
Series 1994, 5.25%,
4/1/13 957,500
PRINCIPAL VALUE
AMOUNT (NOTE 2)
- -------------- --------------
$ 2,000,000 Houston, Texas, Water and
Sewer System Revenue
Bonds, Series 1993 B,
5.00%, 12/01/18 $ 1,757,500
2,000,000 San Antonio, Texas,
Electric & Gas Revenue
Bonds, Series B, 5.00%,
2/1/16 1,777,500
2,000,000 State of Texas, General
Obligation Bonds,
Series 1992 C, 5.50%,
4/1/20 1,907,500
--------------
8,192,500
--------------
WASHINGTON--3.9%
1,000,000 Kent School District No.
415 King County,
Washington, Unlimited
Tax General Obligation
Bonds, Series 1991 B,
6.70%, 12/1/11 1,108,750
1,000,000 Municipality of
Metropolitan Seattle,
Sewer Revenue Bonds,
(Prerefunded 1/1/00),
Series T, 6.875%,
1/1/31 1,107,500
--------------
2,216,250
--------------
WYOMING--3.0%
1,700,000 Lincoln County Pollution
Industrial Control
Revenue Bonds Variable
Rate Demand Note,
4.60%, 11/1/14 1,700,000
--------------
TOTAL INVESTMENTS
(Cost $53,283,012+) 98.4% 56,273,825
OTHER ASSETS AND
LIABILITIES, NET 1.6% 939,331
------- --------------
TOTAL NET ASSETS 100.0% $ 57,213,156
======= ==============
+ The cost of investments for federal income tax
purposes is $53,000,207. At September 30, 1995, net
unrealized appreciation was $3,273,618. This
consisted of aggregate gross unrealized
appreciation for all investments on which there was
an excess of market value over tax cost of
$3,700,625 and aggregate gross unrealized
depreciation of all investments on which there was
an excess of tax cost over market value of
$427,007.
PIMCO Advisors Funds SEE ACCOMPANYING NOTES
<PAGE>
50
PIMCO ADVISORS U.S. GOVERNMENT FUND
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
September 30, 1995
ASSETS:
Securities owned, at value
(Cost of $325,969,809) (Note
2a) $ 334,100,861
Cash 2,283,249
Variation margin on open
futures contracts (Note 2d) 610,656
Interest receivable 1,677,276
Receivable for investments
sold 219,187
Receivable for Fund shares
sold 607,338
Other assets 67,321
--------------
Total assets 339,565,888
LIABILITIES:
Payable for investments
purchased $ 32,818,251
Payable for Fund shares
redeemed 776,608
Dividends payable 355,107
Outstanding options written,
at value (premiums received
$101,682) (Notes 2c and 6) 8,312
Accrued expenses:
Investment advisory fee 146,241
Distribution fee 178,696
Servicing fee 62,847
Other 214,319
----------
Total liabilities 34,560,381
--------------
NET ASSETS $ 305,005,507
--------------
--------------
COMPOSITION OF NET ASSETS:
Capital $ 372,486,113
Undistributed net investment
income 279,541
Accumulated net realized loss
on investments (76,180,944)
Net unrealized appreciation on
securities 8,131,052
Net unrealized appreciation on
options written 93,370
Net unrealized appreciation on
futures contracts (Note 2d) 196,375
--------------
Total net assets $ 305,005,507
--------------
--------------
CALCULATION OF MAXIMUM OFFERING
PRICE
CLASS A SHARES
Net asset value and redemption
price per share ($16,248,239
DIVIDED BY 1,773,232 shares) $9.16
Sales charge--4.75% of public
offering price 0.46
---
Maximum offering price $9.62
---
---
CLASS B SHARES
Net asset value and offering
price per share ($1,671,492
DIVIDED BY 182,680 shares) $9.15
---
---
Redemption price per share *
---
---
CLASS C SHARES
Net asset value and offering
price per share ($287,085,776
DIVIDED BY 31,456,482 shares) $9.13
---
---
Redemption price per share *
---
---
- ------------------
* Varies by length of time shares are held (Note 3d)
STATEMENT OF OPERATIONS
For the Year Ended September 30, 1995
INVESTMENT INCOME:
Interest $ 24,503,958
EXPENSES:
Investment advisory fee (Note
3a) $ 1,868,771
Distribution fee (Class B)
(Note 3b) 1,425
Distribution fee (Class C)
(Note 3b) 2,313,802
Servicing fee (Class A) (Note
3b) 37,643
Servicing fee (Class B) (Note
3b) 475
Servicing fee (Class C) (Note
3b) 771,267
Transfer agent and custody
fees 355,000
Professional fees 50,000
Trustees' fees and expenses
(Note 3c) 36,000
Shareholder reports and
notices 130,000
Miscellaneous 92,215
--------
Total expenses 5,656,598
--------------
Net investment income 18,847,360
--------------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized loss on security
transactions (12,688,130)
Net realized gain on options
written 132,826
Net realized gain on futures
transactions 3,789,704
Net unrealized appreciation on
securities 24,566,750
Net unrealized appreciation on
options written 93,370
Net unrealized appreciation on
futures contracts 285,675
--------------
Net realized and unrealized
gain on investments 16,180,195
--------------
Net increase in net assets
resulting from operations $ 35,027,555
--------------
--------------
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED SEPTEMBER 30,
-----------------------------------------
1995 1994
----------- --------------
OPERATIONS:
Net investment income $ 18,847,360 $ 27,236,854
Net realized loss on security
transactions (12,688,130) (17,045,982)
Net realized gain on options
written 132,826 --
Net realized gain on futures
transactions 3,789,704 178,429
Net unrealized appreciation
(depreciation) on securities 24,566,750 (35,503,425)
Net unrealized appreciation on
options written 93,370 --
Net unrealized appreciation
(depreciation) on futures
contracts 285,675 (409,067)
----------- --------------
Net increase (decrease) in net
assets resulting from
operations 35,027,555 (25,543,191)
Dividends paid from net
investment income
Class A (980,833) (1,229,984)
Class B (10,127) --
Class C (17,838,344) (26,000,244)
Net decrease from Fund share
transactions (Note 5) (91,487,402) (120,159,223)
----------- --------------
Net decrease in net assets (75,289,151) (172,932,642)
NET ASSETS:
Beginning of year 380,294,658 553,227,300
----------- --------------
End of year (including
undistributed net investment
income of $279,541 and
$32,254, respectively) $305,005,507 $ 380,294,658
=========== =============
PIMCO Advisors Funds SEE ACCOMPANYING NOTES
<PAGE>
PIMCO ADVISORS U.S. GOVERNMENT FUND 51
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
September 30, 1995
PRINCIPAL VALUE
AMOUNT (NOTE 2)
- -------------- --------------
U.S. TREASURY
OBLIGATIONS--0.9%
$ 1,315,000 U.S. Treasury Bills,
5.39%-5.70%,
10/26/95-2/8/96* $ 1,302,022
1,000,000 U.S. Treasury Bonds,
12.375%, 5/15/04 1,404,375
--------------
TOTAL U.S. TREASURY
OBLIGATIONS
(Cost $2,811,187) 2,706,397
--------------
U.S. GOVERNMENT AGENCY
OBLIGATIONS--107.7%
FEDERAL HOME LOAN BANK
(FHLB)--0.3%
1,000,000 FHLB, Discount Notes,
5.63%, 10/30/95 995,465
--------------
FEDERAL HOME LOAN
MORTGAGE CORP.
(FHLMC)--11.2%
7,783,529 FHLMC, 30-Year Adjustable
Rate Mortgages, 6.025%,
4/01/24 7,918,573
5,000,000 FHLMC, REMIC 1303, Class
L, 8.25%, 6/15/22* 5,200,780
6,458,000 FHLMC, REMIC 1411, Class
KA, 7.00%, 10/15/03* 6,583,925
4,000,000 FHLMC, REMIC 162, Class
E, 7.00%, 2/15/20* 4,008,276
8,444,266 FHLMC, REMIC 1660, Class
JA, Interest Only,
7/15/07 944,652
10,966,108 FHLMC, REMIC 1702, Class
ZA, 6.50%, 3/15/24 8,875,639
3,996,573 FHLMC, REMIC 32, Class
PT, Interest Only,
2/25/19 551,323
--------------
34,083,168
--------------
FEDERAL HOUSING
ADMINISTRATION
(FHA)--11.8%
1,682,265 FHA, Section #220-221-D4,
Project USGI #190,
9.68%, 5/01/24 1,811,065
12,641,541 FHA, Section #221-D4,
Project BNC #2, 7.316%,
11/01/19 12,858,824
8,312,826 FHA, Section #221-D4,
Project Citibank #99,
7.43%, 10/01/03 8,521,943
4,842,229 FHA, Section #221-D4,
Project Merrill Lynch
#189, 7.43%, 4/1/23 4,970,093
1,928,551 FHA, Section #221-D4,
Project USGI #2012,
7.43%, 9/01/23 1,971,039
4,543,485 FHA, Section #241-F,
Participation
Certificate Jefferson
Township, 7.125%,
2/1/34 4,427,058
1,290,507 FHA, Section #221-D4,
Participation
Certificate Reilly
Dakota MD, 7.43%,
9/1/23 1,328,215
--------------
35,888,237
--------------
FEDERAL NATIONAL MORTGAGE
ASSOCIATION
(FNMA)--46.6%
28,400,000 FNMA, Discount Notes,
5.59%-5.60%,
10/20/95-10/30/95 28,297,201
2,859,948 FNMA, 30-Year Adjustable
Rate Mortgages, 6.429%,
8/1/28 2,882,390
32,577,230 FNMA, 30-Year Fixed Rate
Mortgages, 6.00%-8.50%,
11/1/03-9/1/24* 32,629,167
10,000,000 FNMA, 7.00% ** 9,809,380
PRINCIPAL VALUE
AMOUNT (NOTE 2)
- -------------- --------------
$ 6,571,933 FNMA, REMIC 91-134, Class
Z, 7.00%, 10/25/21 $ 6,111,898
4,219,969 FNMA, REMIC 91-18, Class
H, 8.75%, 1/25/07* 4,300,651
15,000,000 FNMA, REMIC 92-138, Class
G, 7.50%, 8/25/22* 15,240,135
2,591,623 FNMA, REMIC 92-31, Class
XZ, 8.00%, 6/25/22 2,695,311
3,965,703 FNMA, REMIC 92-41, Class
ZC, 8.00%, 2/25/22 3,961,365
5,812,111 FNMA, REMIC 92-73, Class
Z, 7.50%, 5/25/22 5,805,887
2,720,370 FNMA, REMIC 93-137, Class
PV, Interest Only,
5/25/12 156,911
14,800,000 FNMA, REMIC 93-17, Class
EA, 6.15%, 10/25/07* 14,512,865
6,700,000 FNMA, REMIC 93-17, Class
H, 7.50%, 5/25/05* 6,726,172
5,306,118 FNMA, REMIC 94-11, Class
Z, 6.50%, 10/17/24 4,082,946
5,037,565 FNMA, SMBS, Class K-1,
6.00% 11/1/08 4,896,266
--------------
142,108,545
--------------
GOVERNMENT NATIONAL
MORTGAGE
ASSOCIATION
(GNMA)--33.6%
75,457,958 GNMA, 30-Year Adjustable
Rate Mortgages,
5.50%-7.50%,
7/20/22-5/20/25* 76,736,859
23,276,508 GNMA, 30-Year Fixed Rate
Mortgages,
9.00%-10.00%,
11/15/09-1/15/20 24,904,136
101,894 GNMA, Graduated Payment
Mortgages, 11.25%,
12/20/15 113,312
803,921 GNMA, Mobile Home
Mortgages, 10.25%,
10/15/98-12/15/99 844,745
--------------
102,599,052
--------------
U.S. DEPARTMENT OF
VETERANS AFFAIRS--
4.2%
6,231,000 Vendee Mortgage Trust,
REMIC 93-1, Class G,
7.00%, 2/15/00 6,271,891
264,571,431 Vendee Mortgage Trust,
REMIC 93-2, Class IO,
Floating Rate, Interest
Only, 6/15/23 6,614,286
--------------
12,886,177
--------------
TOTAL U.S. GOVERNMENT
AGENCY OBLIGATIONS
(Cost $320,748,310) 328,560,644
--------------
MATURITY
AMOUNT
- --------------
REPURCHASE
AGREEMENT--0.3%
1,000,475 Merrill Lynch Government
Securities, Inc.,
5.70%, dated 9/29/95,
due 10/02/95 (Cost
$1,000,000;
collateralized by
$955,000 U.S. Treasury
Notes, 8.50%, 5/15/97) 1,000,000
--------------
PIMCO Advisors Funds SEE ACCOMPANYING NOTES
<PAGE>
52
PIMCO ADVISORS U.S. GOVERNMENT FUND
- --------------------------------------------------------------------------------
VALUE
CONTRACTS (NOTE 2)
- -------------- --------------
PURCHASED OTC CALL
OPTIONS--0.6%
230 U.S. Treasury Note,
6.75%, 6/30/99,
expiring 11/21/95 @
$97.38 $ 1,142,640
140 U.S. Treasury Note,
6.50%, 4/30/99,
expiring 11/20/95 @
$96.66 691,180
--------------
TOTAL PURCHASED OTC CALL
OPTIONS
(Cost $1,410,312) 1,833,820
--------------
TOTAL SECURITIES OWNED
(Cost $325,969,809+) 334,100,861
--------------
OUTSTANDING PUT OPTIONS WRITTEN--(0.0%)
58 U.S. Treasury 30 Year Bond Future
expiring 11/17/95 @ $106 (3,625)
30 U.S. Treasury 30 Year Bond Future
expiring 12/16/95 @ $108 (4,687)
--------------
TOTAL OUTSTANDING PUT OPTIONS WRITTEN
(Premiums Received $101,682) (8,312)
--------------
TOTAL INVESTMENTS, NET OF
OUTSTANDING OPTIONS
WRITTEN
(Cost $325,868,127) 109.5% 334,092,549
OTHER ASSETS AND
LIABILITIES, NET (9.5%) (29,087,042)
------- --------------
TOTAL NET ASSETS 100.0% $ 305,005,507
======== ==============
+ The cost of investments for federal income tax
purposes is $325,969,809. At September 30, 1995,
net unrealized appreciation was $8,131,052. This
consisted of aggregate gross unrealized
appreciation for all investments on which there was
an excess of market value over tax cost of
$11,624,420 and aggregate gross unrealized
depreciation of all investments on which there was
an excess of tax cost over market value of
$3,493,368.
* Either all or a portion of these securities have
been segregated with the custodian to cover futures
contracts, written options on futures contracts,
forward commitments and when-issued securities.
** Securities purchased on a to-be-announced basis.
PIMCO Advisors Funds SEE ACCOMPANYING NOTES
<PAGE>
PIMCO ADVISORS SHORT-INTERMEDIATE FUND 53
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
September 30, 1995
ASSETS:
Securities owned, at value
(Cost of $79,207,654) (Note
2a) $ 78,694,967
Foreign currency holdings, at
value (Cost of $14,790)
(Note 2b) 14,790
Forward foreign currency
contracts purchased (Cost of
$1,000,005) 1,001,535
Cash 1,382,972
Variation margin on open
futures contracts (Note 2d) 27,313
Interest receivable 928,627
Receivable for investments
sold 3,224,041
Receivable for Fund shares
sold 292,578
Receivable for forward foreign
currency contracts sold
(Notes 2e and 7) 4,128,458
Other assets 18,209
--------------
Total assets 89,713,490
LIABILITIES:
Payable for investments
purchased $ 11,142,558
Payable for forward foreign
currency contracts purchased
(Notes 2e and 7) 1,000,005
Payable for Fund shares
redeemed 310,643
Forward foreign currency
contracts sold, at value
(Cost of $4,128,458) (Notes
2e and 7) 4,162,589
Outstanding options written,
at value (premiums received
$93,796) (Notes 2c and 6) 31,821
Dividends payable 47,783
Accrued expenses:
Investment advisory fee 29,801
Distribution fee 27,414
Servicing fee 14,901
Other 54,204
----------
Total liabilities 16,821,719
--------------
NET ASSETS $ 72,891,771
==============
COMPOSITION OF NET ASSETS:
Capital $ 79,839,305
Undistributed net investment
income 110,640
Accumulated net realized loss
on investments (6,592,002)
Net unrealized depreciation on
securities (512,687)
Net unrealized depreciation on
forward foreign currency
contracts (32,601)
Net unrealized appreciation on
options written 61,975
Net unrealized appreciation on
futures contracts (Note 2d) 17,141
--------------
Total net assets $ 72,891,771
==============
CALCULATION OF MAXIMUM OFFERING
PRICE
CLASS A SHARES
Net asset value and redemption
price per share ($6,342,816
DIVIDED BY 659,157 shares) $9.62
Sales charge--3.00% of public
offering price 0.30
---
Maximum offering price $9.92
---
---
CLASS B SHARES
Net asset value and offering
price per share ($940,616
DIVIDED BY 97,768 shares) $9.62
---
---
Redemption price per share *
---
---
CLASS C SHARES
Net asset value and offering
price per share ($65,608,339
DIVIDED BY 6,837,252 shares) $9.60
---
---
Redemption price per share *
---
---
- ------------------
* Varies by length of time shares are held (Note 3d)
STATEMENT OF OPERATIONS
For the Year Ended September 30, 1995
INVESTMENT INCOME:
Interest $ 5,466,061
EXPENSES:
Investment advisory fee (Note
3a) $ 382,196
Distribution fee (Class B)
(Note 3b) 1,528
Distribution fee (Class C)
(Note 3b) 350,213
Servicing fee (Class A) (Note
3b) 15,482
Servicing fee (Class B) (Note
3b) 510
Servicing fee (Class C) (Note
3b) 175,106
Transfer agent and custody
fees 80,000
Professional fees 22,000
Trustees' fees and expenses
(Note 3c) 3,000
Shareholder reports and
notices 8,000
Miscellaneous 35,222
-------
Total expenses 1,073,257
--------------
Net investment income 4,392,804
--------------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized loss on security
transactions (1,523,700)
Net realized loss on forward
foreign currency contracts (22,135)
Net realized gain on options
written 105,276
Net realized gain on futures
transactions 217,491
Net unrealized appreciation on
securities 2,847,204
Net unrealized depreciation on
forward foreign currency
contracts (32,601)
Net unrealized appreciation on
options written 61,975
Net unrealized depreciation on
futures contracts (121,579)
--------------
Net realized and unrealized
gain on investments 1,531,931
--------------
Net increase in net assets
resulting from operations $ 5,924,735
--------------
--------------
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED SEPTEMBER 30,
-----------------------------------------
1995 1994
---------- --------------
OPERATIONS:
Net investment income $ 4,392,804 $ 5,114,258
Net realized loss on security
transactions (1,523,700) (4,036,896)
Net realized loss on forward
foreign currency contracts (48,556) --
Net realized gain on options
written 105,276 --
Net realized gain on futures
transactions 217,491 351,540
Net unrealized appreciation
(depreciation) on securities 2,847,204 (1,697,229)
Net unrealized depreciation on
forward foreign currency
contracts (6,180) --
Net unrealized appreciation on
options written 61,975 --
Net unrealized appreciation
(depreciation) on futures
contracts (121,579) 135,495
---------- --------------
Net increase (decrease) in net
assets resulting from
operations 5,924,735 (132,832)
Dividends paid from net
investment income
Class A (384,524) (333,151)
Class B (10,689)
Class C (4,027,560) (4,930,236)
Net decrease from Fund share
transactions (Note 5) (22,432,089) (31,808,527)
---------- --------------
Net decrease in net assets (20,930,127) (37,204,746)
NET ASSETS:
Beginning of year 93,821,898 131,026,644
---------- --------------
End of year (including
undistributed net investment
income of $110,640 and
$58,803, respectively) $ 72,891,771 $ 93,821,898
========== =============
PIMCO Advisors Funds SEE ACCOMPANYING NOTES
<PAGE>
54
PIMCO ADVISORS SHORT-INTERMEDIATE FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
September 30, 1995
PRINCIPAL VALUE
AMOUNT (NOTE 2)
- -------------- --------------
SHORT-TERM NOTES--3.9%
$ 1,500,000 Banco Nacional de
Comercio Exterior,
S.N.C., 10.663%,
11/14/95 $ 1,480,450
700,000 General Electric Capital
Corp., 6.50%, 10/2/95 699,874
200,000 National Rural Utilities
Cooperative Finance
Corp., 5.72%, 10/4/95* 199,905
500,000 New South Wales Treasury
Corp., 5.67%, 11/20/95* 496,062
--------------
TOTAL SHORT-TERM NOTES
(Cost $2,876,291) 2,876,291
--------------
U.S. TREASURY
OBLIGATIONS--0.3%
10,000 U.S. Treasury Bills,
5.35%, 2/8/96* 9,809
180,000 U.S. Treasury Notes,
8.125%, 2/15/98* 188,888
--------------
TOTAL U.S. TREASURY
OBLIGATIONS
(Cost $198,132) 198,697
--------------
U.S. GOVERNMENT AGENCY
OBLIGATIONS--59.4%
FEDERAL HOME LOAN BANK
(FHLB)--4.1%
3,000,000 FHLB, Floating Rate,
5.58%, 4/19/99* 3,001,890
--------------
FEDERAL HOME LOAN
MORTGAGE CORP.
(FHLMC)--20.1%
4,469,208 FHLMC, Adjustable Rate
Mortgages,
6.077%-8.097%,
3/1/17-3/1/24* 4,583,448
2,157,338 FHLMC, REMIC 1418, Class
G, 7.00%, 7/15/97* 2,173,106
3,000,000 FHLMC, REMIC 1588, Class
PD, 5.40%, 8/15/14* 2,936,817
18,187,938 FHLMC, REMIC 1689, Class
N, Interest Only,
4/15/19 1,951,729
3,000,000 FHLMC, REMIC 1699, Class
B, 5.65%, 11/15/19* 2,964,417
--------------
14,609,517
--------------
FEDERAL NATIONAL MORTGAGE
ASSOCIATION
(FNMA)--25.9%
398,104 FNMA, 15-Year Fixed Rate
Mortgages, 7.00%,
4/1/02-9/1/04* 400,812
9,617,642 FNMA, Adjustable Rate
Mortgages,
6.282%-7.279%,
7/1/17-10/1/28* 9,775,129
525,901 FNMA, REMIC 92-10, Class
GA, 7.75%, 9/25/96* 528,399
250,000 FNMA, REMIC 92-138, Class
C, 6.00%, 12/25/18* 244,387
799,976 FNMA, REMIC 92-21, Class
F, Floating Rate,
6.475%, 4/25/22* 806,399
3,960,000 FNMA, REMIC 93-186, Class
D, 5.75%, 2/25/05* 3,887,884
2,847,870 FNMA, SMBS, Class K-1,
6.00% 11/1/10* 2,767,990
7,436,100 FNMA, SMBS, Class K-2,
Interest Only, 11/1/08 467,986
--------------
18,878,986
--------------
PRINCIPAL VALUE
AMOUNT (NOTE 2)
- -------------- --------------
GOVERNMENT NATIONAL
MORTGAGE ASSOCIATION
(GNMA)--9.3%
$ 3,000,000 GNMA, 6.00% ** $ 3,002,813
3,772,157 GNMA, Adjustable Rate
Mortgages, 5.50%-6.50%,
1/20/22-7/20/25* 3,774,692
--------------
6,777,505
--------------
TOTAL U.S. GOVERNMENT
AGENCY OBLIGATIONS
(Cost $44,302,822) 43,267,898
--------------
CORPORATE BONDS AND
NOTES--33.1%
FINANCIAL SERVICES--10.6%
1,700,000 Capital One Bank, 6.25%,
7/11/96 1,700,000
2,000,000 Chrysler Financial Corp.,
7.93%, 2/3/97 2,040,240
1,000,000 Ford Motor Credit Corp.,
Medium-Term Note,
Floating Rate, 5.495%,
4/5/99 1,002,690
3,000,000 Salomon Inc., Medium-Term
Note, Floating Rate,
6.012%-6.94%,
3/15/96-10/21/96 3,003,472
--------------
7,746,402
--------------
MEDIA--2.8%
2,000,000 Time Warner Inc.,
Floating Rate, 6.835%,
8/15/00 2,003,500
--------------
METALS AND MINING--1.4%
1,000,000 Noranda Inc., Floating
Rate, 6.75%, 8/18/00 1,011,875
--------------
PRIVATE ASSET BACKED:
MORTGAGES--11.8%
2,375,054 Countrywide Mortgage
Backed Securities,
Inc., REMIC 94-C, Class
A2, 6.50%, 3/25/24* 2,362,512
2,346,592 Fleet Mortgage Securities
Inc., REMIC 93-I, Class
C, 7.20%, 10/25/23* 2,322,047
1,572,677 Prudential Home Mortgage
Securities, REMIC
93-63, Class A13,
6.75%, 1/25/24* 1,557,074
1,638,036 Sears Mortgage Securities
Inc., REMIC 92-PR1,
Class A, Floating Rate,
7.591%, 10/25/22 1,647,250
775,000 Uniprop, REMIC 93-1,
Class C, 8.43%,
12/15/25 700,891
--------------
8,589,774
--------------
TRANSPORTATION: AIR--2.0%
1,400,000 Delta Air Lines, Inc.,
8.50%, 3/15/02 1,484,602
--------------
UTILITIES: ELECTRIC--4.5%
1,000,000 Cleveland Electric
Illuminating Co.,
8.17%, 11/30/98 999,860
2,300,000 System Energy Resources,
Inc., 6.12%, 10/1/95 2,300,000
--------------
3,299,860
--------------
TOTAL CORPORATE BONDS AND
NOTES
(Cost $23,919,727) 24,136,013
--------------
SOVEREIGN ISSUES--11.3%
4,005,768 Deutschland Republic,
6.25%, 1/4/24 3,448,962
3,489,393 Government of Canada,
8.75%, 12/1/05 3,736,058
938,898 Government of Finland,
9.50%, 3/15/04 1,031,048
--------------
TOTAL SOVEREIGN ISSUES
(Cost $7,910,682) 8,216,068
--------------
TOTAL SECURITIES OWNED
(Cost $79,207,654+) 78,694,967
--------------
PIMCO Advisors Funds SEE ACCOMPANYING NOTES
<PAGE>
PIMCO ADVISORS SHORT-INTERMEDIATE FUND 55
- --------------------------------------------------------------------------------
VALUE
CONTRACTS (NOTE 2)
- ---------- --------------
OUTSTANDING PUT OPTIONS
WRITTEN--(0.1%)
18 PIBOR Futures, expiring
December '95 @ FRF93.10 $ (16,496)
39 Eurodollar Futures,
expiring December '95 @
$92 (975)
41 Eurodollar Futures,
expiring March '96 @
$94 (14,350)
--------------
TOTAL OUTSTANDING PUT
OPTIONS WRITTEN
(Premiums Received
$93,796) (31,821)
--------------
TOTAL INVESTMENTS, NET OF
OUTSTANDING OPTIONS
WRITTEN
(Cost $79,113,858) 107.9% 78,663,146
OTHER ASSETS AND
LIABILITIES, NET (7.9%) (5,771,375)
------- --------------
TOTAL NET ASSETS 100.0% $ 72,891,771
======= ==============
+ The cost of investments for federal income tax
purposes is $79,207,654. At September 30, 1995, net
unrealized depreciation was $512,687. This
consisted of aggregate gross unrealized
appreciation for all investments on which there was
an excess of market value over tax cost of $943,216
and aggregate gross unrealized depreciation of all
investments on which there was an excess of tax
cost over market value of $1,455,903.
* Either all or a portion of these securities have
been segregated with the custodian to cover forward
foreign currency contracts, futures contracts,
written options or futures contracts and forward
commitments.
** Securities purchased on a to-be-announced basis.
PIMCO Advisors Funds SEE ACCOMPANYING NOTES
<PAGE>
56
PIMCO ADVISORS MONEY MARKET FUND
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
September 30, 1995
ASSETS:
Securities owned, at value
(Cost of $81,590,999) (Note
2a) $ 81,590,999
Receivable for Fund shares
sold 2,881,177
Other assets 16,601
--------------
Total assets 84,488,777
LIABILITIES:
Payable for Fund shares
redeemed $ 1,250,699
Cash overdraft 139,368
Dividend payable 46,946
Accrued expenses:
Investment advisory fee 7,209
Distribution fee 25
Servicing fee 7,214
Other 98,984
--------
Total liabilities 1,550,445
--------------
NET ASSETS $ 82,938,332
--------------
--------------
COMPOSITION OF NET ASSETS:
Capital $ 82,938,332
--------------
Total net assets $ 82,938,332
--------------
--------------
CALCULATION OF MAXIMUM OFFERING
PRICE
CLASS A SHARES
Net asset value, offering price
and redemption price per share
($13,552,754 DIVIDED BY
13,552,754 shares) $1.00
---------
---------
CLASS B SHARES
Net asset value and offering
price per share ($21,322
DIVIDED BY 21,322 shares) $1.00
---------
---------
Redemption price per share *
---------
---------
CLASS C SHARES
Net asset value and offering
price per share ($69,364,256
DIVIDED BY 69,364,256 shares) $1.00
---------
---------
Redemption price per share *
---------
---------
- ------------------
* Varies by length of time shares are held (Note 3d)
STATEMENT OF OPERATIONS
For the Year Ended September 30, 1995
INVESTMENT INCOME:
Interest $ 5,518,181
EXPENSES:
Investment advisory fee (Note
3a) $ 146,684
Distribution fee (Class B)
(Note 3b) 27
Servicing fee (Class A) (Note
3b) 15,198
Servicing fee (Class B) (Note
3b) 9
Servicing fee (Class C) (Note
3b) 92,222
Transfer agent and custody
fees 135,999
Professional fees 29,000
Trustees's fees and expenses
(Note 3c) 9,000
Shareholder reports and
notices 31,000
Miscellaneous 32,495
-------
Total expenses before waiver
of investment advisory fee 491,634
Waived investment advisory fee
(Note 3a) (23,048)
-------
Total expenses 468,586
--------------
Net investment income $ 5,049,595
--------------
--------------
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED SEPTEMBER 30,
-----------------------------------------
1995 1994
----------- --------------
OPERATIONS:
Net investment income $ 5,049,595 $ 2,437,738
Dividends paid from net
investment income
Class A (731,116) (263,152)
Class B (163)
Class C (4,318,316) (2,174,586)
Net increase (decrease) from
Fund share transactions
(Note 5) (14,058,202) 48,610,710
----------- --------------
Net increase (decrease) in
net assets (14,058,202) 48,610,710
NET ASSETS:
Beginning of year 96,996,534 48,385,824
----------- --------------
End of year $ 82,938,332 $ 96,996,534
=========== =============
PIMCO Advisors Funds SEE ACCOMPANYING NOTES
<PAGE>
PIMCO ADVISORS MONEY MARKET FUND 57
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
September 30, 1995
PRINCIPAL VALUE
AMOUNT (NOTE 2)
- -------------- --------------
COMMERCIAL PAPER
GUARANTEED
BY LETTERS OF
CREDIT--2.7%
$ 2,200,000 Matterhorn Capital Corp.,
5.71%,10/27/95,
guaranteed by Union
Bank of Switzerland
(Cost $2,190,928) $ 2,190,928
--------------
SHORT-TERM NOTES--95.7%
4,000,000 Abbey National North
America, 5.69%, 11/7/95 3,976,608
3,000,000 Apreco Inc., 5.72%,
11/22/95 2,975,213
3,200,000 Bell Atlantic Network
Funding, 5.72%,
10/20/95 3,190,340
2,700,000 Canadian Wheat Board,
5.68%, 11/1/95 2,686,794
4,000,000 Ciesco, L.P., 5.70%,
10/30/95 3,981,633
4,500,000 Cooperative Association
of Tractor Dealers,
Inc., 5.77%,10/25/95 4,482,690
3,100,000 Corporate Asset Funding,
Co. Inc., 5.72%,
10/16/95 3,092,612
5,000,000 CSW Credit Inc., 5.72%,
10/24/95 4,981,728
4,000,000 Delaware Funding Corp.,
5.70%, 10/20/95 3,987,967
4,800,000 General Electric Capital
Corp., 5.68%, 11/17/95 4,764,405
2,700,000 Golden Managers
Acceptance Corp.,
5.76%, 10/4/95 2,698,704
4,500,000 National Rural Utilities
Cooperative Finance
Corp., 5.68%, 10/30/95 4,479,410
PRINCIPAL VALUE
AMOUNT (NOTE 2)
- -------------- --------------
$ 5,000,000 New South Wales Treasury
Corp., 5.71%, 10/12/95 $ 4,991,276
3,500,000 Pearson Inc., 5.72%,
10/10/95 3,494,995
3,400,000 Preferred Receivables
Funding Corp.,
5.73%-5.74%,
10/5/95-10/17/95 3,395,159
5,000,000 Redland Finance Inc.,
5.74%, 10/25/95 4,980,867
2,500,000 Sheffield Receivables
Corp., 5.70%, 11/6/95 2,485,750
3,000,000 Siemens Corp., 5.70%,
10/13/95 2,994,300
3,000,000 Spiegel Funding Corp.,
5.73%, 11/8/95 2,981,855
3,800,000 Supplier Managers
Acceptance Corp.,
5.77%, 10/18/95 3,789,646
5,000,000 USL Capital Corp.,
5.70%-5.72%,
10/5/95-10/27/95 4,988,119
--------------
TOTAL SHORT-TERM NOTES
(Cost $79,400,071) 79,400,071
--------------
TOTAL INVESTMENTS
(Cost $81,590,999) 98.4% 81,590,999
OTHER ASSETS AND
LIABILITIES, NET 1.6% 1,347,333
------- --------------
TOTAL NET ASSETS 100.0% $ 82,938,332
======= =============
PIMCO Advisors Funds SEE ACCOMPANYING NOTES
<PAGE>
58
PIMCO ADVISORS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
For a Fund share outstanding throughout the period
<TABLE>
<CAPTION>
PIMCO ADVISORS EQUITY INCOME FUND
----------------------------------------------------------------------------------------------
CLASS A CLASS B CLASS C CLASS A CLASS C CLASS A CLASS C CLASS A
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
YEAR ENDED SEPTEMBER 30,
----------------------------------------------------------------------------------------------
1995 1995(2) 1995 1994 1994 1993 1993 1992
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period $ 12.50 $ 12.55 $ 12.47 $ 12.88 $ 12.85 $ 10.57 $ 10.56 $ 9.92
----- ----- ----- ----- ----- ----- ----- -----
Income From Investment
Operations:
Net Investment Income 0.36 0.11 0.27 0.34 0.24 0.33 0.25 0.34
Net Gains or Losses on
Securities (both realized and
unrealized) 1.61 1.55 1.59 (0.17) (0.16) 2.30 2.29 0.71
----- ----- ----- ----- ----- ----- ----- -----
Total From Investment Operations 1.97 1.66 1.86 0.17 0.08 2.63 2.54 1.05
----- ----- ----- ----- ----- ----- ----- -----
Less Distributions:
Dividends (from net investment
income) (0.33) (0.08) (0.24) (0.33) (0.24) (0.32) (0.25) (0.40)
Distributions (from capital
gain) -- -- -- (0.22) (0.22) -- -- --
----- ----- ----- ----- ----- ----- ----- -----
Total Distributions (0.33) (0.08) (0.24) (0.55) (0.46) (0.32) (0.25) (0.40)
----- ----- ----- ----- ----- ----- ----- -----
Net Asset Value, End of Period $ 14.14 $ 14.13 $ 14.09 $ 12.50 $ 12.47 $ 12.88 $ 12.85 $ 10.57
===== ===== ===== ===== ===== ===== ===== =====
TOTAL RETURN (without sales
charge) 16.1% 13.3% 15.2% 1.4% 0.7% 25.3% 24.4% 10.7%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (in
000's) $12,933 $1,760 $174,316 $14,942 $178,892 $6,328 $94,247 $2,593
Ratio of Expenses to Average Net
Assets 1.3% 2.1%* 2.1% 1.3% 2.0% 1.3% 2.1% 1.4%
Ratio of Net Investment Income
to Average Net Assets 2.9% 2.2%* 2.1% 2.7% 2.0% 2.9% 2.2% 3.3%
Portfolio Turnover Rate 176.9% 176.9% 176.9% 174.9% 174.9% 167.9% 167.9% 149.0%
</TABLE>
CLASS C CLASS A CLASS C
---------- ---------- ----------
1992 1991(1) 1991
---------- ---------- ----------
Net Asset Value, Beginning of
Period $ 9.91 $ 8.38 $ 8.16
----- ----- -----
Income From Investment
Operations:
Net Investment Income 0.29 0.28 0.36
Net Gains or Losses on
Securities (both realized and
unrealized) 0.68 1.54 1.75
----- ----- -----
Total From Investment Operations 0.97 1.82 2.11
----- ----- -----
Less Distributions:
Dividends (from net investment
income) (0.32) (0.28) (0.36)
Distributions (from capital
gain) -- -- --
----- ----- -----
Total Distributions (0.32) (0.28) (0.36)
----- ----- -----
Net Asset Value, End of Period $ 10.56 $ 9.92 $ 9.91
===== ===== =====
TOTAL RETURN (without sales
charge) 9.9% 34.8% 26.5%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (in
000's) $45,101 $15 $22,651
Ratio of Expenses to Average Net
Assets 2.1% 1.6%* 2.2%
Ratio of Net Investment Income
to Average Net Assets 2.7% 4.4%* 4.2%
Portfolio Turnover Rate 149.0% 142.7% 142.7%
- ------------------
(1) The distribution of Class A shares commenced on February 1, 1991.
(2) The distribution of Class B shares commenced on May 22, 1995.
* Annualized
<TABLE>
<CAPTION>
PIMCO ADVISORS VALUE FUND
----------------------------------
CLASS A CLASS B CLASS C
---------- ---------- ----------
PERIOD ENDED SEPTEMBER 30,
----------------------------------
1995(3) 1995(3) 1995(3)
---------- ---------- ----------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period $ 10.00 $ 10.00 $ 10.00
----- ----- -----
Income From Investment Operations:
Net Investment Income 0.07 0.05 0.05
Net Gains or Losses on Securities (both realized and unrealized) 0.68 0.68 0.68
----- ----- -----
Total From Investment Operations 0.75 0.73 0.73
----- ----- -----
Less Distributions:
Dividends (from net investment income) (0.06) (0.04) (0.04)
Distributions (from capital gain) -- -- --
Return of capital distribution (0.01) (0.01) (0.01)
----- ----- -----
Total Distributions (0.07) (0.05) (0.05)
----- ----- -----
Net Asset Value, End of Period $ 10.68 $ 10.68 $ 10.68
===== ===== =====
TOTAL RETURN (without sales charge) 7.5% 7.3% 7.3%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (in 000's) $ 2,492 $ 3,975 $ 6,643
Ratio of Expenses to Average Net Assets 1.3%* 2.1%* 2.0%*
Ratio of Net Investment Income to Average Net Assets 2.7%* 1.9%* 1.9%*
Portfolio Turnover Rate 0.5% 0.5% 0.5%
</TABLE>
- ------------------
(3) The fund commenced operations on June 27, 1995.
* Annualized
PIMCO Advisors Funds SEE ACCOMPANYING NOTES
<PAGE>
PIMCO ADVISORS FUNDS 59
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
For a Fund share outstanding throughout the period
<TABLE>
<CAPTION>
PIMCO ADVISORS GROWTH FUND
--------------------------------------------------------------------------------------------------
CLASS A CLASS B CLASS C CLASS A CLASS C CLASS A CLASS C CLASS A
---------- ---------- ---------- ---------- ------------ ---------- ------------ ----------
YEAR ENDED SEPTEMBER 30,
--------------------------------------------------------------------------------------------------
1995 1995(5) 1995 1994 1994 1993 1993 1992
---------- ---------- ---------- ---------- ------------ ---------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period $ 22.01 $ 22.63 $ 21.52 $ 23.64 $ 23.32 $ 20.76 $ 20.64 $ 20.63
----- ---------- ---------- ----- ----- ----- ----- -----
Income From Investment
Operations:
Net Investment Income (Loss) 0.12 (0.03) (0.04) 0.12 (0.04) 0.09 (0.07) 0.14
Net Gains or Losses on
Securities (both realized
and unrealized) 4.79 2.34 4.65 0.12 0.11 3.53 3.49 1.38
----- ---------- ---------- ----- ----- ----- ----- -----
Total From Investment
Operations 4.91 2.31 4.61 0.24 0.07 3.62 3.42 1.52
----- ---------- ---------- ----- ----- ----- ----- -----
Less Distributions:
Dividends (from net investment
income) -- -- -- -- -- -- -- (0.14)
Distributions (from capital
gain) (1.19) -- (1.19) (1.87) (1.87) (0.74) (0.74) (1.25)
----- ---------- ---------- ----- ----- ----- ----- -----
Total Distributions (1.19) -- (1.19) (1.87) (1.87) (0.74) (0.74) (1.39)
----- ---------- ---------- ----- ----- ----- ----- -----
Net Asset Value, End of Period $ 25.73 $ 24.94 $ 24.94 $ 22.01 $ 21.52 $ 23.64 $ 23.32 $ 20.76
===== ========== ========== ===== ===== ===== ===== =====
TOTAL RETURN (without sales
charge) 23.7% 10.2% 22.8% 1.3% 0.5% 17.7% 16.9% 7.7%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (in
000's) $134,819 $7,671 $1,290,152 $107,269 $1,085,427 $97,509 $1,077,490 $71,209
Ratio of Expenses to Average
Net Assets 1.1% 1.9%* 1.9% 1.1% 1.9% 1.1% 1.9% 1.1%
Ratio of Net Investment Income
to Average Net Assets 0.5% (0.4)%* (0.2)% 0.6% (0.2)% 0.4% (0.3)% 0.7%
Portfolio Turnover Rate 110.6% 110.6% 110.6% 115.3% 115.3% 109.9% 109.9% 92.3%
</TABLE>
CLASS C CLASS A CLASS C
---------- ---------- ----------
1992 1991(4) 1991
---------- ---------- ----------
Net Asset Value, Beginning of
Period $ 20.54 $ 16.99 $ 16.93
----- ----- -----
Income From Investment
Operations:
Net Investment Income (Loss) (0.01) 0.21 0.12
Net Gains or Losses on
Securities (both realized
and unrealized) 1.37 5.28 5.32
----- ----- -----
Total From Investment
Operations 1.36 5.49 5.44
----- ----- -----
Less Distributions:
Dividends (from net investment
income) (0.01) (0.19) (0.17)
Distributions (from capital
gain) (1.25) (1.66) (1.66)
----- ----- -----
Total Distributions (1.26) (1.85) (1.83)
----- ----- -----
Net Asset Value, End of Period $ 20.64 $ 20.63 $ 20.54
===== ===== =====
TOTAL RETURN (without sales
charge) 6.9% 38.6% 35.1%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (in
000's) $853,121 $17,064 $564,398
Ratio of Expenses to Average
Net Assets 1.9% 1.2%* 1.8%
Ratio of Net Investment Income
to Average Net Assets (0.1)% 0.9%* 0.6%
Portfolio Turnover Rate 92.3% 95.3% 95.3%
- ------------------
(4) The distribution of Class A shares commenced on October 26, 1990.
(5) The distribution of Class B shares commenced on May 23, 1995.
* Annualized
<TABLE>
<CAPTION>
PIMCO ADVISORS TARGET FUND
----------------------------------------------------------------------
CLASS A CLASS B CLASS C CLASS A CLASS C CLASS A
---------- ---------- ---------- ---------- ---------- ----------
PERIOD
ENDED
SEPTEMBER
YEAR ENDED SEPTEMBER 30, 30,
---------------------------------------------------------- ----------
1995 1995(7) 1995 1994 1994 1993(6)
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $13.13 $13.93 $12.95 $12.72 $12.65 $10.00
----- ----- ----- ----- ----- -----
Income From Investment Operations:
Net Investment Loss (0.02) (0.05) (0.12) (0.04) (0.14) (0.02)
Net Gains or Losses on Securities (both realized and
unrealized) 3.45 2.18 3.38 0.57 0.56 2.74
----- ----- ----- ----- ----- -----
Total From Investment Operations 3.43 2.13 3.26 0.53 0.42 2.72
----- ----- ----- ----- ----- -----
Less Distributions:
Dividends (from net investment income) -- -- -- -- -- --
Distributions (from capital gain) (0.16) -- (0.16) (0.12) (0.12) --
----- ----- ----- ----- ----- -----
Total Distributions (0.16) -- (0.16) (0.12) (0.12) --
----- ----- ----- ----- ----- -----
Net Asset Value, End of Period $16.40 $16.06 $16.05 $13.13 $12.95 $12.72
===== ===== ===== ===== ===== =====
TOTAL RETURN (without sales charge) 26.5% 15.3% 25.6% 4.2% 3.4% 27.2%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (in 000's) $121,915 $7,554 $780,355 $90,527 $556,043 $48,787
Ratio of Expenses to Average Net Assets 1.2% 2.0%* 2.0% 1.2% 2.0% 1.3%*
Ratio of Net Investment Income to Average Net Assets (0.1)% (0.9)%* (0.9)% (0.3)% (1.1)% (0.3)%*
Portfolio Turnover Rate 128.3% 128.3% 128.3% 103.5% 103.5% 76.0%
</TABLE>
CLASS C
----------
1993(6)
----------
Net Asset Value, Beginning of Period $10.00
-----
Income From Investment Operations:
Net Investment Loss (0.09)
Net Gains or Losses on Securities (both realized and
unrealized) 2.74
-----
Total From Investment Operations 2.65
-----
Less Distributions:
Dividends (from net investment income) --
Distributions (from capital gain) --
-----
Total Distributions --
-----
Net Asset Value, End of Period $12.65
=====
TOTAL RETURN (without sales charge) 26.5%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (in 000's) $298,238
Ratio of Expenses to Average Net Assets 2.0%*
Ratio of Net Investment Income to Average Net Assets (1.0)%*
Portfolio Turnover Rate 76.0%
- ------------------
(6) The fund commenced operations on December 17, 1992.
(7) The distribution of Class B shares commenced on May 22, 1995.
* Annualized
PIMCO Advisors Funds SEE ACCOMPANYING NOTES
<PAGE>
60
PIMCO ADVISORS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
For a Fund share outstanding throughout the period
<TABLE>
<CAPTION>
PIMCO ADVISORS DISCOVERY FUND
----------------------------------
CLASS A CLASS B CLASS C
---------- ---------- ----------
PERIOD ENDED SEPTEMBER 30,
----------------------------------
1995(8) 1995(8) 1995(8)
---------- ---------- ----------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period $ 10.00 $ 10.00 $ 10.00
----- ----- -----
Income From Investment Operations:
Net Investment Income (Loss) 0.01 (0.01) (0.01)
Net Gains or Losses on Securities (both realized and unrealized) 0.88 0.87 0.87
----- ----- -----
Total From Investment Operations 0.89 0.86 0.86
----- ----- -----
Less Distributions:
Dividends (from net investment income) -- -- --
Distributions (from capital gain) -- -- --
----- ----- -----
Total Distributions -- -- --
----- ----- -----
Net Asset Value, End of Period $ 10.89 $ 10.86 $ 10.86
===== ===== =====
TOTAL RETURN (without sales charge) 8.9% 8.6% 8.6%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (in 000's) $7,658 $10,832 $20,260
Ratio of Expenses to Average Net Assets 1.3%* 2.0%* 2.0%*
Ratio of Net Investment Income to Average Net Assets 0.2%* (0.5)%* (0.5)%*
Portfolio Turnover Rate 34.9% 34.9% 34.9%
</TABLE>
- ------------------
(8) The fund commenced operations on June 27, 1995.
* Annualized
<TABLE>
<CAPTION>
PIMCO ADVISORS OPPORTUNITY FUND
----------------------------------------------------------------------------------
CLASS A CLASS C CLASS A CLASS C CLASS A CLASS C CLASS A
---------- ---------- ---------- ---------- ---------- ---------- ----------
YEAR ENDED SEPTEMBER 30,
----------------------------------------------------------------------------------
1995 1995 1994 1994 1993 1993 1992
---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $28.87 $28.04 $33.43 $32.77 $19.84 $19.60 $17.95
----- ----- ----- ----- ----- ----- -----
Income From Investment Operations:
Net Investment Loss (0.11) (0.34) (0.17) (0.38) (0.15) (0.34) (0.04)
Net Gains or Losses on Securities (both
realized and unrealized) 11.19 10.81 (2.02) (1.98) 14.00 13.77 3.61
----- ----- ----- ----- ----- ----- -----
Total From Investment Operations 11.08 10.47 (2.19) (2.36) 13.85 13.43 3.57
----- ----- ----- ----- ----- ----- -----
Less Distributions:
Dividends (from net investment income) -- -- -- -- -- -- --
Distributions (from capital gain) (0.87) (0.87) (2.26) (2.26) (0.26) (0.26) (1.68)
Return of capital distribution -- -- (.11) (.11) -- -- --
----- ----- ----- ----- ----- ----- -----
Total Distributions (0.87) (0.87) (2.37) (2.37) (0.26) (0.26) (1.68)
----- ----- ----- ----- ----- ----- -----
Net Asset Value, End of Period $39.08 $37.64 $28.87 $28.04 $33.43 $32.77 $19.84
===== ===== ===== ===== ===== ===== =====
TOTAL RETURN (without sales charge) 39.7% 38.6% (6.7)% (7.4)% 70.4% 69.1% 21.6%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (in 000's) $120,830 $715,191 $95,261 $553,460 $106,666 $618,193 $22,454
Ratio of Expenses to Average Net Assets 1.2% 1.9% 1.1% 1.9% 1.2% 2.0% 1.3%
Ratio of Net Investment Income to
Average Net Assets (0.4)% (1.1)% (0.6)% (1.4)% (0.6)% (1.3)% (0.2)%
Portfolio Turnover Rate 101.6% 101.6% 78.4% 78.4% 105.4% 105.4% 93.8%
</TABLE>
CLASS C CLASS A CLASS C
---------- ---------- ----------
1992 1991(9) 1991
---------- ---------- ----------
Net Asset Value, Beginning of Period $17.87 $11.78 $11.93
----- ----- -----
Income From Investment Operations:
Net Investment Loss (0.18) (0.03) (0.11)
Net Gains or Losses on Securities (both
realized and unrealized) 3.59 6.20 6.42
----- ----- -----
Total From Investment Operations 3.41 6.17 6.31
----- ----- -----
Less Distributions:
Dividends (from net investment income) -- -- --
Distributions (from capital gain) (1.68) -- (0.37)
Return of capital distribution -- -- --
----- ----- -----
Total Distributions (1.68) -- (0.37)
----- ----- -----
Net Asset Value, End of Period $19.60 $17.95 $17.87
===== ===== =====
TOTAL RETURN (without sales charge) 20.8% 70.9% 54.4%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (in 000's) $179,081 $1,623 $58,656
Ratio of Expenses to Average Net Assets 2.0% 1.4%* 2.0%
Ratio of Net Investment Income to
Average Net Assets (1.0)% (0.5)%* (0.8)%
Portfolio Turnover Rate 93.8% 144.6% 144.6%
- ------------------
(9) The distribution of Class A shares commenced on December 17, 1990.
* Annualized
PIMCO Advisors Funds SEE ACCOMPANYING NOTES
<PAGE>
PIMCO ADVISORS FUND 61
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
For a Fund share outstanding throughout the period
<TABLE>
<CAPTION>
PIMCO ADVISORS INNOVATION FUND
---------------------------------------------------
CLASS A CLASS B CLASS C
------- ----------- -------
PERIOD ENDED SEPTEMBER 30,
---------------------------------------------------
1995(10) 1995(11) 1995(10)
------- ----------- -------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period $ 10.00 $ 11.81 $ 10.00
----- ----- -----
Income From Investment Operations:
Net Investment Loss (0.06)(12) (0.08) (0.13)(12)
Net Gains or Losses on Securities (both realized and unrealized) 4.80 2.93 4.78
----- ----- -----
Total From Investment Operations 4.74 2.85 4.65
----- ----- -----
Less Distributions:
Dividends (from net investment income) -- -- --
Distributions (from capital gain) -- -- --
----- ----- -----
Total Distributions -- -- --
----- ----- -----
Net Asset Value, End of Period $ 14.74 $ 14.66 $ 14.65
===== ===== ======
TOTAL RETURN (without sales charge) 47.4% 24.1% 46.5%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (in 000's) $28,239 $6,509 $63,952
Ratio of Expenses to Average Net Assets 1.4%* 2.3%* 2.2%*
Ratio of Net Investment Income to Average Net Assets (0.6)%* (1.7)%* (1.4)%*
Portfolio Turnover Rate 86.1% 86.1% 86.1%
</TABLE>
- ------------------
(10) The fund commenced operations on December 22, 1994.
(11) The distribution of Class B shares commenced on May 22, 1995.
(12) Reflecting voluntary waiver of investment advisory fee of $4,666 (.00 per
share) by the Manager as more fully described in Note 3(a) to the Financial
Statements.
* Annualized
<TABLE>
<CAPTION>
PIMCO ADVISORS INTERNATIONAL FUND
----------------------------------------------------------------------------------------------
CLASS A CLASS B CLASS C CLASS A CLASS C CLASS A CLASS C CLASS A
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
YEAR ENDED SEPTEMBER 30,
----------------------------------------------------------------------------------------------
1995 1995(14) 1995 1994 1994 1993 1993 1992
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period $ 12.92 $ 11.30 $ 12.56 $ 12.17 $ 11.92 $ 10.04 $ 9.92 $ 10.54
----- ----- ----- ----- ----- ----- ----- -----
Income From Investment
Operations:
Net Investment Income (Loss) 0.07 0.00 (0.02) 0.04 (0.06) 0.07 (0.01) 0.05
Net Gains or Losses on
Securities (both realized and
unrealized) (0.56) 0.45 (0.55) 0.94 0.93 2.80 2.75 (0.37)
----- ----- ----- ----- ----- ----- ----- -----
Total From Investment Operations (0.49) 0.45 (0.57) 0.98 0.87 2.87 2.74 (0.32)
----- ----- ----- ----- ----- ----- ----- -----
Less Distributions:
Dividends (from net investment
income) -- -- -- -- -- -- -- --
Distributions (from capital
gain) (0.24) -- (0.24) (0.23) (0.23) (0.74) (0.74) (0.18)
----- ----- ----- ----- ----- ----- ----- -----
Total Distributions (0.24) -- (0.24) (0.23) (0.23) (0.74) (0.74) (0.18)
----- ----- ----- ----- ----- ----- ----- -----
Net Asset Value, End of Period $ 12.19 $ 11.75 $ 11.75 $ 12.92 $ 12.56 $ 12.17 $ 11.92 $ 10.04
===== ===== ===== ===== ===== ===== ===== =====
TOTAL RETURN (without sales
charge) (3.7)% 4.0% (4.5)% 8.2% 7.4% 30.4% 29.4% (3.1)%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (in
000's) $17,951 $503 $215,349 $23,289 $294,492 $11,992 $147,194 $471
Ratio of Expenses to Average Net
Assets 1.5% 2.3%* 2.2% 1.4% 2.2% 1.4% 2.2% 1.9%
Ratio of Net Investment Income
to Average Net Assets 0.6% (0.1)%* (0.2)% 0.3% (0.5)% 0.6% (0.1)% 0.5%
Portfolio Turnover Rate 169.8% 169.8% 169.8% 55.1% 55.1% 67.6% 67.6% 159.6%
</TABLE>
CLASS C CLASS A CLASS C
---------- ---------- ----------
1992 1991(13) 1991
---------- ---------- ----------
Net Asset Value, Beginning of
Period $ 10.49 $ 9.48 $ 10.04
----- ----- -----
Income From Investment
Operations:
Net Investment Income (Loss) (0.06) 0.02 (0.08)
Net Gains or Losses on
Securities (both realized and
unrealized) (0.33) 1.04 1.76
----- ----- -----
Total From Investment Operations (0.39) 1.06 1.68
----- ----- -----
Less Distributions:
Dividends (from net investment
income) -- -- --
Distributions (from capital
gain) (0.18) -- (1.23)
----- ----- -----
Total Distributions (0.18) -- (1.23)
----- ----- -----
Net Asset Value, End of Period $ 9.92 $ 10.54 $ 10.49
===== ===== =====
TOTAL RETURN (without sales
charge) (3.8)% 17.3% 18.3%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (in
000's) $28,299 $22 $33,594
Ratio of Expenses to Average Net
Assets 2.6% 1.9%* 2.6%
Ratio of Net Investment Income
to Average Net Assets (0.6)% 0.7%* (0.2)%
Portfolio Turnover Rate 159.6% 107.1% 107.1%
- ------------------
(13) The distribution of Class A shares commenced on February 1, 1991.
(14) The distribution of Class B shares commenced on May 22, 1995.
* Annualized
PIMCO Advisors Funds SEE ACCOMPANYING NOTES
<PAGE>
62
PIMCO ADVISORS FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
For a Fund share outstanding throughout the period
<TABLE>
<CAPTION>
PIMCO ADVISORS PRECIOUS METALS FUND
----------------------------------------------------------------------------------------------
CLASS A CLASS B CLASS C CLASS A CLASS C CLASS A CLASS C CLASS A
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
YEAR ENDED SEPTEMBER 30,
----------------------------------------------------------------------------------------------
1995 1995(16) 1995 1994 1994 1993 1993 1992
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period $14.14 $11.61 $13.75 $10.32 $10.11 $7.54 $7.44 $7.51
----- ----- ----- ----- ----- ----- ----- -----
Income From Investment
Operations:
Net Investment Income (Loss) 0.07 (0.01) (0.02) 0.08 (0.02) 0.06 (0.02) (0.01)
Net Gains or Losses on
Securities (both realized and
unrealized) (1.88) 0.30 (1.83) 3.74 3.66 2.72 2.69 0.04
----- ----- ----- ----- ----- ----- ----- -----
Total From Investment Operations (1.81) 0.29 (1.85) 3.82 3.64 2.78 2.67 0.03
----- ----- ----- ----- ----- ----- ----- -----
Less Distributions:
Dividends (from net investment
income) -- -- -- -- -- -- -- --
Distributions (from capital
gain) -- -- -- -- -- -- -- --
----- ----- ----- ----- ----- ----- ----- -----
Total Distributions -- -- -- -- -- -- -- --
----- ----- ----- ----- ----- ----- ----- -----
Net Asset Value, End of Period $12.33 $11.90 $11.90 $14.14 $13.75 $10.32 $10.11 $7.54
===== ===== ===== ===== ===== ===== ===== =====
TOTAL RETURN (without sales
charge) (12.8)% 2.5% (13.5)% 37.0% 36.0% 36.9% 35.9% 0.4%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (in
000's) $7,670 $251 $42,341 $11,229 $62,825 $3,425 $23,884 $668
Ratio of Expenses to Average Net
Assets 1.4% 2.2%* 2.2% 1.3% 2.1% 1.4% 2.2% 1.9%
Ratio of Net Investment Income
(loss) to Average Net Assets 0.6% (0.2)%* (0.2)% 0.6% (0.2)% 0.6% (0.2)% (0.1)%
Portfolio Turnover Rate 8.7% 8.7% 8.7% 11.0% 11.0% 10.0% 10.0% 29.6%
</TABLE>
CLASS C CLASS A CLASS C
---------- ---------- ----------
1992 1991(15) 1991
---------- ---------- ----------
Net Asset Value, Beginning of
Period $7.46 $7.19 $9.40
----- ----- -----
Income From Investment
Operations:
Net Investment Income (Loss) (0.06) (0.07) (0.05)
Net Gains or Losses on
Securities (both realized and
unrealized) 0.04 0.39 (1.89)
----- ----- -----
Total From Investment Operations (0.02) 0.32 (1.94)
----- ----- -----
Less Distributions:
Dividends (from net investment
income) -- -- --
Distributions (from capital
gain) -- -- --
----- ----- -----
Total Distributions -- -- --
----- ----- -----
Net Asset Value, End of Period $7.44 $7.51 $7.46
===== ===== =====
TOTAL RETURN (without sales
charge) (0.3)% 6.8% (20.6)%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (in
000's) $6,633 $514 $6,995
Ratio of Expenses to Average Net
Assets 2.6% 2.1%* 2.4%
Ratio of Net Investment Income
(loss) to Average Net Assets (0.8)% (1.4)%* (0.8)%
Portfolio Turnover Rate 29.6% 19.4% 19.4%
- ------------------
(15) The distribution of Class A shares commenced on February 1, 1991.
(16) The distribution of Class B shares commenced on June 15, 1995.
* Annualized
<TABLE>
<CAPTION>
PIMCO ADVISORS HIGH INCOME FUND
----------------------------------------------------------------------------------------
CLASS A CLASS B CLASS C CLASS A CLASS C CLASS A CLASS C
----------- ----------- ----------- ----------- ---------- ----------- -----------
YEAR ENDED SEPTEMBER 30,
----------------------------------------------------------------------------------------
1995 1995(18) 1995 1994 1994 1993 1993
----------- ----------- ----------- ----------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period $7.56 $7.75 $7.51 $8.78 $8.75 $8.68 $8.65
----- ----- ----- ----- ---------- ----- -----
Income From Investment
Operations:
Net Investment Income 0.65 0.22 0.58 0.68 0.62 0.75 0.68
Net Gains or Losses on Securities
(both realized and unrealized) 0.39 0.16 0.39 (1.23 ) (1.26) 0.10 0.10
----- ----- ----- ----- ---------- ----- -----
Total From Investment Operations 1.04 0.38 0.97 (0.55 ) (0.64) 0.85 0.78
----- ----- ----- ----- ---------- ----- -----
Less Distributions:
Dividends (from net investment
income) (0.66) (0.21) (0.60) (0.67) (0.60) (0.75) (0.68)
Distributions (from capital gain) -- -- -- -- -- -- --
----- ----- ----- ----- ---------- ----- -----
Total Distributions (0.66) (0.21) (0.60) (0.67) (0.60) (0.75) (0.68)
----- ----- ----- ----- ---------- ----- -----
Net Asset Value, End of Period $7.94 $7.92 $7.88 $7.56 $7.51 $8.78 $8.75
===== ===== ===== ===== ========= ===== =====
TOTAL RETURN (without sales
charge) 14.5% 4.9% 13.5% (6.5)% (7.5)% 10.3% 9.5%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (in
000's) $7,791 $4,552 $157,507 $4,336 $179,274 $5,675 $255,266
Ratio of Expenses to Average Net
Assets 1.1% 1.9%* 1.9% 1.1% 1.9% 1.2% 2.0%
Ratio of Net Investment Income to
Average Net Assets 8.5% 7.8%* 7.7% 8.4% 7.7% 8.7% 8.0%
Portfolio Turnover Rate 162.5% 162.5% 162.5% 133.9% 133.9% 124.1% 124.1%
</TABLE>
<TABLE>
<CAPTION>
CLASS A CLASS C CLASS A CLASS C
----------- ----------- ----------- -----------
1992 1992 1991(17) 1991
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period $8.36 $8.36 $8.56 $8.55
----- ----- ----- -----
Income From Investment
Operations:
Net Investment Income 0.79 0.74 0.57 0.85
Net Gains or Losses on Securities
(both realized and unrealized) 0.29 0.25 (0.14 ) (0.17)
----- ----- ----- -----
Total From Investment Operations 1.08 0.99 0.43 0.68
----- ----- ----- -----
Less Distributions:
Dividends (from net investment
income) (0.76 ) (0.70 ) (0.63 ) (0.87 )
Distributions (from capital gain) -- -- -- --
----- ----- ----- -----
Total Distributions (0.76 ) (0.70 ) (0.63 ) (0.87 )
----- ----- ----- -----
Net Asset Value, End of Period $8.68 $8.65 $8.36 $8.36
===== ===== ===== =====
TOTAL RETURN (without sales
charge) 13.5% 12.4% 8.2% 8.5%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (in
000's) $4,257 $242,160 $1,456 $270,622
Ratio of Expenses to Average Net
Assets 1.2% 1.9% 1.2%* 1.9%
Ratio of Net Investment Income to
Average Net Assets 9.3% 8.7% 10.5%* 10.1%
Portfolio Turnover Rate 162.8% 162.8% 124.0% 124.0%
</TABLE>
- ------------------
(17) The distribution of Class A shares commenced on February 6, 1991.
(18) The distribution of Class B shares commenced on May 22, 1995.
* Annualized
PIMCO Advisors Funds SEE ACCOMPANYING NOTES
<PAGE>
PIMCO ADVISORS FUND 63
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
For a Fund share outstanding throughout the period
<TABLE>
<CAPTION>
PIMCO ADVISORS
TOTAL RETURN INCOME FUND
----------------------------------
CLASS A CLASS B CLASS C
---------- ---------- ----------
PERIOD ENDED SEPTEMBER 30,
----------------------------------
1995(19) 1995(20) 1995(19)
---------- ---------- ----------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period $ 10.00 $ 10.48 $ 10.00
----- ----- -----
Income From Investment Operations:
Net Investment Income 0.41 0.16 0.35
Net Gains or Losses on Securities (both realized and unrealized) 0.68 0.24 0.69
----- ----- -----
Total From Investment Operations 1.09 0.40 1.04
----- ----- -----
Less Distributions:
Dividends (from net investment income) (0.39) (0.15) (0.34)
Distributions (from capital gain) -- -- --
----- ----- -----
Total Distributions (0.39) (0.15) (0.34)
----- ----- -----
Net Asset Value, End of Period $ 10.70 $ 10.73 $ 10.70
===== ===== =====
TOTAL RETURN (without sales charge) 11.1% 3.8% 10.5%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (in 000's) $37,714 $8,805 $45,631
Ratio of Expenses to Average Net Assets 1.2%* 2.0%* 2.0%*
Ratio of Net Investment Income to Average Net Assets 5.1%* 4.2%* 4.3%*
Portfolio Turnover Rate 98.0% 98.0% 98.0%
</TABLE>
==================
(19) The fund commenced operations on December 22, 1994.
(20) The distribution of Class B shares commenced on May 22, 1995.
* Annualized
<TABLE>
<CAPTION>
PIMCO ADVISORS TAX EXEMPT FUND
----------------------------------------------------------------------------------------------
CLASS A CLASS B CLASS C CLASS A CLASS C CLASS A CLASS C CLASS A
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
YEAR ENDED SEPTEMBER 30,
----------------------------------------------------------------------------------------------
1995 1995(22) 1995 1994 1994 1993 1993 1992
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period $ 11.21 $ 11.90 $ 11.21 $ 12.74 $ 12.73 $ 11.94 $ 11.94 $ 11.53
----- ----- ----- ----- ----- ----- ----- -----
Income From Investment
Operations:
Net Investment Income 0.57 0.16 0.48 0.56 0.47 0.61 0.52 0.65
Net Gains or Losses on Securities
(both realized and unrealized) 0.63 (0.07) 0.62 (1.31) (1.30) 1.02 1.01 0.42
----- ----- ----- ----- ----- ----- ----- -----
Total From Investment Operations 1.20 0.09 1.10 (0.75) (0.83) 1.63 1.53 1.07
----- ----- ----- ----- ----- ----- ----- -----
Less Distributions:
Dividends (from net investment
income) (0.58) (0.15) (0.49) (0.58) (0.49) (0.64) (0.55) (0.66)
Distributions (from capital gain) -- -- -- (0.20) (0.20) (0.19) (0.19) --
----- ----- ----- ----- ----- ----- ----- -----
Total Distributions (0.58) (0.15) (0.49) (0.78) (0.69) (0.83) (0.74) (0.66)
----- ----- ----- ----- ----- ----- ----- -----
Net Asset Value, End of Period $ 11.83 $ 11.84 $ 11.82 $ 11.21 $ 11.21 $ 12.74 $ 12.73 $ 11.94
===== ===== ===== ===== ===== ===== ===== =====
TOTAL RETURN (without sales
charge) 11.0% 0.8% 10.1% (6.1)% (6.7)% 14.2% 13.3% 9.5%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (in
000's) $2,701 $288 $54,224 $2,726 $68,214 $2,852 $81,475 $2,295
Ratio of Expenses to Average Net
Assets 1.1% 1.9%* 1.8% 1.1% 1.8% 1.1% 1.8% 1.1%
Ratio of Net Investment Income to
Average Net Assets 5.0% 4.0%* 4.3% 4.7% 4.0% 5.0% 4.2% 5.6%
Portfolio Turnover Rate 35.0% 35.0% 35.0% 63.2% 63.2% 55.9% 55.9% 107.4%
</TABLE>
CLASS C CLASS A CLASS C
---------- ---------- ----------
1992 1991(21) 1991
---------- ---------- ----------
Net Asset Value, Beginning of
Period $ 11.53 $ 11.30 $ 10.97
----- ----- -----
Income From Investment
Operations:
Net Investment Income 0.58 0.38 0.62
Net Gains or Losses on Securities
(both realized and unrealized) 0.41 0.23 0.56
----- ----- -----
Total From Investment Operations 0.99 0.61 1.18
----- ----- -----
Less Distributions:
Dividends (from net investment
income) (0.58) (0.38) (0.62)
Distributions (from capital gain) -- -- --
----- ----- -----
Total Distributions (0.58) (0.38) (0.62)
----- ----- -----
Net Asset Value, End of Period $ 11.94 $ 11.53 $ 11.53
===== ===== =====
TOTAL RETURN (without sales
charge) 8.8% 10.4% 11.0%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (in
000's) $52,113 $321 $46,663
Ratio of Expenses to Average Net
Assets 1.8% 1.1%* 1.8%
Ratio of Net Investment Income to
Average Net Assets 4.9% 5.8%* 5.5%
Portfolio Turnover Rate 107.4% 119.0% 119.0%
- ------------------
(21) The distribution of Class A shares commenced on March 14, 1991.
(22) The distribution of Class B shares commenced on May 30, 1995.
* Annualized
PIMCO Advisors Funds SEE ACCOMPANYING NOTES
<PAGE>
64
PIMCO ADVISORS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
For a Fund share outstanding throughout the period
<TABLE>
<CAPTION>
PIMCO ADVISORS U.S. GOVERNMENT FUND
--------------------------------------------------------------------------------------------------------
CLASS A CLASS B CLASS C CLASS A CLASS C CLASS A CLASS C CLASS A CLASS C CLASS A CLASS C
------- -------- -------- ------- -------- ------- -------- ------- -------- -------- --------
YEAR ENDED SEPTEMBER 30,
--------------------------------------------------------------------------------------------------------
1995 1995(24) 1995 1994 1994 1993 1993 1992 1992 1991(23) 1991
------- -------- -------- ------- -------- ------- -------- ------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of
Period $ 8.68 $ 9.17 $ 8.65 $ 9.71 $ 9.68 $ 9.61 $ 9.58 $ 9.46 $ 9.45 $ 9.31 $ 9.02
------- -------- -------- ------- -------- ------- -------- ------- -------- -------- --------
Income From
Investment
Operations:
Net Investment
Income 0.58 0.16 0.51 0.60 0.53 0.65 0.58 0.75 0.69 0.65 0.81
Net Gains or Losses
on Securities
(both realized and
unrealized) 0.47 (0.02) 0.48 (1.03) (1.03) 0.10 0.10 0.19 0.15 0.15 0.46
------- -------- -------- ------- -------- ------- -------- ------- -------- -------- --------
Total From
Investment
Operations 1.05 0.14 0.99 (0.43) (0.50) 0.75 0.68 0.94 0.84 0.80 1.27
------- -------- -------- ------- -------- ------- -------- ------- -------- -------- --------
Less Distributions:
Dividends (from net
investment income) (0.57) (0.16) (0.51) (0.60) (0.53) (0.65) (0.58) (0.79) (0.71) (0.65) (0.84)
Distributions (from
capital gain) -- -- -- -- -- -- -- -- -- -- --
------- -------- -------- ------- -------- ------- -------- ------- -------- -------- --------
Total Distributions (0.57) (0.16) (0.51) (0.60) (0.53) (0.65) (0.58) (0.79) (0.71) (0.65) (0.84)
------- -------- -------- ------- -------- ------- -------- ------- -------- -------- --------
Net Asset Value, End
of Period $ 9.16 $ 9.15 $ 9.13 $ 8.68 $ 8.65 $ 9.71 $ 9.68 $ 9.61 $ 9.58 $ 9.46 $ 9.45
======= ======== ======== ======= ======== ======= ======== ======= ======== ======== ========
TOTAL RETURN
(without sales
charge) 12.6% 1.6% 11.8% (4.6)% (5.3)% 8.2% 7.4% 10.3% 9.2% 12.3% 14.8%
RATIOS/SUPPLEMENTAL
DATA
Net Assets, End of
Period (in 000's) $16,248 $1,671 $287,086 $15,250 $365,044 $19,939 $533,288 $15,224 $531,310 $3,983 $429,796
Ratio of Expenses to
Average Net Assets 1.0% 1.8%* 1.8% 1.0% 1.7% 1.0% 1.7% 1.0% 1.8% 1.1%* 1.8%
Ratio of Net
Investment Income
to Average Net
Assets 6.5% 5.6%* 5.8% 6.5% 5.8% 6.8% 6.1% 7.8% 7.3% 9.3%* 8.8%
Portfolio Turnover
Rate 115.0% 115.0% 115.0% 121.0% 121.0% 199.7% 199.7% 156.4% 156.4% 37.1% 37.1%
</TABLE>
- ------------------------------
(23) The distribution of Class A shares commenced on January 3, 1991.
(24) The distribution of Class B shares commenced on June 2, 1995.
* Annualized
<PAGE>
FINANCIAL HIGHLIGHTS
For a Fund share outstanding throughout the period
<TABLE>
<CAPTION>
PIMCO ADVISORS SHORT-INTERMEDIATE FUND
----------------------------------------------------------------------------------------
CLASS B CLASS C CLASS A CLASS C CLASS A CLASS C CLASS A
CLASS A -------- -------- ------- --------- ------- --------- -----------
--------
YEAR ENDED SEPTEMBER 30,
----------------------------------------------------------------------------------------
1995 1995(26) 1995 1994 1994 1993 1993 1992
-------- -------- -------- ------- --------- ------- --------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 9.37 $ 9.49 $ 9.37 $ 9.81 $ 9.82 $ 9.96 $ 9.97 $ 10.03
-------- -------- -------- ------- --------- ------- --------- -----
Income From Investment Operations:
Net Investment Income 0.59 0.18 0.54 0.47 0.42 0.48 0.44 0.60(28)
Net Gains or Losses on Securities
(both realized and unrealized) 0.25 0.13 0.23 (0.43) (0.44) (0.15) (0.16) (0.04)
-------- -------- -------- ------- --------- ------- --------- -----
Total From Investment Operations 0.84 0.31 0.77 0.04 (0.02) 0.33 0.28 0.56
-------- -------- -------- ------- --------- ------- --------- -----
Less Distributions:
Dividends (from net investment
income) (0.59) (0.18) (0.54) (0.48) (0.43) (0.48) (0.43) (0.62)
Distributions (from capital gain) -- -- -- -- -- -- -- (0.01)
-------- -------- -------- ------- --------- ------- --------- -----
Total Distributions (0.59) (0.18) (0.54) (0.48) (0.43) (0.48) (0.43) (0.63)
-------- -------- -------- ------- --------- ------- --------- -----
Net Asset Value, End of Period $ 9.62 $ 9.62 $ 9.60 $ 9.37 $ 9.37 $ 9.81 $ 9.82 $ 9.96
======== ======== ======== ======= ========= ======= ========= =====
TOTAL RETURN (without sales charge) 9.3% 3.3% 8.5% 0.4% (0.2)% 3.4% 2.9% 5.8%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (in 000's) $6,343 $941 $65,608 $4,913 $88,909 $7,169 $123,857 $13,535
Ratio of Expenses to Average Net
Assets 1.0% 1.7%* 1.5% 0.9% 1.4% 1.0% 1.5% 0.9%
Ratio of Net Investment Income to
Average Net Assets 6.3% 5.4%* 5.7% 4.9% 4.4% 4.9% 4.4% 6.0%
Portfolio Turnover Rate 173.4% 173.4% 173.4% 86.2% 86.2% 112.7% 112.7% 132.8%
</TABLE>
<TABLE>
<CAPTION>
CLASS C CLASS A CLASS C
------------ ---------- -----------
PERIOD ENDED SEPTEMBER 30,
---------------------------------------
1992 1991(25) 1991(25)
------------ ---------- -----------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period $ 10.03 $ 10.00 $ 10.00
----- ----- -----
Income From Investment Operations:
Net Investment Income 0.55(28) 0.07(27) 0.07(27)
Net Gains or Losses on Securities
(both realized and unrealized) (0.03) 0.03 0.03
----- ----- -----
Total From Investment Operations 0.52 0.10 0.10
----- ----- -----
Less Distributions:
Dividends (from net investment
income) (0.57) (0.07) (0.07)
Distributions (from capital gain) (0.01) -- --
----- ----- -----
Total Distributions (0.58) (0.07) (0.07)
----- ----- -----
Net Asset Value, End of Period $ 9.97 $ 10.03 $ 10.03
===== ===== =====
TOTAL RETURN (without sales charge) 5.4% 8.5% 8.6%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (in 000's) $135,655 $844 32,052
Ratio of Expenses to Average Net
Assets 1.3% 0.4%* 0.9%*
Ratio of Net Investment Income to
Average Net Assets 5.5% 5.3%* 5.0%*
Portfolio Turnover Rate 132.8% 114.6% 114.6%
</TABLE>
==============================
(25) The fund commenced operations on August 16, 1991.
(26) The distribution of Class B shares commenced on May 22, 1995.
(27) Reflecting expense reduction of $2,957 (.00 per share) and voluntary waiver
of investment advisory fee of $29,149 (.01 per share) by the Manager as
more fully described in Note 3(a) to the Financial Statements.
(28) Reflecting voluntary waiver of investment advisory fee of $138,110 (.02 per
share) by the Manager as more fully described in Note 3(a) to the Financial
Statements.
* Annualized
PIMCO Advisors Funds SEE ACCOMPANYING NOTES
<PAGE>
PIMCO ADVISORS FUNDS 65
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
For a Fund share outstanding throughout the period
<TABLE>
<CAPTION>
PIMCO ADVISORS MONEY MARKET FUND
----------------------------------------------------------------------
CLASS A CLASS B CLASS C CLASS A CLASS C
------------ ---------- ------------ ------------ ------------
YEAR ENDED SEPTEMBER 30,
----------------------------------------------------------------------
1995 1995(30) 1995 1994 1994
------------ ---------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
----- ----- ----- ----- -----
Income From Investment Operations:
Net Investment Income 0.054(34) 0.007 0.054(34) 0.030(33) 0.030(33)
----- ----- ----- ----- -----
Less Distributions:
Dividends (from net investment
income) (0.054) (0.007) (0.054) (0.030) (0.030)
----- ----- ----- ----- -----
Net Asset Value, End of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
===== ===== ===== ===== =====
TOTAL RETURN (without sales
charge) 5.4% 0.7% 5.4% 3.0% 3.0%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (in
000's) $13,553 $21 $69,364 $12,933 $84,064
Ratio of Expenses to Average Net
Assets 0.49% 1.46%* 0.50% 0.75% 0.75%
Ratio of Net Investment Income to
Average Net Assets 5.40% 4.79%* 5.37% 3.38% 3.18%
Portfolio Turnover Rate == == == == ==
</TABLE>
CLASS A CLASS C
------------ ------------
1993 1993
------------ ------------
Net Asset Value, Beginning of
Period $ 1.00 $ 1.00
----- -----
Income From Investment Operations:
Net Investment Income 0.025(32) 0.025(32)
----- -----
Less Distributions:
Dividends (from net investment
income) (0.025) (0.025)
----- -----
Net Asset Value, End of Period $ 1.00 $ 1.00
===== =====
TOTAL RETURN (without sales
charge) 2.5% 2.5%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (in
000's) $3,729 $44,657
Ratio of Expenses to Average Net
Assets 0.75% 0.75%
Ratio of Net Investment Income to
Average Net Assets 2.47% 2.51%
Portfolio Turnover Rate -- --
<TABLE>
<CAPTION>
CLASS A CLASS C CLASS A CLASS C
------------ ------------ ---------- ---------
1992 1992 1991(29) 1991
------------ ------------ ---------- ---------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period $ 1.00 $ 1.00 $ 1.00 $ 1.00
----- ----- ----- ---------
Income From Investment Operations:
Net Investment Income 0.032(31) 0.034(31) 0.029 0.053
----- ----- ----- ---------
Less Distributions:
Dividends (from net investment
income) (0.032) (0.034) (0.029) (0.053)
----- ----- ----- ---------
Net Asset Value, End of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00
===== ===== ===== =========
TOTAL RETURN (without sales
charge) 3.2% 3.4% 2.9% 5.3%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (in
000's) $655 $50,761 $275 $63,751
Ratio of Expenses to Average Net
Assets 0.9% 1.0% 1.1%* 1.5%
Ratio of Net Investment Income to
Average Net Assets 3.2% 3.4% 4.8%* 5.5%
Portfolio Turnover Rate -- -- -- --
</TABLE>
- ------------------------------
(29) The distribution of Class A shares commenced on March 5, 1991.
(30) The distribution of Class B shares commenced on July 17, 1995.
(31) Reflecting voluntary waiver of investment advisory fee of $31,042 (.001 per
share) by the Manager as more fully described in Note 3(a) to the Financial
Statements.
(32) Reflecting voluntary waiver of investment advisory fee of $160,471 (.003
per share) by the Manager as more fully described in Note 3(a) to the
Financial Statements.
(33) Reflecting voluntary waiver of investment advisory fee of $142,336 (.002
per share) by the Manager as more fully described in Note 3(a) to the
Financial Statements.
(34) Reflecting voluntary waiver of investment advisory fee of $23,048 (.000 per
share) by the Manager as more fully described in Note 3(a) to the Financial
Statements.
* Annualized
PIMCO Advisors Funds SEE ACCOMPANYING NOTES
<PAGE>
66 PIMCO ADVISORS FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
1 ORGANIZATION AND BUSINESS
PIMCO Advisors Funds (the "Trust") is an investment company registered under
the Investment Company Act of 1940, as amended. It is organized as a
Massachusetts business trust and is an open-end, diversified, management, series
investment company which currently consists of fifteen Funds: PIMCO Advisors
Equity Income Fund, PIMCO Advisors Value Fund, PIMCO Advisors Growth Fund, PIMCO
Advisors Target Fund, PIMCO Advisors Discovery Fund, PIMCO Advisors Opportunity
Fund, PIMCO Advisors Innovation Fund, PIMCO Advisors International Fund, PIMCO
Advisors Precious Metals Fund, PIMCO Advisors High Income Fund, PIMCO Advisors
Total Return Income Fund, PIMCO Advisors Tax Exempt Fund, PIMCO Advisors U.S.
Government Fund, PIMCO Advisors Short=Intermediate Fund and PIMCO Advisors Money
Market Fund.
The Trust offers Class A, Class B and Class C shares of each Fund with the
exception of the Opportunity Fund which does not offer Class B shares. Class A
shares are sold with an initial sales charge. Class B and Class C shares are
sold with a contingent deferred sales charge. All classes of shares have
identical voting, dividend, liquidation and other rights and the same terms and
conditions, except that each class bears different distribution expenses and has
exclusive voting rights with respect to its distribution plan.
2 SIGNIFICANT ACCOUNTING POLICIES
A)PORTFOLIO VALUATIONS: The portfolio investments of the Money
Market Fund are valued at either amortized cost or original cost plus accrued
interest receivable, both of which approximate market value. The amortized cost
of a security is determined by valuing it at original cost and thereafter
amortizing any discount or premium from its face value at a constant rate until
maturity. Since this method does not give consideration to fluctuating interest
rates it may at times result in book valuations that are higher or lower than
the current market price.
For the other Funds, securities for which market quotations are readily
available are valued at market value, which is determined by using the last
reported sale price, or, if no sales are reported--and in the case of certain
securities traded over-the-counter--the mean between the last reported bid and
asked prices. U.S. Government Securities are traded over-the-counter. Short-term
obligations having remaining maturities of 60 days or less are valued at either
amortized cost or original cost plus accrued interest receivable, both of which
approximate market value. All other securities and assets, including any
restricted and/or illiquid securities, will be valued at their fair value as
determined pursuant to procedures adopted by the Trustees.
Each Fund may enter into repurchase agreements with domestic commercial banks
and registered broker/dealers whereby the Fund, through its custodian, receives
delivery of the underlying securities. The market value of these securities will
be at least equal at all times to the total amount of the repurchase obligation,
including the interest factor. The Fund bears a risk of loss in the event that
the other party to a repurchase agreement defaults on its obligations and the
Fund is delayed or prevented from exercising its right to dispose of the
underlying securities including the risk of a possible decline in the value of
the underlying securities during the period while the Fund seeks to assure its
rights. Each Fund's investment adviser, acting under supervision of the Board of
Trustees, reviews the value of the collateral and the creditworthiness of those
banks and dealers with which the Fund enters into repurchase agreements to
evaluate potential risks. In the event of counterparty default, the Fund has the
right to use the underlying securities to offset the loss.
B)FOREIGN CURRENCY TRANSACTIONS: With respect to the Funds
that invest in foreign securities, transactions denominated in foreign
currencies are recorded in the Fund's records at the current prevailing exchange
rate. Asset and liability accounts that are denominated in a foreign currency
are adjusted to reflect the current exchange rate at the end of the period.
Transaction gains or losses resulting from changes in the exchange rate during
the reporting period or upon settlement of the foreign currency transaction are
reported in operations for the current period. Investing in securities of
foreign companies and foreign governments involves special risks and
considerations not typically associated with investing in U.S. companies and the
U.S. Government. These risks include reevaluation of currencies and future
adverse political and economic developments. Moreover, securities of many
foreign companies and foreign governments and their markets may be less liquid
and their prices more volatile than those of securities of comparable U.S.
companies and the U.S. Government.
It is not practicable to isolate the portion of the results of operations
arising as a result of changes in foreign exchange rates from the fluctuations
arising from changes in the market prices of securities during the period.
C)OPTIONS: When a Fund writes a covered call or a put option,
an amount equal to the premium received by it is included in the Fund's
Statement of Assets and Liabilities as an asset and as an equivalent liability.
The amount of the liability is subsequently "marked to market" to reflect the
current market value of the option written. The current market value of a
written option is the last reported sale price on the principal exchange on
which such option is traded or, if no sales are reported, the mean between the
last reported bid and asked prices. If an option which the Fund has written
either expires on its stipulated expiration date, or if the Fund enters into a
closing purchase transaction, the Fund realizes a gain (or loss if the cost of
the closing transaction exceeds the premium received when the option was
written) without regard to any unrealized gain or loss on the underlying
security, and the liability related to such option is extinguished. If a call
option which the Fund has written is exercised, the Fund realizes a gain or loss
from the sale of the underlying security and the proceeds from such sale are
increased by the premium originally received. If a put option which the Fund has
written is exercised, the amount of the premium originally received will reduce
the cost of the security which the Fund purchases upon exercise of the option.
The premium paid by the Fund for the purchase of a call or put option is
included in the Fund's Statement of Assets and Liabilities as an investment and
subsequently "marked to market" to reflect the current market value of the
option purchased. The current market value of a purchased option is the last
reported sale price on the principal exchange on which such option is traded or,
if no sales are reported, the mean between the last reported bid and asked
prices.
<PAGE>
PIMCO ADVISORS FUNDS 67
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS--CONTINUED
If an option which the Fund has purchased expires on its stipulated expiration
date, the Fund realizes a loss in the amount of the cost of the option. If the
Fund enters into a closing transaction, it realizes a gain or loss, depending on
whether the proceeds from the sale are greater or less than the cost of the
option. If the Fund exercises a put option, it realizes a gain or loss from the
sale of the underlying security and the proceeds from such sale will be
decreased by the premium originally paid. If the Fund exercises a call option,
the cost of the security which the Fund purchases upon exercise will be
increased by the premium originally paid.
D)FUTURES CONTRACTS: Initial margin deposits made upon entering
into futures contracts are recognized as assets due from the broker (the Fund's
agent in acquiring the futures position). During the period the futures contract
is open, changes in the value of the contract are recognized as unrealized gains
or losses by "marking to market" on a daily basis to reflect the market value of
the contract at the end of each day's trading.
Variation margin payments are received or made, depending upon whether
unrealized gains or losses are incurred. When the contract is closed, the Fund
records a realized gain or loss equal to the difference between the proceeds
from (or cost of) the closing transaction and the Fund's basis in the contract.
Open futures contracts at September 30, 1995 were as follows:
<TABLE>
<CAPTION>
Unrealized
Market Appreciation
Type Cost Value (Depreciation)
- ----------------------------------------------------------------------------------
<S> <C> <C> <C>
TOTAL RETURN INCOME FUND:
Long U.S. Treasury 5 Year Note (12/95) $14,993,750 $15,032,500 $ 38,750
Long U.S. Treasury 10 Year Note (12/95) 35,934,000 35,941,500 7,500
Long U.S. Treasury 30 Year Bond (12/95) 13,069,063 13,149,532 80,469
Long German Gov't 10 Year DM (12/95) 1,659,758 1,673,813 14,055
-------
$140,774
-------
-------
U.S. GOVERNMENT FUND:
Long U.S. Treasury 5 Year Note (12/95) $ 2,041,906 $ 2,040,125 $ (1,781)
Long U.S. Treasury 10 Year Note (12/95) 54,055,188 54,132,750 77,562
Long U.S. Treasury 30 Year Bond (12/95) 21,947,750 22,068,344 120,594
-------
$196,375
-------
-------
SHORT-INTERMEDIATE FUND:
Long U.S. Treasury 2 Year Note (12/95) $ 8,277,500 $ 8,288,750 $ 11,250
Long U.S. Treasury 5 Year Note (12/95) 3,429,859 3,436,000 6,141
-------
17,391
-------
Short U.S. Treasury 10 Year Note (12/95) $ (110,000) $ (110,250) (250)
-------
$ 17,141
=======
</TABLE>
E)FORWARD FOREIGN CURRENCY CONTRACTS: Forward foreign
currency contracts are valued at the forward rate, and are marked to market
daily. The change in market value is recorded by the Fund as an unrealized gain
or loss. When the contract is closed, the Fund records a realized gain or loss
equal to the difference between the value of the contract at the time it was
opened and the value at the time it was closed.
Forward foreign currency contracts are contracts for delayed delivery of
financial interests in which the seller agrees to make delivery at a specified
future date of a specified financial instrument, at a specified price or yield.
Risks arise from changes in the market value of the underlying instruments and
from the possible inability of counterparties to meet the terms of their
contracts. Credit risk is limited to amounts recorded as unrealized appreciation
on open contracts.
F)DERIVATIVES AND OFF BALANCE SHEET RISK: A Fund's use of
futures contracts, forward foreign currency contracts and options may involve,
to varying degrees, elements of market risk in excess of the amount recognized
in the Statement of Assets and Liabilities. These derivative financial
instruments ("derivatives") are used to adjust the risk and return
characteristics of a Fund's portfolio. Derivatives are not used for the purpose
of leverage. The objective in buying or selling a derivative instrument is to
increase or decrease a Fund's exposure to changing security prices, interest
rates or currency exchange rates. If the Manager misjudges market conditions or
employs a strategy that does not correlate well with the Fund's other
investments, use of these derivatives could result in a loss, regardless of the
Manager's original intent to reduce risk.
G)SECURITY TRANSACTIONS: Security transactions are recorded on
trade=date. Interest income is recorded on the accrual basis.
Realized gains or losses on sales of investments are determined on the
identified cost basis for accounting and tax purposes.
Purchases of securities under agreements to resell are carried at cost, and
the related accrued interest is included in interest receivable.
H)FEDERAL TAXES: Each of the Funds is a separate entity for
federal income tax purposes. It is each Fund's policy to qualify as a regulated
investment company by complying with the requirements of the Internal Revenue
Code applicable to regulated investment companies, and to pay out all its net
investment income and net capital gains to its shareholders. Therefore, no
federal income tax provision is required.
I)EQUALIZATION: Certain Funds follow the accounting practice
known as equalization by which a portion of the proceeds from sales and costs of
redemptions of shares of beneficial interest, equivalent on a per share basis to
the amount of undistributed net investment income on the date of the
transaction, is credited or charged to undistributed net investment income. As a
result, undistributed net investment income per share is unaffected by sales or
redemptions of Fund shares.
J)EXPENSES: Expenses directly attributable to each Fund are
charged to that Fund's operations; expenses which are applicable to all Funds
are allocated among such Funds on a basis deemed fair and equitable by the
Trustees, usually on the basis of relative net assets.
K)ORGANIZATION COSTS: Costs incurred in connection with each
Fund's organization and registration are amortized on a straight=line basis over
the period of benefit, not to exceed 60 months.
L)DIVIDENDS AND DISTRIBUTIONS: Dividend income and
distributions to shareholders are recorded on the ex=dividend date. Income
distributions and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences are primarily due to differing treatments for
foreign currency transactions,
<PAGE>
68 PIMCO ADVISORS FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS--CONTINUED
original issue discount, market discount and net operating losses. The effect of
these differences for the year ended September 30, 1995 are as follows:
Undistributed
Net Accumulated
Investment Realized
Income Gain/(Loss)
- -----------------------------------------------------------------------
Equity Income $ 45,810 $ (45,810)
Value 1,147 (1,147)
International (812,664) 812,664
High Income 139,032 (139,032)
Total Return Income 25,069 (25,069)
Tax Exempt 66,195 (66,195)
U.S. Government 229,231 (229,231)
Short-Intermediate 81,806 (81,806)
The current year's net investment losses of the following Funds have been
charged to undistributed net realized gain on investments of the respective
Funds:
Growth $ 1,692,133
Target 5,836,356
Opportunity 6,920,088
Innovation 398,331
The current year's net investment losses of the Discovery and Precious Metals
Funds in the amounts of $22,777 and $36,880, respectively, have been charged to
the capital of those Funds.
In addition, the capital loss carryforwards of the U.S. Government Fund in the
amount of $44,567,716 which expired in 1995 have been charged to capital of that
Fund.
3 FEES AND RELATED PARTY TRANSACTIONS
A)INVESTMENT ADVISORY FEES: PIMCO Advisors L.P. (the
"Manager") is the investment manager of each of the PIMCO Advisors Funds. The
Manager manages the day=to=day investment affairs and establishes investment
policies for the Trust, and pays all salaries, fees and expenses of officers and
trustees of the Trust who are affiliated with the Manager. Each of the Funds
also has a sub=adviser which, under the supervision of the Manager, directs the
investments of the Fund's assets. Other than the sub=adviser of the Precious
Metals Fund, all of the sub=advisers are affiliates of the Manager. Columbus
Circle Investors serves as the sub=adviser of the Equity Income Fund, Growth
Fund, Target Fund, Opportunity Fund, Innovation Fund, Tax Exempt Fund and Money
Market Fund.
Under the Management Contracts between the Trust and the Manager relating to
each Fund, the Manager is paid at the percentages shown below of the relevant
Fund's average daily net assets for its services to the Trust and the Fund.
Pursuant to Sub=adviser Agreements between the Manager and each of the sub=
advisers with respect to the Funds advised by each, the Manager pays to each
sub=adviser, out of the fee received by the Manager under the relevant
Management Contract, the following percentages of the relevant Fund's average
daily net assets as compensation for the services provided by the sub=adviser.
<TABLE>
<CAPTION>
SUB=ADVISER FEE PAID BY
MANAGEMENT FEE MANAGER
FUND (AS % OF NET ASSETS) SUB=ADVISER (AS % OF NET ASSETS)
=============== ============================ ================================ =============================
<S> <C> <C> <C>
Equity Income .75% of first $200 million Columbus Circle Investors .375% of first $200 million
.70% of amounts over $200 .350% of amounts over $200
million million
Value .70% NFJ Investment Group .350%
Growth .70% of first $200 million Columbus Circle Investors .350% of first $200 million
.65% of amounts over $200 .325% of amounts over $200
million million
Target .75% of first $200 million Columbus Circle Investors .375% of first $200 million
.70% of amounts over $200 .350% of amounts over $200
million million
Discovery .75% of first $200 million Cadence Capital Management .375% of first $200 million
.70% of amounts over $200 .350% of amounts over $200
million million
Opportunity .75% of first $200 million Columbus Circle Investors .375% of first $200 million
.70% of amounts over $200 .350% of amounts over $200
million million
Innovation .75% of first $200 million Columbus Circle Investors .375% of first $200 million
.70% of amounts over $200 .350% of amounts over $200
million million
International .80% Blairlogie Capital Management .40%
Precious Metals .75% of first $200 million Van Eck Associates Corporation .375% of first $200 million
.70% of amounts over $200 .350% of amounts over $200
million million
High Income .60% of first $250 million Pacific Investment Management .25%
.50% of amounts over $250 Company
million
Total Return .60% of first $250 million Pacific Investment Management .25%
Income .50% of amounts over $250 Company
million
Short=Intermediate .50% of first $250 million Pacific Investment Management .25%
.45% of next $250 million Company
.40% of amounts over $500
million
U.S. Government .60 of first $250 million Pacific Investment Management .25%
.50 of amounts over $250 Company
million
Tax Exempt .60% Columbus Circle Investors .30%
Money Market .50% of first $250 million Columbus Circle Investors .25% of first $250 million
.40% of amounts over $250 .20% of amounts over $250
million million
</TABLE>
The Manager's compensation with respect to any Fund is subject to reduction to
the extent in any year that the expenses (generally excluding brokerage
commissions, taxes, interest, distribution=related expenses and extraordinary
expenses) of such Fund exceed the statutory limits of any jurisdiction in which
shares of such Fund are qualified for offer and sale. The most restrictive of
such limitations as of the date of these financial statements is 2 1/2% of the
first $30 million of average net assets, 2% of the next $70 million and 1 1/2%
of any excess over $100 million.
The Manager has voluntarily undertaken to reduce its investment advisory fee
with respect to the Money Market Fund to .10% of the Fund's daily net assets
until further notice.
The Manager voluntarily waived the investment advisory fee for Innovation Fund
for the period from inception to December 31, 1994.
B)DISTRIBUTION AND SERVICING FEES: Pursuant to Distribution and
Servicing Plans adopted by the Trust, the Trust compensates the distributor,
PIMCO Advisors Distribution Company for services
<PAGE>
PIMCO ADVISORS FUNDS 69
================================================================================
NOTES TO FINANCIAL STATEMENTS==CONTINUED
provided and expenses incurred in connection with assistance rendered in the
sale of Trust shares and services rendered to shareholders and for maintenance
of shareholder accounts. As compensation, the Trust pays the distributor a
distribution fee with respect to the Class B and Class C shares of each Fund
with the exception of the Opportunity Fund which does not offer Class B shares
equal to .75% of the Fund's average daily net assets attributable to the
respective class of shares, except that the fee is .50% per annum in the case of
Class C shares of the Short=Intermediate Fund and the fee is not charged in the
case of the Money Market Fund (subject to increase by action of the Trustees to
a rate not exceeding .75% per annum). The Trust pays the distributor a servicing
fee with respect to both Class A, Class B and Class C shares of each Fund equal
to .25% of the average daily net asset value of Class A, Class B and Class C
shares (.10% per annum in the case of the Money Market Fund, subject to increase
by action of the Trustees to a rate not exceeding .25% per annum).
C)TRUSTEE FEES: Effective July 27, 1995, the Trustees approved a
unified fee plan, covering compensation from both of the Trusts for which they
serve as independent Trustees, the PIMCO Advisors Funds and the Cash
Accumulation Trust. The fee is allocated between the Trusts and among the Fund's
of the Trusts based on relative net assets. Trustees other than those affiliated
with the Manager are compensated as follows:
Annual Retainer $ 35,000
Meeting Fee (each meeting attended) 3,000
Committees:
Contract Chairman 6,000
Audit Chairman 2,000
Audit Member 1,000
In addition, the Trustees receive reimbursement for travel and out=of=pocket
costs.
The Trust has an unfunded defined benefit plan for its independent Trustees.
For the year ended September 30, 1995, a net periodic expense of $28,911 was
charged to the Funds.
D)CONTINGENT DEFERRED SALES CHARGE: A contingent deferred
sales charge is imposed on Class B and Class C shares if an investor redeems an
amount which causes the current value of the investor's account for a Fund to
fall below the total dollar amount of investments made subject to a deferred
sales charge, except that no sales charge is imposed if the portion of the
investment redeemed is attributable to reinvested dividends or capital gains
distributions or is derived from increases in the value of the account above the
amount invested subject to a deferred sales charge. Whether a contingent
deferred sales charge is imposed and the amount of the charge will depend on the
number of years since the investor made an investment from which an amount is
being redeemed and the date such investment was made. Investments made in Class
C shares on or after July 1, 1991 are subject to a contingent deferred sales
charge of 1% during the first 12 months after the purchase. For investments made
in Class C shares prior to July 1, 1991 the redemption price per share in the
first year following purchase is 95% of the net asset value per share. In years
two, three, four and five following purchase, the redemption price per share as
a percentage of the net asset value per share increases to 96%, 97%, 98% and
98%, respectively. For investments made in Class B shares the redemption price
per share in the first year following purchase is 95% of the net asset value per
share. In years two, three, four, five and six following purchase the redemption
price increases to 96%, 97%, 97%, 98% and 99%, respectively. Any sales charges
imposed on redemptions are paid to the distributor of shares of the Trust. For
the year ended September 30, 1995, those charges amounted to $1,020,410.
E)INITIAL SALES CHARGE: For the year ended September 30, 1995,
sales charges on Class A shares amounted to $3,708,105, of which $390,319 was
retained by the Trust's distributor.
4 PURCHASES AND SALES OF SECURITIES
During the year ended September 30, 1995, purchases and sales of securities,
other than securities subject to repurchase transactions and short=term interest
bearing securities, were as follows:
PURCHASES SALES
-------------- --------------
Equity Income Fund $ 306,297,545 $ 326,196,005
Value Fund 11,135,887 27,500
Growth Fund 1,294,022,903 1,341,305,133
Target Fund 904,675,098 868,003,697
Discovery Fund 39,677,740 5,549,568
Opportunity Fund 642,898,891 664,930,492
Innovation Fund 103,510,200 33,419,208
International Fund 427,053,936 480,568,573
Precious Metals Fund 4,703,438 12,088,479
High Income Fund 249,280,987 281,371,721
Total Return Income Fund 58,303,886 22,203,803
Tax Exempt Fund 21,367,064 38,589,035
U.S. Government Fund 348,465,097 437,002,374
Short=Intermediate Fund 128,510,303 146,975,305
5 SHARE CAPITAL
The Trust has an unlimited authorized number of shares of beneficial
interest (par value of $.00001) which may, without shareholder approval, be
divided into an unlimited number of series of such shares, and which are
presently divided into fifteen series of shares, one series underlying each
Fund. Each of the Funds are further divided into three classes, designated Class
A, Class B and Class C shares.
Class A transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
SEPTEMBER 30, 1995 SEPTEMBER 30, 1994
-------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
EQUITY INCOME FUND
Sold 260,686 $ 3,289,140 876,807 $ 11,060,492
Issued as reinvestment of dividends 23,331 292,288 31,231 387,381
Reacquired (564,570) (7,089,481) (204,166) (2,527,895)
----------- ------------- ----------- -------------
Net increase (decrease) (280,553) $ (3,508,053) 703,872 $ 8,919,978
----------- ------------- ----------- -------------
----------- ------------- ----------- -------------
</TABLE>
VALUE FUND
Sold 242,130 $ 2,472,689
Issued as reinvestment of dividends 1,295 13,750
Reacquired (10,076) (101,150)
----------- -------------
Net increase 233,349 $ 2,385,289
=========== =============
<PAGE>
70 PIMCO ADVISORS FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS--CONTINUED
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
SEPTEMBER 30, 1995 SEPTEMBER 30, 1994
-------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------- ----------- -------------
GROWTH FUND
<S> <C> <C> <C> <C>
Sold 1,409,045 $ 32,050,531 1,747,778 $ 38,332,332
Issued as reinvestment of distributions 262,751 5,386,396 344,061 7,285,504
Reacquired (1,306,192) (29,329,665) (1,342,561) (29,410,714)
----------- ------------- ----------- -------------
Net increase 365,604 $ 8,107,262 749,278 $ 16,207,122
=========== ============= =========== =============
TARGET FUND
Sold 13,544,331 $ 191,128,896 5,428,996 $ 68,479,509
Issued as reinvestment of distributions 79,693 1,004,929 41,677 512,212
Reacquired (13,086,848) (185,118,962) (2,410,151) (30,702,236)
----------- ------------- ----------- -------------
Net increase 537,176 $ 7,014,863 3,060,522 $ 38,289,485
=========== ============= =========== =============
DISCOVERY FUND
Sold 729,683 $ 7,663,000
Issued as reinvestment of distributions -- --
Reacquired (26,260) (285,707)
----------- -------------
Net increase 703,423 $ 7,377,293
----------- -------------
----------- -------------
OPPORTUNITY FUND
Sold 807,312 $ 24,963,687 1,288,435 $ 38,856,097
Issued as reinvestment of distributions 92,711 2,556,964 237,523 7,006,929
Reacquired (1,108,072) (34,506,453) (1,416,938) (42,418,991)
----------- ------------- ----------- -------------
Net increase (decrease) (208,049) $ (6,985,802) 109,020 $ 3,444,035
=========== ============= =========== =============
INNOVATION FUND
Sold 2,584,850 $ 30,962,017
Issued as reinvestment of distributions -- --
Reacquired (668,582) (8,735,963)
----------- -------------
Net increase 1,916,268 $ 22,226,054
=========== =============
Sold 2,229,678 $ 26,177,560 1,331,394 $ 16,856,412
Issued as reinvestment of distributions 33,274 393,303 23,281 285,897
Reacquired (2,591,891) (30,562,066) (537,984) (6,823,493)
----------- ------------- ----------- -------------
Net increase (decrease) (328,939) $ (3,991,203) 816,691 $ 10,318,816
=========== ============= =========== =============
PRECIOUS METALS FUND
Sold 6,547,890 $ 77,229,258 1,525,289 $ 19,720,125
Issued as reinvestment of distributions -- -- -- --
Reacquired (6,719,897) (79,720,976) (1,063,098) (13,573,919)
----------- ------------- ----------- -------------
Net increase (decrease) (172,007) $ (2,491,718) 462,191 $ 6,146,206
=========== ============= =========== =============
HIGH INCOME FUND
Sold 869,750 $ 6,731,116 174,010 $ 1,437,578
Issued as reinvestment of dividends 29,547 226,492 23,615 190,380
Reacquired (491,881) (3,774,217) (269,774) (2,186,106)
----------- ------------- ----------- -------------
Net increase (decrease) 407,416 $ 3,183,391 (72,149) $ (558,148)
=========== ============= =========== =============
<CAPTION>
YEAR ENDED YEAR ENDED
SEPTEMBER 30, 1995 SEPTEMBER 30, 1994
-------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
TOTAL RETURN INCOME FUND
Sold 4,276,042 $ 44,172,293
Issued as reinvestment of dividends 43,918 461,985
Reacquired (795,904) (8,270,797)
----------- -------------
Net increase 3,524,056 $ 36,363,481
=========== =============
TAX EXEMPT FUND
Sold 58,949 $ 677,966 91,386 $ 1,121,373
Issued as reinvestment of dividends 4,474 50,794 7,646 91,876
Reacquired (78,342) (890,547) (79,724) (977,571)
----------- ------------- ----------- -------------
Net increase (decrease) (14,919) $ (161,787) 19,308 $ 235,678
=========== ============= =========== =============
U.S. GOVERNMENT FUND
Sold 504,540 $ 4,468,418 398,997 $ 3,705,902
Issued as reinvestment of dividends 77,231 684,126 70,314 641,243
Reacquired (564,845) (4,959,223) (765,925) (6,971,886)
----------- ------------- ----------- -------------
Net increase (decrease) 16,926 $ 193,321 (296,614) $ (2,624,741)
=========== ============= =========== =============
SHORT=INTERMEDIATE FUND
Sold 529,986 $ 4,930,172 298,908 $ 2,894,877
Issued as reinvestment of dividends 38,583 363,593 30,172 289,251
Reacquired (433,667) (4,037,826) (535,613) (5,141,556)
----------- ------------- ----------- -------------
Net increase (decrease) 134,902 $ 1,255,939 (206,533) $ (1,957,428)
=========== ============= =========== =============
MONEY MARKET FUND
Sold $ 259,219,711 $ 50,982,630
Issued as reinvestment of dividends 475,312 207,109
Reacquired (259,075,167) (41,985,995)
------------- -------------
Net increase $ 619,856 $ 9,203,744
============= =============
</TABLE>
Class B transactions in shares of beneficial interest were as follows:
YEAR ENDED
SEPTEMBER 30, 1995
--------------------------
SHARES AMOUNT
----------- -------------
EQUITY INCOME FUND
Sold 126,736 $ 1,721,926
Issued as reinvestment of dividends 374 5,242
Reacquired (2,608) (33,787)
----------- -------------
Net increase 124,502 $ 1,693,381
----------- -------------
----------- -------------
VALUE FUND
Sold 376,302 $ 3,853,479
Issued as reinvestment of dividends 1,246 13,228
Reacquired (5,309) (54,180)
----------- -------------
Net increase 372,239 $ 3,812,527
=========== =============
<PAGE>
PIMCO ADVISORS FUNDS 71
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS--CONTINUED
YEAR ENDED
SEPTEMBER 30, 1995
--------------------------
SHARES AMOUNT
----------- -------------
GROWTH FUND
Sold 313,608 $ 7,525,840
Issued as reinvestment of dividends -- --
Reacquired (5,985) (143,794)
----------- -------------
Net increase 307,623 $ 7,382,046
=========== =============
TARGET FUND
Sold 474,550 $ 7,270,317
Issued as reinvestment of dividends -- --
Reacquired (4,062) (62,809)
----------- -------------
Net increase 470,488 $ 7,207,508
----------- -------------
=========== =============
DISCOVERY FUND
Sold 1,011,338 $ 10,648,871
Issued as reinvestment of distributions -- --
Reacquired (14,319) (149,648)
----------- -------------
Net increase 997,019 $ 10,499,223
----------- -------------
INNOVATION FUND
Sold 458,064 $ 6,371,957
Issued as reinvestment of distributions -- --
Reacquired (13,961) (197,256)
----------- -------------
Net increase 444,103 $ 6,174,701
=========== =============
INTERNATIONAL FUND
Sold 42,828 $ 499,329
Issued as reinvestment of distributions -- --
Reacquired -- --
----------- -------------
Net increase 42,828 $ 499,329
----------- -------------
PRECIOUS METALS FUND
Sold 27,731 $ 327,905
Issued as reinvestment of distributions -- --
Reacquired (6,672) (80,735)
----------- -------------
Net increase 21,059 $ 247,170
----------- -------------
HIGH INCOME FUND
Sold 571,478 $ 4,490,849
Issued as reinvestment of dividends 3,341 26,309
Reacquired (1) (8)
----------- -------------
Net increase 574,818 $ 4,517,150
=========== =============
TOTAL RETURN INCOME FUND
Sold 825,334 $ 8,779,866
Issued as reinvestment of dividends 4,233 44,985
Reacquired (8,831) (94,122)
----------- -------------
Net increase 820,736 $ 8,730,729
=========== =============
TAX EXEMPT FUND
Sold 26,915 $ 317,716
Issued as reinvestment of dividends 27 313
Reacquired (2,593) (30,389)
----------- -------------
Net increase 24,349 $ 287,640
=========== =============
U.S. GOVERNMENT FUND
Sold 182,930 $ 1,657,741
Issued as reinvestment of dividends 847 7,668
Reacquired (1,097) (10,003)
----------- -------------
Net increase 182,680 $ 1,655,406
=========== =============
YEAR ENDED
SEPTEMBER 30, 1995
--------------------------
SHARES AMOUNT
----------- -------------
SHORT-INTERMEDIATE FUND
Sold 108,970 $ 1,042,993
Issued as reinvestment of dividends 893 8,546
Reacquired (12,095) (116,038)
----------- -------------
Net increase 97,768 $ 935,501
----------- -------------
MONEY MARKET FUND
Sold $ 103,621
Issued as reinvestment of dividends 74
Reacquired (82,373)
-------------
Net increase $ 21,322
=============
Class C transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
SEPTEMBER 30, 1995 SEPTEMBER 30, 1994
-------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
EQUITY INCOME FUND
Sold 2,571,367 $ 32,020,403 8,994,413 $ 113,486,307
Issued as reinvestment of dividends 224,502 2,833,038 358,535 4,447,570
Reacquired (4,776,986) (59,786,945) (2,339,811) (29,031,397)
----------- ------------- ----------- -------------
Net increase (decrease) (1,981,117) $ (24,933,504) 7,013,137 $ 88,902,480
=========== ============= ========== =============
VALUE FUND
Sold 631,709 $ 6,515,474
Issued as reinvestment of dividends 2,414 25,622
Reacquired (12,027) (124,979)
----------- -------------
Net increase 622,096 $ 6,416,117
=========== =============
GROWTH FUND
Sold 11,099,885 $ 244,928,637 13,716,328 $ 295,715,920
Issued as reinvestment of distributions 2,780,151 55,575,222 3,855,707 81,085,569
Reacquired (12,581,564) (275,156,453) (13,335,554) (287,889,122)
----------- ------------- ----------- -------------
Net increase 1,298,472 $ 25,347,406 4,236,481 $ 88,912,367
=========== ============= ========== =============
TARGET FUND
Sold 20,640,964 $ 283,138,655 31,091,030 $ 388,700,813
Issued as reinvestment of distributions 536,905 6,668,387 265,460 3,235,957
Reacquired (15,505,248) (213,112,060) (12,007,794) (149,840,133)
----------- ------------- ----------- -------------
Net increase 5,672,621 $ 76,694,982 19,348,696 $ 242,096,637
=========== ============= ========== =============
DISCOVERY FUND
Sold 1,929,823 $ 20,459,380
Issued as reinvestment of distributions -- --
Reacquired (65,033) (703,321)
----------- -------------
Net increase 1,864,790 $ 19,756,059
=========== =============
</TABLE>
<PAGE>
72 PIMCO ADVISORS FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS--CONTINUED
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
SEPTEMBER 30, 1995 SEPTEMBER 30, 1994
-------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------- ----------- -------------
OPPORTUNITY FUND
<S> <C> <C> <C> <C>
Sold 7,303,147 $ 227,266,003 7,278,376 $ 208,671,118
Issued as reinvestment of distributions 576,403 15,401,480 1,397,467 40,288,961
Reacquired (8,616,263) (265,954,142) (7,801,930) (220,526,899)
----------- ------------- ----------- -------------
Net increase (decrease) (736,713) $ (23,286,659) 873,913 $ 28,433,180
=========== ============= ========== =============
INNOVATION FUND
Sold 5,445,029 $ 66,151,548
Issued as reinvestment of distributions -- --
Reacquired (1,081,142) (14,292,403)
----------- -------------
Net increase 4,363,887 $ 51,859,145
=========== =============
INTERNATIONAL FUND
Sold 6,696,696 $ 76,414,972 18,022,566 $ 223,207,042
Issued as reinvestment of distributions 454,401 5,207,438 289,913 3,478,958
Reacquired (12,262,848) (139,029,691) (7,214,407) (89,224,376)
----------- ------------- ----------- -------------
Net increase (decrease) (5,111,751) $ (57,407,281) 11,098,072 $ 137,461,624
=========== ============= ========== =============
PRECIOUS METALS FUND
Sold 10,551,298 $ 120,945,392 10,050,521 $ 123,823,376
Issued as reinvestment of distributions -- -- -- --
Reacquired (11,560,915) (132,496,146) (7,844,150) (96,079,680)
----------- ------------- ----------- -------------
Net increase (decrease) (1,009,617) $ (11,550,754) 2,206,371 $ 27,743,696
=========== ============= ========== =============
HIGH INCOME FUND
Sold 3,378,818 $ 25,818,186 4,088,705 $ 33,792,382
Issued as reinvestment of dividends 871,819 6,583,106 1,092,460 8,793,314
Reacquired (8,148,200) (60,958,670) (10,469,847) (84,079,846)
----------- ------------- ----------- -------------
Net decrease (3,897,563) $ (28,557,378) (5,288,682) $ (41,494,150)
=========== ============= ========== =============
TOTAL RETURN INCOME FUND
Sold 4,809,126 $ 50,147,828
Issued as reinvestment of dividends 59,161 623,013
Reacquired (603,682) (6,335,143)
----------- -------------
Net increase 4,264,605 $ 44,435,698
=========== =============
TAX EXEMPT FUND
Sold 362,394 $ 4,117,901 1,387,810 $ 16,983,091
Issued as reinvestment of dividends 156,616 1,783,829 279,514 3,369,278
Reacquired (2,019,443) (22,758,206) (1,978,686) (23,371,907)
----------- ------------- ----------- -------------
Net decrease (1,500,433) $ (16,856,476) (311,362) $ (3,019,538)
=========== ============= ========== =============
<CAPTION>
YEAR ENDED YEAR ENDED
SEPTEMBER 30, 1995 SEPTEMBER 30, 1994
-------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
U.S. GOVERNMENT FUND
Sold 2,045,550 $ 18,036,632 5,144,665 $ 47,808,617
Issued as reinvestment of dividends 1,164,038 10,236,547 1,677,086 15,367,544
Reacquired (13,958,860) (121,609,308) (19,679,368) (180,710,643)
----------- ------------- ----------- -------------
Net decrease (10,749,272) $ (93,336,129) (12,857,617) $(117,534,482)
=========== ============= ========== =============
SHORT-INTERMEDIATE FUND
Sold 5,707,988 $ 53,690,051 6,141,687 $ 58,888,483
Issued as reinvestment of dividends 320,647 3,012,585 379,765 3,637,852
Reacquired (8,681,649) (81,326,165) (9,646,819) (92,377,434)
----------- ------------- ----------- -------------
Net decrease (2,653,014) $ (24,623,529) (3,125,367) $ (29,851,099)
----------- ------------- ----------- -------------
----------- ------------- ----------- -------------
MONEY MARKET FUND
Sold 554,884,511 $ 456,010,094
Issued as reinvestment of dividends 3,480,343 1,817,085
Reacquired (573,064,234) (418,420,213)
------------- -------------
Net increase (decrease) $ (14,699,380) $ 39,406,966
------------- -------------
------------- -------------
</TABLE>
6 WRITTEN OPTION ACTIVITY Written option activity for the year
ended September 30, 1995 were as follows:
AMOUNT OF NUMBER OF
PREMIUMS OPTIONS
---------- -----------
EQUITY INCOME FUND:
Options outstanding at September 30, 1994 $ 15,007 64
Options written during the year ended
September 30, 1995 223,437 1251
Options cancelled in closing purchase
transactions (123,092) (641)
Options expired prior to exercise (77,714) (477)
Options exercised (37,639) (197)
---------- -----------
Options outstanding at September 30, 1995 -- --
=========== ==========
The cost of cancelling options in closing purchase transactions was $137,193
resulting in a net short-term loss of $14,101.
GROWTH FUND:
Options outstanding at September 30, 1994 $ 3,806,502 9,926
Options written during the year ended
September 30, 1995 42,712,362 125,185
Options cancelled in closing purchase
transactions (34,429,051) (83,417)
Options expired prior to exercise (7,078,453) (31,673)
Options exercised (1,844,747) (9,288)
------------ ---------
Options outstanding at September 30, 1995 $ 3,166,613 10,733
=========== ==========
The cost of cancelling options in closing purchase transactions was
$52,025,145 resulting in a net short-term loss of $17,596,094.
<PAGE>
PIMCO ADVISORS FUNDS 73
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS--CONTINUED
AMOUNT OF NUMBER OF
PREMIUMS OPTIONS
------------ ---------
TARGET FUND:
Options outstanding at September 30, 1994 $ 1,177,942 6,860
Options written during the year ended
September 30, 1995 3,255,894 18,079
Options cancelled in closing purchase
transactions (2,311,567) (13,446)
Options expired prior to exercise (521,641) (3,558)
Options exercised (1,436,531) (7,112)
------------ ---------
Options outstanding at September 30, 1995 $ 164,097 823
=========== ==========
The cost of cancelling options in closing purchase transactions was $2,416,673
resulting in a net short-term loss of $105,106.
AMOUNT OF NUMBER OF
PREMIUMS OPTIONS
------------ ---------
OPPORTUNITY FUND:
Options outstanding at September 30, 1994 $ 2,692,443 13,527
Options written during the year ended
September 30, 1995 24,370,978 101,627
Options cancelled in closing purchase
transactions (14,071,399) (58,508)
Options expired prior to exercise (2,480,431) (13,852)
Options exercised (5,541,108) (27,467)
------------ ---------
Options outstanding at September 30, 1995 $ 4,970,483 15,327
=========== ==========
The cost of cancelling options in closing purchase transactions was
$16,191,925 resulting in a net short-term loss of $2,120,526.
AMOUNT OF NUMBER OF
PREMIUMS OPTIONS
------------ ---------
INNOVATION FUND:
Options outstanding at September 30, 1994 $ -- --
Options written during the year ended
September 30, 1995 153,791 668
Options cancelled in closing purchase
transactions (124,180) (512)
Options expired prior to exercise (11,580) (44)
Options exercised (18,031) (112)
------------ ---------
Options outstanding at September 30, 1995 -- --
=========== ==========
The cost of cancelling options in closing purchase transactions was $234,782
resulting in a net short-term loss of $110,602.
AMOUNT OF NUMBER OF
PREMIUMS OPTIONS
------------ ---------
HIGH INCOME FUND:
Options outstanding at September 30, 1994 $ -- --
Options written during the year ended
September 30, 1995 113,875 875
Options cancelled in closing purchase
transactions 0 0
Options expired prior to exercise (85,875) (625)
Options exercised (21,000) (200)
------------ ---------
Options outstanding at September 30, 1995 $ 7,000 50
=========== ==========
AMOUNT OF NUMBER OF
PREMIUMS OPTIONS
------------ ---------
TOTAL RETURN INCOME FUND:
Options outstanding at September 30, 1994 $ -- --
Options written during the year ended
September 30, 1995 257,423 480
Options cancelled in closing purchase
transactions 0 0
Options expired prior to exercise (225,852) (400)
Options exercised 0 0
------------ ---------
Options outstanding at September 30, 1995 $ 31,571 80
------------ ---------
------------ ---------
AMOUNT OF NUMBER OF
PREMIUMS OPTIONS
------------ ---------
U.S. GOVERNMENT FUND:
Options outstanding at September 30, 1994 $ -- --
Options written during the year ended
September 30, 1995 348,585 388
Options cancelled in closing purchase
transactions 0 0
Options expired prior to exercise (132,826) (150)
Options exercised (114,077) (150)
------------ ---------
Options outstanding at September 30, 1995 $ 101,682 88
============ =========
AMOUNT OF NUMBER OF
PREMIUMS OPTIONS
------------ ---------
SHORT INTERMEDIATE FUND:
Options outstanding at September 30, 1994 $ -- --
Options written during the year ended
September 30, 1995 207,467 219
Options cancelled in closing purchase
transactions (113,671) (121)
Options expired prior to exercise 0 0
Options exercised 0 0
------------ ---------
Options outstanding at September 30, 1995 $ 93,796 98
============ =========
The cost of cancelling options in closing purchase transactions was $8,395
resulting in a net short-term gain of $105,276.
<PAGE>
74 PIMCO ADVISORS FUNDS
- --------------------------------------------------------------------------------
7 OUTSTANDING FORWARD FOREIGN CURRENCY CONTRACTS
Outstanding forward foreign currency contracts at September 30, 1995 were as
follows:
<TABLE>
<CAPTION>
Unrealized
Market Settlement Appreciation
Value Date (Depreciation)
----------- ---------- --------------
<S> <C> <C> <C>
INTERNATIONAL FUND
Contracts to Buy:
10,399,988 CHF $ 8,994,024 10/16/95 $ 350,834
25,000,000 FRF 5,091,500 10/16/95 6,885
800,000,000 JPY 8,296,000 10/01/95 590,356
1,600,000,000 JPY 16,592,000 10/16/95 1,180,711
----------- --------------
Total contracts to Buy (Payable Amount
$36,844,738) $38,973,524 $ 2,128,786
=========== ==============
Contracts to Sell:
5,903,188 CHF $ 5,105,142 10/16/95 $ 63,166
25,000,000 FRF 5,091,500 10/16/95 (185,497)
800,000,000 JPY 8,296,000 10/01/95 (286,148)
1,600,000,000 JPY 16,592,000 10/16/95 (572,297)
5,500,000 DM 3,855,891 10/16/95 (118,703)
----------- --------------
Total contracts to Sell (Receivable
Amount $37,841,054) $38,940,533 $(1,099,479)
=========== ==============
TOTAL RETURN INCOME FUND
Contracts to Sell:
295,920 DM $ 207,483 10/16/95 $ (7,483)
4,226,899 DM 2,964,933 10/24/95 (116,618)
=========== ==============
Total contracts to Sell (Receivable
amount $3,048,315) $ 3,172,416 $ (124,101)
=========== ==============
SHORT-INTERMEDIATE FUND
Contracts to Buy:
13,835 CDN $ 10,309 10/16/95 $ 141
4,222,944 FIM 991,226 10/04/95 1,389
----------- --------------
Total contracts to Buy (Payable Amount
$1,000,005) $ 1,001,535 $ 1,530
=========== ==============
Contracts to Sell:
2,929,792 CDN $ 2,183,249 10/12/95 $ (7,860)
4,222,944 FIM 991,226 10/04/95 (27,809)
4,222,944 FIM 988,114 11/06/95 1,538
----------- --------------
Total contracts to Sell (Receivable
Amount $4,128,458) $ 4,162,589 $ (34,131)
=========== ==============
</TABLE>
8 FEDERAL INCOME TAXES
For federal income tax purposes, the funds indicated below have capital loss
carryforwards as of September 30, 1995, which are available to offset future
capital gains, if any.
Capital
Loss
Carryforward Expiration
----------- ---------
Discovery Fund $ 514,000 2003
Precious Metals Fund 529,000 2000
18,000 2001
High Income Fund 14,400,000 1997
16,088,000 1998
28,820,000 1999
5,495,000 2002
50,541,000 2003
Tax-Exempt Fund 1,055,000 2003
U.S. Government Fund 24,887,000 1996
12,490,000 1997
12,622,000 1998
17,277,000 2002
8,501,000 2003
Short-Intermediate Fund 1,598,000 2000
3,550,000 2002
1,170,000 2003
<PAGE>
PIMCO ADVISORS FUNDS 75
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE TRUSTEES AND SHAREHOLDERS OF
PIMCO ADVISORS FUNDS:
We have audited the accompanying statements of assets and liabilities of PIMCO
Advisors Funds (comprised of the PIMCO Advisors Equity Income Fund, PIMCO
Advisors Value Fund, PIMCO Advisors Growth Fund, PIMCO Advisors Target Fund,
PIMCO Advisors Discovery Fund, PIMCO Advisors Opportunity Fund, PIMCO Advisors
Innovation Fund, PIMCO Advisors International Fund, PIMCO Advisors Precious
Metals Fund, PIMCO Advisors High Income Fund, PIMCO Advisors Total Return Income
Fund, PIMCO Advisors Tax Exempt Fund, PIMCO Advisors U.S. Government Fund, PIMCO
Advisors Short-Intermediate Fund, and PIMCO Advisors Money Market Fund),
including the portfolios of investments, as of September 30, 1995 and the
related statements of operations, and changes in net assets for the year then
ended for all Funds other than the PIMCO Advisors Innovation Fund and PIMCO
Advisors Total Return Income Fund for which the period was December 22, 1994,
commencement of operations, to September 30, 1995, and the PIMCO Advisors Value
Fund and PIMCO Advisors Discovery Fund for which the period was June 27, 1995,
commencement of operations, to September 30, 1995, and the statements of changes
in net assets for the year ended September 30, 1994 for all Funds other than the
PIMCO Advisors Innovation Fund, PIMCO Advisors Total Return Income Fund, PIMCO
Advisors Value Fund, and PIMCO Advisors Discovery Fund and selected per share
data and ratios for the periods shown in the "Financial Highlights". The
financial statements and financial highlights are the responsibility of the
Trust's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
September 30, 1995 by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the respective Funds constituting the PIMCO Advisors Funds as of September
30, 1995 and the results of their operations, the changes in their net assets
and their financial highlights for the periods referred to above, in conformity
with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
New York, New York
November 16, 1995
<PAGE>
PIMCO ADVISORS FUNDS
REGISTRATION STATEMENT ON FORM N-1A
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
---------------------------------
(a) Financial Statements (included in Parts A and B).
1. Included in Part A:
a. Condensed Financial Information required by Item 3 relating to
each Fund.
2. Included in Part B:
a. Audited Statement of Assets and Liabilities as of September 30,
1995 relating to each Fund.
b. Audited Statement of Operations for the year ended September 30,
1995 relating to each Fund.
c. Audited Statement of Changes in Net Assets for the periods ended
September 30, 1994 and 1995 relating to each Fund.
d. Audited Portfolio of Investments as of September 30, 1995
relating to each Fund.
e. Notes to Audited Financial Statements for the year ended
September 30, 1995.
(b) Exhibits:
1. The Trust's Amended and Restated Agreement and Declaration of
Trust.
2. Amended and Restated Bylaws of the Trust.
3. None.
3005821.RED
<PAGE>
4. Specimen Share Certificates for Class A, Class B and Class C
shares of each Fund (other than the Emerging Markets Fund).
5a. Management Contracts for Equity Income Fund, Value Fund, Growth
Fund, Target Fund, Discovery Fund, Opportunity Fund, Innovation
Fund, International Fund, Precious Metals Fund, Global Income
Fund, High Income Fund, Total Return Income Fund, Tax Exempt
Fund, U.S. Government Fund, Short-Intermediate Fund and Money
Market Fund.
5b. Sub-Adviser Agreements for Equity Income Fund, Value Fund,
Growth Fund, Target Fund, Discovery Fund, Opportunity Fund,
Innovation Fund, International Fund, Precious Metals Fund,
Global Income Fund, High Income Fund, Total Return Income Fund,
^ Tax Exempt Fund, U.S. Government Fund, Short-Intermediate Fund
and Money Market Fund.
6. Distributor's Contract dated as of May 11, 1995 between the
Trust and PIMCO Advisors Distribution Company as amended through
September 28, 1995.
7. Pension Plan for non-interested Trustees of the Trust dated as
of January 24, 1992, incorporated by reference to Exhibit 7 to
Post-Effective Amendment No. 24 to the Trust's Registration
Statement filed on August 14, 1992.
8. Amended and Restated Custodian Agreement between the Trust and
The Bank of New York, N.A. dated as of September 13, 1985;
Amendment No. 1 thereto dated as of February 14, 1992; and
Amendment No. 2 thereto dated as of July 14, 1995.
9a. Transfer Agency Agreement dated October 1, 1990 among the Trust,
Shareholder Services Inc. and Oppenheimer Management
Corporation, an Addendum thereto dated as of March 31, 1994
and a Second Addendum thereto dated as of August 1,
1995.
3005821.RED
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<PAGE>
9b. Fund Accounting Agreement between the Trust and The Bank of New
York dated as of February 23, 1984.
9c. Amended and Restated Blue Sky Service Agreement dated as of
March 30, 1995 with respect to each Fund between the Trust and
PIMCO Advisors L.P.
9d. Organizational Expense Reimbursement Agreement dated as of July
31, 1991 for the Short-Intermediate Government Fund (now the
Short-Intermediate Fund) between the Trust and Thomson Advisory
Group L.P. ^(now PIMCO Advisors L.P.).
9e. Organizational Expense Reimbursement Agreement dated as of
August 10, 1992 for the Target Fund between the Trust and
Thomson Advisory Group L.P. (now PIMCO Advisors L.P.).
9f. Organizational Expense Reimbursement Agreements dated as of
September 29, 1994 for the Total Return Income Fund and the
Innovation Fund ^ between the Trust and Thomson Advisory Group
L.P. (now PIMCO Advisors L.P.).
9g. Organizational Expense Reimbursement Agreements dated as of
March 30, 1995 for the Discovery Fund and the Value Fund between
the Trust and PIMCO Advisors L.P.
9h. Organizational Expense Reimbursement Agreement dated as of
September 28, 1995 for the Global Income Fund between the Trust
and PIMCO Advisors L.P.
10. Opinion and Consent of Counsel filed with Trust's Rule 24f-2
Notice on November 20, 1995.
11. Consent of Independent Accountants.
12. None.
13. None.
3005821.RED
-3-
<PAGE>
14. None.
15a. PIMCO Advisors Funds Amended and Restated Distribution and
Servicing Plan for Class A Shares dated as of September 11, 1990
and revised through November 15, 1994.
15b. PIMCO Advisors Funds Fourth Amended and Restated Distribution
and Servicing Plan for Class C Shares (formerly Class B shares)
dated as of April 23, 1987 and revised through November 15,
1994.
15c. PIMCO Advisors Funds Distribution and Servicing Plan for Class B
Shares as revised through September 28, 1995.
16. Schedule for computation of performance information.
17. Financial Data Schedule for the fiscal year ended September 30,
1995 (filed under Exhibit 27 for Edgar purposes).
18. Multi-Class Plan entered into by the Trust pursuant to Rule
18f-3 dated as of July 27, 1995.
19. Powers of Attorney for Robert A. Prindiville, Gary L. Light,
Joel Segall, Donald P. Carter, E. Philip Cannon, W. Bryant
Stooks, Gary A. Childress, Gerald M. Thorne and William D.
Cvengros. ^
Item 25. Persons Controlled by or under Common Control with Registrant.
-------------------------------------------------------------
None.
3005821.RED
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<PAGE>
Item 26. Number of Holders of Securities.
-------------------------------
The following table sets forth the number of holders of each class of
securities of the Trust as of November 3, 1995:
Number of
Holders
Title of Class Class A Class B Class C
-------------- ------- ------- -------
Shares of beneficial interest, 1,158 170 17,476
Equity Income Fund
Shares of beneficial interest, 266 442 1,263
Value Fund
Shares of beneficial interest, 9,151 819 106,233
Growth Fund
Shares of beneficial interest, 10,286 1,008 78,223
Target Fund
Shares of beneficial interest, 951 1,324 3,395
Discovery Fund
Shares of beneficial interest, 5,543 0 39,703
Opportunity Fund
Shares of beneficial interest, 2,627 979 8,125
Innovation Fund
Shares of beneficial interest, 2,001 104 28,406
International Fund
Shares of beneficial interest, 0 0 0
Emerging Markets Fund
Shares of beneficial interest, 735 55 5,667
Precious Metals Fund
3005821.RED
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<PAGE>
Shares of beneficial interest, 1 1 1
Global Income Fund
Shares of beneficial interest, 538 251 15,177
High Income Fund
Shares of beneficial interest, 1,087 593 3,022
Total Return Income Fund
Shares of beneficial interest, 95 18 2,418
Tax Exempt Fund
Shares of beneficial interest, 506 67 19,291
U.S. Government Fund
Shares of beneficial interest, 189 56 3,873
Short-Intermediate Fund
Shares of beneficial interest, 382 7 3,762
Money Market Fund
Item 27. Indemnification.
---------------
See Item 4 of Part II to Pre-Effective Amendment No. 1 to this
Registration Statement filed on December 28, 1983, which is incorporated herein
by reference. The provisions of Article VIII of the Registrant's Agreement and
Declaration of Trust set forth in such Item 4 remain in effect as part of the
Registrant's Amended and Restated Agreement and Declaration of Trust.
Item 28. Business and Other Connections of Investment Advisers.
(a) PIMCO Advisors L.P.(referred to herein as either the "Manager" or
PIMCO Advisors L.P.) was organized as a limited partnership under Delaware law
in 1987 and is registered as an investment adviser under the Investment Advisers
Act of 1940. The Manager manages two mutual fund complexes other than the
Trust, Cash Accumulation Trust ("CAT") and PIMCO Advisors Institutional Funds.
The Manager also has various subsidiary partnerships which advise and manage
mutual funds, individual accounts, profit-sharing and pension funds and
institutional accounts and act as sub-advisers
3005821.RED
-6-
<PAGE>
to certain mutual funds. Five of its affiliated advisory firms serve as
sub-advisers to the Registrant's Funds.
PIMCO Partners, G.P. ("PIMCO GP"), the Manager's general partner, is a
general partnership with two partners: (i) an indirect wholly-owned subsidiary
of Pacific Mutual Life Insurance Company; and (ii) PIMCO Partners, L.L.C.
("LLC"), a limited liability company, all of the interests of which are held
directly by the Managing Directors of Pacific Investment Management Company who
are William H. Gross, Dean S. Meiling, James F. Muzzy, William F. Podlich, III,
Frank B. Rabinovitch, Brent R. Harris, John L. Hague, William S. Thompson, Jr.,
William C. Powers and David H. Edington (collectively, the "Managing
Directors"). PIMCO Partners, G.P. has substantially delegated its management and
control of the Manager to an Equity Board and an Operating Board of the Manager.
The activities of the Manager are controlled by its Operating Board except that
certain non-routine or extraordinary actions may not be effected by the
Operating Board without the approval of the Manager's Equity Board. The
Operating Board has in turn delegated the authority to manage day-to-day
operations and policies to an Operating Committee. The Operating Board is
composed of twelve members, of which seven (including the chairman) are
designated by Pacific Investment Management Company, a subsidiary general
partnership of the Manager and a sub-adviser to several of the Funds. The Equity
Board is composed of twelve members including the chief executive officer of the
Manager, three members designated by Pacific Financial Asset Management Company,
the chairman of the Operating Board, two members designated by LLC, two members
designated by holders of Series B Preferred Stock of Thomson Advisory Group
Inc., the former general partner of the Manager, and three independent members.
Because of the ability to designate a majority of the Members of the Operating
Board, Pacific Investment Management Company and the Managing Directors could be
said to control the Manager, although the Managing Directors disclaim such
authority.
The directors and officers of Pacific Investment Management Company,
Columbus Circle Investors ("CCI"), Blairlogie Capital Management ("Blairlogie"),
Cadence Capital Management ("Cadence") and NFJ Investment Group ("NFJ"),
subsidiaries of the Manager that serve as sub-advisers to the Registrant's
Funds, and their significant business connections are described elsewhere in
this Part C.
Set forth below are the substantial business engagements during at least
the two past fiscal years of each director or officer of the
3005821.RED
-7-
<PAGE>
Manager and of each member of the Manager's Operating and Equity Boards:
NAME AND POSITION BUSINESS AND
WITH MANAGER OTHER CONNECTIONS
William D. Cvengros Trustee of the Trust; Trustee of Cash
President, Chief Accumulation Trust ("CAT"); Trustee and ^
Executive Officer, Chairman, PIMCO Advisors Institutional Funds;
Member of Equity and Director, PIMCO Advisors Distribution Company
Operating Boards and ("PADCO"); Director, Furon Corporation.
Operating Committee Formerly, Vice Chairman, Chief Investment
Officer and Director, Pacific Mutual Life
Insurance Company, Director and Chairman,
Pacific Financial Asset Management Company,
Director, Mutual Service Corporation, Director,
Pacific Equities Network, Director, PFAMCo UK
Limited, Non-Executive Director, Blairlogie
Capital Management Limited, Trustee and Vice
President, PFAMCo Funds, Chairman and Director,
Parametric Portfolio Associates, Inc.,
President, Chairman, Chief Executive Officer,
Director and Trustee of various realty group
trusts, and PMRealty Advisors, Inc., President,
Chief Executive Officer and Director, NFJ
Investment Group, Inc., Vice President and
Trustee, Pacific Select Fund, Director, Cadence
Capital Management Corporation
Irwin F. Smith Chairman, Managing Director, Chief Executive
Member of Operating and Officer and Chief Investment Officer, CCI;
Equity Boards and Operating Formerly, Chairman of Thomson Advisory Group
Committee L.P. ("TAGLP") and of the Columbus Circle
Investors Division of TAGLP, Director and
Chairman, Thomson Advisory Group Inc. ("TAG
Inc.")
Robert A. Prindiville Trustee and President of the Trust and CAT;
Executive Vice Director and Chairman, PADCO.
3005821.RED
-8-
<PAGE>
Formerly, President of TAGLP, President and
Director, TAG Inc.; Chairman of TIS
Donald K. Miller Chairman, Greylock Financial Inc.; Director of
Member of Equity Board Huffy Corporation, RPM, Inc. and Christensen
Boyles Corporation; Director, President and
Chief Executive Officer, TAG Inc. Formerly,
Vice Chairman, TAGLP, and Director and Vice
Chairman of TIS
John O. Leasure Director, President and Chief Executive Officer
Senior Vice President of PADCO. Formerly, Executive Vice President,
TAGLP, and President, TIS
Newton B. Schott, Jr. Senior Vice President, Director, Secretary,
Senior Vice President-Legal PADCO; Formerly, Executive Vice President,
and Secretary Secretary and General Counsel, TAGLP, Executive
Vice President, Secretary and General Counsel,
TAG Inc., Executive Vice President and
Secretary, TIS
Robert M. Fitzgerald Senior Vice President Finance and
Senior Vice President Controller, PADCO. Formerly, Chief Financial
Finance and Controller Officer, TPM Financial, Vice President,
Mechanics National Bank, and Partner, Price
Waterhouse.
Donald A. Chiboucas Managing Director and President, CCI;
Member of Operating Formerly, Senior Executive Vice President,
Board TAGLP, President, Columbus Circle Investors
Division, TAGLP, Senior Executive Vice
President, TAG Inc.
Walter E. Auch, Sr. Outside business consultant; Director of Fort
Member of Equity Dearborn Fund, Shearson VIP Fund, Shearson
Board Advisors Fund, Shearson TRAK Fund, Banyan Land
Trust, Banyan Land Fund II, Banyan Mortgage
Fund, Allied Healthcare Products, Inc., First
Western Inc., DHR Group and Geotech Industries;
Formerly, Director, TAG Inc.
3005821.RED
-9-
<PAGE>
Donald R. Kurtz Formerly, Vice President of General Motors
Member of Equity Investment Management Corp. and Director, TAG
Board Inc.
Kenneth M. Poovey Partner, Latham & Watkins
General Counsel and
Board Secretary
Sharon A. Cheever Vice President and Investment Counsel, Pacific
Vice President, Legal Mutual Life Insurance Company
and Assistant
Secretary
Ernest L. Schmider Vice President, Chief Administrative and
Vice President, Legal Legal Officer, Pacific Investment Management
and Assistant Company
Secretary
James F. McIntosh Executive Director, Allen Matkins, Leck, Gamble
Member of Equity & Mallory; Formerly, Director of Pacific
Board Investment Management Company
Samuel C. Newman Senior Vice President and Assistant Secretary,
Vice President PADCO; Formerly, Vice President, TAGLP, Senior
Vice President Mutual Fund Division, TAGLP;
Senior Vice President and Assistant Secretary
of TIS
John Fieseler Formerly, Vice President, TAGLP
Vice President
Brian C. Molloy Formerly, Vice President, TAGLP
Vice President
Walter B. Gerken Trustee, PIMCO Funds. Formerly, Director,
Chairperson and Pacific Investment Management Company,
Member of Equity Chairman, Director, Chairman of Executive
Board Committee and Chief Executive Officer,
Pacific Mutual
William H. Gross Managing Director, Pacific Investment
3005821.RED
-10-
<PAGE>
Member of Equity Management Company; Director and Vice
Board and Operating President, PIASCO and StocksPLUS; Senior Vice
Board President, PIMCO Funds
Brent R. Harris Managing Director, Pacific Investment
Member of Operating Management Company; Director, PIMCO Commercial
Board Mortgage Securities Trust, Inc.; Director and
Vice President, StocksPLUS; Trustee and
Chairman, PIMCO Funds and PIMCO Commercial
Mortgage Securities Trust, Inc.
Dean S. Meiling Managing Director, Pacific Investment
Member of Operating Board Management Company; Director, StocksPLUS;
Vice President, PIMCO Funds
James F. Muzzy Managing Director, Pacific Investment
Member of Operating Board Management Company; Director and Vice
President, StocksPLUS; Vice President, PIMCO
Funds
Daniel S. Pickett Managing Director, CCI; formerly Senior Vice
Member of Operating Board President Columbus Circle Division, TAGLP
William F. Podlich III Managing Director, Pacific Investment
Member of Equity Board and Management Company
Operating Board
William C. Powers Managing Director, Pacific Investment
Member of Operating Board Management Company
Glenn S. Schafer President, Pacific Mutual; Director, Mutual
Member of Equity Board Service Corporation, United Planners Group,
Inc., Pacific Equities Network and Pacific
Financial Holding Company
Thomas C. Sutton Director, Chairman and Chief Executive
Member of Equity Board Officer, Pacific Mutual; Chairman and
President, Pacific Select Fund; Director,
United Planners Group Inc.,
3005821.RED
-11-
<PAGE>
Pacific Equities Network, Mutual Service
Corporation, Pacific Financial Holding Company
and PMRA
William S. Thompson, Jr. Chief Executive Officer and Managing Director,
Member of Equity Board; Pacific Investment Management Company; Director
Chairman and Member of and President, StocksPLUS
Operating Board; Member of
Operating Committee
Michelle Mitchell Senior Vice President, PIMCO Advisors
Vice President Institutional Services; Vice President, PIMCO
Advisors Institutional Funds. Formerly, Vice
President of PFAMCO
The principal business address of the Manager is ^ 800 Newport Center
Drive, Newport Beach, CA 92660. The address of PADCO and CAT is 2187 Atlantic
Street, Stamford, CT 06902. The address of CCI is One Station Place, Stamford,
CT 06902.
The address of PFAMCO, Parametric, Pacific Financial Holding Company,
Pacific Equities Network, Pacific Mutual and Pacific Select Fund is 700 Newport
Center Drive, Newport Beach, CA 92660.
The address of PMRA is 800 Newport Center Drive, Newport Beach, CA 92660.
The address of Pacific Investment Management Company is 840 Newport Center
Drive, Newport Beach, CA 92660.
The address of Mutual Service Corporation is 7108 Fairway Drive, Palm Beach
Gardens, FL 33418.
The address of United Planners Group, Inc. is 7333 East Double Tree Ranch
Road, Scottsdale, AZ 85258.
(b) Columbus Circle Investors Company ("CCI") is a general partnership
formed on September 9, 1994 which is registered as an investment adviser under
the Investment Advisers Act of 1940. The Manager and Columbus Circle Investors
3005821.RED
-12-
<PAGE>
Management Inc.("CCI, Inc."), a wholly-owned subsidiary of the Manager, are the
general partners of CCI. CCI consists of the personnel of the former Columbus
Circle Investors Division of TAGLP and the investment personnel of the former
Mutual Funds Division of TAGLP. CCI acts as sub-adviser to other mutual funds
and also advises and manages individual accounts, profit sharing and pension
funds and institutional accounts.
Set forth below are the substantial business engagements during at least
the two past fiscal years of each director or officer of CCI:
NAME AND POSITION BUSINESS AND
WITH CCI OTHER CONNECTIONS
Irwin F. Smith Member of Equity and Operating Boards and
Chairman, Managing Operating Committee, PIMCO Advisors L.P.;
Director, Chief Executive Formerly, Chairman of TAGLP and of the Columbus
Officer and Chief Investment Circle Investors Division of TAGLP; Director
Officer and Chairman, TAG Inc.
Donald A. Chiboucas Member of Operating Board, PIMCO Advisors,
President and Managing L.P.; Formerly, Senior Executive Vice
Director President, TAGLP; President, Columbus Circle
Investors Division of TAGLP; Senior Executive
Vice President, TAG Inc.
Louis P. Celentano Formerly Senior Vice President, TAGLP and CCI
Managing Director
Daniel S. Pickett Member of Operating Board, PIMCO Advisors L.P.;
Managing Director Formerly Senior Vice President, Columbus Circle
Investors Division, TAGLP
Amy M. Hogan Formerly Senior Vice President, Columbus Circle
Managing Director Investors Division, TAGLP
Robert W. Fehrmann Formerly Senior Vice President, Columbus Circle
Managing Director Investors Division, TAGLP
The address of CCI is One Station Place, Stamford, CT 06902.
3005821.RED
-13-
<PAGE>
(c) Pacific Investment Management Company is a partnership formed on
September 15, 1994 which is registered as an investment adviser under the
Investment Advisers Act of 1940. The Manager and PIMCO Management Inc. are the
general partners of Pacific Investment Management Company. Pacific Investment
Management Company is the successor to the former business of Pacific Investment
Management Company, a California corporation and indirect subsidiary of Pacific
Mutual Life Insurance Company ("Pacific Mutual").
Set forth below are the substantial business engagements during at least
the two past fiscal years of each director or officer of Pacific Investment
Management Company:
NAME AND POSITION BUSINESS AND
OTHER CONNECTIONS
William H. Gross Member of Equity Board and Operating Board,
Managing Director PIMCO Advisors L.P.; Director and Vice
President, StocksPLUS; Senior Vice President,
PIMCO Institutional Funds
Brent R. Harris Member of Operating Board, PIMCO Advisors L.P.;
Managing Director Director and Chairman, PIMCO Commercial
Mortgage Securities Trust, Inc.; Director and
Vice President, StocksPLUS; Trustee and
Chairman, PIMCO Institutional Funds
Dean S. Meiling Member of Operating Board, PIMCO Advisors L.P.;
Managing Director Director, StocksPLUS; Vice President, PIMCO
Institutional Funds; Vice President, PIMCO
Commercial Mortgage Securities Trust, Inc.
James F. Muzzy Member of Operating Board, PIMCO Advisors L.P.;
Managing Director Director and Vice President, StocksPLUS; Vice
President, PIMCO Institutional Funds
William F. Podlich III Member of Equity Board and Operating Board,
Managing Director PIMCO Advisors L.P.; Vice
3005821.RED
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<PAGE>
President, PIMCO Commercial Mortgage Securities
Trust, Inc.
William C. Powers Member of Operating Board, PIMCO Advisors L.P.;
Managing Director Senior Vice President, PIMCO Commercial
Mortgage Securities, Inc.
William S. Thompson, Jr. Member of Equity and Operating Board and
Chief Executive Officer Operating Committee, PIMCO Advisors L.P.; Vice
and Managing Director President, PIMCO Institutional Funds; President
and Director, StocksPLUS; Vice President, PIMCO
Commercial Mortgage Securities, Inc.
Frank B. Rabinovitch None
Managing Director
John L. Hague None
Managing Director
David H. Edington None
Managing Director
The address of Pacific Investment Management Company is 840 Newport Center
Drive, Newport Beach, CA 92660.
(d) Blairlogie Capital Management ("Blairlogie") is a United Kingdom
limited partnership formed in 1994 which is registered as an investment adviser
under the Investment Advisers Act of 1940. Blairlogie has two general partners,
the Manager (which holds a 74.9% interest) and Blairlogie Holdings Limited
(which holds a 0.1% interest), a wholly-owned subsidiary of the Manager, and one
limited partner, Blairlogie Partners L.P. (which holds a 25% interest), a
limited partnership the partners of which are PFAMCO as the general partner, and
James G. Smith, James R. Stephens and Gavin R. Dobson as limited partners.
3005821.RED
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<PAGE>
Set forth below are the substantial business engagements during at least
the two past fiscal years of each director or officer of Blairlogie or
Blairlogie Holdings Limited:
NAME BUSINESS AND
OTHER CONNECTIONS
James G. Smith Formerly, senior portfolio manager, Murray
Managing Director and Johnstone.
Chief Investment Officer of
Blairlogie and
Blairlogie Holdings
Limited.
James R. Stephens None
Managing Director and
Chief Financial Officer of
Blairlogie and
Blairlogie Holdings
Limited.
Gavin R. Dobson None
Managing Director and
Chief Executive Officer of
Blairlogie and Blairlogie
Holdings Limited.
The principal offices of Blairlogie and Blairlogie Holdings Limited are
located at 125 Prince's Street, 4th Floor, Edinburgh EH2 4AD, Scotland.
(e) Van Eck Associates Corporation ("Van Eck") is a Delaware corporation
registered as an investment adviser under the Investment Advisers Act of 1940.
Van Eck provides investment advice as adviser to the Van Eck Funds, Van Eck
Trust and Van Eck Investment Trust, registered series investment companies, and
Van Eck Trust, a registered investment company, and as sub-adviser to the
Natural Resources Series of the GCG Trust, the Gold Stock portfolio of the Chubb
America Fund and the Enterprise Group of Funds, Inc. Precious Metals Portfolio.
In addition to providing investment advice to the mutual funds named above, Van
Eck provides investment advice to other individual and institutional accounts.
3005821.RED
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<PAGE>
Set forth below are the substantial business engagements during at least
the two past fiscal years of each director or officer of Van Eck:
NAME AND POSITION
WITH VAN ECK BUSINESS AND OTHER CONNECTIONS
John C. Van Eck Chairman of the Board and President, Van Eck
Chairman of the Board Funds ("VEF") and Van Eck Worldwide Insurance
Trust ("WWIT"); Chairman of the Board, Van Eck
Securities Corporation ("VESC"); Director,
Eclipse Financial Asset Trust. Formerly,
Director Abex Inc., Director, The Henley
Group, Inc.
Fred M. Van Eck Trustee, VEF and WWIT; Private Investor,
Director Director, VESC
Sigrid S. Van Eck Vice President, Assistant Treasurer and
Director, Vice Director of VESC
President and Assistant
Treasurer
Henry J. Bingham Executive Vice President VEF and WWIT;
Executive Managing President, International Investors Gold
Director Series of VEF
Jan Van Eck Director and Executive Vice President of VESC
Director
Michael G. Doorley Vice President, Treasurer, Controller and Chief
Vice President, Financial Officer of VESC; Vice President,
Treasurer, Controller VEF and WWIT
and Chief Financial
Officer
Bruce J. Smith Vice President and Treasurer of VEF and
Senior Managing WWIT; Senior Managing Director of Operations,
Director, Portfolio VESC
Accounting
3005821.RED
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<PAGE>
William A. Trebilcock Vice President of VEF; Formerly, Director,
Director, Mining Corner Bay Explorations Ltd. ^ Formerly,
Research Director, Precambrian Explorations Inc.
Thaddeus M. Leszcynski Vice President and Secretary of VEF and WWIT;
Vice President, Secretary Vice President, Secretary and General Counsel
and General Counsel of VESC
Derek M. Van Eck Director of VESC; President, Global Hard Assets
Director and and World Trends Series of the Van Eck Funds
Executive Vice
President, Global
Investments
Roger A. Lawson Trustee, VEF and WWIT; Director, President and
Director, President and Chief Executive Officer, VESC. Formerly,
Chief Executive Officer Managing Director and Head of Global Private
Banking and Mutual Funds, Bankers Trust
Company, Managing Director, Member of the
Management Committee, President and Chief
Executive Officer, Fidelity Investments Retail
Group, FMR Corp., Corporate Officer, Member of
the Management Committee and Head of Retail and
Institutional Businesses, Dreyfus Corporation
The principal business address of VEF, VESC, VEAC and WWIT is 99 Park
Avenue, New York, NY 1001.
(f) Cadence Capital Management ("Cadence") is a general partnership which
is registered as an investment adviser under the Investment Advisers Act of
1940. The Manager and Cadence Capital Management Inc., a wholly-owned subsidiary
of the Manager, are the only partners of Cadence. Cadence Capital Management
Corporation, the predecessor investment adviser to Cadence,
3005821.RED
-18-
<PAGE>
commenced operations in 1988. Cadence acts as sub-adviser to other mutual funds
and also advises institutional accounts.
Set forth below are the substantial business engagements during at least
the two past fiscal years of each director or officer of Cadence:
NAME AND POSITION
WITH CADENCE BUSINESS AND OTHER CONNECTIONS
David B. Breed, Member of Operating Board, PIMCO
Managing Director, Advisors L.P.
Chief Executive Officer
and Chief Investment
Officer
Willian B. Bannick, None
Managing Director and
Senior Portfolio Manager
Peter B. McManus, None
Vice President Client
Relations and Marketing
Barbara M. Green, None
Treasurer and Operations
Manager
The principal business address of Cadence is Exchange Place, Boston, MA
02109.
(g) NFJ Investment Group ("NFJ") is a general partnership which is registered as
an investment adviser under the Investment Advisers Act of 1940. The Manager and
NFJ Management Inc., a wholly-owned subsidiary of the Manager, are the only
partners of NFJ. NFJ Investment Group, Inc., the predecessor investment adviser
to NFJ, commenced operations in 1989.
3005821.RED
-19-
<PAGE>
In addition to providing investment advice to the mutual funds named above,
NFJ provides investment advice to other mutual funds, individuals and
institutional accounts.
Set forth below are the substantial business engagements during at least
the two past fiscal years of each director or officer of NFJ:
NAME AND POSITION
WITH NFJ BUSINESS AND OTHER CONNECTIONS
Jack Christopher Najork, None
Managing Director
Benno J. Fischer, None
Managing Director
John L. Johnson, None
Managing Director
The principal business address of NFJ is 2121 San Jacinto, Suite 1440,
Dallas, TX 75201.
Item 29. Principal Underwriters.
-----------------------
(a) PIMCO Advisors Distribution Company ^("PADCO"), the Registrant's
principal underwriter, also serves as underwriter for the Trust, CAT, PIMCO
Funds and PIMCO Advisors Institutional Funds. PADCO is a wholly-owned
subsidiary of the Manager.
(b) Information with respect to directors and officers of PADCO is as
follows:
3005821.RED
-20-
<PAGE>
Positions and Offices Positions and
Names and Principal with Principal Offices with
Business Addresses Underwriter Registrant
- ------------------ ----------- ----------
Robert A. Prindiville Director and Chairman Trustee and
President
John O. Leasure Director and President Vice President
William D. Cvengros Director Trustee
Robert M. Fitzgerald Senior Vice President of None
Finance and Controller
Newton B. Schott, Jr. Director, Senior Vice Vice President
President and and Clerk
Secretary
Samuel C. Newman Senior Vice President Vice President
and Assistant Secretary and Assistant Clerk
Andrew J. Meyers Executive Vice President None
Brian F. Trumbore Senior Vice President None
Paul R. Moody Vice President None
William E. Lynch Vice President None
Paul H. Troyer Vice President None
William Thomas, Jr. Vice President None
Edward W. Janeczek, Jr. Vice President None
Matthew M. Russell Vice President None
Lesley Cotten Vice President None
Jeffrey L. Booth Vice President None
The principal business address of each such individual is 2187 Atlantic
Street, Stamford, CT 06902.
(c) The Registrant has no principal underwriter that is not an affiliated
person of the Registrant or an affiliated person of such an affiliated person.
3005821.RED
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<PAGE>
Item 30. Location of Accounts and Records.
---------------------------------
Persons maintaining physical possession of accounts, books and other
documents required to be maintained by Section 31(a) of the Investment Company
Act of 1940 and the Rules promulgated thereunder include Registrant's Clerk,
Newton B. Schott, Jr.; Registrant's Investment Manager, PIMCO Advisors L.P.;
Registrant's Custodian, The Bank of New York; and Registrant's Transfer Agent
and Shareholder Servicing Agent, Shareholder Services, Inc. The address of the
Clerk is 2187 Atlantic Street, Stamford, Connecticut 06902; the address of the
Manager is ^ 800 Newport Center Drive, Newport Beach, CA 92660; the address of
The Bank of New York is 48 Wall Street, New York, New York 10015; and the
address of Shareholder Services, Inc. is 3410 South Galena Street, Denver,
Colorado 80231.
-22-
3005821.RED
<PAGE>
Item 31. Management Services.
-------------------
None.
Item 32. Undertakings.
------------
(a) The Trust hereby undertakes to call a meeting of the shareholders for
the purpose of voting upon the question of removal of one or more trustees when
requested to do so by the holders of at least 10% of the outstanding shares of
the Trust and to comply with the provisions of Section 16(c) of the Investment
Company Act of 1940 relating to shareholder communication.
(b) The Trust undertakes to furnish to any person to whom a prospectus is
delivered a copy of the Trust's latest annual report upon request and without
charge.
PARTC. -23-
<PAGE>
NOTICE
------
A copy of the Amended and Restated Agreement and Declaration of Trust of
PIMCO Advisors Funds (the "Trust") is on file with the Secretary of State of The
Commonwealth of Massachusetts and notice is hereby given that this instrument is
executed on behalf of the Trust by an officer of the Trust as an officer and not
individually and that the obligations of or arising out of this instrument are
not binding upon any of the Trustees of the Trust or shareholders of any series
of the Trust individually but are binding only upon the assets and property of
the Trust or the respective series.
SIGNATURES
----------
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant has duly caused this Post-Effective
Amendment No. ^ 33 to this Registration Statement to be signed on its behalf by
the undersigned, thereto duly authorized, in the City of Stamford, and the State
of Connecticut on the ^ 27th day of ^ November, 1995.
PIMCO ADVISORS FUNDS
By: /s/ Robert A. Prindiville
Robert A. Prindiville,
President
Pursuant to the requirements of the Securities Act of 1933, this Post-Effective
Amendment No. ^ 33 has been signed below by the following persons in the
capacities and on the dates indicated.
Name Capacity Date
- ---- -------- ----
/s/ Robert A. Prindiville Trustee, President and November 27, 1995
- ------------------------- Principal Executive Officer
Robert A. Prindiville
/s/ Brian C. Molloy Treasurer and Principal November 27, 1995
- ------------------------- Financial and Accounting
Brian C. Molloy Officer
William D. Cvengros* Trustee
- -------------------------
William D. Cvengros
Gary L. Light* Trustee
- -------------------------
Gary L. Light
Joel Segall* Trustee
- -------------------------
Joel Segall
Donald P. Carter* Trustee
- -------------------------
Donald P. Carter
E. Philip Cannon* Trustee
- -------------------------
E. Philip Cannon
Gary A. Childress* Trustee
- -------------------------
Gary A. Childress
<PAGE>
-1-
W. Bryant Stooks* Trustee
- -------------------------
W. Bryant Stooks
Gerald M. Thorne* Trustee
- -------------------------
Gerald M. Thorne
* By: /s/ Robert A. Prindiville
-------------------------
Robert A. Prindiville
Attorney-In-Fact
Date: November 27, 1995
<PAGE>
EXHIBIT LIST
------------
Exhibit Page
------- ----
1. The Trust's Amended and Restated Agreement and
Declaration of Trust.
2. Amended and Restated Bylaws of the Trust.
4. Specimen Share Certificates for Class A, Class B
and Class C Shares.
5a. Management Contracts.
5b. Sub-Adviser Agreements.
6. Distributor's Contract.
8. Amended and Restated Custodian Agreement and Amendments Thereto.
9a. Transfer Agency Agreement and Addendums Thereto.
9b. Fund Accounting Agreement.
9c. Amended and Restated Blue Sky Service Agreement ^.
9d. Organizational Expense Reimbursement Agreement
for the Short-Intermediate Fund.
9e. Organizational Expense Reimbursement Agreement for
the Target Fund.
9f. Organizational Expense Reimbursement Agreements
for the Total Return Income Fund and the
Innovation Fund.
9g. Organizational Expense Reimbursement Agreements
for the Discovery Fund and the Value Fund.
9h. Organizational Expense Reimbursement Agreement
for the Global Income Fund.
10. Opinion and Consent of Counsel filed with the
Trust's Rule 24f-2 Notice.
11. Consent of Independent Accountants.
15a. Class A Distribution and Servicing Plan.
15b. Class C Distribution and Servicing Plan.
15c. Class B Distribution and Servicing Plan.
16. Schedule for Computation of Performance
Information.
17. Financial Data Schedule (filed as Exhibit 27
for Edgar purposes).
18. Multi-Class Plan.
19. Powers of Attorney.
Exhibit 99.B1
The Trust's Amended and Restated Agreement and
Declaration of Trust
<PAGE>
PIMCO Advisors Fund
(formerly known as
Thomson Fund Group)
AMENDED AND RESTATED
AGREEMENT AND DECLARATION OF TRUST
This AMENDED AND RESTATED AGREEMENT AND DECLARATION OF TRUST made at
Boston, Massachusetts this 11th day of September, 1990, by the Trustees
hereunder and by the holders of shares of beneficial interest to be issued
hereunder as hereinafter provided, amending and restating the Agreement and
Declaration of Trust dated October 14, 1983 (the "Original Declaration of
Trust").
Whereas, pursuant to Section 7 of Article IX of the Original
Declaration of Trust the Trustees of the Trust have determined that the Original
Declaration of Trust should be amended so as to provide for two classes of
shares of beneficial interest for each series of the Trust; and
Whereas, the shareholders of each series of this Trust have approved
this Amended and Restated Agreement and Declaration of Trust at a meeting held
on September 7, 1990;
Now, Therefore, the Trustees of this Trust direct that this Amended and
Restated Agreement and Declaration of Trust be filed with the Secretary of State
of The Commonwealth of Massachusetts and shall take effect as of the date of
filing.
Witnesseth that
Whereas, this Trust has been formed to carry on the business of an
investment company; and
Whereas, the Trustees have agreed to manage all property coming into
their hands as trustees of a Massachusetts voluntary association with
transferable shares in accordance with the provisions hereinafter set forth;
Now, Therefore, the Trustees hereby declare that they will hold all
cash, securities and other assets which they may from time to time acquire in
any manner as Trustees hereunder IN TRUST to manage and dispose of the same upon
the following terms and conditions for the benefit of the holders from time to
time of Shares in this Trust as hereinafter set forth.
ARTICLE I
Name and Definitions
Name
Section 1. This Trust shall be known as "PIMCO Advisors Funds", and the
Trustees shall conduct the business of the Trust under that name or any other
name as they may from time to time determine.
Definitions
Section 2. Whenever used herein, unless otherwise required by the
context or specifically provided:
(a) The "Trust" refers to the Massachusetts business trust
established by this Agreement and Declaration of Trust, as amended from time to
time;
(b) "Trustees" refers to the Trustees of the Trust named
herein or elected in accordance with Article IV;
(c) "Shares" means the equal proportionate transferable units
of interest into which the beneficial interest in the Trust shall be divided
from time to time or, if more than one series or class of Shares is authorized
by the Trustees, the equal proportionate transferable units into which each
series or class of Shares shall be divided from time to time;
(d) "Shareholder" means a record owner of Shares;
(e) The "1940 Act" refers to the Investment Company Act of
1940 and the Rules and Regulations thereunder, all as amended from time to time;
(f) The terms "Affiliated Person", "Assignment", "Commission",
"Interested Person", "Principal Underwriter" and "Majority Shareholder Vote"
(the 67% or 50% requirement of the third sentence of Section 2(a)(42) of the
1940 Act, whichever may be applicable) shall have the meanings given them in the
1940 Act;
(g) "Declaration of Trust" shall mean this Amended and
Restated Agreement and Declaration of Trust as amended or restated from time to
time;
(h) "Bylaws" shall mean the Bylaws of the Trust as amended
from time to time;
(i) The term "series" or "series of Shares" refers to the one
or more separate investment portfolios of the Trust into which the assets and
liabilities of the Trust may be divided and the Shares of the Trust representing
the beneficial interest of Shareholders in such respective portfolios; and
(j) the term "class" or "class of Shares" refers to the
division of Shares representing any series into two or more classes as provided
in Article III, Section 1 hereof.
ARTICLE II
Purpose of Trust
The purpose of the Trust is to provide investors a managed investment primarily
in securities, debt instruments and other instruments and rights of a financial
character and to carry on such other business as the Trustees may from time to
time determine pursuant to their authority under this Declaration of Trust.
ARTICLE III
Shares
Division of Beneficial Interest
Section 1. The Shares of the Trust shall be issued in one or more
series as the Trustees may, without shareholder approval, authorize. Each series
shall be preferred over all other series in respect of the assets specifically
allocated to that series within the meaning of the 1940 Act and shall represent
a separate investment portfolio of the Trust. The beneficial interest in each
series shall at all times be divided into Shares, with a par value of $0.00001,
each of which shall, except as provided in the following sentence, represent an
equal proportionate interest in the series with each other Share of the same
series, none having priority or preference over another. The Trustees may,
without Shareholder approval, divide the Shares of any series into two or more
classes, Shares of each such class having such preferences and special or
relative rights and privileges (including conversion rights, if any) as the
Trustees may determine or as shall be set forth in the Bylaws. The number of
Shares authorized shall be unlimited. The Trustees may from time to time divide
or combine the Shares of any series or class into a greater or lesser number
without thereby changing the proportionate beneficial interest in the series or
class.
Ownership of Shares
Section 2. The ownership of Shares shall be recorded on the books of
the Trust or a transfer or similar agent. No certificates certifying the
ownership of Shares shall be issued except as the Trustees may otherwise
determine from time to time. The Trustees may make such rules as they consider
appropriate for the issuance of Share certificates, the transfer of Shares and
similar matters. The record books of the Trust as kept by the Trust or any
transfer or similar agent, as the case may be, shall be conclusive as to who are
the Shareholders of each series and class and as to the number of Shares of each
series and class held from time to time by each Shareholder.
Investment in the Trust
Section 3. The Trustees shall accept investments in the Trust from such
persons and on such terms and for such consideration, which may consist of cash
or tangible or intangible property or a combination thereof, as they or the
Bylaws from time to time authorize.
All consideration received by the Trust for the issue or sale of Shares of each
series, together with all income, earnings, profits, and proceeds thereof,
including any proceeds derived from the sale, exchange or liquidation thereof,
and any funds or payments derived from any reinvestment of such proceeds in
whatever form the same may be, shall irrevocably belong to the series of Shares
with respect to which the same were received by the Trust for all purposes,
subject only to the rights of creditors, and shall be so handled upon the books
of account of the Trust and are herein referred to as "assets of" such series.
No Preemptive Rights
Section 4. Shareholders shall have no preemptive or other right to
subscribe to any additional Shares or other securities issued by the Trust.
Status of Shares and Limitation of Personal Liability
Section 5. Shares shall be deemed to be personal property giving only
the rights provided in this Declaration of Trust or the Bylaws. Every
Shareholder by virtue of having become a Shareholder shall be held to have
expressly assented and agreed to the terms of this Declaration of Trust and the
Bylaws and to have become a party hereto. The death of a Shareholder during the
continuance of the Trust shall not operate to terminate the same nor entitle the
representative of any deceased Shareholder to an accounting to take any action
in court or elsewhere against the Trust or the Trustees, but only to the rights
of said decedent under this Trust. Ownership of Shares shall not entitle the
Shareholder to any title in or to the whole or any part of the Trust property or
right to call for a partition or division of the same or for an accounting, nor
shall the ownership of Shares constitute the Shareholders partners. Neither the
Trust nor the Trustees, nor any officer, employee or agent of the Trust, shall
have any power to bind personally any Shareholder, not except as specifically
provided herein to call upon any Shareholder for the payment of any sum of money
or assessment whatsoever other than such as the Shareholder may at any time
personally agree to pay.
ARTICLE IV
The Trustees
Election
Section 1. A Trustee may be elected either by the Trustees or by the
Shareholders. There shall be not less than three Trustees. The number of
Trustees shall be as provided by the Bylaws or as fixed from time to time by the
Trustees. The Shareholders may elect Trustees at any meeting of Shareholders
called by the Trustees for that purpose. Each Trustee shall serve until he or
she retires, resigns, is removed or dies or until the next meeting of
Shareholders called for the purpose of electing Trustees and until the election
and qualification of his or her successor. Any Trustee may resign at any time by
written instrument signed by such Trustee and delivered to any officer of the
Trust, to each other Trustee or to a meeting of the Trustees. Such resignation
shall be effective upon receipt unless specified to be effective at some other
time. Except to the extent expressly provided in a written agreement with the
Trust, no Trustee resigning and no Trustee removed shall have any right to any
compensation for any period following his resignation or removal, or any right
to damages on account of such removal.
Effect of Death, Resignation, etc. of a Trustee
Section 2. The death, declination, resignation, retirement, removal or
incapacity of the Trustees, or any one of them, shall not operate to annul the
Trust or to revoke any existing agency created pursuant to the terms of this
Declaration of Trust.
Powers
Section 3. Subject to the provisions of this Declaration of Trust, the
business of the Trust shall be managed by the Trustees, and they shall have all
powers necessary or convenient to carry out that responsibility. Without
limiting the foregoing, the Trustees may adopt Bylaws not inconsistent with this
Declaration of Trust providing for the conduct of the business of the Trust and
may amend and repeal them to the extent that such Bylaws do not reserve that
right to the Shareholders; they may fill vacancies, including vacancies caused
by enlargement of their number, and may remove Trustees with or without cause;
they may elect and remove, with or without cause, such officers and appoint and
terminate such agents as they consider appropriate; they may appoint from their
own number, and terminate, any one or more committees consisting of two or more
Trustees as the Trustees may determine; they may employ one or more custodians
of the assets of the Trust and may authorize such custodians to employ
subcustodians and to deposit all or any part of such assets in a system or
systems for the central handling of securities, retain a transfer agent or a
Shareholder servicing agent, or both, provide for the distribution of Shares by
the Trust, through one or more principal underwriters or otherwise, set record
dates for the determination of Shareholders with respect to various matters, and
in general delegate such authority as they consider desirable to any officer of
the Trust, to any committee of the Trustees and to any agent or employee of the
Trust or to any such custodian or underwriter.
Without limiting the foregoing, the Trustees shall have power and
authority:
(a) To invest and reinvest cash, and to hold cash uninvested;
(b) To sell, exchange, lend, pledge, mortgage, hypothecate, write
options on and lease any or all of the assets of the Trust;
(c) To act as a distributor of shares and as underwriter of, or
broker or dealer in, securities and other property;
(d) To vote or give assent, or exercise any rights of ownership, with
respect to stock or other securities or property; and to execute
and deliver proxies or powers of attorney to such person or
persons as the Trustees shall deem proper, granting to such
person or persons such power and discretion with relation to
securities or property as the Trustees shall deem proper;
(e) To exercise powers and rights of subscription or otherwise which
in any matter arise out of ownership of securities;
(f) To hold any security or property in a form not indicating any
trust, whether in bearer, unregistered or other negotiable form,
or in the name of the Trustees or of the Trust or in the name of
a custodian, subcustodian or other depositary or a nominee or
nominees or otherwise;
(g) To allocate assets, liabilities, income and expenses of the Trust
to a particular series of Shares or to apportion the same among
two or more series, provided that any liabilities or expenses
incurred by a particular series of Shares shall be payable solely
out of the assets of that series; and, to the extent necessary or
appropriate to give effect to the preferences and special or
relative rights and privileges of any classes of Shares, to
allocate assets, liabilities, income and expenses of a series to
a particular class of Shares of that series or to apportion the
same among two or more classes of Shares of that series;
(h) To consent to or participate in any plan for the reorganization,
consolidation or merger of any corporation or issuer, any
security of which is or was held in the Trust; to consent to any
contract, lease, mortgage, purchase or sale of property by such
corporation or issuer, and to pay calls or subscriptions with
respect to any security held in the Trust;
(i) To join other security holders in acting through a committee,
depositary, voting trustee or otherwise, and in connection to
deposit any security with, or transfer any security with, or
transfer any security to, any such committee, depositary or
trustee, and to delegate to them such power and authority with
relation to any security (whether or not so deposited or
transferred) as the Trustees shall deem proper, and to agree to
pay, and to pay, such portion of the expenses and compensation of
such committee, depositary or trustee as the Trustees shall deem
proper;
(j) To compromise, arbitrate or otherwise adjust claims in favor of
or against the Trust or any matter in controversy, including but
not limited to claims for taxes;
(k) To enter into joint ventures, general or limited partnerships
and any other combinations or associations;
(l) To borrow funds;
(m) To endorse or guarantee the payment of any notes or other
obligations of any person; to make contracts of guaranty or
suretyship, or otherwise assume liability for payment thereof;
and to mortgage and pledge the Trust property or any part thereof
to secure any of and all such obligations;
(n) To purchase and pay for entirely out of Trust property such
insurance as they may deem necessary or appropriate for the
conduct of business, including without limitation, insurance
policies insuring the assets of the Trust and payment of
distributions and principal on its portfolio investments, and
insurance policies insuring the Shareholders, Trustees, officers,
employees, agents, investment advisers or managers, principal
underwriters, or independent contractors of the Trust
individually against all claims and liabilities of every nature
arising by reason of holding, being or having held any such
office or position, or by reason of any action alleged to have
been taken or omitted by any such person as Shareholder, Trustee,
officer, employee, agent, investment adviser or manager,
principal underwriter, or independent contractor, including any
action taken or omitted that may be determined to constitute
negligence, whether or not the Trust would have the power to
indemnify such person against such liability;
(o) To pay pensions for faithful service, as deemed appropriate by
the Trustees, and to adopt, establish and carry out pension,
profit-sharing, share bonus, share purchase, savings, thrift and
other retirement, incentive and benefit plans, trusts and
provisions, including the purchasing of life insurance and
annuity contracts as a means of providing such retirement and
other benefits, for any or all of the Trustees, officers,
employees and agents of the Trust; and
(p) To engage in any other lawful act or activity in which
corporations organized under the Massachusetts Business
Corporation Act may engage.
The Trustees shall not in any way be bound or limited by any present or
future law or custom in regard to investments by trustees.
Except as otherwise provided herein or from time to time in the Bylaws,
any action to be taken by the Trustees may be taken by a majority of the
Trustees present at a meeting of the Trustees (a quorum being present), within
or without Massachusetts, including any meeting held by means of a conference
telephone or other communications equipment by means of which all persons
participating in the meeting can hear each other at the same time and
participation by such means shall constitute presence in person at a meeting, or
by written consents of a majority of the Trustees then in office.
Payment of Expenses by Trust
Section 4. The Trustees are authorized to pay or to cause to be paid
out of the principal or income of the Trust, or partly out of principal and
partly out of income, as they deem fair, all expenses, fees, charges, taxes and
liabilities incurred or arising in connection with the Trust, in connection with
the management thereof, or in connection with the financing of the sale of
Shares, including, but not limited to, the Trustees' compensation and such
expenses and charges for the services of the Trust's officers, employees, any
investment adviser, manager or sub-adviser, principal underwriter, auditor,
counsel, custodian, transfer agent, shareholder servicing agent, and such other
agents or independent contractors and such other expenses and charges as the
Trustees may deem necessary or proper to incur, provided, however, that all
expenses, fees, charges, taxes and liabilities incurred by or arising in
connection with a particular series of Shares, as determined by the Trustees,
shall by payable solely out of the assets of that series.
Ownership of Assets of the Trust
Section 5. Title to all of the assets of each series of Shares and of
the Trust shall at all times be considered as vested in the Trustees.
Advisory, Management and Distribution
Section 6. The Trustees may, at any time and from time to time,
contract for exclusive or nonexclusive advisory and/or management services with
any corporation, trust, association or other organization (the "Manager"), every
such contract to comply with such requirements and restrictions as may be set
forth in the Bylaws; and any such contract may provide for one or more
sub-advisers who shall perform all or part of the obligations of the Manager
under such contract and may contain such other terms interpretive of or in
addition to said requirements and restrictions as the Trustees may determine,
including, without limitation, authority to determine from time to time what
investments shall be purchased, held, sold, or exchanged and what portion, if
any, of the assets of the Trust shall be held uninvested and to make changes in
the Trust's investments. The Trustees may also, at any time and from time to
time, contract with the Manager or any other corporation, trust, association or
other organization, appointing it exclusive or nonexclusive distributor or
principal underwriter for the Shares, every such contract to comply with such
requirements and restrictions as may be set forth in Bylaws; and any such
contract may contain such other terms interpretive of or in addition to said
requirements and restrictions as the Trustees may determine.
The fact that:
(i) any of the Shareholders, Trustees or officers of the Trust is a
shareholder, director, officer, partner, trustee, employee, manager,
adviser, principal underwriter or distributor or agent of or for any
corporation, trust, association or other organization, or of or for
any parent or affiliate of any organization, with which an advisory
or management contract, or principal underwriter's or distributor's
contract, or transfer, shareholder servicing or other agency contract
may have been or may hereafter be made, or that any such
organization, or any parent or affiliate thereof, is a Shareholder or
has an interest in the Trust, or that
(ii) any corporation, trust, association or other organization with which
an advisory or management contract or principal underwriter's or
distributor's contract, or transfer, shareholder servicing or other
agency contract may have been or may hereafter be made also has an
advisory or management contract, or principal underwriter's or
distributor's contract, or transfer, shareholder servicing or other
agency contract with one or more other corporations, trusts,
associations or other organizations, or has other business or
interests
shall not affect the validity of any such contract or disqualify any
Shareholder, Trustee or officer of the Trust from voting upon or executing the
same or create any liability or accountability to the Trust or its Shareholders.
ARTICLE V
Shareholders' Voting Powers and Meetings
Shareholders shall have such power to vote as is provided for in, and
may hold meetings and take actions pursuant to, the provisions of the Bylaws.
ARTICLE VI
Distributions, Redemptions and Repurchases
Distributions
Section 1. The Trustees may each year, or more frequently if they so
determine, distribute to the Shareholders of each series out of the assets of
such series such amounts as the Trustees may determine. Any such distribution to
the Shareholders of a particular series shall be made to said Shareholders pro
rata in proportion to the number of Shares of such series held by each of them,
except to the extent otherwise required or permitted by the preferences and
special or relative rights and privileges of any classes of Shares of that
series, and any distribution to the Shareholders of a particular class of Shares
shall be made to such Shareholders pro rata in proportion to the number of
Shares of such class held by each of them. Such distributions shall be made in
cash, Shares of other property, or a combination thereof, as determined by the
Trustees. Any such distribution paid in Shares will be paid at the net asset
value thereof as determined in accordance with the Bylaws.
Redemptions and Repurchases
Section 2. The Trust shall purchase such Shares as are offered by any
Shareholder for redemption upon the presentation of any certificate for the
Shares to be purchased, a proper instrument of transfer and a request directed
to the Trust or a person designated by the Trust that the Trust purchase such
Shares, or in accordance with such other procedures for redemption as the
Trustees may from time to time authorize; and the Trust will pay therefor the
net asset value thereof, as next determined in accordance with the Bylaws, less
any redemption charge or fee as the Trustees may from time to time authorize.
Payment for said Shares shall be made by the Trust to the Shareholder within
seven days after the date on which the request is made. The obligation set forth
in this Section 2 is subject to the provision that in the event that any time
the New York Stock Exchange is closed for other than customary weekends or
holidays, or, if permitted by rules of the Securities and Exchange Commission,
during periods when trading on the Exchange is restricted or during any
emergency which makes it impractical for the Trust to dispose of its investments
or to determine fairly the value of its net assets, or during any other period
permitted by order of the Securities and Exchange Commission for the protection
of investors, such obligation may be suspended or postponed by the Trustees. The
Trust may also purchase or repurchase Shares at a price not exceeding the net
asset value of such Shares in effect when the purchase or repurchase of any
contract to purchase or repurchase is made.
Redemption at the Option of the Trust
Section 3. The Trust shall have the right at its option and at any time
to redeem Shares of any Shareholder at the net asset value thereof as determined
in accordance with the Bylaws: (i) if at such time such Shareholder owns fewer
Shares than, or Shares having an aggregate net asset value of less than, an
amount determined from time to time by the Trustees; or (ii) to the extent that
such Shareholder owns Shares of a particular series of Shares equal to or in
excess of a percentage of the outstanding Shares of that series determined from
time to time by the Trustees; or (iii) to the extent that such Shareholder owns
Shares of the Trust representing a percentage equal to or in excess of such
percentage of the aggregate number of outstanding Shares of the Trust or the
aggregate net asset value of the Trust determined from time to time by the
Trustees.
ARTICLE VII
Compensation and Limitation of Liability of Trustees
Compensation
Section 1. The Trustees as such shall be entitled to reasonable
compensation from the Trust; they may fix the amount of their compensation.
Nothing herein shall in any way prevent the employment of any Trustee for
advisory, management, legal, accounting, investment banking, underwriting,
brokerage or other services and payment for the same by the Trust.
Limitation of Liability
Section 2. The Trustees shall not be responsible or liable in any event
for any neglect or wrongdoing of any officer, agent, employee, manager or
principal underwriter of the Trust, nor shall any Trustee be responsible for the
act or omission of any other Trustee, but nothing herein contained shall protect
any Trustee against any liability to which he or she would otherwise be subject
by reason of willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his or her office.
Every note, bond, contract, instrument, certificate or undertaking and every
other act or thing whatsoever executed or done by or on behalf of the Trust or
the Trustees or any of them in connection with the Trust shall be conclusively
deemed to have been executed or done only in or with respect to their or his or
her capacity as Trustees or Trustee, and such Trustees or Trustee shall not be
personally liable thereon.
ARTICLE VIII
Indemnification
Trustees, Officers, etc.
Section 1. The Trust shall indemnify each of its Trustees and officers
(including persons who serve at the Trust's request as directors, officers or
trustees of another organization in which the Trust has any interest as a
shareholder, creditor or otherwise) (hereinafter referred to as a "Covered
Person") against all liabilities and expenses, including but not limited to
amounts paid in satisfaction of judgments, in compromise or as fines and
penalties, and counsel fees reasonably incurred by any Covered Person in
connection with the defense or disposition of any action, suit or other
proceeding, whether civil or criminal, before any court or administrative or
legislative body, in which such Covered Person may be or may have been involved
as a party or otherwise or with which such Covered Person may be or may have
been threatened, while in office or thereafter, by reason of being or having
been such a Covered Person except with respect to any matter as to which such
Covered Person shall have been finally adjudicated in any such action, suit or
other proceeding (a) not to have acted in good faith in the reasonable belief
that such Covered Person's action was in the best interest of the Trust or (b)
to be liable to the Trust or its Shareholders by reason of willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved in the
conduct of such Covered Person's office. Expenses, including counsel fees so
incurred by any such Covered Person (but excluding amounts paid in satisfaction
of judgments, in compromise or as fines or penalties), shall be paid from time
to time by the Trust in advance of the final disposition of any such action,
suit or proceeding upon receipt of any undertaking by or on behalf of such
Covered Person to repay amounts so paid to the Trust if it is ultimately
determined that indemnification of such expenses is not authorized under this
Article, provided, however, that either (a) such Covered Person shall have
provided appropriate security for such undertaking, (b) the Trust shall be
insured against losses arising from any such advance payments or (c) either a
majority of the disinterested Trustees acting on the matter (provided that a
majority of disinterested Trustees then in office act on the matter), or
independent legal counsel in a written opinion, shall have determined, based
upon a review of readily available facts (as opposed to a full trial type
inquiry) that there is reason to believe that such Covered Person will be found
entitled to indemnification under this Article.
Compromise Payment
Section 2. As to any matter disposed of (whether by a compromise
payment, pursuant to a consent decree or otherwise) without an adjudication by a
court, or by any other body before which the proceeding was brought, that such
Covered Person either (a) did not act in good faith in the reasonable belief
that his or her action was in the best interests of the Trust or (b) is liable
to the Trust or its Shareholders by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the conduct of
his or her office, indemnification shall be provided if (a) approved as in the
best interests of the Trust by at least a majority of the disinterested Trustees
acting on the matter (provided that a majority of the disinterested Trustees
then in office act on the matter) upon a determination, based upon a review of
readily available facts (as opposed to a full trial type inquiry) that such
Covered Person acted in good faith in the reasonable belief that his or her
action was in the best interests of the Trust and is not liable to the Trust or
its Shareholders by reason of willful misfeasance, bad faith, gross negligence
or reckless disregard of the duties involved in the conduct of his or her
office, or (b) there has been obtained an opinion in writing of independent
legal counsel, based upon a review of readily available facts (as opposed to a
full trial type inquiry) to the effect that such Covered Person appears to have
acted in good faith in the reasonable belief that his or her action was in the
best interests of the Trust and that such indemnification would not protect such
Covered Person against any liability to the Trust to which he or she would
otherwise be subject be reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his or
her office. Any approval pursuant to this Section shall not prevent the recovery
from any Covered Person of any amount paid to such Covered Person in accordance
with this Section as indemnification if such Covered Person is subsequently
adjudicated by a court of competent jurisdiction not to have acted in good faith
in the reasonable belief that such Covered Person's action was in the best
interests of the Trust or to have been liable to the Trust or its Shareholders
by reason of willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of such Covered Person's office.
Indemnification Not Exclusive
Section 3. The right of indemnification hereby provided shall not be
exclusive of or affect any other rights to which such Covered Person may be
entitled. As used in this Article VIII, the term "Covered Person" shall include
such person's heirs, executors and administrators and a "disinterested Trustee"
is a Trustee who is not an "interested person" of the Trust as defined in
Section 2(a)(19) of the 1940 Act (or who has been exempted from being an
"interested person" by any rule, regulation or order of the Securities and
Exchange Commission) and against whom none of such actions, suits or other
proceedings or another action, suit or other proceeding on the same or similar
grounds is then or has been pending. Nothing contained in this Article shall
affect any rights to indemnification to which personnel of the Trust, other than
Trustees or officers, and other persons may be entitled by contract or otherwise
under law, nor the power of the Trust to purchase and maintain liability
insurance on behalf of any such person; provided, however, that the Trust shall
not purchase or maintain any such liability insurance in contravention of
applicable law, including without limitation the 1940 Act.
Shareholders
Section 4. In case any Shareholder or former Shareholder shall be held
to be personally liable solely by reason of his or her being or having been a
Shareholder and not because of his or her acts or omissions or for some other
reason, the Shareholder or former Shareholder (or his or her heirs, executors,
administrators or other legal representative or, in the case of a corporation or
other entity, its corporate or other general successor) shall be entitled to be
held harmless from and indemnified against all loss and expense arising from
such liability, but only out of the assets of the particular series of Shares of
which he or she is or was a Shareholder.
ARTICLE IX
Miscellaneous
Trustees, Shareholders, etc. Not Personally Liable; Notice
Section 1. All persons extending credit to, contracting with or having
any claim against the Trust or a particular series of Shares shall look only to
the assets of the Trust or the assets of that particular series of Shares for
payment under such credit, contract or claim, and neither the Shareholders nor
the Trustees, nor any of the Trust's officers, employees or agents, whether
past, present or future, shall be personally liable therefor. Nothing in this
Declaration of Trust shall protect any Trustee against any liability to which
such Trustee would otherwise be subject be reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of the office of Trustee.
Every note, bond, contract, instrument, certificate or undertaking made or
issued by the Trustees or by any officer or officers shall give notice that this
Declaration of Trust is on file with the Secretary of State of The Commonwealth
of Massachusetts and shall recite that the same was executed or made by or on
behalf of the Trust or by them as Trustee or Trustees or as officer or officers
and not individually and that the obligations of such instrument are not binding
upon any of them or the Shareholders individually but are binding only upon the
assets and property of the Trust, and may contain such further recital as he or
she or they may deem appropriate, but the omission thereof shall not operate to
bind any Trustee or Trustees or officer or officers or Shareholder or
Shareholders individually.
Trustee's Good Faith Action, Expert Advice, No Bond or Surety
Section 2. The exercise by the Trustees of their powers and discretions
hereunder shall be binding upon everyone interested. A Trustee shall be liable
for his or her own willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of the office of Trustee, and
for nothing else, and shall not be liable for the errors of judgement or
mistakes of fact or law. The Trustees may take advice of counsel or other
experts with respect to the meaning and operation of this Declaration of Trust,
and shall be under no liability for any act or omission in accordance with such
advice or for failing to follow such advice. The Trustees shall not be required
to give any bond as such, nor any surety if a bond is required.
Liability of Third Persons Dealing with Trustee
Section 3. No person dealing with the Trustees shall be bound to make
any inquiry concerning the validity of any transaction made or to be made by the
Trustees or to see to the application of any payments made or property
transferred to the Trust or upon its order.
Duration and Termination of Trust
Section 4. Unless terminated as provided herein, the Trust shall
continue without limitation of time. The Trust may be terminated at any time by
vote of Shareholders holding at least 66 2/3% of Shares entitled to vote or by
the Trustees by written notice to the Shareholders. Any series or class of
Shares may be terminated at any time by vote of Shareholders holding at least 66
2/3% of the Shares of such series or class entitled to vote or by the Trustees
by written notice to the Shareholders of such series. Upon termination of the
Trust or of any one or more series or classes of Shares, after paying or
otherwise providing for all charges, taxes, expenses and liabilities, whether
due or accrued or anticipated, of the Trust or of the particular series or class
as may be determined by the Trustees, the Trust shall in accordance with such
procedures as the Trustees consider appropriate reduce the remaining assets to
distributable from in cash or shares or other property, or any combination
thereof, and distribute the proceeds to the Shareholders of the series involved,
ratably according to the number of Shares of such series held by the several
Shareholders of such series on the date of termination, except to the extent
otherwise required or permitted by the preferences and special or relative
rights and privileges of any classes of Shares of that series, provided that any
distribution to the Shareholders of a particular class of Shares shall be made
to such Shareholders pro rata in proportion to the number of Shares of such
class held by each of them.
Filing and Copies, References, Headings
Section 5. The original or a copy of this instrument and of each
amendment hereto shall be kept at the office of the Trust where it may be
inspected by any Shareholder. A copy of this instrument and of each amendment
hereto shall be filed by the Trust with the Secretary of State of The
Commonwealth of Massachusetts and with the Boston City Clerk, as well as any
other governmental office where such filing may from time to time be required.
Anyone dealing with the Trust may rely on a certificate by an officer of the
Trust as to whether or not any such amendments have been made and as to any
matters in connection with the Trust hereunder, and, with the same effect as if
it were the original, may rely on a copy certified by an officer of the Trust to
be a copy of this instrument or of any such amendments. In this instrument and
in any such amendment, references to this instrument and all expressions like
"herein", "hereof", and "hereunder" shall be deemed to refer to this instrument
as amended or affected by any such amendments. Headings are placed herein for
convenience of reference only and shall not be taken as a part hereof or control
or affect the meaning, construction or effect of this instrument. This
instrument may be executed in any number of counterparts each of which shall be
deemed an original.
Applicable Law
Section 6. This Declaration of Trust is made in The Commonwealth of
Massachusetts, and it is created under and is to be governed by and construed
and administered according to the laws of the laws of said Commonwealth. The
Trust shall be of the type commonly called a Massachusetts business trust and,
without limiting the provisions hereof, the Trust may exercise all powers which
are ordinarily exercised by such a trust.
Amendments
Section 7. This Declaration of Trust may be amended at any time by an
instrument in writing signed by a majority of the then Trustees when authorized
to do so by vote of Shareholders holding a majority of the Shares entitled to
vote, except that an amendment which in the determination of the Trustees shall
affect the holders of one or more series of classes of Shares but not the
holders of all outstanding series and classes shall be authorized by vote of the
Shareholders holding a majority of the Shares entitled to vote of each series
and class affected and no vote of Shareholder of a series or class not affected
shall be required. Amendments having the purpose of changing the name of the
Trust, of establishing, changing or eliminating the par value of the Shares or
of supplying any omission, curing any ambiguity or curing, correcting or
supplementing any defective or inconsistent provision contained herein shall not
require authorization by Shareholder vote.
In Witness Whereof, each of the undersigned has hereunto set his hand
and seal for himself and his assigns, as of the day and year first above
written.
E. Philip Cannon
Donald P. Carter
Emmet Cashin, Jr.
William G. Christensen
Timothy S. Healy, S.J.
Gary L. Light
Joel Segall
Donald K. Miller
Robert A. Prindiville
Exhibit 99.B2
Amended and Restated Bylaws of the Trust
<PAGE>
BYLAWS
of
THOMSON MCKINNON INVESTMENT TRUST
ARTICLE 1
Agreement and Declaration of Trust and Principal Office
1.1 Agreement and Declaration of Trust. These Bylaws shall be subject
to the Agreement and Declaration of Trust, as from time to time in effect (the
"Declaration of Trust"), of Thomson McKinnon Investment Trust, the Massachusetts
business trust established by the Declaration of Trust (the "Trust").
1.2 Principal Office of the Trust. A principal office of the Trust
shall be located in Boston, Massachusetts. The Trust may have such other offices
within or without Massachusetts as the Trustees may determine or as they may
authorize.
ARTICLE 2
Meetings of Trustees
2.1 Regular Meetings. Regular meetings of the Trustees may be held
without call or notice at such places and at such times as the Trustees may from
time to time determine, provided that notice of the first regular meeting
following any such determination shall be given to absent Trustees. A regular
meeting of the Trustees may be held without call or notice immediately after and
at the same place as the annual meeting of the shareholders.
2.2 Special Meetings. Special meetings of the Trustees may be held at
any time and at any place designated in the call of the meeting when called by
the Chairman of the Trustees, the President or the Treasurer or by two or more
Trustees, sufficient notice thereof being given to each Trustee by the Clerk or
an Assistant Clerk or by the officer or the Trustees calling the meeting.
2.3 Notice. It shall be sufficient notice to the Trustee of a special
meeting to send notice by mail at least forty-eight hours or by telegram, telex
or telecopy or other electronic facsimile transmission method at least
twenty-four hours before the meeting addressed to the Trustee at his or her
usual or last known business or residence address or to give notice to him or
her in person or by telephone at least twenty-four hours before the meeting.
Notice of a meeting need not be given to any Trustee if a written waiver of
notice, executed by him or her before the meeting, is filed with the records of
the meeting, or to any Trustee who attends the meeting without protesting prior
thereto or at its commencement the lack of notice to him or her. Neither notice
of a meeting nor a waiver of a notice need specify the purposes of the meeting.
2.4 Quorum. At any meeting of the Trustees a majority of the Trustees
then in office shall constitute a quorum. Any meeting may be adjourned from time
to time by a majority of the votes cast upon the question, whether or not a
quorum is present, and the meeting may be held as adjourned without further
notice.
ARTICLE 3
Officers
3.1 Enumeration: Qualification. The officers of the Trust shall be a
President, a Treasurer, a Clerk, and such other officers including a Chairman of
the Trustees, if any, as the Trustees from time to time may in their discretion
elect. The Trust may also have such agents as the Trustees from time to time may
in their discretion appoint. The Chairman of the Trustees, if one is elected,
shall be a Trustee and may but need not be a shareholder; and any other officer
may but not need be a Trustee or a shareholder. Any two or more offices may be
held by the same person.
3.2 Election. The President, the Treasurer, and the Clerk shall be
elected annually by the Trustees. Other officers, if any, may be elected or
appointed by the Trustees at said meeting or at any other time. Vacancies in any
office may be filled at any time.
3.3 Tenure. The Chairman of the Trustees, if one is elected, the
President, the Treasurer and the Clerk shall hold office until their respective
successors are chosen and qualified, or in each case until he or she sooner
dies, resigns, is removed or becomes disqualified. Each other officer shall hold
office and each agent shall retain authority at the pleasure of the Trustees.
3.4 Powers. Subject to the other provisions of these Bylaws, each
officer shall have, in addition to the duties and powers herein and in the
Declaration of Trust set forth, such duties and powers as are commonly incident
to the office occupied by him or her as if the Trust were organized as a
Massachusetts business corporation and such other duties and powers as the
Trustees may from time to time designate.
3.5 Chairman; President. Unless the Trustees otherwise provide, the
Chairman of the Trustees or, if there is none or in the absence of the Chairman,
the President shall preside at all meetings of the shareholders and of the
Trustees. The President shall be the chief executive officer.
3.6 Treasurer. The Treasurer shall be the chief financial and
accounting officer of the Trust, and shall, subject to the provisions of the
Declaration of Trust and to any arrangement made by the Trustees with a
custodian, investment adviser or manager, or transfer, shareholder servicing or
similar agent, be in charge of the valuable papers, books of account and
accounting records of the Trust, and shall have such other duties and powers as
may be designated from time to time by the Trustees or by the President.
3.7 Clerk. The Clerk shall record all proceedings of the shareholders
and the Trustees in books to be kept therefor, which books or a copy thereof
shall be kept at the principal office of the Trust. In the absence of the Clerk
from any meeting of the shareholders or Trustees, an assistant clerk, or if
there be none or if he or she is absent, a temporary clerk chosen at such
meeting shall record the proceedings thereof in the aforesaid books.
3.8 Resignations. Any officer may resign at any time by written
instrument signed by him or her and delivered to the Chairman, the President or
the Clerk or to a meeting of the Trustees. Such resignation shall be effective
upon receipt unless specified to be effective at some other time. Except to the
extent expressly provided in a written agreement with the Trust, no officer
resigning and no officer removed shall have any right to any compensation for
any period following his or her resignation or removal, or any right to damages
on account of such removal.
ARTICLE 4
Committees
4.1 Quorum; Voting. A majority of the members of any Committee of the
Trustees shall constitute a quorum for the transaction of business, and any
action of such a Committee may be taken at a meeting by a vote of a majority of
the members present (a quorum being present) or evidenced by one or more
writings signed by such a majority. Members of a Committee may participate in a
meeting of such Committee by means of a conference telephone or other
communications equipment by means of which all persons participating in the
meeting can hear each other at the same time and participation by such means
shall constitute presence in person at a meeting.
ARTICLE 5
Reports
5.1 General. The Trustees and officers shall render reports at the time
and in the manner required by the Declaration of Trust or any applicable law.
Officers and Committees shall render such additional reports as they may deem
desirable or as may from time to time be required by the Trustees.
ARTICLE 6
Fiscal Year
6.1 General. Except as from time to time otherwise provided by the
Trustees, the initial fiscal year of the Trust shall end on such date as is
determined in advance or in arrears by the Treasurer, the subsequent fiscal
years shall end on such date in subsequent years.
ARTICLE 7
Seal
7.1 General. The seal of the Trust shall consist of a flat-faced die
with the word "Massachusetts", together with the name of the Trust and the year
of its organization cut or engraved thereon but, unless otherwise required by
the Trustees, the seal shall not be necessary to be placed on, and its absence
shall not impair the validity of, any document, instrument or other paper
executed and delivered by or on behalf of the Trust.
ARTICLE 8
Execution of Papers
8.1 General. Except as the Trustees may generally or in particular
cases authorize the execution thereof in some other manner, all deeds, leases,
contracts, notes and other obligations made by the Trustees shall be signed by
the President or by the Treasurer and need not bear the seal of the Trust.
ARTICLE 9
Issuance of Share Certificates
9.1 Share Certificates. In lieu of issuing certificates for shares, the
Trustees or the transfer agent may either issue receipts therefor or may keep
accounts upon the books of the Trust for the record holders of such shares, who
shall in either case be deemed, for all purposes hereunder, to be the holders of
certificates for such shares as if they had accepted such certificates and shall
be held to have expressly assented and agreed to the terms hereof.
The Trustees may at any time authorize the issuance of share
certificates. In that event, each shareholder shall be entitled to a certificate
stating the number of shares owned by him, in such form as shall be prescribed
from time to time by the Trustees. Such certificates shall be signed by the
president or vice-president and by the treasurer or assistant treasurer. Such
signatures may be facsimile if the certificate is signed by a transfer agent, or
by a registrar, other than a Trustee, officer or employee of the Trust. In case
any officer who has signed or whose facsimile signature has been placed on such
certificate shall cease to be such officer before such certificate is issued, it
may be issued by the Trust with the same effect as if he were such officer at
the time of its issue.
9.2 Loss of Certificates. In case of the alleged loss or destruction or
the mutilation of a share certificate, a duplicate certificate may be issued in
place thereof, upon such terms as the Trustees shall prescribe.
9.3 Issuance of New Certificates to Pledgee. A pledgee of shares
transferred as collateral security shall be entitled to a new certificate if the
instrument of transfer substantially describes the debt or duty that is intended
to be secured thereby. Such new certificates shall express on its face that it
is held as collateral security, and the name of pledgor shall be stated thereon,
who alone shall be liable as a shareholder and entitled to vote thereon.
9.4 Discontinuance of Issuance of Certificates. The Trustees may at any
time discontinue the issuance of share certificates and may, by written notice
to each shareholder, require the surrender of share certificates to the Trust
for cancellation. Such surrender and cancellation shall not effect the ownership
of shares in the Trust.
ARTICLE 10
Provisions Relating to the Conduct of the Trust's Business
10.1 Certain Definitions. When used herein the following words shall
have the following meanings: "Distributor" shall mean any one or more
corporations, firms or associations which have distributor's or principal
underwriter's contracts in effect with the Trust providing that redeemable
shares issued by the Trust shall be offered and sold by such Distributor.
"Manager" shall mean any corporation, firm or association which may at the time
have an advisory or management contract with the Trust and any corporation, firm
or association which may at any time have a sub-advisory contract relating to
the Trust with any such Manager.
10.2 Limitation on Holdings by the Trust of Certain Securities and on
Dealings with Officers or Trustees. The Trust may not purchase or retain shares
of securities issued by an issuer if one or more of the holders of the shares or
securities issued by an issuer or one or more of the officers or directors of
such issuer is an officer or Trustee of the Trust or officer or director of the
Manager and if one or more of such officers, Trustees or directors owns
beneficially more than 1/2 of 1% of the shares or securities, or both, of such
issuer and such officers, Trustees and directors owning more than 1/2 of 1% of
such shares or securities together own beneficially more 5% of such shares or
securities. Each officer and Trustee of the Trust shall keep the Treasurer of
the Trust informed of the names of all issuers shares or securities of which are
held in the portfolio of the Trust in which such officer or Trustee owns as much
as 1/2 of 1% of the outstanding shares of securities.
The Trust will not lend any of its assets to the Distributor or Manager
or to any officer or director of the Distributor or Manager or any officer or
Trustee of the Trust, and shall not permit any officer or Trustee or any officer
or director of the Distributor or Manager to deal for or on behalf of the Trust
with himself or herself as principal or agent, or with any partnership,
association or corporation in which he or she has a financial interest; provided
that the foregoing provisions shall not prevent (a) officers and Trustees of the
Trust or officers and directors of the Distributor or Manager from buying,
holding or selling shares in the Trust or from being partners, officers or
directors of or otherwise financially interested in the Distributor or the
Manager; (b) purchases or sales of securities or other property if such
transaction is permitted by or is exempt or exempted from the provisions of the
Investment Company Act of 1940 or any Rule or Regulation thereunder; (c)
employment of legal counsel, registrar, transfer agent, shareholder servicing
agent, dividend disbursing agent or custodian who is, or has a partner,
shareholder, officer or director who is, an officer or Trustee of the Trust or
an officer or director of the Distributor or Manager; (d) sharing statistical,
research, legal and management expenses and office hire and expenses with any
other investment company in which an officer or Trustee of the Trust or an
officer or director of the Distributor or Manager is an officer or director or
otherwise financially interested.
10.3 Limitation on Dealing in Securities of the Trust by Certain
Officers, Trustees, Distributor or Manager. Neither the Distributor nor Manager,
nor any officer or Trustee of the Trust or officer or director of the
Distributor or Manager shall take long or short positions in securities issued
by the Trust; provided, however, that:
(a) the Distributor may purchase from the Trust and otherwise
deal in shares issued by the Trust pursuant to the terms of its
contract with the Trust;
(b) any officer or Trustee of the Trust or officer or director
of the Distributor or Manager or any trustee or fiduciary for the
benefit of any of them may at any time, or from time to time, purchase
from the Trust or from the Distributor shares issued by the Trust at
the price available to the public or to such officer, Trustee,
director, trustee or fiduciary, no such purchase to be in contravention
of any applicable state or federal requirement; and
(c) the Distributor or the Manager may at any time, or from
time to time, purchase for investment shares issued by the Trust.
10.4 Securities and Cash of the Trust to be held by Custodian subject
to certain Terms and Conditions.
(a) All securities and cash owned by this Trust shall be held
by or deposited with one or more banks or trust companies having
(according to its last published report) not less than $5,000,000
aggregate capital, surplus and undivided profits (any such bank or
trust company being hereby designated as "Custodian"), provided such a
Custodian can be found ready and willing to act; subject to such rules,
regulations and orders, if any, as the Securities and Exchange
Commission may adopt, this Trust may, or may permit any Custodian to,
deposit all or any part of the Securities owned by this Trust in a
system for the central handling of securities pursuant to which all
securities of any particular class or series of any issue deposited
within the system may be transferred or pledged by bookkeeping entry,
without physical delivery. The Custodian may appoint, subject to the
approval of the Trustees, one or more subcustodians.
(b) The Trust shall enter into a written contract with each
Custodian regarding the powers, duties and compensation of such
Custodian with respect to the cash and securities of the Trust held by
such Custodian. Said contract and all amendments thereto shall be
approved by the Trustees.
(c) The Trust shall upon the resignation or inability to serve
of any Custodian or upon change of any Custodian:
(i) in case of such resignation or inability to
serve, use its best efforts to obtain a successor Custodian;
(ii) require that the cash and securities owned by
the Trust be delivered directly to the successor Custodian;
and
(iii) in the event that no successor Custodian can be
found, submit to the shareholders, before permitting delivery
of the cash and securities owned by the Trust otherwise than
to a successor Custodian, the question whether the Trust shall
be liquidated or shall function without a Custodian.
10.5 Requirements and Restrictions Regarding the Management Contract.
Every advisory or management contract entered into by the Trust shall provide
that in the event that the total expenses of any series of shares of the Trust
for any fiscal year should exceed the limits imposed on investment company
expenses imposed by any statute or regulatory authority of any jurisdiction in
which shares of the Trust are offered for sale, the compensation due the Manager
for such fiscal year shall be reduced by the amount of such excess by a
reduction or refund thereof.
10.6 Reports to Shareholders: Distribution from Realized Gains. The
Trust shall send to each shareholder of record at least semi-annually a
statement of the condition of the Trust and of the results of its operations,
containing all information required by applicable laws or regulations.
10.7 Determination of Net Asset Value Per Share. Net asset value per
share of each series of shares of the Trust shall mean: (i) the value of all the
assets of such series; (ii) less total liabilities of such series; (iii) divided
by the number of shares of such series outstanding, in each case at the time of
each determination. The net asset value per share of each series shall be
determined as of the normal close of trading on the New York Stock Exchange on
each day on which such Exchange is open. As of any time other than the normal
close of trading on such Exchange, the Trustees may cause the net asset value
per share last determined to be determined again in a similar manner or adjusted
to reflect changes in market values of securities in the portfolio, such
adjustment to be made on the basis of changes in selected security prices
determined by the Trustees to be relevant to the portfolio of such series or in
averages or in other standard and readily ascertainable market data, and the
Trustees may fix the time when such redetermined or adjusted net asset value per
share of each series shall become effective.
In valuing the portfolio investments of any series for determination of
net asset value per share of such series, securities for which market quotations
are not readily available shall be valued at prices which, in the opinion of the
Trustees or the person designated by the Trustees to make the determination,
most nearly represent the market value of such securities, and other securities
and assets shall be valued at their fair value as determined by or pursuant to
the direction of the Trustees, which in the case of short-term debt obligations,
commercial paper and repurchase agreements may, but need not, be on the basis of
quoted yields for securities of comparable maturity, quality and type, or on the
basis of amortized cost. Expenses and liabilities of the Trust shall be accrued
each day. Liabilities may include such reserves for taxes, estimated accrued
expenses and contingencies as the Trustees or their designates may in their sole
discretion deem fair and reasonable under the circumstances. No accruals shall
be made in respect of taxes on unrealized appreciation of securities owned
unless the Trustees shall otherwise determine. Dividends payable by the Trust
shall be deducted as at the time of but immediately prior to the determination
of net asset value per share on the record date therefor.
ARTICLE 11
Shareholders' Voting Powers and Meetings
11.1 Voting Powers. The Shareholders shall have power to vote only (i)
for the election of Trustees as provided in Article IV, Section I of the
Declaration of Trust, provided, however, that no meeting of Shareholders is
required to be called for the purpose of electing Trustees unless and until such
time as less than a majority of the Trustees have been elected by the
Shareholders, (ii) with respect to any Manager or Sub-Adviser as provided in
Article IV, Section 6 of the Declaration of Trust to the extent required by the
Investment Company Act of 1940 and the rules and regulations thereunder, (iii)
with respect to any termination of this Trust to the extent and as provided in
Article IX, Section 4 of the Declaration of Trust, (iv) with respect to any
amendment of the Declaration of Trust to the extent and as provided in Article
IX, Section 7 of the Declaration of Trust, (v) to the same extent as the
stockholders of a Massachusetts business corporation as to whether or not a
court action, proceeding or claim should or should not be brought or maintained
derivatively or as a class action on behalf of the Trust or Shareholders, and
(vi) with respect to such additional matters relating to the Trust as may be
required by law, the Declaration of Trust, these Bylaws or any registration of
the Trust with the Commission (or any successor agency) or any state, or as the
Trustees may consider necessary or desirable. Each whole Share shall be entitled
to one vote as to any matter on which it is entitled to vote and each fractional
Share shall be entitled to a proportionate fractional vote. On any matter
submitted to a vote of Shareholders all Shares of the Trust then entitled to
vote shall be voted by individual series, except (i) when required by the 1940
Act, Shares shall be voted in the aggregate and not by individual series and
(ii) when the Trustees have determined that the matter affects only the
interests of one or more series, then only Shareholders of such series shall be
entitled to vote thereon. There shall be no cumulative voting in the election of
Trustees. Shares may be voted in person or by proxy. A proxy with respect to
Shares held in the name of two or more persons shall be valid if executed by any
one of them unless at or prior to exercise of the proxy the Trust receives a
specific written notice to the contrary from any one of them. The placing of a
Shareholder's name on a proxy pursuant to telephonic or electronically
transmitted instructions obtained pursuant to procedures reasonably designed to
verify that such instructions have been authorized by such Shareholder shall
constitute execution of such proxy by or on behalf of such shareholder. A proxy
purporting to be executed by or on behalf of a Shareholder shall be deemed valid
unless challenged at or prior to its exercise and the burden of providing
invalidity shall rest on the challenger. Until Shares are issued, the Trustees
may exercise all rights of Shareholders and may take any action required by law,
the Declaration of Trust or these Bylaws to be taken by shareholders.
11.2 Voting Power and Meetings. Meetings of the Shareholders may be
called by the Trustees for the purpose of electing Trustees as provided in
Article IV, Section I of the Declaration of Trust and for such other purposes as
may be prescribed by law, by the Declaration of Trust or by these Bylaws.
Meetings of the Shareholders may also be called by the Trustees from time to
time for the purpose of taking action upon any other matter deemed by the
Trustees to be necessary or desirable. A meeting of Shareholders may be held at
any place designated by the Trustees. Written notice of any meeting of
Shareholders shall be given or caused to be given by the Trustees by mailing
such notice at least seven days before such meeting, postage prepaid, stating
the time and place of the meeting, to each Shareholder at the Shareholder's
address as it appears on the records of the Trust. Whenever notice of a meeting
is required to be given to a Shareholder under the Declaration of Trust or these
Bylaws, a written waiver thereof, executed before or after the meeting by such
Shareholder or his attorney thereunto authorized and filed with the records of
the meeting, shall be deemed equivalent to such notice.
11.3 Quorum and Required Vote. A majority of Shares entitled to vote
shall be a quorum for the transaction of business at a Shareholders' meeting,
except that where any provision of law or of the Declaration of Trust or these
Bylaws permits or requires that holders of any series shall vote as a series,
then a majority of the aggregate number of Shares of that series entitled to
vote shall be necessary to constitute a quorum for the transaction of business
by that series. Any lesser number shall be sufficient for adjournments. Any
adjourned session or sessions may be held, within a reasonable time after the
date set for the original meeting, without the necessity of further notice.
Except when a larger vote is required by any provision of law or the Declaration
of Trust or these Bylaws, a majority of Shares voted shall decide any questions
and a plurality shall elect a Trustee, provided that where any provision of law
or of the Declaration of Trust or these Bylaws permits or requires that the
holders of any series shall vote as a series, then a majority of the Shares of
that series voted on the matter (or a plurality with respect to the election of
a Trustee) shall decide that matter insofar as that series is concerned.
11.4 Action by Written Consent. Any action taken by Shareholders may be
taken without a meeting if a majority of Shareholders entitled to vote on the
matter (or such larger proportion thereof as shall be required by any express
provision of law or the Declaration of Trust or these Bylaws) consent to the
action in writing and such written consents are filed with the records of the
meetings of Shareholders. Such consent shall be treated for all purposes as a
vote taken at a meeting of Shareholders.
11.5 Record Dates. For the purpose of determining the shareholders who
are entitled to vote or act at any meeting or any adjournment thereof, or who
are entitled to receive payment of any dividend or of any other distribution,
the Trustees may from time to time fix a time, which shall be not more than 90
days before the date of any meeting of shareholders or the date for the payment
of any dividend or of any other distribution, as the record date for determining
the shareholders having the right to notice of and to vote at such meeting and
any adjournment thereof or the right to receive such dividend or distribution,
and in such case only shareholders of record on such record date shall have the
right notwithstanding any transfer of shares on the books of the Trust after the
record date; or without fixing such record date the Trustees may for any of such
purpose close the register or transfer books for all or any part of such period.
ARTICLE 12
Amendment to the Bylaws
12.1 General. These Bylaws may be amended or repealed, in whole or
part, by a majority of the Trustees then in office at any meeting of the
Trustees, or by one or more writings signed by such a majority.
Specimen Share Certificates for Class A, Class B
and Class C Shares
<PAGE>
PIMCO ADVISORS FUNDS
Description of Share Certificate for:
PIMCO ADVISORS EQUITY INCOME FUND CLASS A SHARES
Class Share Certificate (8-1/2" x 11")
I. FACE OF CERTIFICATE (All text and other matter lies within
8-1/4" x 10-3/4" decorative border, 5/16" wide)
(upper left corner)- box with heading:NUMBER [of shares]
(upper center) - heading: CLASS A SHARES
(upper right corner)- heading: CP - [number]
(directly below upper right
corner heading:- box with heading: SHARES [amt. of shares]
(centered below boxes)
line 1: single line heading: [appx. 8 pt.]
ESTABLISHED UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
line 2: single line heading: [appx. 18pt.]
PIMCO ADVISORS FUNDS
line 3: single line heading: [appx. 18pt.]
CLASS A SHARES
line 4: single line heading: [appx. 8 pt]
PAR VALUE $.00001 PER SHARE
(at left) single line heading: [appx. 11 pt.]
THIS IS TO CERTIFY THAT
(at right)two line heading: [appx. 10 pt.]
SEE REVERSE FOR
CERTAIN DEFINITIONS
(at right directly below two line heading - box with content)
CUSIP 693387755
(at left appx half way down width of cert. - single line heading)
is the owner of
(at right appx half way down width of cert. - single line heading)
Class A Shares
(centered - text appx. 11pt)
of benficial interest in PIMCO Advisors Funds - PIMCO Advisors
Equity Income Fund, par value $.00001 per share, fully paid and
nonassessable, which shares have been issued and are held under
and subject to terms and provisions of the Amended and Restated
Agreement and Declaration of Trust dated September 11, 1990, of
PIMCO Advisors Funds, and all amendments thereto, heretofore or
hereafter made, copies of which are on file with the Secretary of
the Commonwealth of Massachusetts. [indent] No transfer hereof
will be of any effect as regards the Trustees of PIMCO Advisors
Funds until this certificate, properly endorsed or assigned, has
been surrendered and the transfer recorded upon the books of said
Trustees. [indent] This certificate is executed on behalf of the
Trustees as Trustees and not individually and the obligations
hereof are not binding only upon the assets and property of the
Fund. [indent] IN WITNESS WHEREOF the Trustees under said
Agreement and Declaration of Trust have caused the following
facsimile signatures to be affixed to this certificate and a
facsimile of their common seal to be hereto affixed by the
Transfer Agent.
(at right of text, printed vertically)
line 1: [appx 8 pt. bold]
Countersigned
line 2: [indented under line 1 appx 8 pt.]
SHAREHOLDER SERVICES INC.
line 3: [indented under line 2 appx 8 pt. bold]
Denver (Colo.) [space] Transfer Agent
line 4: [to left aligned under line 1 appx. 8 pt.]
By:
line 5: [spaced from line 4 indented under line 3 appx. 8 pt.]
Authorized Signature
(bottom left of certificate)
1-1/2" diameter facsimile seal
(top of seal: semicircle)
PIMCO ADVISORS FUNDS
(center of seal - two line text)
1983
MASSACHUSETTS
(bottom right - across from seal)
[text appx. 11 pt. bold]
Dated:
[spaced from text - signature line with text below line to
right] President FOR THE TRUSTEES
[spaced from text - signature line with text below line to
right] Treasurer
II. BACK OF CERTIFICATE (text reads from top to bottom of 8"x11" portrait
dimension)
[text appx. 8 pt.]
[indented] The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations.
[text appearing left side of page indented under above paragraph appx 8 pt.] TEN
COM - as tenants in common
TEN ENT - as tenants by the entirety
JT TEN WROS NOT TC - as joint tenants with
rights of survivorship and not
as tenants in common
[text appearing right side of page across from above text appx 8 pt.]
UNIF GIFT/TRANSFER MIN ACT - __________________ Custodian _______________
(Cust) (Minor)
UNDER UGMA/UTMA ___________________
(State)
[text - centered appx 8 pt.]
Additional abbreviations may also be used though
not in the above list.
[text - centered appx. 10 pt.]
For Value Received ................ hereby
sell(s), assign(s), and transfer(s) unto
[text appearing left of page appx. 8 pt]
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
AND PROVIDE CERTIFICATION
BY TRANSFEREE
[graphic: box for identifying number]
<PAGE>
PAGE 2 Back of certificate continued.
[Directly below graphic box: double spaced]
[line 1: with text centered under line]
- ---------------------------------------------------------------------
(Please print or type name and address of assignee)
[line 2: no text under line]
- ---------------------------------------------------------------------
[line 3: no text under line]
- ---------------------------------------------------------------------
[line 4: with text centered under line
- ---------------------------------------------------------------------
Class A Shares of beneficial interest represented by the within Certificate, and
do hereby irrevocably constitute and appoint [line 5: with text centered under
line
- ---------------------------------------------------------------------
Attorney to transfer the said shares on the books of the within named Fund
with full power of substitution in the premises.
[line 6: aligned left - text and line appx. 10 pt.]
Dated____________________________
[line 7: aligned right - text and line appx. 10 pt.]
Signed__________________________
[line 8: aligned right centered text under line appx. 8 pt.]
- --------------------------------
(Both must sign if joint owners)
[line 9, 10 and 11: aligned right 3 lines of text right of lines with centered
text]
Signature(s) __________________________
guaranteed Name of Guarantor
by: _____________________________
Signature of Officer/Title
[aligned left of lines 9-11
graphic box containing text appx. 8 pt.]
Signatures must be guaranteed by a financial institution of
the type described in the prospectus of the Fund.
[aligned right of lines 4-8 printed vertically appx. 8 pt.]
NOTICE: The signature(s) to this assignment must correspond
with the name(s) as written upon face of the certificate in every
particular without alteration or enlargement or any change
whatever.
[single line of text alinged left appx. 10 pt. bold]
PLEASE NOTE: This document contains a watermark when viewed at
an angle. It is invalid without this watermark:
[directly below text above aligned left appx. 18 pt. bold]
P I M C O
[Watermark in five rows vertically across page: PIMCO PIMCO
PIMCO
[bottom of certificate: line with text centered under appx.
16 pt.]
- -----------------------------------------------------------------------------
THIS SPACE MUST NOT BE COVERED IN ANY WAY
<PAGE>
PIMCO ADVISORS FUNDS
Description of Share Certificate for:
PIMCO ADVISORS EQUITY INCOME FUND CLASS B SHARES
Class Share Certificate (8-1/2" x 11")
I. FACE OF CERTIFICATE (All text and other matter lies within
8-1/4" x 10-3/4" decorative border, 5/16" wide)
(upper left corner)- box with heading:NUMBER [of shares]
(upper center) - heading: CLASS B SHARES
(upper right corner)- heading: CP - [number]
(directly below upper right
corner heading:- box with heading: SHARES [amt. of shares]
(centered below boxes)
line 1: single line heading: [appx. 8 pt.]
ESTABLISHED UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
line 2: single line heading: [appx. 18pt.]
PIMCO ADVISORS FUNDS
line 3: single line heading: [appx. 18pt.]
CLASS B SHARES
line 4: single line heading: [appx. 8 pt]
PAR VALUE $.00001 PER SHARE
(at left) single line heading: [appx. 11 pt.]
THIS IS TO CERTIFY THAT
(at right)two line heading: [appx. 10 pt.]
SEE REVERSE FOR
CERTAIN DEFINITIONS
(at right directly below two line heading - box with content)
CUSIP 693387680
(at left appx half way down width of cert. - single line heading)
is the owner of
(at right appx half way down width of cert. - single line heading)
Class B Shares
(centered - text appx. 11pt)
of benficial interest in PIMCO Advisors Funds - PIMCO Advisors
Equity Income Fund, par value $.00001 per share, fully paid and
nonassessable, which shares have been issued and are held under
and subject to terms and provisions of the Amended and Restated
Agreement and Declaration of Trust dated September 11, 1990, of
PIMCO Advisors Funds, and all amendments thereto, heretofore or
hereafter made, copies of which are on file with the Secretary of
the Commonwealth of Massachusetts. [indent] No transfer hereof
will be of any effect as regards the Trustees of PIMCO Advisors
Funds until this certificate, properly endorsed or assigned, has
been surrendered and the transfer recorded upon the books of said
Trustees. [indent] This certificate is executed on behalf of the
Trustees as Trustees and not individually and the obligations
hereof are not binding only upon the assets and property of the
Fund. [indent] IN WITNESS WHEREOF the Trustees under said
Agreement and Declaration of Trust have caused the following
facsimile signatures to be affixed to this certificate and a
facsimile of their common seal to be hereto affixed by the
Transfer Agent.
(at right of text, printed vertically)
line 1: [appx 8 pt. bold]
Countersigned
line 2: [indented under line 1 appx 8 pt.]
SHAREHOLDER SERVICES INC.
line 3: [indented under line 2 appx 8 pt. bold]
Denver (Colo.) [space] Transfer Agent
line 4: [to left aligned under line 1 appx. 8 pt.]
By:
line 5: [spaced from line 4 indented under line 3 appx. 8 pt.]
Authorized Signature
(bottom left of certificate)
1-1/2" diameter facsimile seal
(top of seal: semicircle)
PIMCO ADVISORS FUNDS
(center of seal - two line text)
1983
MASSACHUSETTS
(bottom right - across from seal)
[text appx. 11 pt. bold]
Dated:
[spaced from text - signature line with text below line to
right] President FOR THE TRUSTEES
[spaced from text - signature line with text below line to
right] Treasurer
II. BACK OF CERTIFICATE (text reads from top to bottom of 8"x11" portrait
dimension)
[text appx. 8 pt.]
[indented] The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations.
[text appearing left side of page indented under above paragraph appx 8 pt.] TEN
COM - as tenants in common
TEN ENT - as tenants by the entirety
JT TEN WROS NOT TC - as joint tenants with
rights of survivorship and not
as tenants in common
[text appearing right side of page across from above text appx 8 pt.]
UNIF GIFT/TRANSFER MIN ACT - __________________ Custodian _______________
(Cust) (Minor)
UNDER UGMA/UTMA ___________________
(State)
[text - centered appx 8 pt.]
Additional abbreviations may also be used though
not in the above list.
[text - centered appx. 10 pt.]
For Value Received ................ hereby
sell(s), assign(s), and transfer(s) unto
[text appearing left of page appx. 8 pt]
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
AND PROVIDE CERTIFICATION
BY TRANSFEREE
[graphic: box for identifying number]
<PAGE>
PAGE 2 Back of certificate continued.
[Directly below graphic box: double spaced]
[line 1: with text centered under line]
- ---------------------------------------------------------------------
(Please print or type name and address of assignee)
[line 2: no text under line]
- ---------------------------------------------------------------------
[line 3: no text under line]
- ---------------------------------------------------------------------
[line 4: with text centered under line
- ---------------------------------------------------------------------
Class B Shares of beneficial interest represented by the within Certificate, and
do hereby irrevocably constitute and appoint [line 5: with text centered under
line
- ---------------------------------------------------------------------
Attorney to transfer the said shares on the books of the within named Fund
with full power of substitution in the premises.
[line 6: aligned left - text and line appx. 10 pt.]
Dated____________________________
[line 7: aligned right - text and line appx. 10 pt.]
Signed__________________________
[line 8: aligned right centered text under line appx. 8 pt.]
- --------------------------------
(Both must sign if joint owners)
[line 9, 10 and 11: aligned right 3 lines of text right of lines with centered
text]
Signature(s) __________________________
guaranteed Name of Guarantor
by: _____________________________
Signature of Officer/Title
[aligned left of lines 9-11
graphic box containing text appx. 8 pt.]
Signatures must be guaranteed by a financial institution of
the type described in the prospectus of the Fund.
[aligned right of lines 4-8 printed vertically appx. 8 pt.]
NOTICE: The signature(s) to this assignment must correspond
with the name(s) as written upon face of the certificate in every
particular without alteration or enlargement or any change
whatever.
[single line of text alinged left appx. 10 pt. bold]
PLEASE NOTE: This document contains a watermark when viewed at
an angle. It is invalid without this watermark:
[directly below text above aligned left appx. 18 pt. bold]
P I M C O
[Watermark in five rows vertically across page: PIMCO PIMCO
PIMCO
[bottom of certificate: line with text centered under appx.
16 pt.]
- ------------------------------------------------------------------------------
THIS SPACE MUST NOT BE COVERED IN ANY WAY
<PAGE>
PIMCO ADVISORS FUNDS
Description of Share Certificate for:
PIMCO ADVISORS EQUITY INCOME FUND CLASS C SHARES
Class Share Certificate (8-1/2" x 11")
I. FACE OF CERTIFICATE (All text and other matter lies within
8-1/4" x 10-3/4" decorative border, 5/16" wide)
(upper left corner)- box with heading:NUMBER [of shares]
(upper center) - heading: CLASS C SHARES
(upper right corner)- heading: CP - [number]
(directly below upper right
corner heading:- box with heading: SHARES [amt. of shares]
(centered below boxes)
line 1: single line heading: [appx. 8 pt.]
ESTABLISHED UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
line 2: single line heading: [appx. 18pt.]
PIMCO ADVISORS FUNDS
line 3: single line heading: [appx. 18pt.]
CLASS C SHARES
line 4: single line heading: [appx. 8 pt]
PAR VALUE $.00001 PER SHARE
(at left) single line heading: [appx. 11 pt.]
THIS IS TO CERTIFY THAT
(at right)two line heading: [appx. 10 pt.]
SEE REVERSE FOR
CERTAIN DEFINITIONS
(at right directly below two line heading - box with content)
CUSIP 693387748
(at left appx half way down width of cert. - single line heading)
is the owner of
(at right appx half way down width of cert. - single line heading)
Class C Shares
(centered - text appx. 11pt)
of benficial interest in PIMCO Advisors Funds - PIMCO Advisors
Equity Income Fund, par value $.00001 per share, fully paid and
nonassessable, which shares have been issued and are held under
and subject to terms and provisions of the Amended and Restated
Agreement and Declaration of Trust dated September 11, 1990, of
PIMCO Advisors Funds, and all amendments thereto, heretofore or
hereafter made, copies of which are on file with the Secretary of
the Commonwealth of Massachusetts. [indent] No transfer hereof
will be of any effect as regards the Trustees of PIMCO Advisors
Funds until this certificate, properly endorsed or assigned, has
been surrendered and the transfer recorded upon the books of said
Trustees. [indent] This certificate is executed on behalf of the
Trustees as Trustees and not individually and the obligations
hereof are not binding only upon the assets and property of the
Fund. [indent] IN WITNESS WHEREOF the Trustees under said
Agreement and Declaration of Trust have caused the following
facsimile signatures to be affixed to this certificate and a
facsimile of their common seal to be hereto affixed by the
Transfer Agent.
(at right of text, printed vertically)
line 1: [appx 8 pt. bold]
Countersigned
line 2: [indented under line 1 appx 8 pt.]
SHAREHOLDER SERVICES INC.
line 3: [indented under line 2 appx 8 pt. bold]
Denver (Colo.) [space] Transfer Agent
line 4: [to left aligned under line 1 appx. 8 pt.]
By:
line 5: [spaced from line 4 indented under line 3 appx. 8 pt.]
Authorized Signature
(bottom left of certificate)
1-1/2" diameter facsimile seal
(top of seal: semicircle)
PIMCO ADVISORS FUNDS
(center of seal - two line text)
1983
MASSACHUSETTS
(bottom right - across from seal)
[text appx. 11 pt. bold]
Dated:
[spaced from text - signature line with text below line to
right] President FOR THE TRUSTEES
[spaced from text - signature line with text below line to
right] Treasurer
II. BACK OF CERTIFICATE (text reads from top to bottom of 8"x11" portrait
dimension)
[text appx. 8 pt.]
[indented] The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations.
[text appearing left side of page indented under above paragraph appx 8 pt.] TEN
COM - as tenants in common
TEN ENT - as tenants by the entirety
JT TEN WROS NOT TC - as joint tenants with
rights of survivorship and not
as tenants in common
[text appearing right side of page across from above text appx 8 pt.]
UNIF GIFT/TRANSFER MIN ACT - __________________ Custodian _______________
(Cust) (Minor)
UNDER UGMA/UTMA ___________________
(State)
[text - centered appx 8 pt.]
Additional abbreviations may also be used though
not in the above list.
[text - centered appx. 10 pt.]
For Value Received ................ hereby
sell(s), assign(s), and transfer(s) unto
[text appearing left of page appx. 8 pt]
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
AND PROVIDE CERTIFICATION
BY TRANSFEREE
[graphic: box for identifying number]
<PAGE>
PAGE 2 Back of certificate continued.
[Directly below graphic box: double spaced]
[line 1: with text centered under line]
- ---------------------------------------------------------------------
(Please print or type name and address of assignee)
[line 2: no text under line]
- ---------------------------------------------------------------------
[line 3: no text under line]
- ---------------------------------------------------------------------
[line 4: with text centered under line
- ---------------------------------------------------------------------
Class C Shares of beneficial interest represented by the within Certificate, and
do hereby irrevocably constitute and appoint [line 5: with text centered under
line
- ---------------------------------------------------------------------
Attorney to transfer the said shares on the books of the within named Fund
with full power of substitution in the premises.
[line 6: aligned left - text and line appx. 10 pt.]
Dated____________________________
[line 7: aligned right - text and line appx. 10 pt.]
Signed__________________________
[line 8: aligned right centered text under line appx. 8 pt.]
- --------------------------------
(Both must sign if joint owners)
[line 9, 10 and 11: aligned right 3 lines of text right of lines with centered
text]
Signature(s) __________________________
guaranteed Name of Guarantor
by: _____________________________
Signature of Officer/Title
[aligned left of lines 9-11
graphic box containing text appx. 8 pt.]
Signatures must be guaranteed by a financial institution of
the type described in the prospectus of the Fund.
[aligned right of lines 4-8 printed vertically appx. 8 pt.]
NOTICE: The signature(s) to this assignment must correspond
with the name(s) as written upon face of the certificate in every
particular without alteration or enlargement or any change
whatever.
[single line of text alinged left appx. 10 pt. bold]
PLEASE NOTE: This document contains a watermark when viewed at
an angle. It is invalid without this watermark:
[directly below text above aligned left appx. 18 pt. bold]
P I M C O
[Watermark in five rows vertically across page: PIMCO PIMCO
PIMCO
[bottom of certificate: line with text centered under appx.
16 pt.]
- ----------------------------------------------------------------------------
THIS SPACE MUST NOT BE COVERED IN ANY WAY
<PAGE>
PIMCO ADVISORS FUNDS
Description of Share Certificate for:
PIMCO ADVISORS VALUE FUND CLASS A SHARES
Class Share Certificate (8-1/2" x 11")
I. FACE OF CERTIFICATE (All text and other matter lies within
8-1/4" x 10-3/4" decorative border, 5/16" wide)
(upper left corner)- box with heading:NUMBER [of shares]
(upper center) - heading: CLASS A SHARES
(upper right corner)- heading: CP - [number]
(directly below upper right
corner heading:- box with heading: SHARES [amt. of shares]
(centered below boxes)
line 1: single line heading: [appx. 8 pt.]
ESTABLISHED UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
line 2: single line heading: [appx. 18pt.]
PIMCO ADVISORS FUNDS
line 3: single line heading: [appx. 18pt.]
CLASS A SHARES
line 4: single line heading: [appx. 8 pt]
PAR VALUE $.00001 PER SHARE
(at left) single line heading: [appx. 11 pt.]
THIS IS TO CERTIFY THAT
(at right)two line heading: [appx. 10 pt.]
SEE REVERSE FOR
CERTAIN DEFINITIONS
(at right directly below two line heading - box with content)
CUSIP 693387516
(at left appx half way down width of cert. - single line heading)
is the owner of
(at right appx half way down width of cert. - single line heading)
Class A Shares
(centered - text appx. 11pt)
of benficial interest in PIMCO Advisors Funds - PIMCO Advisors
Value Fund, par value $.00001 per share, fully paid and
nonassessable, which shares have been issued and are held under
and subject to terms and provisions of the Amended and Restated
Agreement and Declaration of Trust dated September 11, 1990, of
PIMCO Advisors Funds, and all amendments thereto, heretofore or
hereafter made, copies of which are on file with the Secretary of
the Commonwealth of Massachusetts. [indent] No transfer hereof
will be of any effect as regards the Trustees of PIMCO Advisors
Funds until this certificate, properly endorsed or assigned, has
been surrendered and the transfer recorded upon the books of said
Trustees. [indent] This certificate is executed on behalf of the
Trustees as Trustees and not individually and the obligations
hereof are not binding only upon the assets and property of the
Fund. [indent] IN WITNESS WHEREOF the Trustees under said
Agreement and Declaration of Trust have caused the following
facsimile signatures to be affixed to this certificate and a
facsimile of their common seal to be hereto affixed by the
Transfer Agent.
(at right of text, printed vertically)
line 1: [appx 8 pt. bold]
Countersigned
line 2: [indented under line 1 appx 8 pt.]
SHAREHOLDER SERVICES INC.
line 3: [indented under line 2 appx 8 pt. bold]
Denver (Colo.) [space] Transfer Agent
line 4: [to left aligned under line 1 appx. 8 pt.]
By:
line 5: [spaced from line 4 indented under line 3 appx. 8 pt.]
Authorized Signature
(bottom left of certificate)
1-1/2" diameter facsimile seal
(top of seal: semicircle)
PIMCO ADVISORS FUNDS
(center of seal - two line text)
1983
MASSACHUSETTS
(bottom right - across from seal)
[text appx. 11 pt. bold]
Dated:
[spaced from text - signature line with text below line to
right] President FOR THE TRUSTEES
[spaced from text - signature line with text below line to
right] Treasurer
II. BACK OF CERTIFICATE (text reads from top to bottom of 8"x11" portrait
dimension)
[text appx. 8 pt.]
[indented] The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations.
[text appearing left side of page indented under above paragraph appx 8 pt.] TEN
COM - as tenants in common
TEN ENT - as tenants by the entirety
JT TEN WROS NOT TC - as joint tenants with
rights of survivorship and not
as tenants in common
[text appearing right side of page across from above text appx 8 pt.]
UNIF GIFT/TRANSFER MIN ACT - __________________ Custodian _______________
(Cust) (Minor)
UNDER UGMA/UTMA ___________________
(State)
[text - centered appx 8 pt.]
Additional abbreviations may also be used though
not in the above list.
[text - centered appx. 10 pt.]
For Value Received ................ hereby
sell(s), assign(s), and transfer(s) unto
[text appearing left of page appx. 8 pt]
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
AND PROVIDE CERTIFICATION
BY TRANSFEREE
[graphic: box for identifying number]
<PAGE>
PAGE 2 Back of certificate continued.
[Directly below graphic box: double spaced]
[line 1: with text centered under line]
- ---------------------------------------------------------------------
(Please print or type name and address of assignee)
[line 2: no text under line]
- ---------------------------------------------------------------------
[line 3: no text under line]
- ---------------------------------------------------------------------
[line 4: with text centered under line
- ---------------------------------------------------------------------
Class A Shares of beneficial interest represented by the within Certificate, and
do hereby irrevocably constitute and appoint [line 5: with text centered under
line
- ---------------------------------------------------------------------
Attorney to transfer the said shares on the books of the within named Fund
with full power of substitution in the premises.
[line 6: aligned left - text and line appx. 10 pt.]
Dated____________________________
[line 7: aligned right - text and line appx. 10 pt.]
Signed__________________________
[line 8: aligned right centered text under line appx. 8 pt.]
- --------------------------------
(Both must sign if joint owners)
[line 9, 10 and 11: aligned right 3 lines of text right of lines with centered
text]
Signature(s) __________________________
guaranteed Name of Guarantor
by: _____________________________
Signature of Officer/Title
[aligned left of lines 9-11
graphic box containing text appx. 8 pt.]
Signatures must be guaranteed by a financial institution of
the type described in the prospectus of the Fund.
[aligned right of lines 4-8 printed vertically appx. 8 pt.]
NOTICE: The signature(s) to this assignment must correspond
with the name(s) as written upon face of the certificate in every
particular without alteration or enlargement or any change
whatever.
[single line of text alinged left appx. 10 pt. bold]
PLEASE NOTE: This document contains a watermark when viewed at
an angle. It is invalid without this watermark:
[directly below text above aligned left appx. 18 pt. bold]
P I M C O
[Watermark in five rows vertically across page: PIMCO PIMCO
PIMCO
[bottom of certificate: line with text centered under appx.
16 pt.]
- -----------------------------------------------------------------------------
THIS SPACE MUST NOT BE COVERED IN ANY WAY
<PAGE>
PIMCO ADVISORS FUNDS
Description of Share Certificate for:
PIMCO ADVISORS VALUE FUND CLASS B SHARES
Class Share Certificate (8-1/2" x 11")
I. FACE OF CERTIFICATE (All text and other matter lies within
8-1/4" x 10-3/4" decorative border, 5/16" wide)
(upper left corner)- box with heading:NUMBER [of shares]
(upper center) - heading: CLASS B SHARES
(upper right corner)- heading: CP - [number]
(directly below upper right
corner heading:- box with heading: SHARES [amt. of shares]
(centered below boxes)
line 1: single line heading: [appx. 8 pt.]
ESTABLISHED UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
line 2: single line heading: [appx. 18pt.]
PIMCO ADVISORS FUNDS
line 3: single line heading: [appx. 18pt.]
CLASS B SHARES
line 4: single line heading: [appx. 8 pt]
PAR VALUE $.00001 PER SHARE
(at left) single line heading: [appx. 11 pt.]
THIS IS TO CERTIFY THAT
(at right)two line heading: [appx. 10 pt.]
SEE REVERSE FOR
CERTAIN DEFINITIONS
(at right directly below two line heading - box with content)
CUSIP 693387490
(at left appx half way down width of cert. - single line heading)
is the owner of
(at right appx half way down width of cert. - single line heading)
Class B Shares
(centered - text appx. 11pt)
of benficial interest in PIMCO Advisors Funds - PIMCO Advisors
Value Fund, par value $.00001 per share, fully paid and
nonassessable, which shares have been issued and are held under
and subject to terms and provisions of the Amended and Restated
Agreement and Declaration of Trust dated September 11, 1990, of
PIMCO Advisors Funds, and all amendments thereto, heretofore or
hereafter made, copies of which are on file with the Secretary of
the Commonwealth of Massachusetts. [indent] No transfer hereof
will be of any effect as regards the Trustees of PIMCO Advisors
Funds until this certificate, properly endorsed or assigned, has
been surrendered and the transfer recorded upon the books of said
Trustees. [indent] This certificate is executed on behalf of the
Trustees as Trustees and not individually and the obligations
hereof are not binding only upon the assets and property of the
Fund. [indent] IN WITNESS WHEREOF the Trustees under said
Agreement and Declaration of Trust have caused the following
facsimile signatures to be affixed to this certificate and a
facsimile of their common seal to be hereto affixed by the
Transfer Agent.
(at right of text, printed vertically)
line 1: [appx 8 pt. bold]
Countersigned
line 2: [indented under line 1 appx 8 pt.]
SHAREHOLDER SERVICES INC.
line 3: [indented under line 2 appx 8 pt. bold]
Denver (Colo.) [space] Transfer Agent
line 4: [to left aligned under line 1 appx. 8 pt.]
By:
line 5: [spaced from line 4 indented under line 3 appx. 8 pt.]
Authorized Signature
(bottom left of certificate)
1-1/2" diameter facsimile seal
(top of seal: semicircle)
PIMCO ADVISORS FUNDS
(center of seal - two line text)
1983
MASSACHUSETTS
(bottom right - across from seal)
[text appx. 11 pt. bold]
Dated:
[spaced from text - signature line with text below line to
right] President FOR THE TRUSTEES
[spaced from text - signature line with text below line to
right] Treasurer
II. BACK OF CERTIFICATE (text reads from top to bottom of 8"x11" portrait
dimension)
[text appx. 8 pt.]
[indented] The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations.
[text appearing left side of page indented under above paragraph appx 8 pt.] TEN
COM - as tenants in common
TEN ENT - as tenants by the entirety
JT TEN WROS NOT TC - as joint tenants with
rights of survivorship and not
as tenants in common
[text appearing right side of page across from above text appx 8 pt.]
UNIF GIFT/TRANSFER MIN ACT - __________________ Custodian _______________
(Cust) (Minor)
UNDER UGMA/UTMA ___________________
(State)
[text - centered appx 8 pt.]
Additional abbreviations may also be used though
not in the above list.
[text - centered appx. 10 pt.]
For Value Received ................ hereby
sell(s), assign(s), and transfer(s) unto
[text appearing left of page appx. 8 pt]
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
AND PROVIDE CERTIFICATION
BY TRANSFEREE
[graphic: box for identifying number]
<PAGE>
PAGE 2 Back of certificate continued.
[Directly below graphic box: double spaced]
[line 1: with text centered under line]
- ---------------------------------------------------------------------
(Please print or type name and address of assignee)
[line 2: no text under line]
- ---------------------------------------------------------------------
[line 3: no text under line]
- ---------------------------------------------------------------------
[line 4: with text centered under line
- ---------------------------------------------------------------------
Class B Shares of beneficial interest represented by the within Certificate, and
do hereby irrevocably constitute and appoint [line 5: with text centered under
line
- ---------------------------------------------------------------------
Attorney to transfer the said shares on the books of the within named Fund
with full power of substitution in the premises.
[line 6: aligned left - text and line appx. 10 pt.]
Dated____________________________
[line 7: aligned right - text and line appx. 10 pt.]
Signed__________________________
[line 8: aligned right centered text under line appx. 8 pt.]
- --------------------------------
(Both must sign if joint owners)
[line 9, 10 and 11: aligned right 3 lines of text right of lines with centered
text]
Signature(s) __________________________
guaranteed Name of Guarantor
by: _____________________________
Signature of Officer/Title
[aligned left of lines 9-11
graphic box containing text appx. 8 pt.]
Signatures must be guaranteed by a financial institution of
the type described in the prospectus of the Fund.
[aligned right of lines 4-8 printed vertically appx. 8 pt.]
NOTICE: The signature(s) to this assignment must correspond
with the name(s) as written upon face of the certificate in every
particular without alteration or enlargement or any change
whatever.
[single line of text alinged left appx. 10 pt. bold]
PLEASE NOTE: This document contains a watermark when viewed at
an angle. It is invalid without this watermark:
[directly below text above aligned left appx. 18 pt. bold]
P I M C O
[Watermark in five rows vertically across page: PIMCO PIMCO
PIMCO
[bottom of certificate: line with text centered under appx.
16 pt.]
- -----------------------------------------------------------------------
THIS SPACE MUST NOT BE COVERED IN ANY WAY
<PAGE>
PIMCO ADVISORS FUNDS
Description of Share Certificate for:
PIMCO ADVISORS VALUE FUND CLASS C SHARES
Class Share Certificate (8-1/2" x 11")
I. FACE OF CERTIFICATE (All text and other matter lies within
8-1/4" x 10-3/4" decorative border, 5/16" wide)
(upper left corner)- box with heading:NUMBER [of shares]
(upper center) - heading: CLASS C SHARES
(upper right corner)- heading: CP - [number]
(directly below upper right
corner heading:- box with heading: SHARES [amt. of shares]
(centered below boxes)
line 1: single line heading: [appx. 8 pt.]
ESTABLISHED UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
line 2: single line heading: [appx. 18pt.]
PIMCO ADVISORS FUNDS
line 3: single line heading: [appx. 18pt.]
CLASS C SHARES
line 4: single line heading: [appx. 8 pt]
PAR VALUE $.00001 PER SHARE
(at left) single line heading: [appx. 11 pt.]
THIS IS TO CERTIFY THAT
(at right)two line heading: [appx. 10 pt.]
SEE REVERSE FOR
CERTAIN DEFINITIONS
(at right directly below two line heading - box with content)
CUSIP 693387482
(at left appx half way down width of cert. - single line heading)
is the owner of
(at right appx half way down width of cert. - single line heading)
Class C Shares
(centered - text appx. 11pt)
of benficial interest in PIMCO Advisors Funds - PIMCO Advisors
Value Fund, par value $.00001 per share, fully paid and
nonassessable, which shares have been issued and are held under
and subject to terms and provisions of the Amended and Restated
Agreement and Declaration of Trust dated September 11, 1990, of
PIMCO Advisors Funds, and all amendments thereto, heretofore or
hereafter made, copies of which are on file with the Secretary of
the Commonwealth of Massachusetts. [indent] No transfer hereof
will be of any effect as regards the Trustees of PIMCO Advisors
Funds until this certificate, properly endorsed or assigned, has
been surrendered and the transfer recorded upon the books of said
Trustees. [indent] This certificate is executed on behalf of the
Trustees as Trustees and not individually and the obligations
hereof are not binding only upon the assets and property of the
Fund. [indent] IN WITNESS WHEREOF the Trustees under said
Agreement and Declaration of Trust have caused the following
facsimile signatures to be affixed to this certificate and a
facsimile of their common seal to be hereto affixed by the
Transfer Agent.
(at right of text, printed vertically)
line 1: [appx 8 pt. bold]
Countersigned
line 2: [indented under line 1 appx 8 pt.]
SHAREHOLDER SERVICES INC.
line 3: [indented under line 2 appx 8 pt. bold]
Denver (Colo.) [space] Transfer Agent
line 4: [to left aligned under line 1 appx. 8 pt.]
By:
line 5: [spaced from line 4 indented under line 3 appx. 8 pt.]
Authorized Signature
(bottom left of certificate)
1-1/2" diameter facsimile seal
(top of seal: semicircle)
PIMCO ADVISORS FUNDS
(center of seal - two line text)
1983
MASSACHUSETTS
(bottom right - across from seal)
[text appx. 11 pt. bold]
Dated:
[spaced from text - signature line with text below line to
right] President FOR THE TRUSTEES
[spaced from text - signature line with text below line to
right] Treasurer
II. BACK OF CERTIFICATE (text reads from top to bottom of 8"x11" portrait
dimension)
[text appx. 8 pt.]
[indented] The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations.
[text appearing left side of page indented under above paragraph appx 8 pt.] TEN
COM - as tenants in common
TEN ENT - as tenants by the entirety
JT TEN WROS NOT TC - as joint tenants with
rights of survivorship and not
as tenants in common
[text appearing right side of page across from above text appx 8 pt.]
UNIF GIFT/TRANSFER MIN ACT - __________________ Custodian _______________
(Cust) (Minor)
UNDER UGMA/UTMA ___________________
(State)
[text - centered appx 8 pt.]
Additional abbreviations may also be used though
not in the above list.
[text - centered appx. 10 pt.]
For Value Received ................ hereby
sell(s), assign(s), and transfer(s) unto
[text appearing left of page appx. 8 pt]
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
AND PROVIDE CERTIFICATION
BY TRANSFEREE
[graphic: box for identifying number]
<PAGE>
PAGE 2 Back of certificate continued.
[Directly below graphic box: double spaced]
[line 1: with text centered under line]
- ---------------------------------------------------------------------
(Please print or type name and address of assignee)
[line 2: no text under line]
- ---------------------------------------------------------------------
[line 3: no text under line]
- ---------------------------------------------------------------------
[line 4: with text centered under line
- ---------------------------------------------------------------------
Class C Shares of beneficial interest represented by the within Certificate, and
do hereby irrevocably constitute and appoint [line 5: with text centered under
line
- ---------------------------------------------------------------------
Attorney to transfer the said shares on the books of the within named Fund
with full power of substitution in the premises.
[line 6: aligned left - text and line appx. 10 pt.]
Dated____________________________
[line 7: aligned right - text and line appx. 10 pt.]
Signed__________________________
[line 8: aligned right centered text under line appx. 8 pt.]
- --------------------------------
(Both must sign if joint owners)
[line 9, 10 and 11: aligned right 3 lines of text right of lines with centered
text]
Signature(s) __________________________
guaranteed Name of Guarantor
by: _____________________________
Signature of Officer/Title
[aligned left of lines 9-11
graphic box containing text appx. 8 pt.]
Signatures must be guaranteed by a financial institution of
the type described in the prospectus of the Fund.
[aligned right of lines 4-8 printed vertically appx. 8 pt.]
NOTICE: The signature(s) to this assignment must correspond
with the name(s) as written upon face of the certificate in every
particular without alteration or enlargement or any change
whatever.
[single line of text alinged left appx. 10 pt. bold]
PLEASE NOTE: This document contains a watermark when viewed at
an angle. It is invalid without this watermark:
[directly below text above aligned left appx. 18 pt. bold]
P I M C O
[Watermark in five rows vertically across page: PIMCO PIMCO
PIMCO
[bottom of certificate: line with text centered under appx.
16 pt.]
- ----------------------------------------------------------------------------
THIS SPACE MUST NOT BE COVERED IN ANY WAY
<PAGE>
PIMCO ADVISORS FUNDS
Description of Share Certificate for:
PIMCO ADVISORS GROWTH FUND CLASS A SHARES
Class Share Certificate (8-1/2" x 11")
I. FACE OF CERTIFICATE (All text and other matter lies within
8-1/4" x 10-3/4" decorative border, 5/16" wide)
(upper left corner)- box with heading:NUMBER [of shares]
(upper center) - heading: CLASS A SHARES
(upper right corner)- heading: CP - [number]
(directly below upper right
corner heading:- box with heading: SHARES [amt. of shares]
(centered below boxes)
line 1: single line heading: [appx. 8 pt.]
ESTABLISHED UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
line 2: single line heading: [appx. 18pt.]
PIMCO ADVISORS FUNDS
line 3: single line heading: [appx. 18pt.]
CLASS A SHARES
line 4: single line heading: [appx. 8 pt]
PAR VALUE $.00001 PER SHARE
(at left) single line heading: [appx. 11 pt.]
THIS IS TO CERTIFY THAT
(at right)two line heading: [appx. 10 pt.]
SEE REVERSE FOR
CERTAIN DEFINITIONS
(at right directly below two line heading - box with content)
CUSIP 693387508
(at left appx half way down width of cert. - single line heading)
is the owner of
(at right appx half way down width of cert. - single line heading)
Class A Shares
(centered - text appx. 11pt)
of benficial interest in PIMCO Advisors Funds - PIMCO Advisors
Growth Fund, par value $.00001 per share, fully paid and
nonassessable, which shares have been issued and are held under
and subject to terms and provisions of the Amended and Restated
Agreement and Declaration of Trust dated September 11, 1990, of
PIMCO Advisors Funds, and all amendments thereto, heretofore or
hereafter made, copies of which are on file with the Secretary of
the Commonwealth of Massachusetts. [indent] No transfer hereof
will be of any effect as regards the Trustees of PIMCO Advisors
Funds until this certificate, properly endorsed or assigned, has
been surrendered and the transfer recorded upon the books of said
Trustees. [indent] This certificate is executed on behalf of the
Trustees as Trustees and not individually and the obligations
hereof are not binding only upon the assets and property of the
Fund. [indent] IN WITNESS WHEREOF the Trustees under said
Agreement and Declaration of Trust have caused the following
facsimile signatures to be affixed to this certificate and a
facsimile of their common seal to be hereto affixed by the
Transfer Agent.
(at right of text, printed vertically)
line 1: [appx 8 pt. bold]
Countersigned
line 2: [indented under line 1 appx 8 pt.]
SHAREHOLDER SERVICES INC.
line 3: [indented under line 2 appx 8 pt. bold]
Denver (Colo.) [space] Transfer Agent
line 4: [to left aligned under line 1 appx. 8 pt.]
By:
line 5: [spaced from line 4 indented under line 3 appx. 8 pt.]
Authorized Signature
(bottom left of certificate)
1-1/2" diameter facsimile seal
(top of seal: semicircle)
PIMCO ADVISORS FUNDS
(center of seal - two line text)
1983
MASSACHUSETTS
(bottom right - across from seal)
[text appx. 11 pt. bold]
Dated:
[spaced from text - signature line with text below line to
right] President FOR THE TRUSTEES
[spaced from text - signature line with text below line to
right] Treasurer
II. BACK OF CERTIFICATE (text reads from top to bottom of 8"x11"
portrait dimension)
[text appx. 8 pt.]
[indented] The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations.
[text appearing left side of page indented under above paragraph appx 8 pt.] TEN
COM - as tenants in common
TEN ENT - as tenants by the entirety
JT TEN WROS NOT TC - as joint tenants with
rights of survivorship and not
as tenants in common
[text appearing right side of page across from above text appx 8 pt.]
UNIF GIFT/TRANSFER MIN ACT - __________________ Custodian _______________
(Cust) (Minor)
UNDER UGMA/UTMA ___________________
(State)
[text - centered appx 8 pt.]
Additional abbreviations may also be used though
not in the above list.
[text - centered appx. 10 pt.]
For Value Received ................ hereby
sell(s), assign(s), and transfer(s) unto
[text appearing left of page appx. 8 pt]
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
AND PROVIDE CERTIFICATION
BY TRANSFEREE
[graphic: box for identifying number]
<PAGE>
PAGE 2 Back of certificate continued.
[Directly below graphic box: double spaced]
[line 1: with text centered under line]
- ---------------------------------------------------------------------
(Please print or type name and address of assignee)
[line 2: no text under line]
- ---------------------------------------------------------------------
[line 3: no text under line]
- ---------------------------------------------------------------------
[line 4: with text centered under line
- ---------------------------------------------------------------------
Class A Shares of beneficial interest represented by the within Certificate, and
do hereby irrevocably constitute and appoint [line 5: with text centered under
line
- ---------------------------------------------------------------------
Attorney to transfer the said shares on the books of the within named Fund
with full power of substitution in the premises.
[line 6: aligned left - text and line appx. 10 pt.]
Dated____________________________
[line 7: aligned right - text and line appx. 10 pt.]
Signed__________________________
[line 8: aligned right centered text under line appx. 8 pt.]
- --------------------------------
(Both must sign if joint owners)
[line 9, 10 and 11: aligned right 3 lines of text right of lines with centered
text]
Signature(s) __________________________
guaranteed Name of Guarantor
by: _____________________________
Signature of Officer/Title
[aligned left of lines 9-11
graphic box containing text appx. 8 pt.]
Signatures must be guaranteed by a financial institution of
the type described in the prospectus of the Fund.
[aligned right of lines 4-8 printed vertically appx. 8 pt.]
NOTICE: The signature(s) to this assignment must correspond
with the name(s) as written upon face of the certificate in every
particular without alteration or enlargement or any change
whatever.
[single line of text alinged left appx. 10 pt. bold]
PLEASE NOTE: This document contains a watermark when viewed at
an angle. It is invalid without this watermark:
[directly below text above aligned left appx. 18 pt. bold]
P I M C O
[Watermark in five rows vertically across page: PIMCO PIMCO
PIMCO
[bottom of certificate: line with text centered under appx.
16 pt.]
- ------------------------------------------------------------------------------
THIS SPACE MUST NOT BE COVERED IN ANY WAY
<PAGE>
PIMCO ADVISORS FUNDS
Description of Share Certificate for:
PIMCO ADVISORS GROWTH FUND CLASS B SHARES
Class Share Certificate (8-1/2" x 11")
I. FACE OF CERTIFICATE (All text and other matter lies within
8-1/4" x 10-3/4" decorative border, 5/16" wide)
(upper left corner)- box with heading:NUMBER [of shares]
(upper center) - heading: CLASS B SHARES
(upper right corner)- heading: CP - [number]
(directly below upper right
corner heading:- box with heading: SHARES [amt. of shares]
(centered below boxes)
line 1: single line heading: [appx. 8 pt.]
ESTABLISHED UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
line 2: single line heading: [appx. 18pt.]
PIMCO ADVISORS FUNDS
line 3: single line heading: [appx. 18pt.]
CLASS B SHARES
line 4: single line heading: [appx. 8 pt]
PAR VALUE $.00001 PER SHARE
(at left) single line heading: [appx. 11 pt.]
THIS IS TO CERTIFY THAT
(at right)two line heading: [appx. 10 pt.]
SEE REVERSE FOR
CERTAIN DEFINITIONS
(at right directly below two line heading - box with content)
CUSIP 693387672
(at left appx half way down width of cert. - single line heading)
is the owner of
(at right appx half way down width of cert. - single line heading)
Class B Shares
(centered - text appx. 11pt)
of benficial interest in PIMCO Advisors Funds - PIMCO Advisors
Growth Fund, par value $.00001 per share, fully paid and
nonassessable, which shares have been issued and are held under
and subject to terms and provisions of the Amended and Restated
Agreement and Declaration of Trust dated September 11, 1990, of
PIMCO Advisors Funds, and all amendments thereto, heretofore or
hereafter made, copies of which are on file with the Secretary of
the Commonwealth of Massachusetts. [indent] No transfer hereof
will be of any effect as regards the Trustees of PIMCO Advisors
Funds until this certificate, properly endorsed or assigned, has
been surrendered and the transfer recorded upon the books of said
Trustees. [indent] This certificate is executed on behalf of the
Trustees as Trustees and not individually and the obligations
hereof are not binding only upon the assets and property of the
Fund. [indent] IN WITNESS WHEREOF the Trustees under said
Agreement and Declaration of Trust have caused the following
facsimile signatures to be affixed to this certificate and a
facsimile of their common seal to be hereto affixed by the
Transfer Agent.
(at right of text, printed vertically)
line 1: [appx 8 pt. bold]
Countersigned
line 2: [indented under line 1 appx 8 pt.]
SHAREHOLDER SERVICES INC.
line 3: [indented under line 2 appx 8 pt. bold]
Denver (Colo.) [space] Transfer Agent
line 4: [to left aligned under line 1 appx. 8 pt.]
By:
line 5: [spaced from line 4 indented under line 3 appx. 8 pt.]
Authorized Signature
(bottom left of certificate)
1-1/2" diameter facsimile seal
(top of seal: semicircle)
PIMCO ADVISORS FUNDS
(center of seal - two line text)
1983
MASSACHUSETTS
(bottom right - across from seal)
[text appx. 11 pt. bold]
Dated:
[spaced from text - signature line with text below line to
right] President FOR THE TRUSTEES
[spaced from text - signature line with text below line to
right] Treasurer
II. BACK OF CERTIFICATE (text reads from top to bottom of 8"x11"
portrait dimension)
[text appx. 8 pt.]
[indented] The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations.
[text appearing left side of page indented under above paragraph appx 8 pt.] TEN
COM - as tenants in common
TEN ENT - as tenants by the entirety
JT TEN WROS NOT TC - as joint tenants with
rights of survivorship and not
as tenants in common
[text appearing right side of page across from above text appx 8 pt.]
UNIF GIFT/TRANSFER MIN ACT - __________________ Custodian _______________
(Cust) (Minor)
UNDER UGMA/UTMA ___________________
(State)
[text - centered appx 8 pt.]
Additional abbreviations may also be used though
not in the above list.
[text - centered appx. 10 pt.]
For Value Received ................ hereby
sell(s), assign(s), and transfer(s) unto
[text appearing left of page appx. 8 pt]
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
AND PROVIDE CERTIFICATION
BY TRANSFEREE
[graphic: box for identifying number]
<PAGE>
PAGE 2 Back of certificate continued.
[Directly below graphic box: double spaced]
[line 1: with text centered under line]
- ---------------------------------------------------------------------
(Please print or type name and address of assignee)
[line 2: no text under line]
- ---------------------------------------------------------------------
[line 3: no text under line]
- ---------------------------------------------------------------------
[line 4: with text centered under line
- ---------------------------------------------------------------------
Class B Shares of beneficial interest represented by the within Certificate, and
do hereby irrevocably constitute and appoint [line 5: with text centered under
line
- ---------------------------------------------------------------------
Attorney to transfer the said shares on the books of the within named Fund
with full power of substitution in the premises.
[line 6: aligned left - text and line appx. 10 pt.]
Dated____________________________
[line 7: aligned right - text and line appx. 10 pt.]
Signed__________________________
[line 8: aligned right centered text under line appx. 8 pt.]
- --------------------------------
(Both must sign if joint owners)
[line 9, 10 and 11: aligned right 3 lines of text right of lines with centered
text]
Signature(s) __________________________
guaranteed Name of Guarantor
by: _____________________________
Signature of Officer/Title
[aligned left of lines 9-11
graphic box containing text appx. 8 pt.]
Signatures must be guaranteed by a financial institution of
the type described in the prospectus of the Fund.
[aligned right of lines 4-8 printed vertically appx. 8 pt.]
NOTICE: The signature(s) to this assignment must correspond
with the name(s) as written upon face of the certificate in every
particular without alteration or enlargement or any change
whatever.
[single line of text alinged left appx. 10 pt. bold]
PLEASE NOTE: This document contains a watermark when viewed at
an angle. It is invalid without this watermark:
[directly below text above aligned left appx. 18 pt. bold]
P I M C O
[Watermark in five rows vertically across page: PIMCO PIMCO
PIMCO
[bottom of certificate: line with text centered under appx.
16 pt.]
- ------------------------------------------------------------------------
THIS SPACE MUST NOT BE COVERED IN ANY WAY
<PAGE>
PIMCO ADVISORS FUNDS
Description of Share Certificate for:
PIMCO ADVISORS GROWTH FUND CLASS C SHARES
Class Share Certificate (8-1/2" x 11")
I. FACE OF CERTIFICATE (All text and other matter lies within
8-1/4" x 10-3/4" decorative border, 5/16" wide)
(upper left corner)- box with heading:NUMBER [of shares]
(upper center) - heading: CLASS C SHARES
(upper right corner)- heading: CP - [number]
(directly below upper right
corner heading:- box with heading: SHARES [amt. of shares]
(centered below boxes)
line 1: single line heading: [appx. 8 pt.]
ESTABLISHED UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
line 2: single line heading: [appx. 18pt.]
PIMCO ADVISORS FUNDS
line 3: single line heading: [appx. 18pt.]
CLASS C SHARES
line 4: single line heading: [appx. 8 pt]
PAR VALUE $.00001 PER SHARE
(at left) single line heading: [appx. 11 pt.]
THIS IS TO CERTIFY THAT
(at right)two line heading: [appx. 10 pt.]
SEE REVERSE FOR
CERTAIN DEFINITIONS
(at right directly below two line heading - box with content)
CUSIP 693387607
(at left appx half way down width of cert. - single line heading)
is the owner of
(at right appx half way down width of cert. - single line heading)
Class C Shares
(centered - text appx. 11pt)
of benficial interest in PIMCO Advisors Funds - PIMCO Advisors
Growth Fund, par value $.00001 per share, fully paid and
nonassessable, which shares have been issued and are held under
and subject to terms and provisions of the Amended and Restated
Agreement and Declaration of Trust dated September 11, 1990, of
PIMCO Advisors Funds, and all amendments thereto, heretofore or
hereafter made, copies of which are on file with the Secretary of
the Commonwealth of Massachusetts. [indent] No transfer hereof
will be of any effect as regards the Trustees of PIMCO Advisors
Funds until this certificate, properly endorsed or assigned, has
been surrendered and the transfer recorded upon the books of said
Trustees. [indent] This certificate is executed on behalf of the
Trustees as Trustees and not individually and the obligations
hereof are not binding only upon the assets and property of the
Fund. [indent] IN WITNESS WHEREOF the Trustees under said
Agreement and Declaration of Trust have caused the following
facsimile signatures to be affixed to this certificate and a
facsimile of their common seal to be hereto affixed by the
Transfer Agent.
(at right of text, printed vertically)
line 1: [appx 8 pt. bold]
Countersigned
line 2: [indented under line 1 appx 8 pt.]
SHAREHOLDER SERVICES INC.
line 3: [indented under line 2 appx 8 pt. bold]
Denver (Colo.) [space] Transfer Agent
line 4: [to left aligned under line 1 appx. 8 pt.]
By:
line 5: [spaced from line 4 indented under line 3 appx. 8 pt.]
Authorized Signature
(bottom left of certificate)
1-1/2" diameter facsimile seal
(top of seal: semicircle)
PIMCO ADVISORS FUNDS
(center of seal - two line text)
1983
MASSACHUSETTS
(bottom right - across from seal)
[text appx. 11 pt. bold]
Dated:
[spaced from text - signature line with text below line to
right] President FOR THE TRUSTEES
[spaced from text - signature line with text below line to
right] Treasurer
II. BACK OF CERTIFICATE (text reads from top to bottom of 8"x11" portrait
dimension)
[text appx. 8 pt.]
[indented] The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations.
[text appearing left side of page indented under above paragraph appx 8 pt.] TEN
COM - as tenants in common
TEN ENT - as tenants by the entirety
JT TEN WROS NOT TC - as joint tenants with
rights of survivorship and not
as tenants in common
[text appearing right side of page across from above
text appx 8 pt.]
UNIF GIFT/TRANSFER MIN ACT - __________________ Custodian _______________
(Cust) (Minor)
UNDER UGMA/UTMA ___________________
(State)
[text - centered appx 8 pt.]
Additional abbreviations may also be used though
not in the above list.
[text - centered appx. 10 pt.]
For Value Received ................ hereby
sell(s), assign(s), and transfer(s) unto
[text appearing left of page appx. 8 pt]
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
AND PROVIDE CERTIFICATION
BY TRANSFEREE
[graphic: box for identifying number]
<PAGE>
PAGE 2 Back of certificate continued.
[Directly below graphic box: double spaced]
[line 1: with text centered under line]
- ---------------------------------------------------------------------
(Please print or type name and address of assignee)
[line 2: no text under line]
- ---------------------------------------------------------------------
[line 3: no text under line]
- ---------------------------------------------------------------------
[line 4: with text centered under line
- ---------------------------------------------------------------------
Class C Shares of beneficial interest represented by the within Certificate, and
do hereby irrevocably constitute and appoint [line 5: with text centered under
line
- ---------------------------------------------------------------------
Attorney to transfer the said shares on the books of the within named Fund
with full power of substitution in the premises.
[line 6: aligned left - text and line appx. 10 pt.]
Dated____________________________
[line 7: aligned right - text and line appx. 10 pt.]
Signed__________________________
[line 8: aligned right centered text under line appx. 8 pt.]
- --------------------------------
(Both must sign if joint owners)
[line 9, 10 and 11: aligned right 3 lines of text right of lines with centered
text]
Signature(s) __________________________
guaranteed Name of Guarantor
by: _____________________________
Signature of Officer/Title
[aligned left of lines 9-11
graphic box containing text appx. 8 pt.]
Signatures must be guaranteed by a financial institution of
the type described in the prospectus of the Fund.
[aligned right of lines 4-8 printed vertically appx. 8 pt.]
NOTICE: The signature(s) to this assignment must correspond
with the name(s) as written upon face of the certificate in every
particular without alteration or enlargement or any change
whatever.
[single line of text alinged left appx. 10 pt. bold]
PLEASE NOTE: This document contains a watermark when viewed at
an angle. It is invalid without this watermark:
[directly below text above aligned left appx. 18 pt. bold]
P I M C O
[Watermark in five rows vertically across page: PIMCO PIMCO
PIMCO
[bottom of certificate: line with text centered under appx.
16 pt.]
- -----------------------------------------------------------------------------
THIS SPACE MUST NOT BE COVERED IN ANY WAY
<PAGE>
PIMCO ADVISORS FUNDS
Description of Share Certificate for:
PIMCO ADVISORS TARGET FUND CLASS A SHARES
Class Share Certificate (8-1/2" x 11")
I. FACE OF CERTIFICATE (All text and other matter lies within
8-1/4" x 10-3/4" decorative border, 5/16" wide)
(upper left corner)- box with heading:NUMBER [of shares]
(upper center) - heading: CLASS A SHARES
(upper right corner)- heading: CP - [number]
(directly below upper right
corner heading:- box with heading: SHARES [amt. of shares]
(centered below boxes)
line 1: single line heading: [appx. 8 pt.]
ESTABLISHED UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
line 2: single line heading: [appx. 18pt.]
PIMCO ADVISORS FUNDS
line 3: single line heading: [appx. 18pt.]
CLASS A SHARES
line 4: single line heading: [appx. 8 pt]
PAR VALUE $.00001 PER SHARE
(at left) single line heading: [appx. 11 pt.]
THIS IS TO CERTIFY THAT
(at right)two line heading: [appx. 10 pt.]
SEE REVERSE FOR
CERTAIN DEFINITIONS
(at right directly below two line heading - box with content)
CUSIP 693387821
(at left appx half way down width of cert. - single line heading)
is the owner of
(at right appx half way down width of cert. - single line heading)
Class A Shares
(centered - text appx. 11pt)
of benficial interest in PIMCO Advisors Funds - PIMCO Advisors
Target Fund, par value $.00001 per share, fully paid and
nonassessable, which shares have been issued and are held under
and subject to terms and provisions of the Amended and Restated
Agreement and Declaration of Trust dated September 11, 1990, of
PIMCO Advisors Funds, and all amendments thereto, heretofore or
hereafter made, copies of which are on file with the Secretary of
the Commonwealth of Massachusetts. [indent] No transfer hereof
will be of any effect as regards the Trustees of PIMCO Advisors
Funds until this certificate, properly endorsed or assigned, has
been surrendered and the transfer recorded upon the books of said
Trustees. [indent] This certificate is executed on behalf of the
Trustees as Trustees and not individually and the obligations
hereof are not binding only upon the assets and property of the
Fund. [indent] IN WITNESS WHEREOF the Trustees under said
Agreement and Declaration of Trust have caused the following
facsimile signatures to be affixed to this certificate and a
facsimile of their common seal to be hereto affixed by the
Transfer Agent.
(at right of text, printed vertically)
line 1: [appx 8 pt. bold]
Countersigned
line 2: [indented under line 1 appx 8 pt.]
SHAREHOLDER SERVICES INC.
line 3: [indented under line 2 appx 8 pt. bold]
Denver (Colo.) [space] Transfer Agent
line 4: [to left aligned under line 1 appx. 8 pt.]
By:
line 5: [spaced from line 4 indented under line 3 appx. 8 pt.]
Authorized Signature
(bottom left of certificate)
1-1/2" diameter facsimile seal
(top of seal: semicircle)
PIMCO ADVISORS FUNDS
(center of seal - two line text)
1983
MASSACHUSETTS
(bottom right - across from seal)
[text appx. 11 pt. bold]
Dated:
[spaced from text - signature line with text below line to
right] President FOR THE TRUSTEES
[spaced from text - signature line with text below line to
right] Treasurer
II. BACK OF CERTIFICATE (text reads from top to bottom of 8"x11" portrait
dimension)
[text appx. 8 pt.]
[indented] The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations.
[text appearing left side of page indented under above paragraph appx 8 pt.] TEN
COM - as tenants in common
TEN ENT - as tenants by the entirety
JT TEN WROS NOT TC - as joint tenants with
rights of survivorship and not
as tenants in common
[text appearing right side of page across from above
text appx 8 pt.]
UNIF GIFT/TRANSFER MIN ACT - __________________ Custodian _______________
(Cust) (Minor)
UNDER UGMA/UTMA ___________________
(State)
[text - centered appx 8 pt.]
Additional abbreviations may also be used though
not in the above list.
[text - centered appx. 10 pt.]
For Value Received ................ hereby
sell(s), assign(s), and transfer(s) unto
[text appearing left of page appx. 8 pt]
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
AND PROVIDE CERTIFICATION
BY TRANSFEREE
[graphic: box for identifying number]
<PAGE>
PAGE 2 Back of certificate continued.
[Directly below graphic box: double spaced]
[line 1: with text centered under line]
- ---------------------------------------------------------------------
(Please print or type name and address of assignee)
[line 2: no text under line]
- ---------------------------------------------------------------------
[line 3: no text under line]
- ---------------------------------------------------------------------
[line 4: with text centered under line
- ---------------------------------------------------------------------
Class A Shares of beneficial interest represented by the within Certificate, and
do hereby irrevocably constitute and appoint [line 5: with text centered under
line
- ---------------------------------------------------------------------
Attorney to transfer the said shares on the books of the within named Fund
with full power of substitution in the premises.
[line 6: aligned left - text and line appx. 10 pt.]
Dated____________________________
[line 7: aligned right - text and line appx. 10 pt.]
Signed__________________________
[line 8: aligned right centered text under line appx. 8 pt.]
- --------------------------------
(Both must sign if joint owners)
[line 9, 10 and 11: aligned right 3 lines of text right of lines with centered
text]
Signature(s) __________________________
guaranteed Name of Guarantor
by: _____________________________
Signature of Officer/Title
[aligned left of lines 9-11
graphic box containing text appx. 8 pt.]
Signatures must be guaranteed by a financial institution of
the type described in the prospectus of the Fund.
[aligned right of lines 4-8 printed vertically appx. 8 pt.]
NOTICE: The signature(s) to this assignment must correspond
with the name(s) as written upon face of the certificate in every
particular without alteration or enlargement or any change
whatever.
[single line of text alinged left appx. 10 pt. bold]
PLEASE NOTE: This document contains a watermark when viewed at
an angle. It is invalid without this watermark:
[directly below text above aligned left appx. 18 pt. bold]
P I M C O
[Watermark in five rows vertically across page: PIMCO PIMCO
PIMCO
[bottom of certificate: line with text centered under appx.
16 pt.]
- --------------------------------------------------------------------------
THIS SPACE MUST NOT BE COVERED IN ANY WAY
<PAGE>
PIMCO ADVISORS FUNDS
Description of Share Certificate for:
PIMCO ADVISORS TARGET FUND CLASS B SHARES
Class Share Certificate (8-1/2" x 11")
I. FACE OF CERTIFICATE (All text and other matter lies within
8-1/4" x 10-3/4" decorative border, 5/16" wide)
(upper left corner)- box with heading:NUMBER [of shares]
(upper center) - heading: CLASS B SHARES
(upper right corner)- heading: CP - [number]
(directly below upper right
corner heading:- box with heading: SHARES [amt. of shares]
(centered below boxes)
line 1: single line heading: [appx. 8 pt.]
ESTABLISHED UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
line 2: single line heading: [appx. 18pt.]
PIMCO ADVISORS FUNDS
line 3: single line heading: [appx. 18pt.]
CLASS B SHARES
line 4: single line heading: [appx. 8 pt]
PAR VALUE $.00001 PER SHARE
(at left) single line heading: [appx. 11 pt.]
THIS IS TO CERTIFY THAT
(at right)two line heading: [appx. 10 pt.]
SEE REVERSE FOR
CERTAIN DEFINITIONS
(at right directly below two line heading - box with content)
CUSIP 693387664
(at left appx half way down width of cert. - single line heading)
is the owner of
(at right appx half way down width of cert. - single line heading)
Class B Shares
(centered - text appx. 11pt)
of benficial interest in PIMCO Advisors Funds - PIMCO Advisors
Target Fund, par value $.00001 per share, fully paid and
nonassessable, which shares have been issued and are held under
and subject to terms and provisions of the Amended and Restated
Agreement and Declaration of Trust dated September 11, 1990, of
PIMCO Advisors Funds, and all amendments thereto, heretofore or
hereafter made, copies of which are on file with the Secretary of
the Commonwealth of Massachusetts. [indent] No transfer hereof
will be of any effect as regards the Trustees of PIMCO Advisors
Funds until this certificate, properly endorsed or assigned, has
been surrendered and the transfer recorded upon the books of said
Trustees. [indent] This certificate is executed on behalf of the
Trustees as Trustees and not individually and the obligations
hereof are not binding only upon the assets and property of the
Fund. [indent] IN WITNESS WHEREOF the Trustees under said
Agreement and Declaration of Trust have caused the following
facsimile signatures to be affixed to this certificate and a
facsimile of their common seal to be hereto affixed by the
Transfer Agent.
(at right of text, printed vertically)
line 1: [appx 8 pt. bold]
Countersigned
line 2: [indented under line 1 appx 8 pt.]
SHAREHOLDER SERVICES INC.
line 3: [indented under line 2 appx 8 pt. bold]
Denver (Colo.) [space] Transfer Agent
line 4: [to left aligned under line 1 appx. 8 pt.]
By:
line 5: [spaced from line 4 indented under line 3 appx. 8 pt.]
Authorized Signature
(bottom left of certificate)
1-1/2" diameter facsimile seal
(top of seal: semicircle)
PIMCO ADVISORS FUNDS
(center of seal - two line text)
1983
MASSACHUSETTS
(bottom right - across from seal)
[text appx. 11 pt. bold]
Dated:
[spaced from text - signature line with text below line to
right] President FOR THE TRUSTEES
[spaced from text - signature line with text below line to
right] Treasurer
II. BACK OF CERTIFICATE (text reads from top to bottom of 8"x11" portrait
dimension)
[text appx. 8 pt.]
[indented] The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations.
[text appearing left side of page indented under above paragraph appx 8 pt.] TEN
COM - as tenants in common
TEN ENT - as tenants by the entirety
JT TEN WROS NOT TC - as joint tenants with
rights of survivorship and not
as tenants in common
[text appearing right side of page across from above text appx 8 pt.]
UNIF GIFT/TRANSFER MIN ACT - __________________ Custodian _______________
(Cust) (Minor)
UNDER UGMA/UTMA ___________________
(State)
[text - centered appx 8 pt.]
Additional abbreviations may also be used though
not in the above list.
[text - centered appx. 10 pt.]
For Value Received ................ hereby
sell(s), assign(s), and transfer(s) unto
[text appearing left of page appx. 8 pt]
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
AND PROVIDE CERTIFICATION
BY TRANSFEREE
[graphic: box for identifying number]
<PAGE>
PAGE 2 Back of certificate continued.
[Directly below graphic box: double spaced]
[line 1: with text centered under line]
- ---------------------------------------------------------------------
(Please print or type name and address of assignee)
[line 2: no text under line]
- ---------------------------------------------------------------------
[line 3: no text under line]
- ---------------------------------------------------------------------
[line 4: with text centered under line
- ---------------------------------------------------------------------
Class B Shares of beneficial interest represented by the within Certificate, and
do hereby irrevocably constitute and appoint [line 5: with text centered under
line
- ---------------------------------------------------------------------
Attorney to transfer the said shares on the books of the within named Fund
with full power of substitution in the premises.
[line 6: aligned left - text and line appx. 10 pt.]
Dated____________________________
[line 7: aligned right - text and line appx. 10 pt.]
Signed__________________________
[line 8: aligned right centered text under line appx. 8 pt.]
- --------------------------------
(Both must sign if joint owners)
[line 9, 10 and 11: aligned right 3 lines of text right of lines with centered
text]
Signature(s) __________________________
guaranteed Name of Guarantor
by: _____________________________
Signature of Officer/Title
[aligned left of lines 9-11
graphic box containing text appx. 8 pt.]
Signatures must be guaranteed by a financial institution of
the type described in the prospectus of the Fund.
[aligned right of lines 4-8 printed vertically appx. 8 pt.]
NOTICE: The signature(s) to this assignment must correspond
with the name(s) as written upon face of the certificate in every
particular without alteration or enlargement or any change
whatever.
[single line of text alinged left appx. 10 pt. bold]
PLEASE NOTE: This document contains a watermark when viewed at
an angle. It is invalid without this watermark:
[directly below text above aligned left appx. 18 pt. bold]
P I M C O
[Watermark in five rows vertically across page: PIMCO PIMCO
PIMCO
[bottom of certificate: line with text centered under appx.
16 pt.]
- ------------------------------------------------------------------------
THIS SPACE MUST NOT BE COVERED IN ANY WAY
<PAGE>
PIMCO ADVISORS FUNDS
Description of Share Certificate for:
PIMCO ADVISORS TARGET FUND CLASS C SHARES
Class Share Certificate (8-1/2" x 11")
I. FACE OF CERTIFICATE (All text and other matter lies within
8-1/4" x 10-3/4" decorative border, 5/16" wide)
(upper left corner)- box with heading:NUMBER [of shares]
(upper center) - heading: CLASS C SHARES
(upper right corner)- heading: CP - [number]
(directly below upper right
corner heading:- box with heading: SHARES [amt. of shares]
(centered below boxes)
line 1: single line heading: [appx. 8 pt.]
ESTABLISHED UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
line 2: single line heading: [appx. 18pt.]
PIMCO ADVISORS FUNDS
line 3: single line heading: [appx. 18pt.]
CLASS C SHARES
line 4: single line heading: [appx. 8 pt]
PAR VALUE $.00001 PER SHARE
(at left) single line heading: [appx. 11 pt.]
THIS IS TO CERTIFY THAT
(at right)two line heading: [appx. 10 pt.]
SEE REVERSE FOR
CERTAIN DEFINITIONS
(at right directly below two line heading - box with content)
CUSIP 693387813
(at left appx half way down width of cert. - single line heading)
is the owner of
(at right appx half way down width of cert. - single line heading)
Class C Shares
(centered - text appx. 11pt)
of benficial interest in PIMCO Advisors Funds - PIMCO Advisors
Target Fund, par value $.00001 per share, fully paid and
nonassessable, which shares have been issued and are held under
and subject to terms and provisions of the Amended and Restated
Agreement and Declaration of Trust dated September 11, 1990, of
PIMCO Advisors Funds, and all amendments thereto, heretofore or
hereafter made, copies of which are on file with the Secretary of
the Commonwealth of Massachusetts. [indent] No transfer hereof
will be of any effect as regards the Trustees of PIMCO Advisors
Funds until this certificate, properly endorsed or assigned, has
been surrendered and the transfer recorded upon the books of said
Trustees. [indent] This certificate is executed on behalf of the
Trustees as Trustees and not individually and the obligations
hereof are not binding only upon the assets and property of the
Fund. [indent] IN WITNESS WHEREOF the Trustees under said
Agreement and Declaration of Trust have caused the following
facsimile signatures to be affixed to this certificate and a
facsimile of their common seal to be hereto affixed by the
Transfer Agent.
(at right of text, printed vertically)
line 1: [appx 8 pt. bold]
Countersigned
line 2: [indented under line 1 appx 8 pt.]
SHAREHOLDER SERVICES INC.
line 3: [indented under line 2 appx 8 pt. bold]
Denver (Colo.) [space] Transfer Agent
line 4: [to left aligned under line 1 appx. 8 pt.]
By:
line 5: [spaced from line 4 indented under line 3 appx. 8 pt.]
Authorized Signature
(bottom left of certificate)
1-1/2" diameter facsimile seal
(top of seal: semicircle)
PIMCO ADVISORS FUNDS
(center of seal - two line text)
1983
MASSACHUSETTS
(bottom right - across from seal)
[text appx. 11 pt. bold]
Dated:
[spaced from text - signature line with text below line to
right] President FOR THE TRUSTEES
[spaced from text - signature line with text below line to
right] Treasurer
II. BACK OF CERTIFICATE (text reads from top to bottom of 8"x11"
portrait dimension)
[text appx. 8 pt.]
[indented] The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations.
[text appearing left side of page indented under above paragraph appx 8 pt.] TEN
COM - as tenants in common
TEN ENT - as tenants by the entirety
JT TEN WROS NOT TC - as joint tenants with
rights of survivorship and not
as tenants in common
[text appearing right side of page across from above text appx 8 pt.]
UNIF GIFT/TRANSFER MIN ACT - __________________ Custodian _______________
(Cust) (Minor)
UNDER UGMA/UTMA ___________________
(State)
[text - centered appx 8 pt.]
Additional abbreviations may also be used though
not in the above list.
[text - centered appx. 10 pt.]
For Value Received ................ hereby
sell(s), assign(s), and transfer(s) unto
[text appearing left of page appx. 8 pt]
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
AND PROVIDE CERTIFICATION
BY TRANSFEREE
[graphic: box for identifying number]
<PAGE>
PAGE 2 Back of certificate continued.
[Directly below graphic box: double spaced]
[line 1: with text centered under line]
- ---------------------------------------------------------------------
(Please print or type name and address of assignee)
[line 2: no text under line]
- ---------------------------------------------------------------------
[line 3: no text under line]
- ---------------------------------------------------------------------
[line 4: with text centered under line
- ---------------------------------------------------------------------
Class C Shares of beneficial interest represented by the within Certificate, and
do hereby irrevocably constitute and appoint [line 5: with text centered under
line
- ---------------------------------------------------------------------
Attorney to transfer the said shares on the books of the within named Fund
with full power of substitution in the premises.
[line 6: aligned left - text and line appx. 10 pt.]
Dated____________________________
[line 7: aligned right - text and line appx. 10 pt.]
Signed__________________________
[line 8: aligned right centered text under line appx. 8 pt.]
- --------------------------------
(Both must sign if joint owners)
[line 9, 10 and 11: aligned right 3 lines of text right of lines with centered
text]
Signature(s) __________________________
guaranteed Name of Guarantor
by: _____________________________
Signature of Officer/Title
[aligned left of lines 9-11
graphic box containing text appx. 8 pt.]
Signatures must be guaranteed by a financial institution of
the type described in the prospectus of the Fund.
[aligned right of lines 4-8 printed vertically appx. 8 pt.]
NOTICE: The signature(s) to this assignment must correspond
with the name(s) as written upon face of the certificate in every
particular without alteration or enlargement or any change
whatever.
[single line of text alinged left appx. 10 pt. bold]
PLEASE NOTE: This document contains a watermark when viewed at
an angle. It is invalid without this watermark:
[directly below text above aligned left appx. 18 pt. bold]
P I M C O
[Watermark in five rows vertically across page: PIMCO PIMCO
PIMCO
[bottom of certificate: line with text centered under appx.
16 pt.]
- ----------------------------------------------------------------------------
THIS SPACE MUST NOT BE COVERED IN ANY WAY
<PAGE>
PIMCO ADVISORS FUNDS
Description of Share Certificate for:
PIMCO ADVISORS DISCOVERY FUND CLASS A SHARES
Class Share Certificate (8-1/2" x 11")
I. FACE OF CERTIFICATE (All text and other matter lies within
8-1/4" x 10-3/4" decorative border, 5/16" wide)
(upper left corner)- box with heading:NUMBER [of shares]
(upper center) - heading: CLASS A SHARES
(upper right corner)- heading: CP - [number]
(directly below upper right
corner heading:- box with heading: SHARES [amt. of shares]
(centered below boxes)
line 1: single line heading: [appx. 8 pt.]
ESTABLISHED UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
line 2: single line heading: [appx. 18pt.]
PIMCO ADVISORS FUNDS
line 3: single line heading: [appx. 18pt.]
CLASS A SHARES
line 4: single line heading: [appx. 8 pt]
PAR VALUE $.00001 PER SHARE
(at left) single line heading: [appx. 11 pt.]
THIS IS TO CERTIFY THAT
(at right)two line heading: [appx. 10 pt.]
SEE REVERSE FOR
CERTAIN DEFINITIONS
(at right directly below two line heading - box with content)
CUSIP 693387540
(at left appx half way down width of cert. - single line heading)
is the owner of
(at right appx half way down width of cert. - single line heading)
Class A Shares
(centered - text appx. 11pt)
of benficial interest in PIMCO Advisors Funds - PIMCO Advisors
Discovery Fund, par value $.00001 per share, fully paid and
nonassessable, which shares have been issued and are held under
and subject to terms and provisions of the Amended and Restated
Agreement and Declaration of Trust dated September 11, 1990, of
PIMCO Advisors Funds, and all amendments thereto, heretofore or
hereafter made, copies of which are on file with the Secretary of
the Commonwealth of Massachusetts. [indent] No transfer hereof
will be of any effect as regards the Trustees of PIMCO Advisors
Funds until this certificate, properly endorsed or assigned, has
been surrendered and the transfer recorded upon the books of said
Trustees. [indent] This certificate is executed on behalf of the
Trustees as Trustees and not individually and the obligations
hereof are not binding only upon the assets and property of the
Fund. [indent] IN WITNESS WHEREOF the Trustees under said
Agreement and Declaration of Trust have caused the following
facsimile signatures to be affixed to this certificate and a
facsimile of their common seal to be hereto affixed by the
Transfer Agent.
(at right of text, printed vertically)
line 1: [appx 8 pt. bold]
Countersigned
line 2: [indented under line 1 appx 8 pt.]
SHAREHOLDER SERVICES INC.
line 3: [indented under line 2 appx 8 pt. bold]
Denver (Colo.) [space] Transfer Agent
line 4: [to left aligned under line 1 appx. 8 pt.]
By:
line 5: [spaced from line 4 indented under line 3 appx. 8 pt.]
Authorized Signature
(bottom left of certificate)
1-1/2" diameter facsimile seal
(top of seal: semicircle)
PIMCO ADVISORS FUNDS
(center of seal - two line text)
1983
MASSACHUSETTS
(bottom right - across from seal)
[text appx. 11 pt. bold]
Dated:
[spaced from text - signature line with text below line to
right] President FOR THE TRUSTEES
[spaced from text - signature line with text below line to
right] Treasurer
II. BACK OF CERTIFICATE (text reads from top to bottom of 8"x11" portrait
dimension)
[text appx. 8 pt.]
[indented] The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations.
[text appearing left side of page indented under above paragraph appx 8 pt.] TEN
COM - as tenants in common
TEN ENT - as tenants by the entirety
JT TEN WROS NOT TC - as joint tenants with
rights of survivorship and not
as tenants in common
[text appearing right side of page across from above text appx 8 pt.]
UNIF GIFT/TRANSFER MIN ACT - __________________ Custodian _______________
(Cust) (Minor)
UNDER UGMA/UTMA ___________________
(State)
[text - centered appx 8 pt.]
Additional abbreviations may also be used though
not in the above list.
[text - centered appx. 10 pt.]
For Value Received ................ hereby
sell(s), assign(s), and transfer(s) unto
[text appearing left of page appx. 8 pt]
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
AND PROVIDE CERTIFICATION
BY TRANSFEREE
[graphic: box for identifying number]
<PAGE>
PAGE 2 Back of certificate continued.
[Directly below graphic box: double spaced]
[line 1: with text centered under line]
- ---------------------------------------------------------------------
(Please print or type name and address of assignee)
[line 2: no text under line]
- ---------------------------------------------------------------------
[line 3: no text under line]
- ---------------------------------------------------------------------
[line 4: with text centered under line
- ---------------------------------------------------------------------
Class A Shares of beneficial interest represented by the within Certificate, and
do hereby irrevocably constitute and appoint [line 5: with text centered under
line
- ---------------------------------------------------------------------
Attorney to transfer the said shares on the books of the within named Fund
with full power of substitution in the premises.
[line 6: aligned left - text and line appx. 10 pt.]
Dated____________________________
[line 7: aligned right - text and line appx. 10 pt.]
Signed__________________________
[line 8: aligned right centered text under line appx. 8 pt.]
- --------------------------------
(Both must sign if joint owners)
[line 9, 10 and 11: aligned right 3 lines of text right of lines with centered
text]
Signature(s) __________________________
guaranteed Name of Guarantor
by: _____________________________
Signature of Officer/Title
[aligned left of lines 9-11
graphic box containing text appx. 8 pt.]
Signatures must be guaranteed by a financial institution of
the type described in the prospectus of the Fund.
[aligned right of lines 4-8 printed vertically appx. 8 pt.]
NOTICE: The signature(s) to this assignment must correspond
with the name(s) as written upon face of the certificate in every
particular without alteration or enlargement or any change
whatever.
[single line of text alinged left appx. 10 pt. bold]
PLEASE NOTE: This document contains a watermark when viewed at
an angle. It is invalid without this watermark:
[directly below text above aligned left appx. 18 pt. bold]
P I M C O
[Watermark in five rows vertically across page: PIMCO PIMCO
PIMCO
[bottom of certificate: line with text centered under appx.
16 pt.]
- -----------------------------------------------------------------------------
THIS SPACE MUST NOT BE COVERED IN ANY WAY
<PAGE>
PIMCO ADVISORS FUNDS
Description of Share Certificate for:
PIMCO ADVISORS DISCOVERY FUND CLASS B SHARES
Class Share Certificate (8-1/2" x 11")
I. FACE OF CERTIFICATE (All text and other matter lies within
8-1/4" x 10-3/4" decorative border, 5/16" wide)
(upper left corner)- box with heading:NUMBER [of shares]
(upper center) - heading: CLASS B SHARES
(upper right corner)- heading: CP - [number]
(directly below upper right
corner heading:- box with heading: SHARES [amt. of shares]
(centered below boxes)
line 1: single line heading: [appx. 8 pt.]
ESTABLISHED UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
line 2: single line heading: [appx. 18pt.]
PIMCO ADVISORS FUNDS
line 3: single line heading: [appx. 18pt.]
CLASS B SHARES
line 4: single line heading: [appx. 8 pt]
PAR VALUE $.00001 PER SHARE
(at left) single line heading: [appx. 11 pt.]
THIS IS TO CERTIFY THAT
(at right)two line heading: [appx. 10 pt.]
SEE REVERSE FOR
CERTAIN DEFINITIONS
(at right directly below two line heading - box with content)
CUSIP 693387532
(at left appx half way down width of cert. - single line heading)
is the owner of
(at right appx half way down width of cert. - single line heading)
Class B Shares
(centered - text appx. 11pt)
of benficial interest in PIMCO Advisors Funds - PIMCO Advisors
Discovery Fund, par value $.00001 per share, fully paid and
nonassessable, which shares have been issued and are held under
and subject to terms and provisions of the Amended and Restated
Agreement and Declaration of Trust dated September 11, 1990, of
PIMCO Advisors Funds, and all amendments thereto, heretofore or
hereafter made, copies of which are on file with the Secretary of
the Commonwealth of Massachusetts. [indent] No transfer hereof
will be of any effect as regards the Trustees of PIMCO Advisors
Funds until this certificate, properly endorsed or assigned, has
been surrendered and the transfer recorded upon the books of said
Trustees. [indent] This certificate is executed on behalf of the
Trustees as Trustees and not individually and the obligations
hereof are not binding only upon the assets and property of the
Fund. [indent] IN WITNESS WHEREOF the Trustees under said
Agreement and Declaration of Trust have caused the following
facsimile signatures to be affixed to this certificate and a
facsimile of their common seal to be hereto affixed by the
Transfer Agent.
(at right of text, printed vertically)
line 1: [appx 8 pt. bold]
Countersigned
line 2: [indented under line 1 appx 8 pt.]
SHAREHOLDER SERVICES INC.
line 3: [indented under line 2 appx 8 pt. bold]
Denver (Colo.) [space] Transfer Agent
line 4: [to left aligned under line 1 appx. 8 pt.]
By:
line 5: [spaced from line 4 indented under line 3 appx. 8 pt.]
Authorized Signature
(bottom left of certificate)
1-1/2" diameter facsimile seal
(top of seal: semicircle)
PIMCO ADVISORS FUNDS
(center of seal - two line text)
1983
MASSACHUSETTS
(bottom right - across from seal)
[text appx. 11 pt. bold]
Dated:
[spaced from text - signature line with text below line to
right] President FOR THE TRUSTEES
[spaced from text - signature line with text below line to
right] Treasurer
II. BACK OF CERTIFICATE (text reads from top to bottom of 8"x11" portrait
dimension)
[text appx. 8 pt.]
[indented] The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations.
[text appearing left side of page indented under above paragraph appx 8 pt.] TEN
COM - as tenants in common
TEN ENT - as tenants by the entirety
JT TEN WROS NOT TC - as joint tenants with
rights of survivorship and not
as tenants in common
[text appearing right side of page across from above text appx 8 pt.]
UNIF GIFT/TRANSFER MIN ACT - __________________ Custodian _______________
(Cust) (Minor)
UNDER UGMA/UTMA ___________________
(State)
[text - centered appx 8 pt.]
Additional abbreviations may also be used though
not in the above list.
[text - centered appx. 10 pt.]
For Value Received ................ hereby
sell(s), assign(s), and transfer(s) unto
[text appearing left of page appx. 8 pt]
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
AND PROVIDE CERTIFICATION
BY TRANSFEREE
[graphic: box for identifying number]
<PAGE>
PAGE 2 Back of certificate continued.
[Directly below graphic box: double spaced]
[line 1: with text centered under line]
- ---------------------------------------------------------------------
(Please print or type name and address of assignee)
[line 2: no text under line]
- ---------------------------------------------------------------------
[line 3: no text under line]
- ---------------------------------------------------------------------
[line 4: with text centered under line
- ---------------------------------------------------------------------
Class B Shares of beneficial interest represented by the within Certificate, and
do hereby irrevocably constitute and appoint [line 5: with text centered under
line
- ---------------------------------------------------------------------
Attorney to transfer the said shares on the books of the within named Fund
with full power of substitution in the premises.
[line 6: aligned left - text and line appx. 10 pt.]
Dated____________________________
[line 7: aligned right - text and line appx. 10 pt.]
Signed__________________________
[line 8: aligned right centered text under line appx. 8 pt.]
- --------------------------------
(Both must sign if joint owners)
[line 9, 10 and 11: aligned right 3 lines of text right of lines with centered
text]
Signature(s) __________________________
guaranteed Name of Guarantor
by: _____________________________
Signature of Officer/Title
[aligned left of lines 9-11
graphic box containing text appx. 8 pt.]
Signatures must be guaranteed by a financial institution of
the type described in the prospectus of the Fund.
[aligned right of lines 4-8 printed vertically appx. 8 pt.]
NOTICE: The signature(s) to this assignment must correspond
with the name(s) as written upon face of the certificate in every
particular without alteration or enlargement or any change
whatever.
[single line of text alinged left appx. 10 pt. bold]
PLEASE NOTE: This document contains a watermark when viewed at
an angle. It is invalid without this watermark:
[directly below text above aligned left appx. 18 pt. bold]
P I M C O
[Watermark in five rows vertically across page: PIMCO PIMCO
PIMCO
[bottom of certificate: line with text centered under appx.
16 pt.]
- -------------------------------------------------------------------------------
THIS SPACE MUST NOT BE COVERED IN ANY WAY
<PAGE>
PIMCO ADVISORS FUNDS
Description of Share Certificate for:
PIMCO ADVISORS DISCOVERY FUND CLASS C SHARES
Class Share Certificate (8-1/2" x 11")
I. FACE OF CERTIFICATE (All text and other matter lies within
8-1/4" x 10-3/4" decorative border, 5/16" wide)
(upper left corner)- box with heading:NUMBER [of shares]
(upper center) - heading: CLASS C SHARES
(upper right corner)- heading: CP - [number]
(directly below upper right
corner heading:- box with heading: SHARES [amt. of shares]
(centered below boxes)
line 1: single line heading: [appx. 8 pt.]
ESTABLISHED UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
line 2: single line heading: [appx. 18pt.]
PIMCO ADVISORS FUNDS
line 3: single line heading: [appx. 18pt.]
CLASS C SHARES
line 4: single line heading: [appx. 8 pt]
PAR VALUE $.00001 PER SHARE
(at left) single line heading: [appx. 11 pt.]
THIS IS TO CERTIFY THAT
(at right)two line heading: [appx. 10 pt.]
SEE REVERSE FOR
CERTAIN DEFINITIONS
(at right directly below two line heading - box with content)
CUSIP 693387524
(at left appx half way down width of cert. - single line heading)
is the owner of
(at right appx half way down width of cert. - single line heading)
Class C Shares
(centered - text appx. 11pt)
of benficial interest in PIMCO Advisors Funds - PIMCO Advisors
Discovery Fund, par value $.00001 per share, fully paid and
nonassessable, which shares have been issued and are held under
and subject to terms and provisions of the Amended and Restated
Agreement and Declaration of Trust dated September 11, 1990, of
PIMCO Advisors Funds, and all amendments thereto, heretofore or
hereafter made, copies of which are on file with the Secretary of
the Commonwealth of Massachusetts. [indent] No transfer hereof
will be of any effect as regards the Trustees of PIMCO Advisors
Funds until this certificate, properly endorsed or assigned, has
been surrendered and the transfer recorded upon the books of said
Trustees. [indent] This certificate is executed on behalf of the
Trustees as Trustees and not individually and the obligations
hereof are not binding only upon the assets and property of the
Fund. [indent] IN WITNESS WHEREOF the Trustees under said
Agreement and Declaration of Trust have caused the following
facsimile signatures to be affixed to this certificate and a
facsimile of their common seal to be hereto affixed by the
Transfer Agent.
(at right of text, printed vertically)
line 1: [appx 8 pt. bold]
Countersigned
line 2: [indented under line 1 appx 8 pt.]
SHAREHOLDER SERVICES INC.
line 3: [indented under line 2 appx 8 pt. bold]
Denver (Colo.) [space] Transfer Agent
line 4: [to left aligned under line 1 appx. 8 pt.]
By:
line 5: [spaced from line 4 indented under line 3 appx. 8 pt.]
Authorized Signature
(bottom left of certificate)
1-1/2" diameter facsimile seal
(top of seal: semicircle)
PIMCO ADVISORS FUNDS
(center of seal - two line text)
1983
MASSACHUSETTS
(bottom right - across from seal)
[text appx. 11 pt. bold]
Dated:
[spaced from text - signature line with text below line to
right] President FOR THE TRUSTEES
[spaced from text - signature line with text below line to
right] Treasurer
II. BACK OF CERTIFICATE (text reads from top to bottom of 8"x11" portrait
dimension)
[text appx. 8 pt.]
[indented] The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations.
[text appearing left side of page indented under above paragraph appx 8 pt.] TEN
COM - as tenants in common
TEN ENT - as tenants by the entirety
JT TEN WROS NOT TC - as joint tenants with
rights of survivorship and not
as tenants in common
[text appearing right side of page across from above text appx 8 pt.]
UNIF GIFT/TRANSFER MIN ACT - __________________ Custodian _______________
(Cust) (Minor)
UNDER UGMA/UTMA ___________________
(State)
[text - centered appx 8 pt.]
Additional abbreviations may also be used though
not in the above list.
[text - centered appx. 10 pt.]
For Value Received ................ hereby
sell(s), assign(s), and transfer(s) unto
[text appearing left of page appx. 8 pt]
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
AND PROVIDE CERTIFICATION
BY TRANSFEREE
[graphic: box for identifying number]
<PAGE>
PAGE 2 Back of certificate continued.
[Directly below graphic box: double spaced]
[line 1: with text centered under line]
- ---------------------------------------------------------------------
(Please print or type name and address of assignee)
[line 2: no text under line]
- ---------------------------------------------------------------------
[line 3: no text under line]
- ---------------------------------------------------------------------
[line 4: with text centered under line
- ---------------------------------------------------------------------
Class C Shares of beneficial interest represented by the within Certificate, and
do hereby irrevocably constitute and appoint [line 5: with text centered under
line
- ---------------------------------------------------------------------
Attorney to transfer the said shares on the books of the within named Fund
with full power of substitution in the premises.
[line 6: aligned left - text and line appx. 10 pt.]
Dated____________________________
[line 7: aligned right - text and line appx. 10 pt.]
Signed__________________________
[line 8: aligned right centered text under line appx. 8 pt.]
- --------------------------------
(Both must sign if joint owners)
[line 9, 10 and 11: aligned right 3 lines of text right of lines with centered
text]
Signature(s) __________________________
guaranteed Name of Guarantor
by: _____________________________
Signature of Officer/Title
[aligned left of lines 9-11
graphic box containing text appx. 8 pt.]
Signatures must be guaranteed by a financial institution of
the type described in the prospectus of the Fund.
[aligned right of lines 4-8 printed vertically appx. 8 pt.]
NOTICE: The signature(s) to this assignment must correspond
with the name(s) as written upon face of the certificate in every
particular without alteration or enlargement or any change
whatever.
[single line of text alinged left appx. 10 pt. bold]
PLEASE NOTE: This document contains a watermark when viewed at
an angle. It is invalid without this watermark:
[directly below text above aligned left appx. 18 pt. bold]
P I M C O
[Watermark in five rows vertically across page: PIMCO PIMCO
PIMCO
[bottom of certificate: line with text centered under appx.
16 pt.]
- -----------------------------------------------------------------------------
THIS SPACE MUST NOT BE COVERED IN ANY WAY
<PAGE>
PIMCO ADVISORS FUNDS
Description of Share Certificate for:
PIMCO ADVISORS OPPORTUNITY FUND CLASS A SHARES
Class Share Certificate (8-1/2" x 11")
I. FACE OF CERTIFICATE (All text and other matter lies within
8-1/4" x 10-3/4" decorative border, 5/16" wide)
(upper left corner)- box with heading:NUMBER [of shares]
(upper center) - heading: CLASS A SHARES
(upper right corner)- heading: CP - [number]
(directly below upper right
corner heading:- box with heading: SHARES [amt. of shares]
(centered below boxes)
line 1: single line heading: [appx. 8 pt.]
ESTABLISHED UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
line 2: single line heading: [appx. 18pt.]
PIMCO ADVISORS FUNDS
line 3: single line heading: [appx. 18pt.]
CLASS A SHARES
line 4: single line heading: [appx. 8 pt]
PAR VALUE $.00001 PER SHARE
(at left) single line heading: [appx. 11 pt.]
THIS IS TO CERTIFY THAT
(at right)two line heading: [appx. 10 pt.]
SEE REVERSE FOR
CERTAIN DEFINITIONS
(at right directly below two line heading - box with content)
CUSIP 693387300
(at left appx half way down width of cert. - single line heading)
is the owner of
(at right appx half way down width of cert. - single line heading)
Class A Shares
(centered - text appx. 11pt)
of benficial interest in PIMCO Advisors Funds - PIMCO Advisors
Opportunity Fund, par value $.00001 per share, fully paid and
nonassessable, which shares have been issued and are held under
and subject to terms and provisions of the Amended and Restated
Agreement and Declaration of Trust dated September 11, 1990, of
PIMCO Advisors Funds, and all amendments thereto, heretofore or
hereafter made, copies of which are on file with the Secretary of
the Commonwealth of Massachusetts. [indent] No transfer hereof
will be of any effect as regards the Trustees of PIMCO Advisors
Funds until this certificate, properly endorsed or assigned, has
been surrendered and the transfer recorded upon the books of said
Trustees. [indent] This certificate is executed on behalf of the
Trustees as Trustees and not individually and the obligations
hereof are not binding only upon the assets and property of the
Fund. [indent] IN WITNESS WHEREOF the Trustees under said
Agreement and Declaration of Trust have caused the following
facsimile signatures to be affixed to this certificate and a
facsimile of their common seal to be hereto affixed by the
Transfer Agent.
(at right of text, printed vertically)
line 1: [appx 8 pt. bold]
Countersigned
line 2: [indented under line 1 appx 8 pt.]
SHAREHOLDER SERVICES INC.
line 3: [indented under line 2 appx 8 pt. bold]
Denver (Colo.) [space] Transfer Agent
line 4: [to left aligned under line 1 appx. 8 pt.]
By:
line 5: [spaced from line 4 indented under line 3 appx. 8 pt.]
Authorized Signature
(bottom left of certificate)
1-1/2" diameter facsimile seal
(top of seal: semicircle)
PIMCO ADVISORS FUNDS
(center of seal - two line text)
1983
MASSACHUSETTS
(bottom right - across from seal)
[text appx. 11 pt. bold]
Dated:
[spaced from text - signature line with text below line to
right] President FOR THE TRUSTEES
[spaced from text - signature line with text below line to
right] Treasurer
II. BACK OF CERTIFICATE (text reads from top to bottom of 8"x11" portrait
dimension)
[text appx. 8 pt.]
[indented] The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations.
[text appearing left side of page indented under above paragraph appx 8 pt.] TEN
COM - as tenants in common
TEN ENT - as tenants by the entirety
JT TEN WROS NOT TC - as joint tenants with
rights of survivorship and not
as tenants in common
[text appearing right side of page across from above text appx 8 pt.]
UNIF GIFT/TRANSFER MIN ACT - __________________ Custodian _______________
(Cust) (Minor)
UNDER UGMA/UTMA ___________________
(State)
[text - centered appx 8 pt.]
Additional abbreviations may also be used though
not in the above list.
[text - centered appx. 10 pt.]
For Value Received ................ hereby
sell(s), assign(s), and transfer(s) unto
[text appearing left of page appx. 8 pt]
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
AND PROVIDE CERTIFICATION
BY TRANSFEREE
[graphic: box for identifying number]
<PAGE>
PAGE 2 Back of certificate continued.
[Directly below graphic box: double spaced]
[line 1: with text centered under line]
- ---------------------------------------------------------------------
(Please print or type name and address of assignee)
[line 2: no text under line]
- ---------------------------------------------------------------------
[line 3: no text under line]
- ---------------------------------------------------------------------
[line 4: with text centered under line
- ---------------------------------------------------------------------
Class A Shares of beneficial interest represented by the within Certificate, and
do hereby irrevocably constitute and appoint [line 5: with text centered under
line
- ---------------------------------------------------------------------
Attorney to transfer the said shares on the books of the within named Fund
with full power of substitution in the premises.
[line 6: aligned left - text and line appx. 10 pt.]
Dated____________________________
[line 7: aligned right - text and line appx. 10 pt.]
Signed__________________________
[line 8: aligned right centered text under line appx. 8 pt.]
- --------------------------------
(Both must sign if joint owners)
[line 9, 10 and 11: aligned right 3 lines of text right of lines with centered
text]
Signature(s) __________________________
guaranteed Name of Guarantor
by: _____________________________
Signature of Officer/Title
[aligned left of lines 9-11
graphic box containing text appx. 8 pt.]
Signatures must be guaranteed by a financial institution of
the type described in the prospectus of the Fund.
[aligned right of lines 4-8 printed vertically appx. 8 pt.]
NOTICE: The signature(s) to this assignment must correspond
with the name(s) as written upon face of the certificate in every
particular without alteration or enlargement or any change
whatever.
[single line of text alinged left appx. 10 pt. bold]
PLEASE NOTE: This document contains a watermark when viewed at
an angle. It is invalid without this watermark:
[directly below text above aligned left appx. 18 pt. bold]
P I M C O
[Watermark in five rows vertically across page: PIMCO PIMCO
PIMCO
[bottom of certificate: line with text centered under appx.
16 pt.]
- ----------------------------------------------------------------------------
THIS SPACE MUST NOT BE COVERED IN ANY WAY
<PAGE>
PIMCO ADVISORS FUNDS
Description of Share Certificate for:
PIMCO ADVISORS OPPORTUNITY FUND CLASS B SHARES
Class Share Certificate (8-1/2" x 11")
I. FACE OF CERTIFICATE (All text and other matter lies within
8-1/4" x 10-3/4" decorative border, 5/16" wide)
(upper left corner)- box with heading:NUMBER [of shares]
(upper center) - heading: CLASS B SHARES
(upper right corner)- heading: CP - [number]
(directly below upper right
corner heading:- box with heading: SHARES [amt. of shares]
(centered below boxes)
line 1: single line heading: [appx. 8 pt.]
ESTABLISHED UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
line 2: single line heading: [appx. 18pt.]
PIMCO ADVISORS FUNDS
line 3: single line heading: [appx. 18pt.]
CLASS B SHARES
line 4: single line heading: [appx. 8 pt]
PAR VALUE $.00001 PER SHARE
(at left) single line heading: [appx. 11 pt.]
THIS IS TO CERTIFY THAT
(at right)two line heading: [appx. 10 pt.]
SEE REVERSE FOR
CERTAIN DEFINITIONS
(at right directly below two line heading - box with content)
CUSIP 693387656
(at left appx half way down width of cert. - single line heading)
is the owner of
(at right appx half way down width of cert. - single line heading)
Class B Shares
(centered - text appx. 11pt)
of benficial interest in PIMCO Advisors Funds - PIMCO Advisors
Opportunity Fund, par value $.00001 per share, fully paid and
nonassessable, which shares have been issued and are held under
and subject to terms and provisions of the Amended and Restated
Agreement and Declaration of Trust dated September 11, 1990, of
PIMCO Advisors Funds, and all amendments thereto, heretofore or
hereafter made, copies of which are on file with the Secretary of
the Commonwealth of Massachusetts. [indent] No transfer hereof
will be of any effect as regards the Trustees of PIMCO Advisors
Funds until this certificate, properly endorsed or assigned, has
been surrendered and the transfer recorded upon the books of said
Trustees. [indent] This certificate is executed on behalf of the
Trustees as Trustees and not individually and the obligations
hereof are not binding only upon the assets and property of the
Fund. [indent] IN WITNESS WHEREOF the Trustees under said
Agreement and Declaration of Trust have caused the following
facsimile signatures to be affixed to this certificate and a
facsimile of their common seal to be hereto affixed by the
Transfer Agent.
(at right of text, printed vertically)
line 1: [appx 8 pt. bold]
Countersigned
line 2: [indented under line 1 appx 8 pt.]
SHAREHOLDER SERVICES INC.
line 3: [indented under line 2 appx 8 pt. bold]
Denver (Colo.) [space] Transfer Agent
line 4: [to left aligned under line 1 appx. 8 pt.]
By:
line 5: [spaced from line 4 indented under line 3 appx. 8 pt.]
Authorized Signature
(bottom left of certificate)
1-1/2" diameter facsimile seal
(top of seal: semicircle)
PIMCO ADVISORS FUNDS
(center of seal - two line text)
1983
MASSACHUSETTS
(bottom right - across from seal)
[text appx. 11 pt. bold]
Dated:
[spaced from text - signature line with text below line to
right] President FOR THE TRUSTEES
[spaced from text - signature line with text below line to
right] Treasurer
II. BACK OF CERTIFICATE (text reads from top to bottom of 8"x11" portrait
dimension)
[text appx. 8 pt.]
[indented] The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations.
[text appearing left side of page indented under above paragraph appx 8 pt.] TEN
COM - as tenants in common
TEN ENT - as tenants by the entirety
JT TEN WROS NOT TC - as joint tenants with
rights of survivorship and not
as tenants in common
[text appearing right side of page across from above text appx 8 pt.]
UNIF GIFT/TRANSFER MIN ACT - __________________ Custodian _______________
(Cust) (Minor)
UNDER UGMA/UTMA ___________________
(State)
[text - centered appx 8 pt.]
Additional abbreviations may also be used though
not in the above list.
[text - centered appx. 10 pt.]
For Value Received ................ hereby
sell(s), assign(s), and transfer(s) unto
[text appearing left of page appx. 8 pt]
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
AND PROVIDE CERTIFICATION
BY TRANSFEREE
[graphic: box for identifying number]
<PAGE>
PAGE 2 Back of certificate continued.
[Directly below graphic box: double spaced]
[line 1: with text centered under line]
- ---------------------------------------------------------------------
(Please print or type name and address of assignee)
[line 2: no text under line]
- ---------------------------------------------------------------------
[line 3: no text under line]
- ---------------------------------------------------------------------
[line 4: with text centered under line
- ---------------------------------------------------------------------
Class B Shares of beneficial interest represented by the within Certificate, and
do hereby irrevocably constitute and appoint [line 5: with text centered under
line
- ---------------------------------------------------------------------
Attorney to transfer the said shares on the books of the within named Fund
with full power of substitution in the premises.
[line 6: aligned left - text and line appx. 10 pt.]
Dated____________________________
[line 7: aligned right - text and line appx. 10 pt.]
Signed__________________________
[line 8: aligned right centered text under line appx. 8 pt.]
- --------------------------------
(Both must sign if joint owners)
[line 9, 10 and 11: aligned right 3 lines of text right of lines with centered
text]
Signature(s) __________________________
guaranteed Name of Guarantor
by: _____________________________
Signature of Officer/Title
[aligned left of lines 9-11
graphic box containing text appx. 8 pt.]
Signatures must be guaranteed by a financial institution of
the type described in the prospectus of the Fund.
[aligned right of lines 4-8 printed vertically appx. 8 pt.]
NOTICE: The signature(s) to this assignment must correspond
with the name(s) as written upon face of the certificate in every
particular without alteration or enlargement or any change
whatever.
[single line of text alinged left appx. 10 pt. bold]
PLEASE NOTE: This document contains a watermark when viewed at
an angle. It is invalid without this watermark:
[directly below text above aligned left appx. 18 pt. bold]
P I M C O
[Watermark in five rows vertically across page: PIMCO PIMCO
PIMCO
[bottom of certificate: line with text centered under appx.
16 pt.]
- ------------------------------------------------------------------------------
THIS SPACE MUST NOT BE COVERED IN ANY WAY
<PAGE>
PIMCO ADVISORS FUNDS
Description of Share Certificate for:
PIMCO ADVISORS OPPORTUNITY FUND CLASS C SHARES
Class Share Certificate (8-1/2" x 11")
I. FACE OF CERTIFICATE (All text and other matter lies within
8-1/4" x 10-3/4" decorative border, 5/16" wide)
(upper left corner)- box with heading:NUMBER [of shares]
(upper center) - heading: CLASS C SHARES
(upper right corner)- heading: CP - [number]
(directly below upper right
corner heading:- box with heading: SHARES [amt. of shares]
(centered below boxes)
line 1: single line heading: [appx. 8 pt.]
ESTABLISHED UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
line 2: single line heading: [appx. 18pt.]
PIMCO ADVISORS FUNDS
line 3: single line heading: [appx. 18pt.]
CLASS C SHARES
line 4: single line heading: [appx. 8 pt]
PAR VALUE $.00001 PER SHARE
(at left) single line heading: [appx. 11 pt.]
THIS IS TO CERTIFY THAT
(at right)two line heading: [appx. 10 pt.]
SEE REVERSE FOR
CERTAIN DEFINITIONS
(at right directly below two line heading - box with content)
CUSIP 693387409
(at left appx half way down width of cert. - single line heading)
is the owner of
(at right appx half way down width of cert. - single line heading)
Class C Shares
(centered - text appx. 11pt)
of benficial interest in PIMCO Advisors Funds - PIMCO Advisors
Opportunity Fund, par value $.00001 per share, fully paid and
nonassessable, which shares have been issued and are held under
and subject to terms and provisions of the Amended and Restated
Agreement and Declaration of Trust dated September 11, 1990, of
PIMCO Advisors Funds, and all amendments thereto, heretofore or
hereafter made, copies of which are on file with the Secretary of
the Commonwealth of Massachusetts. [indent] No transfer hereof
will be of any effect as regards the Trustees of PIMCO Advisors
Funds until this certificate, properly endorsed or assigned, has
been surrendered and the transfer recorded upon the books of said
Trustees. [indent] This certificate is executed on behalf of the
Trustees as Trustees and not individually and the obligations
hereof are not binding only upon the assets and property of the
Fund. [indent] IN WITNESS WHEREOF the Trustees under said
Agreement and Declaration of Trust have caused the following
facsimile signatures to be affixed to this certificate and a
facsimile of their common seal to be hereto affixed by the
Transfer Agent.
(at right of text, printed vertically)
line 1: [appx 8 pt. bold]
Countersigned
line 2: [indented under line 1 appx 8 pt.]
SHAREHOLDER SERVICES INC.
line 3: [indented under line 2 appx 8 pt. bold]
Denver (Colo.) [space] Transfer Agent
line 4: [to left aligned under line 1 appx. 8 pt.]
By:
line 5: [spaced from line 4 indented under line 3 appx. 8 pt.]
Authorized Signature
(bottom left of certificate)
1-1/2" diameter facsimile seal
(top of seal: semicircle)
PIMCO ADVISORS FUNDS
(center of seal - two line text)
1983
MASSACHUSETTS
(bottom right - across from seal)
[text appx. 11 pt. bold]
Dated:
[spaced from text - signature line with text below line to
right] President FOR THE TRUSTEES
[spaced from text - signature line with text below line to
right] Treasurer
II. BACK OF CERTIFICATE (text reads from top to bottom of 8"x11" portrait
dimension)
[text appx. 8 pt.]
[indented] The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations.
[text appearing left side of page indented under above paragraph appx 8 pt.] TEN
COM - as tenants in common
TEN ENT - as tenants by the entirety
JT TEN WROS NOT TC - as joint tenants with
rights of survivorship and not
as tenants in common
[text appearing right side of page across from above text appx 8 pt.]
UNIF GIFT/TRANSFER MIN ACT - __________________ Custodian _______________
(Cust) (Minor)
UNDER UGMA/UTMA ___________________
(State)
[text - centered appx 8 pt.]
Additional abbreviations may also be used though
not in the above list.
[text - centered appx. 10 pt.]
For Value Received ................ hereby
sell(s), assign(s), and transfer(s) unto
[text appearing left of page appx. 8 pt]
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
AND PROVIDE CERTIFICATION
BY TRANSFEREE
[graphic: box for identifying number]
<PAGE>
PAGE 2 Back of certificate continued.
[Directly below graphic box: double spaced]
[line 1: with text centered under line]
- ---------------------------------------------------------------------
(Please print or type name and address of assignee)
[line 2: no text under line]
- ---------------------------------------------------------------------
[line 3: no text under line]
- ---------------------------------------------------------------------
[line 4: with text centered under line
- ---------------------------------------------------------------------
Class C Shares of beneficial interest represented by the within Certificate, and
do hereby irrevocably constitute and appoint [line 5: with text centered under
line
- ---------------------------------------------------------------------
Attorney to transfer the said shares on the books of the within named Fund
with full power of substitution in the premises.
[line 6: aligned left - text and line appx. 10 pt.]
Dated____________________________
[line 7: aligned right - text and line appx. 10 pt.]
Signed__________________________
[line 8: aligned right centered text under line appx. 8 pt.]
- --------------------------------
(Both must sign if joint owners)
[line 9, 10 and 11: aligned right 3 lines of text right of lines with centered
text]
Signature(s) __________________________
guaranteed Name of Guarantor
by: _____________________________
Signature of Officer/Title
[aligned left of lines 9-11
graphic box containing text appx. 8 pt.]
Signatures must be guaranteed by a financial institution of
the type described in the prospectus of the Fund.
[aligned right of lines 4-8 printed vertically appx. 8 pt.]
NOTICE: The signature(s) to this assignment must correspond
with the name(s) as written upon face of the certificate in every
particular without alteration or enlargement or any change
whatever.
[single line of text alinged left appx. 10 pt. bold]
PLEASE NOTE: This document contains a watermark when viewed at
an angle. It is invalid without this watermark:
[directly below text above aligned left appx. 18 pt. bold]
P I M C O
[Watermark in five rows vertically across page: PIMCO PIMCO
PIMCO
[bottom of certificate: line with text centered under appx.
16 pt.]
- -----------------------------------------------------------------------------
THIS SPACE MUST NOT BE COVERED IN ANY WAY
<PAGE>
PIMCO ADVISORS FUNDS
Description of Share Certificate for:
PIMCO ADVISORS INNOVATION FUND CLASS A SHARES
Class Share Certificate (8-1/2" x 11")
I. FACE OF CERTIFICATE (All text and other matter lies within
8-1/4" x 10-3/4" decorative border, 5/16" wide)
(upper left corner)- box with heading:NUMBER [of shares]
(upper center) - heading: CLASS A SHARES
(upper right corner)- heading: CP - [number]
(directly below upper right
corner heading:- box with heading: SHARES [amt. of shares]
(centered below boxes)
line 1: single line heading: [appx. 8 pt.]
ESTABLISHED UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
line 2: single line heading: [appx. 18pt.]
PIMCO ADVISORS FUNDS
line 3: single line heading: [appx. 18pt.]
CLASS A SHARES
line 4: single line heading: [appx. 8 pt]
PAR VALUE $.00001 PER SHARE
(at left) single line heading: [appx. 11 pt.]
THIS IS TO CERTIFY THAT
(at right)two line heading: [appx. 10 pt.]
SEE REVERSE FOR
CERTAIN DEFINITIONS
(at right directly below two line heading - box with content)
CUSIP 693387730
(at left appx half way down width of cert. - single line heading)
is the owner of
(at right appx half way down width of cert. - single line heading)
Class A Shares
(centered - text appx. 11pt)
of benficial interest in PIMCO Advisors Funds - PIMCO Advisors
Innovation Fund, par value $.00001 per share, fully paid and
nonassessable, which shares have been issued and are held under
and subject to terms and provisions of the Amended and Restated
Agreement and Declaration of Trust dated September 11, 1990, of
PIMCO Advisors Funds, and all amendments thereto, heretofore or
hereafter made, copies of which are on file with the Secretary of
the Commonwealth of Massachusetts. [indent] No transfer hereof
will be of any effect as regards the Trustees of PIMCO Advisors
Funds until this certificate, properly endorsed or assigned, has
been surrendered and the transfer recorded upon the books of said
Trustees. [indent] This certificate is executed on behalf of the
Trustees as Trustees and not individually and the obligations
hereof are not binding only upon the assets and property of the
Fund. [indent] IN WITNESS WHEREOF the Trustees under said
Agreement and Declaration of Trust have caused the following
facsimile signatures to be affixed to this certificate and a
facsimile of their common seal to be hereto affixed by the
Transfer Agent.
(at right of text, printed vertically)
line 1: [appx 8 pt. bold]
Countersigned
line 2: [indented under line 1 appx 8 pt.]
SHAREHOLDER SERVICES INC.
line 3: [indented under line 2 appx 8 pt. bold]
Denver (Colo.) [space] Transfer Agent
line 4: [to left aligned under line 1 appx. 8 pt.]
By:
line 5: [spaced from line 4 indented under line 3 appx. 8 pt.]
Authorized Signature
(bottom left of certificate)
1-1/2" diameter facsimile seal
(top of seal: semicircle)
PIMCO ADVISORS FUNDS
(center of seal - two line text)
1983
MASSACHUSETTS
(bottom right - across from seal)
[text appx. 11 pt. bold]
Dated:
[spaced from text - signature line with text below line to
right] President FOR THE TRUSTEES
[spaced from text - signature line with text below line to
right] Treasurer
II. BACK OF CERTIFICATE (text reads from top to bottom of 8"x11" portrait
dimension)
[text appx. 8 pt.]
[indented] The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations.
[text appearing left side of page indented under above paragraph appx 8 pt.] TEN
COM - as tenants in common
TEN ENT - as tenants by the entirety
JT TEN WROS NOT TC - as joint tenants with
rights of survivorship and not
as tenants in common
[text appearing right side of page across from above text appx 8 pt.]
UNIF GIFT/TRANSFER MIN ACT - __________________ Custodian _______________
(Cust) (Minor)
UNDER UGMA/UTMA ___________________
(State)
[text - centered appx 8 pt.]
Additional abbreviations may also be used though
not in the above list.
[text - centered appx. 10 pt.]
For Value Received ................ hereby
sell(s), assign(s), and transfer(s) unto
[text appearing left of page appx. 8 pt]
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
AND PROVIDE CERTIFICATION
BY TRANSFEREE
[graphic: box for identifying number]
<PAGE>
PAGE 2 Back of certificate continued.
[Directly below graphic box: double spaced]
[line 1: with text centered under line]
- ---------------------------------------------------------------------
(Please print or type name and address of assignee)
[line 2: no text under line]
- ---------------------------------------------------------------------
[line 3: no text under line]
- ---------------------------------------------------------------------
[line 4: with text centered under line
- ---------------------------------------------------------------------
Class A Shares of beneficial interest represented by the within Certificate, and
do hereby irrevocably constitute and appoint [line 5: with text centered under
line
- ---------------------------------------------------------------------
Attorney to transfer the said shares on the books of the within named Fund
with full power of substitution in the premises.
[line 6: aligned left - text and line appx. 10 pt.]
Dated____________________________
[line 7: aligned right - text and line appx. 10 pt.]
Signed__________________________
[line 8: aligned right centered text under line appx. 8 pt.]
- --------------------------------
(Both must sign if joint owners)
[line 9, 10 and 11: aligned right 3 lines of text right of lines with centered
text]
Signature(s) __________________________
guaranteed Name of Guarantor
by: _____________________________
Signature of Officer/Title
[aligned left of lines 9-11
graphic box containing text appx. 8 pt.]
Signatures must be guaranteed by a financial institution of
the type described in the prospectus of the Fund.
[aligned right of lines 4-8 printed vertically appx. 8 pt.]
NOTICE: The signature(s) to this assignment must correspond
with the name(s) as written upon face of the certificate in every
particular without alteration or enlargement or any change
whatever.
[single line of text alinged left appx. 10 pt. bold]
PLEASE NOTE: This document contains a watermark when viewed at
an angle. It is invalid without this watermark:
[directly below text above aligned left appx. 18 pt. bold]
P I M C O
[Watermark in five rows vertically across page: PIMCO PIMCO
PIMCO
[bottom of certificate: line with text centered under appx.
16 pt.]
- ------------------------------------------------------------------------------
THIS SPACE MUST NOT BE COVERED IN ANY WAY
<PAGE>
PIMCO ADVISORS FUNDS
Description of Share Certificate for:
PIMCO ADVISORS INNOVATION FUND CLASS B SHARES
Class Share Certificate (8-1/2" x 11")
I. FACE OF CERTIFICATE (All text and other matter lies within
8-1/4" x 10-3/4" decorative border, 5/16" wide)
(upper left corner)- box with heading:NUMBER [of shares]
(upper center) - heading: CLASS B SHARES
(upper right corner)- heading: CP - [number]
(directly below upper right
corner heading:- box with heading: SHARES [amt. of shares]
(centered below boxes)
line 1: single line heading: [appx. 8 pt.]
ESTABLISHED UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
line 2: single line heading: [appx. 18pt.]
PIMCO ADVISORS FUNDS
line 3: single line heading: [appx. 18pt.]
CLASS B SHARES
line 4: single line heading: [appx. 8 pt]
PAR VALUE $.00001 PER SHARE
(at left) single line heading: [appx. 11 pt.]
THIS IS TO CERTIFY THAT
(at right)two line heading: [appx. 10 pt.]
SEE REVERSE FOR
CERTAIN DEFINITIONS
(at right directly below two line heading - box with content)
CUSIP 693387649
(at left appx half way down width of cert. - single line heading)
is the owner of
(at right appx half way down width of cert. - single line heading)
Class B Shares
(centered - text appx. 11pt)
of benficial interest in PIMCO Advisors Funds - PIMCO Advisors
Innovation Fund, par value $.00001 per share, fully paid and
nonassessable, which shares have been issued and are held under
and subject to terms and provisions of the Amended and Restated
Agreement and Declaration of Trust dated September 11, 1990, of
PIMCO Advisors Funds, and all amendments thereto, heretofore or
hereafter made, copies of which are on file with the Secretary of
the Commonwealth of Massachusetts. [indent] No transfer hereof
will be of any effect as regards the Trustees of PIMCO Advisors
Funds until this certificate, properly endorsed or assigned, has
been surrendered and the transfer recorded upon the books of said
Trustees. [indent] This certificate is executed on behalf of the
Trustees as Trustees and not individually and the obligations
hereof are not binding only upon the assets and property of the
Fund. [indent] IN WITNESS WHEREOF the Trustees under said
Agreement and Declaration of Trust have caused the following
facsimile signatures to be affixed to this certificate and a
facsimile of their common seal to be hereto affixed by the
Transfer Agent.
(at right of text, printed vertically)
line 1: [appx 8 pt. bold]
Countersigned
line 2: [indented under line 1 appx 8 pt.]
SHAREHOLDER SERVICES INC.
line 3: [indented under line 2 appx 8 pt. bold]
Denver (Colo.) [space] Transfer Agent
line 4: [to left aligned under line 1 appx. 8 pt.]
By:
line 5: [spaced from line 4 indented under line 3 appx. 8 pt.]
Authorized Signature
(bottom left of certificate)
1-1/2" diameter facsimile seal
(top of seal: semicircle)
PIMCO ADVISORS FUNDS
(center of seal - two line text)
1983
MASSACHUSETTS
(bottom right - across from seal)
[text appx. 11 pt. bold]
Dated:
[spaced from text - signature line with text below line to
right] President FOR THE TRUSTEES
[spaced from text - signature line with text below line to
right] Treasurer
II. BACK OF CERTIFICATE (text reads from top to bottom of 8"x11" portrait
dimension)
[text appx. 8 pt.]
[indented] The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations.
[text appearing left side of page indented under above paragraph appx 8 pt.] TEN
COM - as tenants in common
TEN ENT - as tenants by the entirety
JT TEN WROS NOT TC - as joint tenants with
rights of survivorship and not
as tenants in common
[text appearing right side of page across from above text appx 8 pt.]
UNIF GIFT/TRANSFER MIN ACT - __________________ Custodian _______________
(Cust) (Minor)
UNDER UGMA/UTMA ___________________
(State)
[text - centered appx 8 pt.]
Additional abbreviations may also be used though
not in the above list.
[text - centered appx. 10 pt.]
For Value Received ................ hereby
sell(s), assign(s), and transfer(s) unto
[text appearing left of page appx. 8 pt]
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
AND PROVIDE CERTIFICATION
BY TRANSFEREE
[graphic: box for identifying number]
<PAGE>
PAGE 2 Back of certificate continued.
[Directly below graphic box: double spaced]
[line 1: with text centered under line]
- ---------------------------------------------------------------------
(Please print or type name and address of assignee)
[line 2: no text under line]
- ---------------------------------------------------------------------
[line 3: no text under line]
- ---------------------------------------------------------------------
[line 4: with text centered under line
- ---------------------------------------------------------------------
Class B Shares of beneficial interest represented by the within Certificate, and
do hereby irrevocably constitute and appoint [line 5: with text centered under
line
- ---------------------------------------------------------------------
Attorney to transfer the said shares on the books of the within named Fund
with full power of substitution in the premises.
[line 6: aligned left - text and line appx. 10 pt.]
Dated____________________________
[line 7: aligned right - text and line appx. 10 pt.]
Signed__________________________
[line 8: aligned right centered text under line appx. 8 pt.]
- --------------------------------
(Both must sign if joint owners)
[line 9, 10 and 11: aligned right 3 lines of text right of lines with centered
text]
Signature(s) __________________________
guaranteed Name of Guarantor
by: _____________________________
Signature of Officer/Title
[aligned left of lines 9-11
graphic box containing text appx. 8 pt.]
Signatures must be guaranteed by a financial institution of
the type described in the prospectus of the Fund.
[aligned right of lines 4-8 printed vertically appx. 8 pt.]
NOTICE: The signature(s) to this assignment must correspond
with the name(s) as written upon face of the certificate in every
particular without alteration or enlargement or any change
whatever.
[single line of text alinged left appx. 10 pt. bold]
PLEASE NOTE: This document contains a watermark when viewed at
an angle. It is invalid without this watermark:
[directly below text above aligned left appx. 18 pt. bold]
P I M C O
[Watermark in five rows vertically across page: PIMCO PIMCO
PIMCO
[bottom of certificate: line with text centered under appx.
16 pt.]
- -----------------------------------------------------------------------------
THIS SPACE MUST NOT BE COVERED IN ANY WAY
<PAGE>
PIMCO ADVISORS FUNDS
Description of Share Certificate for:
PIMCO ADVISORS INNOVATION FUND CLASS C SHARES
Class Share Certificate (8-1/2" x 11")
I. FACE OF CERTIFICATE (All text and other matter lies within
8-1/4" x 10-3/4" decorative border, 5/16" wide)
(upper left corner)- box with heading:NUMBER [of shares]
(upper center) - heading: CLASS C SHARES
(upper right corner)- heading: CP - [number]
(directly below upper right
corner heading:- box with heading: SHARES [amt. of shares]
(centered below boxes)
line 1: single line heading: [appx. 8 pt.]
ESTABLISHED UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
line 2: single line heading: [appx. 18pt.]
PIMCO ADVISORS FUNDS
line 3: single line heading: [appx. 18pt.]
CLASS C SHARES
line 4: single line heading: [appx. 8 pt]
PAR VALUE $.00001 PER SHARE
(at left) single line heading: [appx. 11 pt.]
THIS IS TO CERTIFY THAT
(at right)two line heading: [appx. 10 pt.]
SEE REVERSE FOR
CERTAIN DEFINITIONS
(at right directly below two line heading - box with content)
CUSIP 693387722
(at left appx half way down width of cert. - single line heading)
is the owner of
(at right appx half way down width of cert. - single line heading)
Class C Shares
(centered - text appx. 11pt)
of benficial interest in PIMCO Advisors Funds - PIMCO Advisors
Innovation Fund, par value $.00001 per share, fully paid and
nonassessable, which shares have been issued and are held under
and subject to terms and provisions of the Amended and Restated
Agreement and Declaration of Trust dated September 11, 1990, of
PIMCO Advisors Funds, and all amendments thereto, heretofore or
hereafter made, copies of which are on file with the Secretary of
the Commonwealth of Massachusetts. [indent] No transfer hereof
will be of any effect as regards the Trustees of PIMCO Advisors
Funds until this certificate, properly endorsed or assigned, has
been surrendered and the transfer recorded upon the books of said
Trustees. [indent] This certificate is executed on behalf of the
Trustees as Trustees and not individually and the obligations
hereof are not binding only upon the assets and property of the
Fund. [indent] IN WITNESS WHEREOF the Trustees under said
Agreement and Declaration of Trust have caused the following
facsimile signatures to be affixed to this certificate and a
facsimile of their common seal to be hereto affixed by the
Transfer Agent.
(at right of text, printed vertically)
line 1: [appx 8 pt. bold]
Countersigned
line 2: [indented under line 1 appx 8 pt.]
SHAREHOLDER SERVICES INC.
line 3: [indented under line 2 appx 8 pt. bold]
Denver (Colo.) [space] Transfer Agent
line 4: [to left aligned under line 1 appx. 8 pt.]
By:
line 5: [spaced from line 4 indented under line 3 appx. 8 pt.]
Authorized Signature
(bottom left of certificate)
1-1/2" diameter facsimile seal
(top of seal: semicircle)
PIMCO ADVISORS FUNDS
(center of seal - two line text)
1983
MASSACHUSETTS
(bottom right - across from seal)
[text appx. 11 pt. bold]
Dated:
[spaced from text - signature line with text below line to
right] President FOR THE TRUSTEES
[spaced from text - signature line with text below line to
right] Treasurer
II. BACK OF CERTIFICATE (text reads from top to bottom of 8"x11" portrait
dimension)
[text appx. 8 pt.]
[indented] The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations.
[text appearing left side of page indented under above paragraph appx 8 pt.] TEN
COM - as tenants in common
TEN ENT - as tenants by the entirety
JT TEN WROS NOT TC - as joint tenants with
rights of survivorship and not
as tenants in common
[text appearing right side of page across from above text appx 8 pt.]
UNIF GIFT/TRANSFER MIN ACT - __________________ Custodian _______________
(Cust) (Minor)
UNDER UGMA/UTMA ___________________
(State)
[text - centered appx 8 pt.]
Additional abbreviations may also be used though
not in the above list.
[text - centered appx. 10 pt.]
For Value Received ................ hereby
sell(s), assign(s), and transfer(s) unto
[text appearing left of page appx. 8 pt]
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
AND PROVIDE CERTIFICATION
BY TRANSFEREE
[graphic: box for identifying number]
<PAGE>
PAGE 2 Back of certificate continued.
[Directly below graphic box: double spaced]
[line 1: with text centered under line]
- ---------------------------------------------------------------------
(Please print or type name and address of assignee)
[line 2: no text under line]
- ---------------------------------------------------------------------
[line 3: no text under line]
- ---------------------------------------------------------------------
[line 4: with text centered under line
- ---------------------------------------------------------------------
Class C Shares of beneficial interest represented by the within Certificate, and
do hereby irrevocably constitute and appoint [line 5: with text centered under
line
- ---------------------------------------------------------------------
Attorney to transfer the said shares on the books of the within named Fund
with full power of substitution in the premises.
[line 6: aligned left - text and line appx. 10 pt.]
Dated____________________________
[line 7: aligned right - text and line appx. 10 pt.]
Signed__________________________
[line 8: aligned right centered text under line appx. 8 pt.]
- --------------------------------
(Both must sign if joint owners)
[line 9, 10 and 11: aligned right 3 lines of text right of lines with centered
text]
Signature(s) __________________________
guaranteed Name of Guarantor
by: _____________________________
Signature of Officer/Title
[aligned left of lines 9-11
graphic box containing text appx. 8 pt.]
Signatures must be guaranteed by a financial institution of
the type described in the prospectus of the Fund.
[aligned right of lines 4-8 printed vertically appx. 8 pt.]
NOTICE: The signature(s) to this assignment must correspond
with the name(s) as written upon face of the certificate in every
particular without alteration or enlargement or any change
whatever.
[single line of text alinged left appx. 10 pt. bold]
PLEASE NOTE: This document contains a watermark when viewed at
an angle. It is invalid without this watermark:
[directly below text above aligned left appx. 18 pt. bold]
P I M C O
[Watermark in five rows vertically across page: PIMCO PIMCO
PIMCO
[bottom of certificate: line with text centered under appx.
16 pt.]
- ------------------------------------------------------------------------------
THIS SPACE MUST NOT BE COVERED IN ANY WAY
<PAGE>
PIMCO ADVISORS FUNDS
Description of Share Certificate for:
PIMCO ADVISORS INTERNATIONAL FUND CLASS A SHARES
Class Share Certificate (8-1/2" x 11")
I. FACE OF CERTIFICATE (All text and other matter lies within
8-1/4" x 10-3/4" decorative border, 5/16" wide)
(upper left corner)- box with heading:NUMBER [of shares]
(upper center) - heading: CLASS A SHARES
(upper right corner)- heading: CP - [number]
(directly below upper right
corner heading:- box with heading: SHARES [amt. of shares]
(centered below boxes)
line 1: single line heading: [appx. 8 pt.]
ESTABLISHED UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
line 2: single line heading: [appx. 18pt.]
PIMCO ADVISORS FUNDS
line 3: single line heading: [appx. 18pt.]
CLASS A SHARES
line 4: single line heading: [appx. 8 pt]
PAR VALUE $.00001 PER SHARE
(at left) single line heading: [appx. 11 pt.]
THIS IS TO CERTIFY THAT
(at right)two line heading: [appx. 10 pt.]
SEE REVERSE FOR
CERTAIN DEFINITIONS
(at right directly below two line heading - box with content)
CUSIP 693387847
(at left appx half way down width of cert. - single line heading)
is the owner of
(at right appx half way down width of cert. - single line heading)
Class A Shares
(centered - text appx. 11pt)
of benficial interest in PIMCO Advisors Funds - PIMCO Advisors
International Fund, par value $.00001 per share, fully paid and
nonassessable, which shares have been issued and are held under
and subject to terms and provisions of the Amended and Restated
Agreement and Declaration of Trust dated September 11, 1990, of
PIMCO Advisors Funds, and all amendments thereto, heretofore or
hereafter made, copies of which are on file with the Secretary of
the Commonwealth of Massachusetts. [indent] No transfer hereof
will be of any effect as regards the Trustees of PIMCO Advisors
Funds until this certificate, properly endorsed or assigned, has
been surrendered and the transfer recorded upon the books of said
Trustees. [indent] This certificate is executed on behalf of the
Trustees as Trustees and not individually and the obligations
hereof are not binding only upon the assets and property of the
Fund. [indent] IN WITNESS WHEREOF the Trustees under said
Agreement and Declaration of Trust have caused the following
facsimile signatures to be affixed to this certificate and a
facsimile of their common seal to be hereto affixed by the
Transfer Agent.
(at right of text, printed vertically)
line 1: [appx 8 pt. bold]
Countersigned
line 2: [indented under line 1 appx 8 pt.]
SHAREHOLDER SERVICES INC.
line 3: [indented under line 2 appx 8 pt. bold]
Denver (Colo.) [space] Transfer Agent
line 4: [to left aligned under line 1 appx. 8 pt.]
By:
line 5: [spaced from line 4 indented under line 3 appx. 8 pt.]
Authorized Signature
(bottom left of certificate)
1-1/2" diameter facsimile seal
(top of seal: semicircle)
PIMCO ADVISORS FUNDS
(center of seal - two line text)
1983
MASSACHUSETTS
(bottom right - across from seal)
[text appx. 11 pt. bold]
Dated:
[spaced from text - signature line with text below line to
right] President FOR THE TRUSTEES
[spaced from text - signature line with text below line to
right] Treasurer
II. BACK OF CERTIFICATE (text reads from top to bottom of 8"x11" portrait
dimension)
[text appx. 8 pt.]
[indented] The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations.
[text appearing left side of page indented under above paragraph appx 8 pt.] TEN
COM - as tenants in common
TEN ENT - as tenants by the entirety
JT TEN WROS NOT TC - as joint tenants with
rights of survivorship and not
as tenants in common
[text appearing right side of page across from above text appx 8 pt.]
UNIF GIFT/TRANSFER MIN ACT - __________________ Custodian _______________
(Cust) (Minor)
UNDER UGMA/UTMA ___________________
(State)
[text - centered appx 8 pt.]
Additional abbreviations may also be used though
not in the above list.
[text - centered appx. 10 pt.]
For Value Received ................ hereby
sell(s), assign(s), and transfer(s) unto
[text appearing left of page appx. 8 pt]
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
AND PROVIDE CERTIFICATION
BY TRANSFEREE
[graphic: box for identifying number]
<PAGE>
PAGE 2 Back of certificate continued.
[Directly below graphic box: double spaced]
[line 1: with text centered under line]
- ---------------------------------------------------------------------
(Please print or type name and address of assignee)
[line 2: no text under line]
- ---------------------------------------------------------------------
[line 3: no text under line]
- ---------------------------------------------------------------------
[line 4: with text centered under line
- ---------------------------------------------------------------------
Class A Shares of beneficial interest represented by the within Certificate, and
do hereby irrevocably constitute and appoint [line 5: with text centered under
line
- ---------------------------------------------------------------------
Attorney to transfer the said shares on the books of the within named Fund
with full power of substitution in the premises.
[line 6: aligned left - text and line appx. 10 pt.]
Dated____________________________
[line 7: aligned right - text and line appx. 10 pt.]
Signed__________________________
[line 8: aligned right centered text under line appx. 8 pt.]
- --------------------------------
(Both must sign if joint owners)
[line 9, 10 and 11: aligned right 3 lines of text right of lines with centered
text]
Signature(s) __________________________
guaranteed Name of Guarantor
by: _____________________________
Signature of Officer/Title
[aligned left of lines 9-11
graphic box containing text appx. 8 pt.]
Signatures must be guaranteed by a financial institution of
the type described in the prospectus of the Fund.
[aligned right of lines 4-8 printed vertically appx. 8 pt.]
NOTICE: The signature(s) to this assignment must correspond
with the name(s) as written upon face of the certificate in every
particular without alteration or enlargement or any change
whatever.
[single line of text alinged left appx. 10 pt. bold]
PLEASE NOTE: This document contains a watermark when viewed at
an angle. It is invalid without this watermark:
[directly below text above aligned left appx. 18 pt. bold]
P I M C O
[Watermark in five rows vertically across page: PIMCO PIMCO
PIMCO
[bottom of certificate: line with text centered under appx.
16 pt.]
- -----------------------------------------------------------------------------
THIS SPACE MUST NOT BE COVERED IN ANY WAY
<PAGE>
PIMCO ADVISORS FUNDS
Description of Share Certificate for:
PIMCO ADVISORS INTERNATIONAL FUND CLASS B SHARES
Class Share Certificate (8-1/2" x 11")
I. FACE OF CERTIFICATE (All text and other matter lies within
8-1/4" x 10-3/4" decorative border, 5/16" wide)
(upper left corner)- box with heading:NUMBER [of shares]
(upper center) - heading: CLASS B SHARES
(upper right corner)- heading: CP - [number]
(directly below upper right
corner heading:- box with heading: SHARES [amt. of shares]
(centered below boxes)
line 1: single line heading: [appx. 8 pt.]
ESTABLISHED UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
line 2: single line heading: [appx. 18pt.]
PIMCO ADVISORS FUNDS
line 3: single line heading: [appx. 18pt.]
CLASS B SHARES
line 4: single line heading: [appx. 8 pt]
PAR VALUE $.00001 PER SHARE
(at left) single line heading: [appx. 11 pt.]
THIS IS TO CERTIFY THAT
(at right)two line heading: [appx. 10 pt.]
SEE REVERSE FOR
CERTAIN DEFINITIONS
(at right directly below two line heading - box with content)
CUSIP 693387631
(at left appx half way down width of cert. - single line heading)
is the owner of
(at right appx half way down width of cert. - single line heading)
Class B Shares
(centered - text appx. 11pt)
of benficial interest in PIMCO Advisors Funds - PIMCO Advisors
International Fund, par value $.00001 per share, fully paid and
nonassessable, which shares have been issued and are held under
and subject to terms and provisions of the Amended and Restated
Agreement and Declaration of Trust dated September 11, 1990, of
PIMCO Advisors Funds, and all amendments thereto, heretofore or
hereafter made, copies of which are on file with the Secretary of
the Commonwealth of Massachusetts. [indent] No transfer hereof
will be of any effect as regards the Trustees of PIMCO Advisors
Funds until this certificate, properly endorsed or assigned, has
been surrendered and the transfer recorded upon the books of said
Trustees. [indent] This certificate is executed on behalf of the
Trustees as Trustees and not individually and the obligations
hereof are not binding only upon the assets and property of the
Fund. [indent] IN WITNESS WHEREOF the Trustees under said
Agreement and Declaration of Trust have caused the following
facsimile signatures to be affixed to this certificate and a
facsimile of their common seal to be hereto affixed by the
Transfer Agent.
(at right of text, printed vertically)
line 1: [appx 8 pt. bold]
Countersigned
line 2: [indented under line 1 appx 8 pt.]
SHAREHOLDER SERVICES INC.
line 3: [indented under line 2 appx 8 pt. bold]
Denver (Colo.) [space] Transfer Agent
line 4: [to left aligned under line 1 appx. 8 pt.]
By:
line 5: [spaced from line 4 indented under line 3 appx. 8 pt.]
Authorized Signature
(bottom left of certificate)
1-1/2" diameter facsimile seal
(top of seal: semicircle)
PIMCO ADVISORS FUNDS
(center of seal - two line text)
1983
MASSACHUSETTS
(bottom right - across from seal)
[text appx. 11 pt. bold]
Dated:
[spaced from text - signature line with text below line to
right] President FOR THE TRUSTEES
[spaced from text - signature line with text below line to
right] Treasurer
II. BACK OF CERTIFICATE (text reads from top to bottom of 8"x11" portrait
dimension)
[text appx. 8 pt.]
[indented] The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations.
[text appearing left side of page indented under above paragraph appx 8 pt.] TEN
COM - as tenants in common
TEN ENT - as tenants by the entirety
JT TEN WROS NOT TC - as joint tenants with
rights of survivorship and not
as tenants in common
[text appearing right side of page across from above text appx 8 pt.]
UNIF GIFT/TRANSFER MIN ACT - __________________ Custodian _______________
(Cust) (Minor)
UNDER UGMA/UTMA ___________________
(State)
[text - centered appx 8 pt.]
Additional abbreviations may also be used though
not in the above list.
[text - centered appx. 10 pt.]
For Value Received ................ hereby
sell(s), assign(s), and transfer(s) unto
[text appearing left of page appx. 8 pt]
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
AND PROVIDE CERTIFICATION
BY TRANSFEREE
[graphic: box for identifying number]
<PAGE>
PAGE 2 Back of certificate continued.
[Directly below graphic box: double spaced]
[line 1: with text centered under line]
- ---------------------------------------------------------------------
(Please print or type name and address of assignee)
[line 2: no text under line]
- ---------------------------------------------------------------------
[line 3: no text under line]
- ---------------------------------------------------------------------
[line 4: with text centered under line
- ---------------------------------------------------------------------
Class B Shares of beneficial interest represented by the within Certificate, and
do hereby irrevocably constitute and appoint [line 5: with text centered under
line
- ---------------------------------------------------------------------
Attorney to transfer the said shares on the books of the within named Fund
with full power of substitution in the premises.
[line 6: aligned left - text and line appx. 10 pt.]
Dated____________________________
[line 7: aligned right - text and line appx. 10 pt.]
Signed__________________________
[line 8: aligned right centered text under line appx. 8 pt.]
- --------------------------------
(Both must sign if joint owners)
[line 9, 10 and 11: aligned right 3 lines of text right of lines with centered
text]
Signature(s) __________________________
guaranteed Name of Guarantor
by: _____________________________
Signature of Officer/Title
[aligned left of lines 9-11
graphic box containing text appx. 8 pt.]
Signatures must be guaranteed by a financial institution of
the type described in the prospectus of the Fund.
[aligned right of lines 4-8 printed vertically appx. 8 pt.]
NOTICE: The signature(s) to this assignment must correspond
with the name(s) as written upon face of the certificate in every
particular without alteration or enlargement or any change
whatever.
[single line of text alinged left appx. 10 pt. bold]
PLEASE NOTE: This document contains a watermark when viewed at
an angle. It is invalid without this watermark:
[directly below text above aligned left appx. 18 pt. bold]
P I M C O
[Watermark in five rows vertically across page: PIMCO PIMCO
PIMCO
[bottom of certificate: line with text centered under appx.
16 pt.]
- --------------------------------------------------------------------------
THIS SPACE MUST NOT BE COVERED IN ANY WAY
<PAGE>
PIMCO ADVISORS FUNDS
Description of Share Certificate for:
PIMCO ADVISORS INTERNATIONAL FUND CLASS C SHARES
Class Share Certificate (8-1/2" x 11")
I. FACE OF CERTIFICATE (All text and other matter lies within
8-1/4" x 10-3/4" decorative border, 5/16" wide)
(upper left corner)- box with heading:NUMBER [of shares]
(upper center) - heading: CLASS C SHARES
(upper right corner)- heading: CP - [number]
(directly below upper right
corner heading:- box with heading: SHARES [amt. of shares]
(centered below boxes)
line 1: single line heading: [appx. 8 pt.]
ESTABLISHED UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
line 2: single line heading: [appx. 18pt.]
PIMCO ADVISORS FUNDS
line 3: single line heading: [appx. 18pt.]
CLASS C SHARES
line 4: single line heading: [appx. 8 pt]
PAR VALUE $.00001 PER SHARE
(at left) single line heading: [appx. 11 pt.]
THIS IS TO CERTIFY THAT
(at right)two line heading: [appx. 10 pt.]
SEE REVERSE FOR
CERTAIN DEFINITIONS
(at right directly below two line heading - box with content)
CUSIP 693387839
(at left appx half way down width of cert. - single line heading)
is the owner of
(at right appx half way down width of cert. - single line heading)
Class C Shares
(centered - text appx. 11pt)
of benficial interest in PIMCO Advisors Funds - PIMCO Advisors
International Fund, par value $.00001 per share, fully paid and
nonassessable, which shares have been issued and are held under
and subject to terms and provisions of the Amended and Restated
Agreement and Declaration of Trust dated September 11, 1990, of
PIMCO Advisors Funds, and all amendments thereto, heretofore or
hereafter made, copies of which are on file with the Secretary of
the Commonwealth of Massachusetts. [indent] No transfer hereof
will be of any effect as regards the Trustees of PIMCO Advisors
Funds until this certificate, properly endorsed or assigned, has
been surrendered and the transfer recorded upon the books of said
Trustees. [indent] This certificate is executed on behalf of the
Trustees as Trustees and not individually and the obligations
hereof are not binding only upon the assets and property of the
Fund. [indent] IN WITNESS WHEREOF the Trustees under said
Agreement and Declaration of Trust have caused the following
facsimile signatures to be affixed to this certificate and a
facsimile of their common seal to be hereto affixed by the
Transfer Agent.
(at right of text, printed vertically)
line 1: [appx 8 pt. bold]
Countersigned
line 2: [indented under line 1 appx 8 pt.]
SHAREHOLDER SERVICES INC.
line 3: [indented under line 2 appx 8 pt. bold]
Denver (Colo.) [space] Transfer Agent
line 4: [to left aligned under line 1 appx. 8 pt.]
By:
line 5: [spaced from line 4 indented under line 3 appx. 8 pt.]
Authorized Signature
(bottom left of certificate)
1-1/2" diameter facsimile seal
(top of seal: semicircle)
PIMCO ADVISORS FUNDS
(center of seal - two line text)
1983
MASSACHUSETTS
(bottom right - across from seal)
[text appx. 11 pt. bold]
Dated:
[spaced from text - signature line with text below line to
right] President FOR THE TRUSTEES
[spaced from text - signature line with text below line to
right] Treasurer
II. BACK OF CERTIFICATE (text reads from top to bottom of 8"x11" portrait
dimension)
[text appx. 8 pt.]
[indented] The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations.
[text appearing left side of page indented under above paragraph appx 8 pt.] TEN
COM - as tenants in common
TEN ENT - as tenants by the entirety
JT TEN WROS NOT TC - as joint tenants with
rights of survivorship and not
as tenants in common
[text appearing right side of page across from above text appx 8 pt.]
UNIF GIFT/TRANSFER MIN ACT - __________________ Custodian _______________
(Cust) (Minor)
UNDER UGMA/UTMA ___________________
(State)
[text - centered appx 8 pt.]
Additional abbreviations may also be used though
not in the above list.
[text - centered appx. 10 pt.]
For Value Received ................ hereby
sell(s), assign(s), and transfer(s) unto
[text appearing left of page appx. 8 pt]
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
AND PROVIDE CERTIFICATION
BY TRANSFEREE
[graphic: box for identifying number]
<PAGE>
PAGE 2 Back of certificate continued.
[Directly below graphic box: double spaced]
[line 1: with text centered under line]
- ---------------------------------------------------------------------
(Please print or type name and address of assignee)
[line 2: no text under line]
- ---------------------------------------------------------------------
[line 3: no text under line]
- ---------------------------------------------------------------------
[line 4: with text centered under line
- ---------------------------------------------------------------------
Class C Shares of beneficial interest represented by the within Certificate, and
do hereby irrevocably constitute and appoint [line 5: with text centered under
line
- ---------------------------------------------------------------------
Attorney to transfer the said shares on the books of the within named Fund
with full power of substitution in the premises.
[line 6: aligned left - text and line appx. 10 pt.]
Dated____________________________
[line 7: aligned right - text and line appx. 10 pt.]
Signed__________________________
[line 8: aligned right centered text under line appx. 8 pt.]
- --------------------------------
(Both must sign if joint owners)
[line 9, 10 and 11: aligned right 3 lines of text right of lines with centered
text]
Signature(s) __________________________
guaranteed Name of Guarantor
by: _____________________________
Signature of Officer/Title
[aligned left of lines 9-11
graphic box containing text appx. 8 pt.]
Signatures must be guaranteed by a financial institution of
the type described in the prospectus of the Fund.
[aligned right of lines 4-8 printed vertically appx. 8 pt.]
NOTICE: The signature(s) to this assignment must correspond
with the name(s) as written upon face of the certificate in every
particular without alteration or enlargement or any change
whatever.
[single line of text alinged left appx. 10 pt. bold]
PLEASE NOTE: This document contains a watermark when viewed at
an angle. It is invalid without this watermark:
[directly below text above aligned left appx. 18 pt. bold]
P I M C O
[Watermark in five rows vertically across page: PIMCO PIMCO
PIMCO
[bottom of certificate: line with text centered under appx.
16 pt.]
- -------------------------------------------------------------------------
THIS SPACE MUST NOT BE COVERED IN ANY WAY
<PAGE>
PIMCO ADVISORS FUNDS
Description of Share Certificate for:
PIMCO ADVISORS PRECIOUS METALS FUND CLASS A SHARES
Class Share Certificate (8-1/2" x 11")
I. FACE OF CERTIFICATE (All text and other matter lies within
8-1/4" x 10-3/4" decorative border, 5/16" wide)
(upper left corner)- box with heading:NUMBER [of shares]
(upper center) - heading: CLASS A SHARES
(upper right corner)- heading: CP - [number]
(directly below upper right
corner heading:- box with heading: SHARES [amt. of shares]
(centered below boxes)
line 1: single line heading: [appx. 8 pt.]
ESTABLISHED UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
line 2: single line heading: [appx. 18pt.]
PIMCO ADVISORS FUNDS
line 3: single line heading: [appx. 18pt.]
CLASS A SHARES
line 4: single line heading: [appx. 8 pt]
PAR VALUE $.00001 PER SHARE
(at left) single line heading: [appx. 11 pt.]
THIS IS TO CERTIFY THAT
(at right)two line heading: [appx. 10 pt.]
SEE REVERSE FOR
CERTAIN DEFINITIONS
(at right directly below two line heading - box with content)
CUSIP 693387771
(at left appx half way down width of cert. - single line heading)
is the owner of
(at right appx half way down width of cert. - single line heading)
Class A Shares
(centered - text appx. 11pt)
of benficial interest in PIMCO Advisors Funds - PIMCO Advisors
Precious Metals Fund, par value $.00001 per share, fully paid and
nonassessable, which shares have been issued and are held under
and subject to terms and provisions of the Amended and Restated
Agreement and Declaration of Trust dated September 11, 1990, of
PIMCO Advisors Funds, and all amendments thereto, heretofore or
hereafter made, copies of which are on file with the Secretary of
the Commonwealth of Massachusetts. [indent] No transfer hereof
will be of any effect as regards the Trustees of PIMCO Advisors
Funds until this certificate, properly endorsed or assigned, has
been surrendered and the transfer recorded upon the books of said
Trustees. [indent] This certificate is executed on behalf of the
Trustees as Trustees and not individually and the obligations
hereof are not binding only upon the assets and property of the
Fund. [indent] IN WITNESS WHEREOF the Trustees under said
Agreement and Declaration of Trust have caused the following
facsimile signatures to be affixed to this certificate and a
facsimile of their common seal to be hereto affixed by the
Transfer Agent.
(at right of text, printed vertically)
line 1: [appx 8 pt. bold]
Countersigned
line 2: [indented under line 1 appx 8 pt.]
SHAREHOLDER SERVICES INC.
line 3: [indented under line 2 appx 8 pt. bold]
Denver (Colo.) [space] Transfer Agent
line 4: [to left aligned under line 1 appx. 8 pt.]
By:
line 5: [spaced from line 4 indented under line 3 appx. 8 pt.]
Authorized Signature
(bottom left of certificate)
1-1/2" diameter facsimile seal
(top of seal: semicircle)
PIMCO ADVISORS FUNDS
(center of seal - two line text)
1983
MASSACHUSETTS
(bottom right - across from seal)
[text appx. 11 pt. bold]
Dated:
[spaced from text - signature line with text below line to
right] President FOR THE TRUSTEES
[spaced from text - signature line with text below line to
right] Treasurer
II. BACK OF CERTIFICATE (text reads from top to bottom of 8"x11" portrait
dimension)
[text appx. 8 pt.]
[indented] The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations.
[text appearing left side of page indented under above paragraph appx 8 pt.] TEN
COM - as tenants in common
TEN ENT - as tenants by the entirety
JT TEN WROS NOT TC - as joint tenants with
rights of survivorship and not
as tenants in common
[text appearing right side of page across from above text appx 8 pt.]
UNIF GIFT/TRANSFER MIN ACT - __________________ Custodian _______________
(Cust) (Minor)
UNDER UGMA/UTMA ___________________
(State)
[text - centered appx 8 pt.]
Additional abbreviations may also be used though
not in the above list.
[text - centered appx. 10 pt.]
For Value Received ................ hereby
sell(s), assign(s), and transfer(s) unto
[text appearing left of page appx. 8 pt]
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
AND PROVIDE CERTIFICATION
BY TRANSFEREE
[graphic: box for identifying number]
<PAGE>
PAGE 2 Back of certificate continued.
[Directly below graphic box: double spaced]
[line 1: with text centered under line]
- ---------------------------------------------------------------------
(Please print or type name and address of assignee)
[line 2: no text under line]
- ---------------------------------------------------------------------
[line 3: no text under line]
- ---------------------------------------------------------------------
[line 4: with text centered under line
- ---------------------------------------------------------------------
Class A Shares of beneficial interest represented by the within Certificate, and
do hereby irrevocably constitute and appoint [line 5: with text centered under
line
- ---------------------------------------------------------------------
Attorney to transfer the said shares on the books of the within named Fund
with full power of substitution in the premises.
[line 6: aligned left - text and line appx. 10 pt.]
Dated____________________________
[line 7: aligned right - text and line appx. 10 pt.]
Signed__________________________
[line 8: aligned right centered text under line appx. 8 pt.]
- --------------------------------
(Both must sign if joint owners)
[line 9, 10 and 11: aligned right 3 lines of text right of lines with centered
text]
Signature(s) __________________________
guaranteed Name of Guarantor
by: _____________________________
Signature of Officer/Title
[aligned left of lines 9-11
graphic box containing text appx. 8 pt.]
Signatures must be guaranteed by a financial institution of
the type described in the prospectus of the Fund.
[aligned right of lines 4-8 printed vertically appx. 8 pt.]
NOTICE: The signature(s) to this assignment must correspond
with the name(s) as written upon face of the certificate in every
particular without alteration or enlargement or any change
whatever.
[single line of text alinged left appx. 10 pt. bold]
PLEASE NOTE: This document contains a watermark when viewed at
an angle. It is invalid without this watermark:
[directly below text above aligned left appx. 18 pt. bold]
P I M C O
[Watermark in five rows vertically across page: PIMCO PIMCO
PIMCO
[bottom of certificate: line with text centered under appx.
16 pt.]
- -------------------------------------------------------------------------------
THIS SPACE MUST NOT BE COVERED IN ANY WAY
<PAGE>
PIMCO ADVISORS FUNDS
Description of Share Certificate for:
PIMCO ADVISORS PRECIOUS METALS FUND CLASS B SHARES
Class Share Certificate (8-1/2" x 11")
I. FACE OF CERTIFICATE (All text and other matter lies within
8-1/4" x 10-3/4" decorative border, 5/16" wide)
(upper left corner)- box with heading:NUMBER [of shares]
(upper center) - heading: CLASS B SHARES
(upper right corner)- heading: CP - [number]
(directly below upper right
corner heading:- box with heading: SHARES [amt. of shares]
(centered below boxes)
line 1: single line heading: [appx. 8 pt.]
ESTABLISHED UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
line 2: single line heading: [appx. 18pt.]
PIMCO ADVISORS FUNDS
line 3: single line heading: [appx. 18pt.]
CLASS B SHARES
line 4: single line heading: [appx. 8 pt]
PAR VALUE $.00001 PER SHARE
(at left) single line heading: [appx. 11 pt.]
THIS IS TO CERTIFY THAT
(at right)two line heading: [appx. 10 pt.]
SEE REVERSE FOR
CERTAIN DEFINITIONS
(at right directly below two line heading - box with content)
CUSIP 693387623
(at left appx half way down width of cert. - single line heading)
is the owner of
(at right appx half way down width of cert. - single line heading)
Class B Shares
(centered - text appx. 11pt)
of benficial interest in PIMCO Advisors Funds - PIMCO Advisors
Precious Metals Fund, par value $.00001 per share, fully paid and
nonassessable, which shares have been issued and are held under
and subject to terms and provisions of the Amended and Restated
Agreement and Declaration of Trust dated September 11, 1990, of
PIMCO Advisors Funds, and all amendments thereto, heretofore or
hereafter made, copies of which are on file with the Secretary of
the Commonwealth of Massachusetts. [indent] No transfer hereof
will be of any effect as regards the Trustees of PIMCO Advisors
Funds until this certificate, properly endorsed or assigned, has
been surrendered and the transfer recorded upon the books of said
Trustees. [indent] This certificate is executed on behalf of the
Trustees as Trustees and not individually and the obligations
hereof are not binding only upon the assets and property of the
Fund. [indent] IN WITNESS WHEREOF the Trustees under said
Agreement and Declaration of Trust have caused the following
facsimile signatures to be affixed to this certificate and a
facsimile of their common seal to be hereto affixed by the
Transfer Agent.
(at right of text, printed vertically)
line 1: [appx 8 pt. bold]
Countersigned
line 2: [indented under line 1 appx 8 pt.]
SHAREHOLDER SERVICES INC.
line 3: [indented under line 2 appx 8 pt. bold]
Denver (Colo.) [space] Transfer Agent
line 4: [to left aligned under line 1 appx. 8 pt.]
By:
line 5: [spaced from line 4 indented under line 3 appx. 8 pt.]
Authorized Signature
(bottom left of certificate)
1-1/2" diameter facsimile seal
(top of seal: semicircle)
PIMCO ADVISORS FUNDS
(center of seal - two line text)
1983
MASSACHUSETTS
(bottom right - across from seal)
[text appx. 11 pt. bold]
Dated:
[spaced from text - signature line with text below line to
right] President FOR THE TRUSTEES
[spaced from text - signature line with text below line to
right] Treasurer
II. BACK OF CERTIFICATE (text reads from top to bottom of 8"x11" portrait
dimension)
[text appx. 8 pt.]
[indented] The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations.
[text appearing left side of page indented under above paragraph appx 8 pt.] TEN
COM - as tenants in common
TEN ENT - as tenants by the entirety
JT TEN WROS NOT TC - as joint tenants with
rights of survivorship and not
as tenants in common
[text appearing right side of page across from above text appx 8 pt.]
UNIF GIFT/TRANSFER MIN ACT - __________________ Custodian _______________
(Cust) (Minor)
UNDER UGMA/UTMA ___________________
(State)
[text - centered appx 8 pt.]
Additional abbreviations may also be used though
not in the above list.
[text - centered appx. 10 pt.]
For Value Received ................ hereby
sell(s), assign(s), and transfer(s) unto
[text appearing left of page appx. 8 pt]
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
AND PROVIDE CERTIFICATION
BY TRANSFEREE
[graphic: box for identifying number]
<PAGE>
PAGE 2 Back of certificate continued.
[Directly below graphic box: double spaced]
[line 1: with text centered under line]
- ---------------------------------------------------------------------
(Please print or type name and address of assignee)
[line 2: no text under line]
- ---------------------------------------------------------------------
[line 3: no text under line]
- ---------------------------------------------------------------------
[line 4: with text centered under line
- ---------------------------------------------------------------------
Class B Shares of beneficial interest represented by the within Certificate, and
do hereby irrevocably constitute and appoint [line 5: with text centered under
line
- ---------------------------------------------------------------------
Attorney to transfer the said shares on the books of the within named Fund
with full power of substitution in the premises.
[line 6: aligned left - text and line appx. 10 pt.]
Dated____________________________
[line 7: aligned right - text and line appx. 10 pt.]
Signed__________________________
[line 8: aligned right centered text under line appx. 8 pt.]
- --------------------------------
(Both must sign if joint owners)
[line 9, 10 and 11: aligned right 3 lines of text right of lines with centered
text]
Signature(s) __________________________
guaranteed Name of Guarantor
by: _____________________________
Signature of Officer/Title
[aligned left of lines 9-11
graphic box containing text appx. 8 pt.]
Signatures must be guaranteed by a financial institution of
the type described in the prospectus of the Fund.
[aligned right of lines 4-8 printed vertically appx. 8 pt.]
NOTICE: The signature(s) to this assignment must correspond
with the name(s) as written upon face of the certificate in every
particular without alteration or enlargement or any change
whatever.
[single line of text alinged left appx. 10 pt. bold]
PLEASE NOTE: This document contains a watermark when viewed at
an angle. It is invalid without this watermark:
[directly below text above aligned left appx. 18 pt. bold]
P I M C O
[Watermark in five rows vertically across page: PIMCO PIMCO
PIMCO
[bottom of certificate: line with text centered under appx.
16 pt.]
- ------------------------------------------------------------------------------
THIS SPACE MUST NOT BE COVERED IN ANY WAY
<PAGE>
PIMCO ADVISORS FUNDS
Description of Share Certificate for:
PIMCO ADVISORS PRECIOUS METALS FUND CLASS C SHARES
Class Share Certificate (8-1/2" x 11")
I. FACE OF CERTIFICATE (All text and other matter lies within
8-1/4" x 10-3/4" decorative border, 5/16" wide)
(upper left corner)- box with heading:NUMBER [of shares]
(upper center) - heading: CLASS C SHARES
(upper right corner)- heading: CP - [number]
(directly below upper right
corner heading:- box with heading: SHARES [amt. of shares]
(centered below boxes)
line 1: single line heading: [appx. 8 pt.]
ESTABLISHED UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
line 2: single line heading: [appx. 18pt.]
PIMCO ADVISORS FUNDS
line 3: single line heading: [appx. 18pt.]
CLASS C SHARES
line 4: single line heading: [appx. 8 pt]
PAR VALUE $.00001 PER SHARE
(at left) single line heading: [appx. 11 pt.]
THIS IS TO CERTIFY THAT
(at right)two line heading: [appx. 10 pt.]
SEE REVERSE FOR
CERTAIN DEFINITIONS
(at right directly below two line heading - box with content)
CUSIP 693387763
(at left appx half way down width of cert. - single line heading)
is the owner of
(at right appx half way down width of cert. - single line heading)
Class C Shares
(centered - text appx. 11pt)
of benficial interest in PIMCO Advisors Funds - PIMCO Advisors
Precious Metals Fund, par value $.00001 per share, fully paid and
nonassessable, which shares have been issued and are held under
and subject to terms and provisions of the Amended and Restated
Agreement and Declaration of Trust dated September 11, 1990, of
PIMCO Advisors Funds, and all amendments thereto, heretofore or
hereafter made, copies of which are on file with the Secretary of
the Commonwealth of Massachusetts. [indent] No transfer hereof
will be of any effect as regards the Trustees of PIMCO Advisors
Funds until this certificate, properly endorsed or assigned, has
been surrendered and the transfer recorded upon the books of said
Trustees. [indent] This certificate is executed on behalf of the
Trustees as Trustees and not individually and the obligations
hereof are not binding only upon the assets and property of the
Fund. [indent] IN WITNESS WHEREOF the Trustees under said
Agreement and Declaration of Trust have caused the following
facsimile signatures to be affixed to this certificate and a
facsimile of their common seal to be hereto affixed by the
Transfer Agent.
(at right of text, printed vertically)
line 1: [appx 8 pt. bold]
Countersigned
line 2: [indented under line 1 appx 8 pt.]
SHAREHOLDER SERVICES INC.
line 3: [indented under line 2 appx 8 pt. bold]
Denver (Colo.) [space] Transfer Agent
line 4: [to left aligned under line 1 appx. 8 pt.]
By:
line 5: [spaced from line 4 indented under line 3 appx. 8 pt.]
Authorized Signature
(bottom left of certificate)
1-1/2" diameter facsimile seal
(top of seal: semicircle)
PIMCO ADVISORS FUNDS
(center of seal - two line text)
1983
MASSACHUSETTS
(bottom right - across from seal)
[text appx. 11 pt. bold]
Dated:
[spaced from text - signature line with text below line to
right] President FOR THE TRUSTEES
[spaced from text - signature line with text below line to
right] Treasurer
II. BACK OF CERTIFICATE (text reads from top to bottom of 8"x11" portrait
dimension)
[text appx. 8 pt.]
[indented] The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations.
[text appearing left side of page indented under above paragraph appx 8 pt.] TEN
COM - as tenants in common
TEN ENT - as tenants by the entirety
JT TEN WROS NOT TC - as joint tenants with
rights of survivorship and not
as tenants in common
[text appearing right side of page across from above text appx 8 pt.]
UNIF GIFT/TRANSFER MIN ACT - __________________ Custodian _______________
(Cust) (Minor)
UNDER UGMA/UTMA ___________________
(State)
[text - centered appx 8 pt.]
Additional abbreviations may also be used though
not in the above list.
[text - centered appx. 10 pt.]
For Value Received ................ hereby
sell(s), assign(s), and transfer(s) unto
[text appearing left of page appx. 8 pt]
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
AND PROVIDE CERTIFICATION
BY TRANSFEREE
[graphic: box for identifying number]
<PAGE>
PAGE 2 Back of certificate continued.
[Directly below graphic box: double spaced]
[line 1: with text centered under line]
- ---------------------------------------------------------------------
(Please print or type name and address of assignee)
[line 2: no text under line]
- ---------------------------------------------------------------------
[line 3: no text under line]
- ---------------------------------------------------------------------
[line 4: with text centered under line
- ---------------------------------------------------------------------
Class C Shares of beneficial interest represented by the within Certificate, and
do hereby irrevocably constitute and appoint [line 5: with text centered under
line
- ---------------------------------------------------------------------
Attorney to transfer the said shares on the books of the within named Fund
with full power of substitution in the premises.
[line 6: aligned left - text and line appx. 10 pt.]
Dated____________________________
[line 7: aligned right - text and line appx. 10 pt.]
Signed__________________________
[line 8: aligned right centered text under line appx. 8 pt.]
- --------------------------------
(Both must sign if joint owners)
[line 9, 10 and 11: aligned right 3 lines of text right of lines with centered
text]
Signature(s) __________________________
guaranteed Name of Guarantor
by: _____________________________
Signature of Officer/Title
[aligned left of lines 9-11
graphic box containing text appx. 8 pt.]
Signatures must be guaranteed by a financial institution of
the type described in the prospectus of the Fund.
[aligned right of lines 4-8 printed vertically appx. 8 pt.]
NOTICE: The signature(s) to this assignment must correspond
with the name(s) as written upon face of the certificate in every
particular without alteration or enlargement or any change
whatever.
[single line of text alinged left appx. 10 pt. bold]
PLEASE NOTE: This document contains a watermark when viewed at
an angle. It is invalid without this watermark:
[directly below text above aligned left appx. 18 pt. bold]
P I M C O
[Watermark in five rows vertically across page: PIMCO PIMCO
PIMCO
[bottom of certificate: line with text centered under appx.
16 pt.]
- -----------------------------------------------------------------------------
THIS SPACE MUST NOT BE COVERED IN ANY WAY
<PAGE>
<PAGE>
PIMCO ADVISORS FUNDS
Description of Share Certificate for:
PIMCO ADVISORS GLOBAL INCOME FUND CLASS A SHARES
Class Share Certificate (8-1/2" x 11")
I. FACE OF CERTIFICATE (All text and other matter lies within
8-1/4" x 10-3/4" decorative border, 5/16" wide)
(upper left corner)- box with heading:NUMBER [of shares]
(upper center) - heading: CLASS A SHARES
(upper right corner)- heading: CP - [number]
(directly below upper right
corner heading:- box with heading: SHARES [amt. of shares]
(centered below boxes)
line 1: single line heading: [appx. 8 pt.]
ESTABLISHED UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
line 2: single line heading: [appx. 18pt.]
PIMCO ADVISORS FUNDS
line 3: single line heading: [appx. 18pt.]
CLASS A SHARES
line 4: single line heading: [appx. 8 pt]
PAR VALUE $.00001 PER SHARE
(at left) single line heading: [appx. 11 pt.]
THIS IS TO CERTIFY THAT
(at right)two line heading: [appx. 10 pt.]
SEE REVERSE FOR
CERTAIN DEFINITIONS
(at right directly below two line heading - box with content)
CUSIP 693387474
(at left appx half way down width of cert. - single line heading)
is the owner of
(at right appx half way down width of cert. - single line heading)
Class A Shares
(centered - text appx. 11pt)
of benficial interest in PIMCO Advisors Funds - PIMCO Advisors
Global Income Fund, par value $.00001 per share, fully paid and
nonassessable, which shares have been issued and are held under
and subject to terms and provisions of the Amended and Restated
Agreement and Declaration of Trust dated September 11, 1990, of
PIMCO Advisors Funds, and all amendments thereto, heretofore or
hereafter made, copies of which are on file with the Secretary of
the Commonwealth of Massachusetts. [indent] No transfer hereof
will be of any effect as regards the Trustees of PIMCO Advisors
Funds until this certificate, properly endorsed or assigned, has
been surrendered and the transfer recorded upon the books of said
Trustees. [indent] This certificate is executed on behalf of the
Trustees as Trustees and not individually and the obligations
hereof are not binding only upon the assets and property of the
Fund. [indent] IN WITNESS WHEREOF the Trustees under said
Agreement and Declaration of Trust have caused the following
facsimile signatures to be affixed to this certificate and a
facsimile of their common seal to be hereto affixed by the
Transfer Agent.
(at right of text, printed vertically)
line 1: [appx 8 pt. bold]
Countersigned
line 2: [indented under line 1 appx 8 pt.]
SHAREHOLDER SERVICES INC.
line 3: [indented under line 2 appx 8 pt. bold]
Denver (Colo.) [space] Transfer Agent
line 4: [to left aligned under line 1 appx. 8 pt.]
By:
line 5: [spaced from line 4 indented under line 3 appx. 8 pt.]
Authorized Signature
(bottom left of certificate)
1-1/2" diameter facsimile seal
(top of seal: semicircle)
PIMCO ADVISORS FUNDS
(center of seal - two line text)
1983
MASSACHUSETTS
(bottom right - across from seal)
[text appx. 11 pt. bold]
Dated:
[spaced from text - signature line with text below line to
right] President FOR THE TRUSTEES
[spaced from text - signature line with text below line to
right] Treasurer
II. BACK OF CERTIFICATE (text reads from top to bottom of 8"x11" portrait
dimension)
[text appx. 8 pt.]
[indented] The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations.
[text appearing left side of page indented under above paragraph appx 8 pt.] TEN
COM - as tenants in common
TEN ENT - as tenants by the entirety
JT TEN WROS NOT TC - as joint tenants with
rights of survivorship and not
as tenants in common
[text appearing right side of page across from above text appx 8 pt.]
UNIF GIFT/TRANSFER MIN ACT - __________________ Custodian _______________
(Cust) (Minor)
UNDER UGMA/UTMA ___________________
(State)
[text - centered appx 8 pt.]
Additional abbreviations may also be used though
not in the above list.
[text - centered appx. 10 pt.]
For Value Received ................ hereby
sell(s), assign(s), and transfer(s) unto
[text appearing left of page appx. 8 pt]
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
AND PROVIDE CERTIFICATION
BY TRANSFEREE
[graphic: box for identifying number]
<PAGE>
PAGE 2 Back of certificate continued.
[Directly below graphic box: double spaced]
[line 1: with text centered under line]
- ---------------------------------------------------------------------
(Please print or type name and address of assignee)
[line 2: no text under line]
- ---------------------------------------------------------------------
[line 3: no text under line]
- ---------------------------------------------------------------------
[line 4: with text centered under line
- ---------------------------------------------------------------------
Class A Shares of beneficial interest represented by the within Certificate, and
do hereby irrevocably constitute and appoint [line 5: with text centered under
line
- ---------------------------------------------------------------------
Attorney to transfer the said shares on the books of the within named Fund
with full power of substitution in the premises.
[line 6: aligned left - text and line appx. 10 pt.]
Dated____________________________
[line 7: aligned right - text and line appx. 10 pt.]
Signed__________________________
[line 8: aligned right centered text under line appx. 8 pt.]
- --------------------------------
(Both must sign if joint owners)
[line 9, 10 and 11: aligned right 3 lines of text right of lines with centered
text]
Signature(s) __________________________
guaranteed Name of Guarantor
by: _____________________________
Signature of Officer/Title
[aligned left of lines 9-11
graphic box containing text appx. 8 pt.]
Signatures must be guaranteed by a financial institution of
the type described in the prospectus of the Fund.
[aligned right of lines 4-8 printed vertically appx. 8 pt.]
NOTICE: The signature(s) to this assignment must correspond
with the name(s) as written upon face of the certificate in every
particular without alteration or enlargement or any change
whatever.
[single line of text alinged left appx. 10 pt. bold]
PLEASE NOTE: This document contains a watermark when viewed at
an angle. It is invalid without this watermark:
[directly below text above aligned left appx. 18 pt. bold]
P I M C O
[Watermark in five rows vertically across page: PIMCO PIMCO
PIMCO
[bottom of certificate: line with text centered under appx.
16 pt.]
- -----------------------------------------------------------------------------
THIS SPACE MUST NOT BE COVERED IN ANY WAY
<PAGE>
PIMCO ADVISORS FUNDS
Description of Share Certificate for:
PIMCO ADVISORS GLOBAL INCOME FUND CLASS B SHARES
Class Share Certificate (8-1/2" x 11")
I. FACE OF CERTIFICATE (All text and other matter lies within
8-1/4" x 10-3/4" decorative border, 5/16" wide)
(upper left corner)- box with heading:NUMBER [of shares]
(upper center) - heading: CLASS B SHARES
(upper right corner)- heading: CP - [number]
(directly below upper right
corner heading:- box with heading: SHARES [amt. of shares]
(centered below boxes)
line 1: single line heading: [appx. 8 pt.]
ESTABLISHED UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
line 2: single line heading: [appx. 18pt.]
PIMCO ADVISORS FUNDS
line 3: single line heading: [appx. 18pt.]
CLASS B SHARES
line 4: single line heading: [appx. 8 pt]
PAR VALUE $.00001 PER SHARE
(at left) single line heading: [appx. 11 pt.]
THIS IS TO CERTIFY THAT
(at right)two line heading: [appx. 10 pt.]
SEE REVERSE FOR
CERTAIN DEFINITIONS
(at right directly below two line heading - box with content)
CUSIP 693387466
(at left appx half way down width of cert. - single line heading)
is the owner of
(at right appx half way down width of cert. - single line heading)
Class B Shares
(centered - text appx. 11pt)
of benficial interest in PIMCO Advisors Funds - PIMCO Advisors
Global Income Fund, par value $.00001 per share, fully paid and
nonassessable, which shares have been issued and are held under
and subject to terms and provisions of the Amended and Restated
Agreement and Declaration of Trust dated September 11, 1990, of
PIMCO Advisors Funds, and all amendments thereto, heretofore or
hereafter made, copies of which are on file with the Secretary of
the Commonwealth of Massachusetts. [indent] No transfer hereof
will be of any effect as regards the Trustees of PIMCO Advisors
Funds until this certificate, properly endorsed or assigned, has
been surrendered and the transfer recorded upon the books of said
Trustees. [indent] This certificate is executed on behalf of the
Trustees as Trustees and not individually and the obligations
hereof are not binding only upon the assets and property of the
Fund. [indent] IN WITNESS WHEREOF the Trustees under said
Agreement and Declaration of Trust have caused the following
facsimile signatures to be affixed to this certificate and a
facsimile of their common seal to be hereto affixed by the
Transfer Agent.
(at right of text, printed vertically)
line 1: [appx 8 pt. bold]
Countersigned
line 2: [indented under line 1 appx 8 pt.]
SHAREHOLDER SERVICES INC.
line 3: [indented under line 2 appx 8 pt. bold]
Denver (Colo.) [space] Transfer Agent
line 4: [to left aligned under line 1 appx. 8 pt.]
By:
line 5: [spaced from line 4 indented under line 3 appx. 8 pt.]
Authorized Signature
(bottom left of certificate)
1-1/2" diameter facsimile seal
(top of seal: semicircle)
PIMCO ADVISORS FUNDS
(center of seal - two line text)
1983
MASSACHUSETTS
(bottom right - across from seal)
[text appx. 11 pt. bold]
Dated:
[spaced from text - signature line with text below line to
right] President FOR THE TRUSTEES
[spaced from text - signature line with text below line to
right] Treasurer
II. BACK OF CERTIFICATE (text reads from top to bottom of 8"x11" portrait
dimension)
[text appx. 8 pt.]
[indented] The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations.
[text appearing left side of page indented under above paragraph appx 8 pt.] TEN
COM - as tenants in common
TEN ENT - as tenants by the entirety
JT TEN WROS NOT TC - as joint tenants with
rights of survivorship and not
as tenants in common
[text appearing right side of page across from above text appx 8 pt.]
UNIF GIFT/TRANSFER MIN ACT - __________________ Custodian _______________
(Cust) (Minor)
UNDER UGMA/UTMA ___________________
(State)
[text - centered appx 8 pt.]
Additional abbreviations may also be used though
not in the above list.
[text - centered appx. 10 pt.]
For Value Received ................ hereby
sell(s), assign(s), and transfer(s) unto
[text appearing left of page appx. 8 pt]
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
AND PROVIDE CERTIFICATION
BY TRANSFEREE
[graphic: box for identifying number]
<PAGE>
PAGE 2 Back of certificate continued.
[Directly below graphic box: double spaced]
[line 1: with text centered under line]
- ---------------------------------------------------------------------
(Please print or type name and address of assignee)
[line 2: no text under line]
- ---------------------------------------------------------------------
[line 3: no text under line]
- ---------------------------------------------------------------------
[line 4: with text centered under line
- ---------------------------------------------------------------------
Class B Shares of beneficial interest represented by the within Certificate, and
do hereby irrevocably constitute and appoint [line 5: with text centered under
line
- ---------------------------------------------------------------------
Attorney to transfer the said shares on the books of the within named Fund
with full power of substitution in the premises.
[line 6: aligned left - text and line appx. 10 pt.]
Dated____________________________
[line 7: aligned right - text and line appx. 10 pt.]
Signed__________________________
[line 8: aligned right centered text under line appx. 8 pt.]
- --------------------------------
(Both must sign if joint owners)
[line 9, 10 and 11: aligned right 3 lines of text right of lines with centered
text]
Signature(s) __________________________
guaranteed Name of Guarantor
by: _____________________________
Signature of Officer/Title
[aligned left of lines 9-11
graphic box containing text appx. 8 pt.]
Signatures must be guaranteed by a financial institution of
the type described in the prospectus of the Fund.
[aligned right of lines 4-8 printed vertically appx. 8 pt.]
NOTICE: The signature(s) to this assignment must correspond
with the name(s) as written upon face of the certificate in every
particular without alteration or enlargement or any change
whatever.
[single line of text alinged left appx. 10 pt. bold]
PLEASE NOTE: This document contains a watermark when viewed at
an angle. It is invalid without this watermark:
[directly below text above aligned left appx. 18 pt. bold]
P I M C O
[Watermark in five rows vertically across page: PIMCO PIMCO
PIMCO
[bottom of certificate: line with text centered under appx.
16 pt.]
- -------------------------------------------------------------------------------
THIS SPACE MUST NOT BE COVERED IN ANY WAY
<PAGE>
PIMCO ADVISORS FUNDS
Description of Share Certificate for:
PIMCO ADVISORS GLOBAL INCOME FUND CLASS C SHARES
Class Share Certificate (8-1/2" x 11")
I. FACE OF CERTIFICATE (All text and other matter lies within
8-1/4" x 10-3/4" decorative border, 5/16" wide)
(upper left corner)- box with heading:NUMBER [of shares]
(upper center) - heading: CLASS C SHARES
(upper right corner)- heading: CP - [number]
(directly below upper right
corner heading:- box with heading: SHARES [amt. of shares]
(centered below boxes)
line 1: single line heading: [appx. 8 pt.]
ESTABLISHED UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
line 2: single line heading: [appx. 18pt.]
PIMCO ADVISORS FUNDS
line 3: single line heading: [appx. 18pt.]
CLASS C SHARES
line 4: single line heading: [appx. 8 pt]
PAR VALUE $.00001 PER SHARE
(at left) single line heading: [appx. 11 pt.]
THIS IS TO CERTIFY THAT
(at right)two line heading: [appx. 10 pt.]
SEE REVERSE FOR
CERTAIN DEFINITIONS
(at right directly below two line heading - box with content)
CUSIP 693387458
(at left appx half way down width of cert. - single line heading)
is the owner of
(at right appx half way down width of cert. - single line heading)
Class C Shares
(centered - text appx. 11pt)
of benficial interest in PIMCO Advisors Funds - PIMCO Advisors
Global Income Fund, par value $.00001 per share, fully paid and
nonassessable, which shares have been issued and are held under
and subject to terms and provisions of the Amended and Restated
Agreement and Declaration of Trust dated September 11, 1990, of
PIMCO Advisors Funds, and all amendments thereto, heretofore or
hereafter made, copies of which are on file with the Secretary of
the Commonwealth of Massachusetts. [indent] No transfer hereof
will be of any effect as regards the Trustees of PIMCO Advisors
Funds until this certificate, properly endorsed or assigned, has
been surrendered and the transfer recorded upon the books of said
Trustees. [indent] This certificate is executed on behalf of the
Trustees as Trustees and not individually and the obligations
hereof are not binding only upon the assets and property of the
Fund. [indent] IN WITNESS WHEREOF the Trustees under said
Agreement and Declaration of Trust have caused the following
facsimile signatures to be affixed to this certificate and a
facsimile of their common seal to be hereto affixed by the
Transfer Agent.
(at right of text, printed vertically)
line 1: [appx 8 pt. bold]
Countersigned
line 2: [indented under line 1 appx 8 pt.]
SHAREHOLDER SERVICES INC.
line 3: [indented under line 2 appx 8 pt. bold]
Denver (Colo.) [space] Transfer Agent
line 4: [to left aligned under line 1 appx. 8 pt.]
By:
line 5: [spaced from line 4 indented under line 3 appx. 8 pt.]
Authorized Signature
(bottom left of certificate)
1-1/2" diameter facsimile seal
(top of seal: semicircle)
PIMCO ADVISORS FUNDS
(center of seal - two line text)
1983
MASSACHUSETTS
(bottom right - across from seal)
[text appx. 11 pt. bold]
Dated:
[spaced from text - signature line with text below line to
right] President FOR THE TRUSTEES
[spaced from text - signature line with text below line to
right] Treasurer
II. BACK OF CERTIFICATE (text reads from top to bottom of 8"x11" portrait
dimension)
[text appx. 8 pt.]
[indented] The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations.
[text appearing left side of page indented under above paragraph appx 8 pt.] TEN
COM - as tenants in common
TEN ENT - as tenants by the entirety
JT TEN WROS NOT TC - as joint tenants with
rights of survivorship and not
as tenants in common
[text appearing right side of page across from above text appx 8 pt.]
UNIF GIFT/TRANSFER MIN ACT - __________________ Custodian _______________
(Cust) (Minor)
UNDER UGMA/UTMA ___________________
(State)
[text - centered appx 8 pt.]
Additional abbreviations may also be used though
not in the above list.
[text - centered appx. 10 pt.]
For Value Received ................ hereby
sell(s), assign(s), and transfer(s) unto
[text appearing left of page appx. 8 pt]
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
AND PROVIDE CERTIFICATION
BY TRANSFEREE
[graphic: box for identifying number]
<PAGE>
PAGE 2 Back of certificate continued.
[Directly below graphic box: double spaced]
[line 1: with text centered under line]
- ---------------------------------------------------------------------
(Please print or type name and address of assignee)
[line 2: no text under line]
- ---------------------------------------------------------------------
[line 3: no text under line]
- ---------------------------------------------------------------------
[line 4: with text centered under line
- ---------------------------------------------------------------------
Class C Shares of beneficial interest represented by the within Certificate, and
do hereby irrevocably constitute and appoint [line 5: with text centered under
line
- ---------------------------------------------------------------------
Attorney to transfer the said shares on the books of the within named Fund
with full power of substitution in the premises.
[line 6: aligned left - text and line appx. 10 pt.]
Dated____________________________
[line 7: aligned right - text and line appx. 10 pt.]
Signed__________________________
[line 8: aligned right centered text under line appx. 8 pt.]
- --------------------------------
(Both must sign if joint owners)
[line 9, 10 and 11: aligned right 3 lines of text right of lines with centered
text]
Signature(s) __________________________
guaranteed Name of Guarantor
by: _____________________________
Signature of Officer/Title
[aligned left of lines 9-11
graphic box containing text appx. 8 pt.]
Signatures must be guaranteed by a financial institution of
the type described in the prospectus of the Fund.
[aligned right of lines 4-8 printed vertically appx. 8 pt.]
NOTICE: The signature(s) to this assignment must correspond
with the name(s) as written upon face of the certificate in every
particular without alteration or enlargement or any change
whatever.
[single line of text alinged left appx. 10 pt. bold]
PLEASE NOTE: This document contains a watermark when viewed at
an angle. It is invalid without this watermark:
[directly below text above aligned left appx. 18 pt. bold]
P I M C O
[Watermark in five rows vertically across page: PIMCO PIMCO
PIMCO
[bottom of certificate: line with text centered under appx.
16 pt.]
- ------------------------------------------------------------------------------
THIS SPACE MUST NOT BE COVERED IN ANY WAY
<PAGE>
PIMCO ADVISORS FUNDS
Description of Share Certificate for:
PIMCO ADVISORS HIGH INCOME FUND CLASS A SHARES
Class Share Certificate (8-1/2" x 11")
I. FACE OF CERTIFICATE (All text and other matter lies within
8-1/4" x 10-3/4" decorative border, 5/16" wide)
(upper left corner)- box with heading:NUMBER [of shares]
(upper center) - heading: CLASS A SHARES
(upper right corner)- heading: CP - [number]
(directly below upper right
corner heading:- box with heading: SHARES [amt. of shares]
(centered below boxes)
line 1: single line heading: [appx. 8 pt.]
ESTABLISHED UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
line 2: single line heading: [appx. 18pt.]
PIMCO ADVISORS FUNDS
line 3: single line heading: [appx. 18pt.]
CLASS A SHARES
line 4: single line heading: [appx. 8 pt]
PAR VALUE $.00001 PER SHARE
(at left) single line heading: [appx. 11 pt.]
THIS IS TO CERTIFY THAT
(at right)two line heading: [appx. 10 pt.]
SEE REVERSE FOR
CERTAIN DEFINITIONS
(at right directly below two line heading - box with content)
CUSIP 693387102
(at left appx half way down width of cert. - single line heading)
is the owner of
(at right appx half way down width of cert. - single line heading)
Class A Shares
(centered - text appx. 11pt)
of benficial interest in PIMCO Advisors Funds - PIMCO Advisors
High Income Fund, par value $.00001 per share, fully paid and
nonassessable, which shares have been issued and are held under
and subject to terms and provisions of the Amended and Restated
Agreement and Declaration of Trust dated September 11, 1990, of
PIMCO Advisors Funds, and all amendments thereto, heretofore or
hereafter made, copies of which are on file with the Secretary of
the Commonwealth of Massachusetts. [indent] No transfer hereof
will be of any effect as regards the Trustees of PIMCO Advisors
Funds until this certificate, properly endorsed or assigned, has
been surrendered and the transfer recorded upon the books of said
Trustees. [indent] This certificate is executed on behalf of the
Trustees as Trustees and not individually and the obligations
hereof are not binding only upon the assets and property of the
Fund. [indent] IN WITNESS WHEREOF the Trustees under said
Agreement and Declaration of Trust have caused the following
facsimile signatures to be affixed to this certificate and a
facsimile of their common seal to be hereto affixed by the
Transfer Agent.
(at right of text, printed vertically)
line 1: [appx 8 pt. bold]
Countersigned
line 2: [indented under line 1 appx 8 pt.]
SHAREHOLDER SERVICES INC.
line 3: [indented under line 2 appx 8 pt. bold]
Denver (Colo.) [space] Transfer Agent
line 4: [to left aligned under line 1 appx. 8 pt.]
By:
line 5: [spaced from line 4 indented under line 3 appx. 8 pt.]
Authorized Signature
(bottom left of certificate)
1-1/2" diameter facsimile seal
(top of seal: semicircle)
PIMCO ADVISORS FUNDS
(center of seal - two line text)
1983
MASSACHUSETTS
(bottom right - across from seal)
[text appx. 11 pt. bold]
Dated:
[spaced from text - signature line with text below line to
right] President FOR THE TRUSTEES
[spaced from text - signature line with text below line to
right] Treasurer
II. BACK OF CERTIFICATE (text reads from top to bottom of 8"x11" portrait
dimension)
[text appx. 8 pt.]
[indented] The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations.
[text appearing left side of page indented under above paragraph appx 8 pt.] TEN
COM - as tenants in common
TEN ENT - as tenants by the entirety
JT TEN WROS NOT TC - as joint tenants with
rights of survivorship and not
as tenants in common
[text appearing right side of page across from above text appx 8 pt.]
UNIF GIFT/TRANSFER MIN ACT - __________________ Custodian _______________
(Cust) (Minor)
UNDER UGMA/UTMA ___________________
(State)
[text - centered appx 8 pt.]
Additional abbreviations may also be used though
not in the above list.
[text - centered appx. 10 pt.]
For Value Received ................ hereby
sell(s), assign(s), and transfer(s) unto
[text appearing left of page appx. 8 pt]
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
AND PROVIDE CERTIFICATION
BY TRANSFEREE
[graphic: box for identifying number]
<PAGE>
PAGE 2 Back of certificate continued.
[Directly below graphic box: double spaced]
[line 1: with text centered under line]
- ---------------------------------------------------------------------
(Please print or type name and address of assignee)
[line 2: no text under line]
- ---------------------------------------------------------------------
[line 3: no text under line]
- ---------------------------------------------------------------------
[line 4: with text centered under line
- ---------------------------------------------------------------------
Class A Shares of beneficial interest represented by the within Certificate, and
do hereby irrevocably constitute and appoint [line 5: with text centered under
line
- ---------------------------------------------------------------------
Attorney to transfer the said shares on the books of the within named Fund
with full power of substitution in the premises.
[line 6: aligned left - text and line appx. 10 pt.]
Dated____________________________
[line 7: aligned right - text and line appx. 10 pt.]
Signed__________________________
[line 8: aligned right centered text under line appx. 8 pt.]
- --------------------------------
(Both must sign if joint owners)
[line 9, 10 and 11: aligned right 3 lines of text right of lines with centered
text]
Signature(s) __________________________
guaranteed Name of Guarantor
by: _____________________________
Signature of Officer/Title
[aligned left of lines 9-11
graphic box containing text appx. 8 pt.]
Signatures must be guaranteed by a financial institution of
the type described in the prospectus of the Fund.
[aligned right of lines 4-8 printed vertically appx. 8 pt.]
NOTICE: The signature(s) to this assignment must correspond
with the name(s) as written upon face of the certificate in every
particular without alteration or enlargement or any change
whatever.
[single line of text alinged left appx. 10 pt. bold]
PLEASE NOTE: This document contains a watermark when viewed at
an angle. It is invalid without this watermark:
[directly below text above aligned left appx. 18 pt. bold]
P I M C O
[Watermark in five rows vertically across page: PIMCO PIMCO
PIMCO
[bottom of certificate: line with text centered under appx.
16 pt.]
- ------------------------------------------------------------------------------
THIS SPACE MUST NOT BE COVERED IN ANY WAY
<PAGE>
PIMCO ADVISORS FUNDS
Description of Share Certificate for:
PIMCO ADVISORS HIGH INCOME FUND CLASS B SHARES
Class Share Certificate (8-1/2" x 11")
I. FACE OF CERTIFICATE (All text and other matter lies within
8-1/4" x 10-3/4" decorative border, 5/16" wide)
(upper left corner)- box with heading:NUMBER [of shares]
(upper center) - heading: CLASS B SHARES
(upper right corner)- heading: CP - [number]
(directly below upper right
corner heading:- box with heading: SHARES [amt. of shares]
(centered below boxes)
line 1: single line heading: [appx. 8 pt.]
ESTABLISHED UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
line 2: single line heading: [appx. 18pt.]
PIMCO ADVISORS FUNDS
line 3: single line heading: [appx. 18pt.]
CLASS B SHARES
line 4: single line heading: [appx. 8 pt]
PAR VALUE $.00001 PER SHARE
(at left) single line heading: [appx. 11 pt.]
THIS IS TO CERTIFY THAT
(at right)two line heading: [appx. 10 pt.]
SEE REVERSE FOR
CERTAIN DEFINITIONS
(at right directly below two line heading - box with content)
CUSIP 693387615
(at left appx half way down width of cert. - single line heading)
is the owner of
(at right appx half way down width of cert. - single line heading)
Class B Shares
(centered - text appx. 11pt)
of benficial interest in PIMCO Advisors Funds - PIMCO Advisors
High Income Fund, par value $.00001 per share, fully paid and
nonassessable, which shares have been issued and are held under
and subject to terms and provisions of the Amended and Restated
Agreement and Declaration of Trust dated September 11, 1990, of
PIMCO Advisors Funds, and all amendments thereto, heretofore or
hereafter made, copies of which are on file with the Secretary of
the Commonwealth of Massachusetts. [indent] No transfer hereof
will be of any effect as regards the Trustees of PIMCO Advisors
Funds until this certificate, properly endorsed or assigned, has
been surrendered and the transfer recorded upon the books of said
Trustees. [indent] This certificate is executed on behalf of the
Trustees as Trustees and not individually and the obligations
hereof are not binding only upon the assets and property of the
Fund. [indent] IN WITNESS WHEREOF the Trustees under said
Agreement and Declaration of Trust have caused the following
facsimile signatures to be affixed to this certificate and a
facsimile of their common seal to be hereto affixed by the
Transfer Agent.
(at right of text, printed vertically)
line 1: [appx 8 pt. bold]
Countersigned
line 2: [indented under line 1 appx 8 pt.]
SHAREHOLDER SERVICES INC.
line 3: [indented under line 2 appx 8 pt. bold]
Denver (Colo.) [space] Transfer Agent
line 4: [to left aligned under line 1 appx. 8 pt.]
By:
line 5: [spaced from line 4 indented under line 3 appx. 8 pt.]
Authorized Signature
(bottom left of certificate)
1-1/2" diameter facsimile seal
(top of seal: semicircle)
PIMCO ADVISORS FUNDS
(center of seal - two line text)
1983
MASSACHUSETTS
(bottom right - across from seal)
[text appx. 11 pt. bold]
Dated:
[spaced from text - signature line with text below line to
right] President FOR THE TRUSTEES
[spaced from text - signature line with text below line to
right] Treasurer
II. BACK OF CERTIFICATE (text reads from top to bottom of 8"x11" portrait
dimension)
[text appx. 8 pt.]
[indented] The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations.
[text appearing left side of page indented under above paragraph appx 8 pt.] TEN
COM - as tenants in common
TEN ENT - as tenants by the entirety
JT TEN WROS NOT TC - as joint tenants with
rights of survivorship and not
as tenants in common
[text appearing right side of page across from above text appx 8 pt.]
UNIF GIFT/TRANSFER MIN ACT - __________________ Custodian _______________
(Cust) (Minor)
UNDER UGMA/UTMA ___________________
(State)
[text - centered appx 8 pt.]
Additional abbreviations may also be used though
not in the above list.
[text - centered appx. 10 pt.]
For Value Received ................ hereby
sell(s), assign(s), and transfer(s) unto
[text appearing left of page appx. 8 pt]
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
AND PROVIDE CERTIFICATION
BY TRANSFEREE
[graphic: box for identifying number]
<PAGE>
PAGE 2 Back of certificate continued.
[Directly below graphic box: double spaced]
[line 1: with text centered under line]
- ---------------------------------------------------------------------
(Please print or type name and address of assignee)
[line 2: no text under line]
- ---------------------------------------------------------------------
[line 3: no text under line]
- ---------------------------------------------------------------------
[line 4: with text centered under line
- ---------------------------------------------------------------------
Class B Shares of beneficial interest represented by the within Certificate, and
do hereby irrevocably constitute and appoint [line 5: with text centered under
line
- ---------------------------------------------------------------------
Attorney to transfer the said shares on the books of the within named Fund
with full power of substitution in the premises.
[line 6: aligned left - text and line appx. 10 pt.]
Dated____________________________
[line 7: aligned right - text and line appx. 10 pt.]
Signed__________________________
[line 8: aligned right centered text under line appx. 8 pt.]
- --------------------------------
(Both must sign if joint owners)
[line 9, 10 and 11: aligned right 3 lines of text right of lines with centered
text]
Signature(s) __________________________
guaranteed Name of Guarantor
by: _____________________________
Signature of Officer/Title
[aligned left of lines 9-11
graphic box containing text appx. 8 pt.]
Signatures must be guaranteed by a financial institution of
the type described in the prospectus of the Fund.
[aligned right of lines 4-8 printed vertically appx. 8 pt.]
NOTICE: The signature(s) to this assignment must correspond
with the name(s) as written upon face of the certificate in every
particular without alteration or enlargement or any change
whatever.
[single line of text alinged left appx. 10 pt. bold]
PLEASE NOTE: This document contains a watermark when viewed at
an angle. It is invalid without this watermark:
[directly below text above aligned left appx. 18 pt. bold]
P I M C O
[Watermark in five rows vertically across page: PIMCO PIMCO
PIMCO
[bottom of certificate: line with text centered under appx.
16 pt.]
- -----------------------------------------------------------------------------
THIS SPACE MUST NOT BE COVERED IN ANY WAY
<PAGE>
PIMCO ADVISORS FUNDS
Description of Share Certificate for:
PIMCO ADVISORS HIGH INCOME FUND CLASS C SHARES
Class Share Certificate (8-1/2" x 11")
I. FACE OF CERTIFICATE (All text and other matter lies within
8-1/4" x 10-3/4" decorative border, 5/16" wide)
(upper left corner)- box with heading:NUMBER [of shares]
(upper center) - heading: CLASS C SHARES
(upper right corner)- heading: CP - [number]
(directly below upper right
corner heading:- box with heading: SHARES [amt. of shares]
(centered below boxes)
line 1: single line heading: [appx. 8 pt.]
ESTABLISHED UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
line 2: single line heading: [appx. 18pt.]
PIMCO ADVISORS FUNDS
line 3: single line heading: [appx. 18pt.]
CLASS C SHARES
line 4: single line heading: [appx. 8 pt]
PAR VALUE $.00001 PER SHARE
(at left) single line heading: [appx. 11 pt.]
THIS IS TO CERTIFY THAT
(at right)two line heading: [appx. 10 pt.]
SEE REVERSE FOR
CERTAIN DEFINITIONS
(at right directly below two line heading - box with content)
CUSIP 693387201
(at left appx half way down width of cert. - single line heading)
is the owner of
(at right appx half way down width of cert. - single line heading)
Class C Shares
(centered - text appx. 11pt)
of benficial interest in PIMCO Advisors Funds - PIMCO Advisors
High Income Fund, par value $.00001 per share, fully paid and
nonassessable, which shares have been issued and are held under
and subject to terms and provisions of the Amended and Restated
Agreement and Declaration of Trust dated September 11, 1990, of
PIMCO Advisors Funds, and all amendments thereto, heretofore or
hereafter made, copies of which are on file with the Secretary of
the Commonwealth of Massachusetts. [indent] No transfer hereof
will be of any effect as regards the Trustees of PIMCO Advisors
Funds until this certificate, properly endorsed or assigned, has
been surrendered and the transfer recorded upon the books of said
Trustees. [indent] This certificate is executed on behalf of the
Trustees as Trustees and not individually and the obligations
hereof are not binding only upon the assets and property of the
Fund. [indent] IN WITNESS WHEREOF the Trustees under said
Agreement and Declaration of Trust have caused the following
facsimile signatures to be affixed to this certificate and a
facsimile of their common seal to be hereto affixed by the
Transfer Agent.
(at right of text, printed vertically)
line 1: [appx 8 pt. bold]
Countersigned
line 2: [indented under line 1 appx 8 pt.]
SHAREHOLDER SERVICES INC.
line 3: [indented under line 2 appx 8 pt. bold]
Denver (Colo.) [space] Transfer Agent
line 4: [to left aligned under line 1 appx. 8 pt.]
By:
line 5: [spaced from line 4 indented under line 3 appx. 8 pt.]
Authorized Signature
(bottom left of certificate)
1-1/2" diameter facsimile seal
(top of seal: semicircle)
PIMCO ADVISORS FUNDS
(center of seal - two line text)
1983
MASSACHUSETTS
(bottom right - across from seal)
[text appx. 11 pt. bold]
Dated:
[spaced from text - signature line with text below line to
right] President FOR THE TRUSTEES
[spaced from text - signature line with text below line to
right] Treasurer
II. BACK OF CERTIFICATE (text reads from top to bottom of 8"x11" portrait
dimension)
[text appx. 8 pt.]
[indented] The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations.
[text appearing left side of page indented under above paragraph appx 8 pt.] TEN
COM - as tenants in common
TEN ENT - as tenants by the entirety
JT TEN WROS NOT TC - as joint tenants with
rights of survivorship and not
as tenants in common
[text appearing right side of page across from above text appx 8 pt.]
UNIF GIFT/TRANSFER MIN ACT - __________________ Custodian _______________
(Cust) (Minor)
UNDER UGMA/UTMA ___________________
(State)
[text - centered appx 8 pt.]
Additional abbreviations may also be used though
not in the above list.
[text - centered appx. 10 pt.]
For Value Received ................ hereby
sell(s), assign(s), and transfer(s) unto
[text appearing left of page appx. 8 pt]
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
AND PROVIDE CERTIFICATION
BY TRANSFEREE
[graphic: box for identifying number]
<PAGE>
PAGE 2 Back of certificate continued.
[Directly below graphic box: double spaced]
[line 1: with text centered under line]
- ---------------------------------------------------------------------
(Please print or type name and address of assignee)
[line 2: no text under line]
- ---------------------------------------------------------------------
[line 3: no text under line]
- ---------------------------------------------------------------------
[line 4: with text centered under line
- ---------------------------------------------------------------------
Class C Shares of beneficial interest represented by the within Certificate, and
do hereby irrevocably constitute and appoint [line 5: with text centered under
line
- ---------------------------------------------------------------------
Attorney to transfer the said shares on the books of the within named Fund
with full power of substitution in the premises.
[line 6: aligned left - text and line appx. 10 pt.]
Dated____________________________
[line 7: aligned right - text and line appx. 10 pt.]
Signed__________________________
[line 8: aligned right centered text under line appx. 8 pt.]
- --------------------------------
(Both must sign if joint owners)
[line 9, 10 and 11: aligned right 3 lines of text right of lines with centered
text]
Signature(s) __________________________
guaranteed Name of Guarantor
by: _____________________________
Signature of Officer/Title
[aligned left of lines 9-11
graphic box containing text appx. 8 pt.]
Signatures must be guaranteed by a financial institution of
the type described in the prospectus of the Fund.
[aligned right of lines 4-8 printed vertically appx. 8 pt.]
NOTICE: The signature(s) to this assignment must correspond
with the name(s) as written upon face of the certificate in every
particular without alteration or enlargement or any change
[single line of text alinged left appx. 10 pt. bold]
PLEASE NOTE: This document contains a watermark when viewed at
an angle. It is invalid without this watermark:
[directly below text above aligned left appx. 18 pt. bold]
P I M C O
[Watermark in five rows vertically across page: PIMCO PIMCO
PIMCO
[bottom of certificate: line with text centered under appx.
16 pt.]
- ------------------------------------------------------------------------------
THIS SPACE MUST NOT BE COVERED IN ANY WAY
<PAGE>
PIMCO ADVISORS FUNDS
Description of Share Certificate for:
PIMCO ADVISORS TOTAL RETURN INCOME FUND CLASS A SHARES
Class Share Certificate (8-1/2" x 11")
I. FACE OF CERTIFICATE (All text and other matter lies within
8-1/4" x 10-3/4" decorative border, 5/16" wide)
(upper left corner)- box with heading:NUMBER [of shares]
(upper center) - heading: CLASS A SHARES
(upper right corner)- heading: CP - [number]
(directly below upper right
corner heading:- box with heading: SHARES [amt. of shares]
(centered below boxes)
line 1: single line heading: [appx. 8 pt.]
ESTABLISHED UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
line 2: single line heading: [appx. 18pt.]
PIMCO ADVISORS FUNDS
line 3: single line heading: [appx. 18pt.]
CLASS A SHARES
line 4: single line heading: [appx. 8 pt]
PAR VALUE $.00001 PER SHARE
(at left) single line heading: [appx. 11 pt.]
THIS IS TO CERTIFY THAT
(at right)two line heading: [appx. 10 pt.]
SEE REVERSE FOR
CERTAIN DEFINITIONS
(at right directly below two line heading - box with content)
CUSIP 693387714
(at left appx half way down width of cert. - single line heading)
is the owner of
(at right appx half way down width of cert. - single line heading)
Class A Shares
(centered - text appx. 11pt)
of benficial interest in PIMCO Advisors Funds - PIMCO Advisors
Total Return Income Fund, par value $.00001 per share, fully paid
and nonassessable, which shares have been issued and are held
under and subject to terms and provisions of the Amended and
Restated Agreement and Declaration of Trust dated September 11,
1990, of PIMCO Advisors Funds, and all amendments thereto,
heretofore or hereafter made, copies of which are on file with
the Secretary of the Commonwealth of Massachusetts. [indent] No
transfer hereof will be of any effect as regards the Trustees of
PIMCO Advisors Funds until this certificate, properly endorsed or
assigned, has been surrendered and the transfer recorded upon the
books of said Trustees. [indent] This certificate is executed on
behalf of the Trustees as Trustees and not individually and the
obligations hereof are not binding only upon the assets and
property of the Fund. [indent] IN WITNESS WHEREOF the Trustees
under said Agreement and Declaration of Trust have caused the
following facsimile signatures to be affixed to this certificate
and a facsimile of their common seal to be hereto affixed by the
Transfer Agent.
(at right of text, printed vertically)
line 1: [appx 8 pt. bold]
Countersigned
line 2: [indented under line 1 appx 8 pt.]
SHAREHOLDER SERVICES INC.
line 3: [indented under line 2 appx 8 pt. bold]
Denver (Colo.) [space] Transfer Agent
line 4: [to left aligned under line 1 appx. 8 pt.]
By:
line 5: [spaced from line 4 indented under line 3 appx. 8 pt.]
Authorized Signature
(bottom left of certificate)
1-1/2" diameter facsimile seal
(top of seal: semicircle)
PIMCO ADVISORS FUNDS
(center of seal - two line text)
1983
MASSACHUSETTS
(bottom right - across from seal)
[text appx. 11 pt. bold]
Dated:
[spaced from text - signature line with text below line to
right] President FOR THE TRUSTEES
[spaced from text - signature line with text below line to
right] Treasurer
II. BACK OF CERTIFICATE (text reads from top to bottom of 8"x11" portrait
dimension)
[text appx. 8 pt.]
[indented] The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations.
[text appearing left side of page indented under above paragraph appx 8 pt.] TEN
COM - as tenants in common
TEN ENT - as tenants by the entirety
JT TEN WROS NOT TC - as joint tenants with
rights of survivorship and not
as tenants in common
[text appearing right side of page across from above text appx 8 pt.]
UNIF GIFT/TRANSFER MIN ACT - __________________ Custodian _______________
(Cust) (Minor)
UNDER UGMA/UTMA ___________________
(State)
[text - centered appx 8 pt.]
Additional abbreviations may also be used though
not in the above list.
[text - centered appx. 10 pt.]
For Value Received ................ hereby
sell(s), assign(s), and transfer(s) unto
[text appearing left of page appx. 8 pt]
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
AND PROVIDE CERTIFICATION
BY TRANSFEREE
[graphic: box for identifying number]
<PAGE>
PAGE 2 Back of certificate continued.
[Directly below graphic box: double spaced]
[line 1: with text centered under line]
- ---------------------------------------------------------------------
(Please print or type name and address of assignee)
[line 2: no text under line]
- ---------------------------------------------------------------------
[line 3: no text under line]
- ---------------------------------------------------------------------
[line 4: with text centered under line
- ---------------------------------------------------------------------
Class A Shares of beneficial interest represented by the within Certificate, and
do hereby irrevocably constitute and appoint [line 5: with text centered under
line
- ---------------------------------------------------------------------
Attorney to transfer the said shares on the books of the within named Fund
with full power of substitution in the premises.
[line 6: aligned left - text and line appx. 10 pt.]
Dated____________________________
[line 7: aligned right - text and line appx. 10 pt.]
Signed__________________________
[line 8: aligned right centered text under line appx. 8 pt.]
- --------------------------------
(Both must sign if joint owners)
[line 9, 10 and 11: aligned right 3 lines of text right of lines with centered
text]
Signature(s) __________________________
guaranteed Name of Guarantor
by: _____________________________
Signature of Officer/Title
[aligned left of lines 9-11
graphic box containing text appx. 8 pt.]
Signatures must be guaranteed by a financial institution of
the type described in the prospectus of the Fund.
[aligned right of lines 4-8 printed vertically appx. 8 pt.]
NOTICE: The signature(s) to this assignment must correspond
with the name(s) as written upon face of the certificate in every
particular without alteration or enlargement or any change
whatever.
[single line of text alinged left appx. 10 pt. bold]
PLEASE NOTE: This document contains a watermark when viewed at
an angle. It is invalid without this watermark:
[directly below text above aligned left appx. 18 pt. bold]
P I M C O
[Watermark in five rows vertically across page: PIMCO PIMCO
PIMCO
[bottom of certificate: line with text centered under appx.
16 pt.]
- ------------------------------------------------------------------------------
THIS SPACE MUST NOT BE COVERED IN ANY WAY
<PAGE>
PIMCO ADVISORS FUNDS
Description of Share Certificate for:
PIMCO ADVISORS TOTAL RETURN INCOME FUND CLASS B SHARES
Class Share Certificate (8-1/2" x 11")
I. FACE OF CERTIFICATE (All text and other matter lies within
8-1/4" x 10-3/4" decorative border, 5/16" wide)
(upper left corner)- box with heading:NUMBER [of shares]
(upper center) - heading: CLASS B SHARES
(upper right corner)- heading: CP - [number]
(directly below upper right
corner heading:- box with heading: SHARES [amt. of shares]
(centered below boxes)
line 1: single line heading: [appx. 8 pt.]
ESTABLISHED UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
line 2: single line heading: [appx. 18pt.]
PIMCO ADVISORS FUNDS
line 3: single line heading: [appx. 18pt.]
CLASS B SHARES
line 4: single line heading: [appx. 8 pt]
PAR VALUE $.00001 PER SHARE
(at left) single line heading: [appx. 11 pt.]
THIS IS TO CERTIFY THAT
(at right)two line heading: [appx. 10 pt.]
SEE REVERSE FOR
CERTAIN DEFINITIONS
(at right directly below two line heading - box with content)
CUSIP 693387599
(at left appx half way down width of cert. - single line heading)
is the owner of
(at right appx half way down width of cert. - single line heading)
Class B Shares
(centered - text appx. 11pt)
of benficial interest in PIMCO Advisors Funds - PIMCO Advisors
Total Return Income Fund, par value $.00001 per share, fully paid
and nonassessable, which shares have been issued and are held
under and subject to terms and provisions of the Amended and
Restated Agreement and Declaration of Trust dated September 11,
1990, of PIMCO Advisors Funds, and all amendments thereto,
heretofore or hereafter made, copies of which are on file with
the Secretary of the Commonwealth of Massachusetts. [indent] No
transfer hereof will be of any effect as regards the Trustees of
PIMCO Advisors Funds until this certificate, properly endorsed or
assigned, has been surrendered and the transfer recorded upon the
books of said Trustees. [indent] This certificate is executed on
behalf of the Trustees as Trustees and not individually and the
obligations hereof are not binding only upon the assets and
property of the Fund. [indent] IN WITNESS WHEREOF the Trustees
under said Agreement and Declaration of Trust have caused the
following facsimile signatures to be affixed to this certificate
and a facsimile of their common seal to be hereto affixed by the
Transfer Agent.
(at right of text, printed vertically)
line 1: [appx 8 pt. bold]
Countersigned
line 2: [indented under line 1 appx 8 pt.]
SHAREHOLDER SERVICES INC.
line 3: [indented under line 2 appx 8 pt. bold]
Denver (Colo.) [space] Transfer Agent
line 4: [to left aligned under line 1 appx. 8 pt.]
By:
line 5: [spaced from line 4 indented under line 3 appx. 8 pt.]
Authorized Signature
(bottom left of certificate)
1-1/2" diameter facsimile seal
(top of seal: semicircle)
PIMCO ADVISORS FUNDS
(center of seal - two line text)
1983
MASSACHUSETTS
(bottom right - across from seal)
[text appx. 11 pt. bold]
Dated:
[spaced from text - signature line with text below line to
right] President FOR THE TRUSTEES
[spaced from text - signature line with text below line to
right] Treasurer
II. BACK OF CERTIFICATE (text reads from top to bottom of 8"x11" portrait
dimension)
[text appx. 8 pt.]
[indented] The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations.
[text appearing left side of page indented under above paragraph appx 8 pt.] TEN
COM - as tenants in common
TEN ENT - as tenants by the entirety
JT TEN WROS NOT TC - as joint tenants with
rights of survivorship and not
as tenants in common
[text appearing right side of page across from above text appx 8 pt.]
UNIF GIFT/TRANSFER MIN ACT - __________________ Custodian _______________
(Cust) (Minor)
UNDER UGMA/UTMA ___________________
(State)
[text - centered appx 8 pt.]
Additional abbreviations may also be used though
not in the above list.
[text - centered appx. 10 pt.]
For Value Received ................ hereby
sell(s), assign(s), and transfer(s) unto
[text appearing left of page appx. 8 pt]
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
AND PROVIDE CERTIFICATION
BY TRANSFEREE
[graphic: box for identifying number]
<PAGE>
PAGE 2 Back of certificate continued.
[Directly below graphic box: double spaced]
[line 1: with text centered under line]
- ---------------------------------------------------------------------
(Please print or type name and address of assignee)
[line 2: no text under line]
- ---------------------------------------------------------------------
[line 3: no text under line]
- ---------------------------------------------------------------------
[line 4: with text centered under line
- ---------------------------------------------------------------------
Class B Shares of beneficial interest represented by the within Certificate, and
do hereby irrevocably constitute and appoint [line 5: with text centered under
line
- ---------------------------------------------------------------------
Attorney to transfer the said shares on the books of the within named Fund
with full power of substitution in the premises.
[line 6: aligned left - text and line appx. 10 pt.]
Dated____________________________
[line 7: aligned right - text and line appx. 10 pt.]
Signed__________________________
[line 8: aligned right centered text under line appx. 8 pt.]
- --------------------------------
(Both must sign if joint owners)
[line 9, 10 and 11: aligned right 3 lines of text right of lines with centered
text]
Signature(s) __________________________
guaranteed Name of Guarantor
by: _____________________________
Signature of Officer/Title
[aligned left of lines 9-11
graphic box containing text appx. 8 pt.]
Signatures must be guaranteed by a financial institution of
the type described in the prospectus of the Fund.
[aligned right of lines 4-8 printed vertically appx. 8 pt.]
NOTICE: The signature(s) to this assignment must correspond
with the name(s) as written upon face of the certificate in every
particular without alteration or enlargement or any change
whatever.
[single line of text alinged left appx. 10 pt. bold]
PLEASE NOTE: This document contains a watermark when viewed at
an angle. It is invalid without this watermark:
[directly below text above aligned left appx. 18 pt. bold]
P I M C O
[Watermark in five rows vertically across page: PIMCO PIMCO
PIMCO
[bottom of certificate: line with text centered under appx.
16 pt.]
- -----------------------------------------------------------------------------
THIS SPACE MUST NOT BE COVERED IN ANY WAY
<PAGE>
PIMCO ADVISORS FUNDS
Description of Share Certificate for:
PIMCO ADVISORS TOTAL RETURN INCOME FUND CLASS C SHARES
Class Share Certificate (8-1/2" x 11")
I. FACE OF CERTIFICATE (All text and other matter lies within
8-1/4" x 10-3/4" decorative border, 5/16" wide)
(upper left corner)- box with heading:NUMBER [of shares]
(upper center) - heading: CLASS C SHARES
(upper right corner)- heading: CP - [number]
(directly below upper right
corner heading:- box with heading: SHARES [amt. of shares]
(centered below boxes)
line 1: single line heading: [appx. 8 pt.]
ESTABLISHED UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
line 2: single line heading: [appx. 18pt.]
PIMCO ADVISORS FUNDS
line 3: single line heading: [appx. 18pt.]
CLASS C SHARES
line 4: single line heading: [appx. 8 pt]
PAR VALUE $.00001 PER SHARE
(at left) single line heading: [appx. 11 pt.]
THIS IS TO CERTIFY THAT
(at right)two line heading: [appx. 10 pt.]
SEE REVERSE FOR
CERTAIN DEFINITIONS
(at right directly below two line heading - box with content)
CUSIP 693387698
(at left appx half way down width of cert. - single line heading)
is the owner of
(at right appx half way down width of cert. - single line heading)
Class C Shares
(centered - text appx. 11pt)
of benficial interest in PIMCO Advisors Funds - PIMCO Advisors
Total Return Income Fund, par value $.00001 per share, fully paid
and nonassessable, which shares have been issued and are held
under and subject to terms and provisions of the Amended and
Restated Agreement and Declaration of Trust dated September 11,
1990, of PIMCO Advisors Funds, and all amendments thereto,
heretofore or hereafter made, copies of which are on file with
the Secretary of the Commonwealth of Massachusetts. [indent] No
transfer hereof will be of any effect as regards the Trustees of
PIMCO Advisors Funds until this certificate, properly endorsed or
assigned, has been surrendered and the transfer recorded upon the
books of said Trustees. [indent] This certificate is executed on
behalf of the Trustees as Trustees and not individually and the
obligations hereof are not binding only upon the assets and
property of the Fund. [indent] IN WITNESS WHEREOF the Trustees
under said Agreement and Declaration of Trust have caused the
following facsimile signatures to be affixed to this certificate
and a facsimile of their common seal to be hereto affixed by the
Transfer Agent.
(at right of text, printed vertically)
line 1: [appx 8 pt. bold]
Countersigned
line 2: [indented under line 1 appx 8 pt.]
SHAREHOLDER SERVICES INC.
line 3: [indented under line 2 appx 8 pt. bold]
Denver (Colo.) [space] Transfer Agent
line 4: [to left aligned under line 1 appx. 8 pt.]
By:
line 5: [spaced from line 4 indented under line 3 appx. 8 pt.]
Authorized Signature
(bottom left of certificate)
1-1/2" diameter facsimile seal
(top of seal: semicircle)
PIMCO ADVISORS FUNDS
(center of seal - two line text)
1983
MASSACHUSETTS
(bottom right - across from seal)
[text appx. 11 pt. bold]
Dated:
[spaced from text - signature line with text below line to
right] President FOR THE TRUSTEES
[spaced from text - signature line with text below line to
right] Treasurer
II. BACK OF CERTIFICATE (text reads from top to bottom of 8"x11" portrait
dimension)
[text appx. 8 pt.]
[indented] The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations.
[text appearing left side of page indented under above paragraph appx 8 pt.] TEN
COM - as tenants in common
TEN ENT - as tenants by the entirety
JT TEN WROS NOT TC - as joint tenants with
rights of survivorship and not
as tenants in common
[text appearing right side of page across from above text appx 8 pt.]
UNIF GIFT/TRANSFER MIN ACT - __________________ Custodian _______________
(Cust) (Minor)
UNDER UGMA/UTMA ___________________
(State)
[text - centered appx 8 pt.]
Additional abbreviations may also be used though
not in the above list.
[text - centered appx. 10 pt.]
For Value Received ................ hereby
sell(s), assign(s), and transfer(s) unto
[text appearing left of page appx. 8 pt]
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
AND PROVIDE CERTIFICATION
BY TRANSFEREE
[graphic: box for identifying number]
<PAGE>
PAGE 2 Back of certificate continued.
[Directly below graphic box: double spaced]
[line 1: with text centered under line]
- ---------------------------------------------------------------------
(Please print or type name and address of assignee)
[line 2: no text under line]
- ---------------------------------------------------------------------
[line 3: no text under line]
- ---------------------------------------------------------------------
[line 4: with text centered under line
- ---------------------------------------------------------------------
Class C Shares of beneficial interest represented by the within Certificate, and
do hereby irrevocably constitute and appoint [line 5: with text centered under
line
- ---------------------------------------------------------------------
Attorney to transfer the said shares on the books of the within named Fund
with full power of substitution in the premises.
[line 6: aligned left - text and line appx. 10 pt.]
Dated____________________________
[line 7: aligned right - text and line appx. 10 pt.]
Signed__________________________
[line 8: aligned right centered text under line appx. 8 pt.]
- --------------------------------
(Both must sign if joint owners)
[line 9, 10 and 11: aligned right 3 lines of text right of lines with centered
text]
Signature(s) __________________________
guaranteed Name of Guarantor
by: _____________________________
Signature of Officer/Title
[aligned left of lines 9-11
graphic box containing text appx. 8 pt.]
Signatures must be guaranteed by a financial institution of
the type described in the prospectus of the Fund.
[aligned right of lines 4-8 printed vertically appx. 8 pt.]
NOTICE: The signature(s) to this assignment must correspond
with the name(s) as written upon face of the certificate in every
particular without alteration or enlargement or any change
whatever.
[single line of text alinged left appx. 10 pt. bold]
PLEASE NOTE: This document contains a watermark when viewed at
an angle. It is invalid without this watermark:
[directly below text above aligned left appx. 18 pt. bold]
P I M C O
[Watermark in five rows vertically across page: PIMCO PIMCO
PIMCO
[bottom of certificate: line with text centered under appx.
16 pt.]
- ------------------------------------------------------------------------------
THIS SPACE MUST NOT BE COVERED IN ANY WAY
<PAGE>
PIMCO ADVISORS FUNDS
Description of Share Certificate for:
PIMCO ADVISORS TAX EXEMPT FUND CLASS A SHARES
Class Share Certificate (8-1/2" x 11")
I. FACE OF CERTIFICATE (All text and other matter lies within
8-1/4" x 10-3/4" decorative border, 5/16" wide)
(upper left corner)- box with heading:NUMBER [of shares]
(upper center) - heading: CLASS A SHARES
(upper right corner)- heading: CP - [number]
(directly below upper right
corner heading:- box with heading: SHARES [amt. of shares]
(centered below boxes)
line 1: single line heading: [appx. 8 pt.]
ESTABLISHED UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
line 2: single line heading: [appx. 18pt.]
PIMCO ADVISORS FUNDS
line 3: single line heading: [appx. 18pt.]
CLASS A SHARES
line 4: single line heading: [appx. 8 pt]
PAR VALUE $.00001 PER SHARE
(at left) single line heading: [appx. 11 pt.]
THIS IS TO CERTIFY THAT
(at right)two line heading: [appx. 10 pt.]
SEE REVERSE FOR
CERTAIN DEFINITIONS
(at right directly below two line heading - box with content)
CUSIP 693387862
(at left appx half way down width of cert. - single line heading)
is the owner of
(at right appx half way down width of cert. - single line heading)
Class A Shares
(centered - text appx. 11pt)
of benficial interest in PIMCO Advisors Funds - PIMCO Advisors
Tax Exempt Fund, par value $.00001 per share, fully paid and
nonassessable, which shares have been issued and are held under
and subject to terms and provisions of the Amended and Restated
Agreement and Declaration of Trust dated September 11, 1990, of
PIMCO Advisors Funds, and all amendments thereto, heretofore or
hereafter made, copies of which are on file with the Secretary of
the Commonwealth of Massachusetts. [indent] No transfer hereof
will be of any effect as regards the Trustees of PIMCO Advisors
Funds until this certificate, properly endorsed or assigned, has
been surrendered and the transfer recorded upon the books of said
Trustees. [indent] This certificate is executed on behalf of the
Trustees as Trustees and not individually and the obligations
hereof are not binding only upon the assets and property of the
Fund. [indent] IN WITNESS WHEREOF the Trustees under said
Agreement and Declaration of Trust have caused the following
facsimile signatures to be affixed to this certificate and a
facsimile of their common seal to be hereto affixed by the
Transfer Agent.
(at right of text, printed vertically)
line 1: [appx 8 pt. bold]
Countersigned
line 2: [indented under line 1 appx 8 pt.]
SHAREHOLDER SERVICES INC.
line 3: [indented under line 2 appx 8 pt. bold]
Denver (Colo.) [space] Transfer Agent
line 4: [to left aligned under line 1 appx. 8 pt.]
By:
line 5: [spaced from line 4 indented under line 3 appx. 8 pt.]
Authorized Signature
(bottom left of certificate)
1-1/2" diameter facsimile seal
(top of seal: semicircle)
PIMCO ADVISORS FUNDS
(center of seal - two line text)
1983
MASSACHUSETTS
(bottom right - across from seal)
[text appx. 11 pt. bold]
Dated:
[spaced from text - signature line with text below line to
right] President FOR THE TRUSTEES
[spaced from text - signature line with text below line to
right] Treasurer
II. BACK OF CERTIFICATE (text reads from top to bottom of 8"x11" portrait
dimension)
[text appx. 8 pt.]
[indented] The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations.
[text appearing left side of page indented under above paragraph appx 8 pt.] TEN
COM - as tenants in common
TEN ENT - as tenants by the entirety
JT TEN WROS NOT TC - as joint tenants with
rights of survivorship and not
as tenants in common
[text appearing right side of page across from above text appx 8 pt.]
UNIF GIFT/TRANSFER MIN ACT - __________________ Custodian _______________
(Cust) (Minor)
UNDER UGMA/UTMA ___________________
(State)
[text - centered appx 8 pt.]
Additional abbreviations may also be used though
not in the above list.
[text - centered appx. 10 pt.]
For Value Received ................ hereby
sell(s), assign(s), and transfer(s) unto
[text appearing left of page appx. 8 pt]
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
AND PROVIDE CERTIFICATION
BY TRANSFEREE
[graphic: box for identifying number]
<PAGE>
PAGE 2 Back of certificate continued.
[Directly below graphic box: double spaced]
[line 1: with text centered under line]
- ---------------------------------------------------------------------
(Please print or type name and address of assignee)
[line 2: no text under line]
- ---------------------------------------------------------------------
[line 3: no text under line]
- ---------------------------------------------------------------------
[line 4: with text centered under line
- ---------------------------------------------------------------------
Class A Shares of beneficial interest represented by the within Certificate, and
do hereby irrevocably constitute and appoint [line 5: with text centered under
line
- ---------------------------------------------------------------------
Attorney to transfer the said shares on the books of the within named Fund
with full power of substitution in the
premises.
[line 6: aligned left - text and line appx. 10 pt.]
Dated____________________________
[line 7: aligned right - text and line appx. 10 pt.]
Signed__________________________
[line 8: aligned right centered text under line appx. 8 pt.]
- --------------------------------
(Both must sign if joint owners)
[line 9, 10 and 11: aligned right 3 lines of text right of lines with centered
text]
Signature(s) __________________________
guaranteed Name of Guarantor
by: _____________________________
Signature of Officer/Title
[aligned left of lines 9-11
graphic box containing text appx. 8 pt.]
Signatures must be guaranteed by a financial institution of
the type described in the prospectus of the Fund.
[aligned right of lines 4-8 printed vertically appx. 8 pt.]
NOTICE: The signature(s) to this assignment must correspond
with the name(s) as written upon face of the certificate in every
particular without alteration or enlargement or any change
whatever.
[single line of text alinged left appx. 10 pt. bold]
PLEASE NOTE: This document contains a watermark when viewed at
an angle. It is invalid without this watermark:
[directly below text above aligned left appx. 18 pt. bold]
P I M C O
[Watermark in five rows vertically across page: PIMCO PIMCO
PIMCO
[bottom of certificate: line with text centered under appx.
16 pt.]
- --------------------------------------------------------------------------
THIS SPACE MUST NOT BE COVERED IN ANY WAY
<PAGE>
PIMCO ADVISORS FUNDS
Description of Share Certificate for:
PIMCO ADVISORS TAX EXEMPT FUND CLASS B SHARES
Class Share Certificate (8-1/2" x 11")
I. FACE OF CERTIFICATE (All text and other matter lies within
8-1/4" x 10-3/4" decorative border, 5/16" wide)
(upper left corner)- box with heading:NUMBER [of shares]
(upper center) - heading: CLASS B SHARES
(upper right corner)- heading: CP - [number]
(directly below upper right
corner heading:- box with heading: SHARES [amt. of shares]
(centered below boxes)
line 1: single line heading: [appx. 8 pt.]
ESTABLISHED UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
line 2: single line heading: [appx. 18pt.]
PIMCO ADVISORS FUNDS
line 3: single line heading: [appx. 18pt.]
CLASS B SHARES
line 4: single line heading: [appx. 8 pt]
PAR VALUE $.00001 PER SHARE
(at left) single line heading: [appx. 11 pt.]
THIS IS TO CERTIFY THAT
(at right)two line heading: [appx. 10 pt.]
SEE REVERSE FOR
CERTAIN DEFINITIONS
(at right directly below two line heading - box with content)
CUSIP 693387581
(at left appx half way down width of cert. - single line heading)
is the owner of
(at right appx half way down width of cert. - single line heading)
Class B Shares
(centered - text appx. 11pt)
of benficial interest in PIMCO Advisors Funds - PIMCO Advisors
Tax Exempt Fund, par value $.00001 per share, fully paid and
nonassessable, which shares have been issued and are held under
and subject to terms and provisions of the Amended and Restated
Agreement and Declaration of Trust dated September 11, 1990, of
PIMCO Advisors Funds, and all amendments thereto, heretofore or
hereafter made, copies of which are on file with the Secretary of
the Commonwealth of Massachusetts. [indent] No transfer hereof
will be of any effect as regards the Trustees of PIMCO Advisors
Funds until this certificate, properly endorsed or assigned, has
been surrendered and the transfer recorded upon the books of said
Trustees. [indent] This certificate is executed on behalf of the
Trustees as Trustees and not individually and the obligations
hereof are not binding only upon the assets and property of the
Fund. [indent] IN WITNESS WHEREOF the Trustees under said
Agreement and Declaration of Trust have caused the following
facsimile signatures to be affixed to this certificate and a
facsimile of their common seal to be hereto affixed by the
Transfer Agent.
(at right of text, printed vertically)
line 1: [appx 8 pt. bold]
Countersigned
line 2: [indented under line 1 appx 8 pt.]
SHAREHOLDER SERVICES INC.
line 3: [indented under line 2 appx 8 pt. bold]
Denver (Colo.) [space] Transfer Agent
line 4: [to left aligned under line 1 appx. 8 pt.]
By:
line 5: [spaced from line 4 indented under line 3 appx. 8 pt.]
Authorized Signature
(bottom left of certificate)
1-1/2" diameter facsimile seal
(top of seal: semicircle)
PIMCO ADVISORS FUNDS
(center of seal - two line text)
1983
MASSACHUSETTS
(bottom right - across from seal)
[text appx. 11 pt. bold]
Dated:
[spaced from text - signature line with text below line to
right] President FOR THE TRUSTEES
[spaced from text - signature line with text below line to
right] Treasurer
II. BACK OF CERTIFICATE (text reads from top to bottom of 8"x11" portrait
dimension)
[text appx. 8 pt.]
[indented] The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations.
[text appearing left side of page indented under above paragraph appx 8 pt.] TEN
COM - as tenants in common
TEN ENT - as tenants by the entirety
JT TEN WROS NOT TC - as joint tenants with
rights of survivorship and not
as tenants in common
[text appearing right side of page across from above text appx 8 pt.]
UNIF GIFT/TRANSFER MIN ACT - __________________ Custodian _______________
(Cust) (Minor)
UNDER UGMA/UTMA ___________________
(State)
[text - centered appx 8 pt.]
Additional abbreviations may also be used though
not in the above list.
[text - centered appx. 10 pt.]
For Value Received ................ hereby
sell(s), assign(s), and transfer(s) unto
[text appearing left of page appx. 8 pt]
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
AND PROVIDE CERTIFICATION
BY TRANSFEREE
[graphic: box for identifying number]
<PAGE>
PAGE 2 Back of certificate continued.
[Directly below graphic box: double spaced]
[line 1: with text centered under line]
- ---------------------------------------------------------------------
(Please print or type name and address of assignee)
[line 2: no text under line]
- ---------------------------------------------------------------------
[line 3: no text under line]
- ---------------------------------------------------------------------
[line 4: with text centered under line
- ---------------------------------------------------------------------
Class B Shares of beneficial interest represented by the within Certificate, and
do hereby irrevocably constitute and appoint [line 5: with text centered under
line
- ---------------------------------------------------------------------
Attorney to transfer the said shares on the books of the within named Fund
with full power of substitution in the premises.
[line 6: aligned left - text and line appx. 10 pt.]
Dated____________________________
[line 7: aligned right - text and line appx. 10 pt.]
Signed__________________________
[line 8: aligned right centered text under line appx. 8 pt.]
- --------------------------------
(Both must sign if joint owners)
[line 9, 10 and 11: aligned right 3 lines of text right of lines with centered
text]
Signature(s) __________________________
guaranteed Name of Guarantor
by: _____________________________
Signature of Officer/Title
[aligned left of lines 9-11
graphic box containing text appx. 8 pt.]
Signatures must be guaranteed by a financial institution of
the type described in the prospectus of the Fund.
[aligned right of lines 4-8 printed vertically appx. 8 pt.]
NOTICE: The signature(s) to this assignment must correspond
with the name(s) as written upon face of the certificate in every
particular without alteration or enlargement or any change
whatever.
[single line of text alinged left appx. 10 pt. bold]
PLEASE NOTE: This document contains a watermark when viewed at
an angle. It is invalid without this watermark:
[directly below text above aligned left appx. 18 pt. bold]
P I M C O
[Watermark in five rows vertically across page: PIMCO PIMCO
PIMCO
[bottom of certificate: line with text centered under appx.
16 pt.]
- -------------------------------------------------------------------------------
THIS SPACE MUST NOT BE COVERED IN ANY WAY
<PAGE>
PIMCO ADVISORS FUNDS
Description of Share Certificate for:
PIMCO ADVISORS TAX EXEMPT FUND CLASS C SHARES
Class Share Certificate (8-1/2" x 11")
I. FACE OF CERTIFICATE (All text and other matter lies within
8-1/4" x 10-3/4" decorative border, 5/16" wide)
(upper left corner)- box with heading:NUMBER [of shares]
(upper center) - heading: CLASS C SHARES
(upper right corner)- heading: CP - [number]
(directly below upper right
corner heading:- box with heading: SHARES [amt. of shares]
(centered below boxes)
line 1: single line heading: [appx. 8 pt.]
ESTABLISHED UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
line 2: single line heading: [appx. 18pt.]
PIMCO ADVISORS FUNDS
line 3: single line heading: [appx. 18pt.]
CLASS C SHARES
line 4: single line heading: [appx. 8 pt]
PAR VALUE $.00001 PER SHARE
(at left) single line heading: [appx. 11 pt.]
THIS IS TO CERTIFY THAT
(at right)two line heading: [appx. 10 pt.]
SEE REVERSE FOR
CERTAIN DEFINITIONS
(at right directly below two line heading - box with content)
CUSIP 693387854
(at left appx half way down width of cert. - single line heading)
is the owner of
(at right appx half way down width of cert. - single line heading)
Class C Shares
(centered - text appx. 11pt)
of benficial interest in PIMCO Advisors Funds - PIMCO Advisors
Tax Exempt Fund, par value $.00001 per share, fully paid and
nonassessable, which shares have been issued and are held under
and subject to terms and provisions of the Amended and Restated
Agreement and Declaration of Trust dated September 11, 1990, of
PIMCO Advisors Funds, and all amendments thereto, heretofore or
hereafter made, copies of which are on file with the Secretary of
the Commonwealth of Massachusetts. [indent] No transfer hereof
will be of any effect as regards the Trustees of PIMCO Advisors
Funds until this certificate, properly endorsed or assigned, has
been surrendered and the transfer recorded upon the books of said
Trustees. [indent] This certificate is executed on behalf of the
Trustees as Trustees and not individually and the obligations
hereof are not binding only upon the assets and property of the
Fund. [indent] IN WITNESS WHEREOF the Trustees under said
Agreement and Declaration of Trust have caused the following
facsimile signatures to be affixed to this certificate and a
facsimile of their common seal to be hereto affixed by the
Transfer Agent.
(at right of text, printed vertically)
line 1: [appx 8 pt. bold]
Countersigned
line 2: [indented under line 1 appx 8 pt.]
SHAREHOLDER SERVICES INC.
line 3: [indented under line 2 appx 8 pt. bold]
Denver (Colo.) [space] Transfer Agent
line 4: [to left aligned under line 1 appx. 8 pt.]
By:
line 5: [spaced from line 4 indented under line 3 appx. 8 pt.]
Authorized Signature
(bottom left of certificate)
1-1/2" diameter facsimile seal
(top of seal: semicircle)
PIMCO ADVISORS FUNDS
(center of seal - two line text)
1983
MASSACHUSETTS
(bottom right - across from seal)
[text appx. 11 pt. bold]
Dated:
[spaced from text - signature line with text below line to
right] President FOR THE TRUSTEES
[spaced from text - signature line with text below line to
right] Treasurer
II. BACK OF CERTIFICATE (text reads from top to bottom of 8"x11" portrait
dimension)
[text appx. 8 pt.]
[indented] The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations.
[text appearing left side of page indented under above paragraph appx 8 pt.] TEN
COM - as tenants in common
TEN ENT - as tenants by the entirety
JT TEN WROS NOT TC - as joint tenants with
rights of survivorship and not
as tenants in common
[text appearing right side of page across from above text appx 8 pt.]
UNIF GIFT/TRANSFER MIN ACT - __________________ Custodian _______________
(Cust) (Minor)
UNDER UGMA/UTMA ___________________
(State)
[text - centered appx 8 pt.]
Additional abbreviations may also be used though
not in the above list.
[text - centered appx. 10 pt.]
For Value Received ................ hereby
sell(s), assign(s), and transfer(s) unto
[text appearing left of page appx. 8 pt]
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
AND PROVIDE CERTIFICATION
BY TRANSFEREE
[graphic: box for identifying number]
<PAGE>
PAGE 2 Back of certificate continued.
[Directly below graphic box: double spaced]
[line 1: with text centered under line]
- ---------------------------------------------------------------------
(Please print or type name and address of assignee)
[line 2: no text under line]
- ---------------------------------------------------------------------
[line 3: no text under line]
- ---------------------------------------------------------------------
[line 4: with text centered under line
- ---------------------------------------------------------------------
Class C Shares of beneficial interest represented by the within Certificate, and
do hereby irrevocably constitute and appoint [line 5: with text centered under
line
- ---------------------------------------------------------------------
Attorney to transfer the said shares on the books of the within named Fund
with full power of substitution in the premises.
[line 6: aligned left - text and line appx. 10 pt.]
Dated____________________________
[line 7: aligned right - text and line appx. 10 pt.]
Signed__________________________
[line 8: aligned right centered text under line appx. 8 pt.]
- --------------------------------
(Both must sign if joint owners)
[line 9, 10 and 11: aligned right 3 lines of text right of lines with centered
text]
Signature(s) __________________________
guaranteed Name of Guarantor
by: _____________________________
Signature of Officer/Title
[aligned left of lines 9-11
graphic box containing text appx. 8 pt.]
Signatures must be guaranteed by a financial institution of
the type described in the prospectus of the Fund.
[aligned right of lines 4-8 printed vertically appx. 8 pt.]
NOTICE: The signature(s) to this assignment must correspond
with the name(s) as written upon face of the certificate in every
particular without alteration or enlargement or any change
whatever.
[single line of text alinged left appx. 10 pt. bold]
PLEASE NOTE: This document contains a watermark when viewed at
an angle. It is invalid without this watermark:
[directly below text above aligned left appx. 18 pt. bold]
P I M C O
[Watermark in five rows vertically across page: PIMCO PIMCO
PIMCO
[bottom of certificate: line with text centered under appx.
16 pt.]
- ----------------------------------------------------------------------------
THIS SPACE MUST NOT BE COVERED IN ANY WAY
<PAGE>
PIMCO ADVISORS FUNDS
Description of Share Certificate for:
PIMCO ADVISORS U.S. GOVERNMENT FUND CLASS A SHARES
Class Share Certificate (8-1/2" x 11")
I. FACE OF CERTIFICATE (All text and other matter lies within
8-1/4" x 10-3/4" decorative border, 5/16" wide)
(upper left corner)- box with heading:NUMBER [of shares]
(upper center) - heading: CLASS A SHARES
(upper right corner)- heading: CP - [number]
(directly below upper right
corner heading:- box with heading: SHARES [amt. of shares]
(centered below boxes)
line 1: single line heading: [appx. 8 pt.]
ESTABLISHED UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
line 2: single line heading: [appx. 18pt.]
PIMCO ADVISORS FUNDS
line 3: single line heading: [appx. 18pt.]
CLASS A SHARES
line 4: single line heading: [appx. 8 pt]
PAR VALUE $.00001 PER SHARE
(at left) single line heading: [appx. 11 pt.]
THIS IS TO CERTIFY THAT
(at right)two line heading: [appx. 10 pt.]
SEE REVERSE FOR
CERTAIN DEFINITIONS
(at right directly below two line heading - box with content)
CUSIP 693387888
(at left appx half way down width of cert. - single line heading)
is the owner of
(at right appx half way down width of cert. - single line heading)
Class A Shares
(centered - text appx. 11pt)
of benficial interest in PIMCO Advisors Funds - PIMCO Advisors
U.S. Government Fund, par value $.00001 per share, fully paid and
nonassessable, which shares have been issued and are held under
and subject to terms and provisions of the Amended and Restated
Agreement and Declaration of Trust dated September 11, 1990, of
PIMCO Advisors Funds, and all amendments thereto, heretofore or
hereafter made, copies of which are on file with the Secretary of
the Commonwealth of Massachusetts. [indent] No transfer hereof
will be of any effect as regards the Trustees of PIMCO Advisors
Funds until this certificate, properly endorsed or assigned, has
been surrendered and the transfer recorded upon the books of said
Trustees. [indent] This certificate is executed on behalf of the
Trustees as Trustees and not individually and the obligations
hereof are not binding only upon the assets and property of the
Fund. [indent] IN WITNESS WHEREOF the Trustees under said
Agreement and Declaration of Trust have caused the following
facsimile signatures to be affixed to this certificate and a
facsimile of their common seal to be hereto affixed by the
Transfer Agent.
(at right of text, printed vertically)
line 1: [appx 8 pt. bold]
Countersigned
line 2: [indented under line 1 appx 8 pt.]
SHAREHOLDER SERVICES INC.
line 3: [indented under line 2 appx 8 pt. bold]
Denver (Colo.) [space] Transfer Agent
line 4: [to left aligned under line 1 appx. 8 pt.]
By:
line 5: [spaced from line 4 indented under line 3 appx. 8 pt.]
Authorized Signature
(bottom left of certificate)
1-1/2" diameter facsimile seal
(top of seal: semicircle)
PIMCO ADVISORS FUNDS
(center of seal - two line text)
1983
MASSACHUSETTS
(bottom right - across from seal)
[text appx. 11 pt. bold]
Dated:
[spaced from text - signature line with text below line to
right] President FOR THE TRUSTEES
[spaced from text - signature line with text below line to
right] Treasurer
II. BACK OF CERTIFICATE (text reads from top to bottom of 8"x11" portrait
dimension)
[text appx. 8 pt.]
[indented] The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations.
[text appearing left side of page indented under above paragraph appx 8 pt.] TEN
COM - as tenants in common
TEN ENT - as tenants by the entirety
JT TEN WROS NOT TC - as joint tenants with
rights of survivorship and not
as tenants in common
[text appearing right side of page across from above text appx 8 pt.]
UNIF GIFT/TRANSFER MIN ACT - __________________ Custodian _______________
(Cust) (Minor)
UNDER UGMA/UTMA ___________________
(State)
[text - centered appx 8 pt.]
Additional abbreviations may also be used though
not in the above list.
[text - centered appx. 10 pt.]
For Value Received ................ hereby
sell(s), assign(s), and transfer(s) unto
[text appearing left of page appx. 8 pt]
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
AND PROVIDE CERTIFICATION
BY TRANSFEREE
[graphic: box for identifying number]
<PAGE>
PAGE 2 Back of certificate continued.
[Directly below graphic box: double spaced]
[line 1: with text centered under line]
- ---------------------------------------------------------------------
(Please print or type name and address of assignee)
[line 2: no text under line]
- ---------------------------------------------------------------------
[line 3: no text under line]
- ---------------------------------------------------------------------
[line 4: with text centered under line
- ---------------------------------------------------------------------
Class A Shares of beneficial interest represented by the within Certificate, and
do hereby irrevocably constitute and appoint [line 5: with text centered under
line
- ---------------------------------------------------------------------
Attorney to transfer the said shares on the books of the within named Fund
with full power of substitution in the premises.
[line 6: aligned left - text and line appx. 10 pt.]
Dated____________________________
[line 7: aligned right - text and line appx. 10 pt.]
Signed__________________________
[line 8: aligned right centered text under line appx. 8 pt.]
- --------------------------------
(Both must sign if joint owners)
[line 9, 10 and 11: aligned right 3 lines of text right of lines with centered
text]
Signature(s) __________________________
guaranteed Name of Guarantor
by: _____________________________
Signature of Officer/Title
[aligned left of lines 9-11
graphic box containing text appx. 8 pt.]
Signatures must be guaranteed by a financial institution of
the type described in the prospectus of the Fund.
[aligned right of lines 4-8 printed vertically appx. 8 pt.]
NOTICE: The signature(s) to this assignment must correspond
with the name(s) as written upon face of the certificate in every
particular without alteration or enlargement or any change
whatever.
[single line of text alinged left appx. 10 pt. bold]
PLEASE NOTE: This document contains a watermark when viewed at
an angle. It is invalid without this watermark:
[directly below text above aligned left appx. 18 pt. bold]
P I M C O
[Watermark in five rows vertically across page: PIMCO PIMCO
PIMCO
[bottom of certificate: line with text centered under appx.
16 pt.]
- ----------------------------------------------------------------------------
THIS SPACE MUST NOT BE COVERED IN ANY WAY
<PAGE>
PIMCO ADVISORS FUNDS
Description of Share Certificate for:
PIMCO ADVISORS U.S. GOVERNMENT FUND CLASS B SHARES
Class Share Certificate (8-1/2" x 11")
I. FACE OF CERTIFICATE (All text and other matter lies within
8-1/4" x 10-3/4" decorative border, 5/16" wide)
(upper left corner)- box with heading:NUMBER [of shares]
(upper center) - heading: CLASS B SHARES
(upper right corner)- heading: CP - [number]
(directly below upper right
corner heading:- box with heading: SHARES [amt. of shares]
(centered below boxes)
line 1: single line heading: [appx. 8 pt.]
ESTABLISHED UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
line 2: single line heading: [appx. 18pt.]
PIMCO ADVISORS FUNDS
line 3: single line heading: [appx. 18pt.]
CLASS B SHARES
line 4: single line heading: [appx. 8 pt]
PAR VALUE $.00001 PER SHARE
(at left) single line heading: [appx. 11 pt.]
THIS IS TO CERTIFY THAT
(at right)two line heading: [appx. 10 pt.]
SEE REVERSE FOR
CERTAIN DEFINITIONS
(at right directly below two line heading - box with content)
CUSIP 693387573
(at left appx half way down width of cert. - single line heading)
is the owner of
(at right appx half way down width of cert. - single line heading)
Class B Shares
(centered - text appx. 11pt)
of benficial interest in PIMCO Advisors Funds - PIMCO Advisors
U.S. Government Fund, par value $.00001 per share, fully paid and
nonassessable, which shares have been issued and are held under
and subject to terms and provisions of the Amended and Restated
Agreement and Declaration of Trust dated September 11, 1990, of
PIMCO Advisors Funds, and all amendments thereto, heretofore or
hereafter made, copies of which are on file with the Secretary of
the Commonwealth of Massachusetts. [indent] No transfer hereof
will be of any effect as regards the Trustees of PIMCO Advisors
Funds until this certificate, properly endorsed or assigned, has
been surrendered and the transfer recorded upon the books of said
Trustees. [indent] This certificate is executed on behalf of the
Trustees as Trustees and not individually and the obligations
hereof are not binding only upon the assets and property of the
Fund. [indent] IN WITNESS WHEREOF the Trustees under said
Agreement and Declaration of Trust have caused the following
facsimile signatures to be affixed to this certificate and a
facsimile of their common seal to be hereto affixed by the
Transfer Agent.
(at right of text, printed vertically)
line 1: [appx 8 pt. bold]
Countersigned
line 2: [indented under line 1 appx 8 pt.]
SHAREHOLDER SERVICES INC.
line 3: [indented under line 2 appx 8 pt. bold]
Denver (Colo.) [space] Transfer Agent
line 4: [to left aligned under line 1 appx. 8 pt.]
By:
line 5: [spaced from line 4 indented under line 3 appx. 8 pt.]
Authorized Signature
(bottom left of certificate)
1-1/2" diameter facsimile seal
(top of seal: semicircle)
PIMCO ADVISORS FUNDS
(center of seal - two line text)
1983
MASSACHUSETTS
(bottom right - across from seal)
[text appx. 11 pt. bold]
Dated:
[spaced from text - signature line with text below line to
right] President FOR THE TRUSTEES
[spaced from text - signature line with text below line to
right] Treasurer
II. BACK OF CERTIFICATE (text reads from top to bottom of 8"x11" portrait
dimension)
[text appx. 8 pt.]
[indented] The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations.
[text appearing left side of page indented under above paragraph appx 8 pt.] TEN
COM - as tenants in common
TEN ENT - as tenants by the entirety
JT TEN WROS NOT TC - as joint tenants with
rights of survivorship and not
as tenants in common
[text appearing right side of page across from above text appx 8 pt.]
UNIF GIFT/TRANSFER MIN ACT - __________________ Custodian _______________
(Cust) (Minor)
UNDER UGMA/UTMA ___________________
(State)
[text - centered appx 8 pt.]
Additional abbreviations may also be used though
not in the above list.
[text - centered appx. 10 pt.]
For Value Received ................ hereby
sell(s), assign(s), and transfer(s) unto
[text appearing left of page appx. 8 pt]
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
AND PROVIDE CERTIFICATION
BY TRANSFEREE
[graphic: box for identifying number]
<PAGE>
PAGE 2 Back of certificate continued.
[Directly below graphic box: double spaced]
[line 1: with text centered under line]
- ---------------------------------------------------------------------
(Please print or type name and address of assignee)
[line 2: no text under line]
- ---------------------------------------------------------------------
[line 3: no text under line]
- ---------------------------------------------------------------------
[line 4: with text centered under line
- ---------------------------------------------------------------------
Class B Shares of beneficial interest represented by the within Certificate, and
do hereby irrevocably constitute and appoint [line 5: with text centered under
line
- ---------------------------------------------------------------------
Attorney to transfer the said shares on the books of the within named Fund
with full power of substitution in the premises.
[line 6: aligned left - text and line appx. 10 pt.]
Dated____________________________
[line 7: aligned right - text and line appx. 10 pt.]
Signed__________________________
[line 8: aligned right centered text under line appx. 8 pt.]
- --------------------------------
(Both must sign if joint owners)
[line 9, 10 and 11: aligned right 3 lines of text right of lines with centered
text]
Signature(s) __________________________
guaranteed Name of Guarantor
by: _____________________________
Signature of Officer/Title
[aligned left of lines 9-11
graphic box containing text appx. 8 pt.]
Signatures must be guaranteed by a financial institution of
the type described in the prospectus of the Fund.
[aligned right of lines 4-8 printed vertically appx. 8 pt.]
NOTICE: The signature(s) to this assignment must correspond
with the name(s) as written upon face of the certificate in every
particular without alteration or enlargement or any change
whatever.
[single line of text alinged left appx. 10 pt. bold]
PLEASE NOTE: This document contains a watermark when viewed at
an angle. It is invalid without this watermark:
[directly below text above aligned left appx. 18 pt. bold]
P I M C O
[Watermark in five rows vertically across page: PIMCO PIMCO
PIMCO
[bottom of certificate: line with text centered under appx.
16 pt.]
- -------------------------------------------------------------------------------
THIS SPACE MUST NOT BE COVERED IN ANY WAY
<PAGE>
PIMCO ADVISORS FUNDS
Description of Share Certificate for:
PIMCO ADVISORS U.S. GOVERNMENT FUND CLASS C SHARES
Class Share Certificate (8-1/2" x 11")
I. FACE OF CERTIFICATE (All text and other matter lies within
8-1/4" x 10-3/4" decorative border, 5/16" wide)
(upper left corner)- box with heading:NUMBER [of shares]
(upper center) - heading: CLASS C SHARES
(upper right corner)- heading: CP - [number]
(directly below upper right
corner heading:- box with heading: SHARES [amt. of shares]
(centered below boxes)
line 1: single line heading: [appx. 8 pt.]
ESTABLISHED UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
line 2: single line heading: [appx. 18pt.]
PIMCO ADVISORS FUNDS
line 3: single line heading: [appx. 18pt.]
CLASS C SHARES
line 4: single line heading: [appx. 8 pt]
PAR VALUE $.00001 PER SHARE
(at left) single line heading: [appx. 11 pt.]
THIS IS TO CERTIFY THAT
(at right)two line heading: [appx. 10 pt.]
SEE REVERSE FOR
CERTAIN DEFINITIONS
(at right directly below two line heading - box with content)
CUSIP 693387870
(at left appx half way down width of cert. - single line heading)
is the owner of
(at right appx half way down width of cert. - single line heading)
Class C Shares
(centered - text appx. 11pt)
of benficial interest in PIMCO Advisors Funds - PIMCO Advisors
U.S. Government Fund, par value $.00001 per share, fully paid and
nonassessable, which shares have been issued and are held under
and subject to terms and provisions of the Amended and Restated
Agreement and Declaration of Trust dated September 11, 1990, of
PIMCO Advisors Funds, and all amendments thereto, heretofore or
hereafter made, copies of which are on file with the Secretary of
the Commonwealth of Massachusetts. [indent] No transfer hereof
will be of any effect as regards the Trustees of PIMCO Advisors
Funds until this certificate, properly endorsed or assigned, has
been surrendered and the transfer recorded upon the books of said
Trustees. [indent] This certificate is executed on behalf of the
Trustees as Trustees and not individually and the obligations
hereof are not binding only upon the assets and property of the
Fund. [indent] IN WITNESS WHEREOF the Trustees under said
Agreement and Declaration of Trust have caused the following
facsimile signatures to be affixed to this certificate and a
facsimile of their common seal to be hereto affixed by the
Transfer Agent.
(at right of text, printed vertically)
line 1: [appx 8 pt. bold]
Countersigned
line 2: [indented under line 1 appx 8 pt.]
SHAREHOLDER SERVICES INC.
line 3: [indented under line 2 appx 8 pt. bold]
Denver (Colo.) [space] Transfer Agent
line 4: [to left aligned under line 1 appx. 8 pt.]
By:
line 5: [spaced from line 4 indented under line 3 appx. 8 pt.]
Authorized Signature
(bottom left of certificate)
1-1/2" diameter facsimile seal
(top of seal: semicircle)
PIMCO ADVISORS FUNDS
(center of seal - two line text)
1983
MASSACHUSETTS
(bottom right - across from seal)
[text appx. 11 pt. bold]
Dated:
[spaced from text - signature line with text below line to
right] President FOR THE TRUSTEES
[spaced from text - signature line with text below line to
right] Treasurer
II. BACK OF CERTIFICATE (text reads from top to bottom of 8"x11" portrait
dimension)
[text appx. 8 pt.]
[indented] The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations.
[text appearing left side of page indented under above paragraph appx 8 pt.] TEN
COM - as tenants in common
TEN ENT - as tenants by the entirety
JT TEN WROS NOT TC - as joint tenants with
rights of survivorship and not
as tenants in common
[text appearing right side of page across from above text appx 8 pt.]
UNIF GIFT/TRANSFER MIN ACT - __________________ Custodian _______________
(Cust) (Minor)
UNDER UGMA/UTMA ___________________
(State)
[text - centered appx 8 pt.]
Additional abbreviations may also be used though
not in the above list.
[text - centered appx. 10 pt.]
For Value Received ................ hereby
sell(s), assign(s), and transfer(s) unto
[text appearing left of page appx. 8 pt]
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
AND PROVIDE CERTIFICATION
BY TRANSFEREE
[graphic: box for identifying number]
<PAGE>
PAGE 2 Back of certificate continued.
[Directly below graphic box: double spaced]
[line 1: with text centered under line]
- ---------------------------------------------------------------------
(Please print or type name and address of assignee)
[line 2: no text under line]
- ---------------------------------------------------------------------
[line 3: no text under line]
- ---------------------------------------------------------------------
[line 4: with text centered under line
- ---------------------------------------------------------------------
Class C Shares of beneficial interest represented by the within Certificate, and
do hereby irrevocably constitute and appoint [line 5: with text centered under
line
- ---------------------------------------------------------------------
Attorney to transfer the said shares on the books of the within named Fund
with full power of substitution in the premises.
[line 6: aligned left - text and line appx. 10 pt.]
Dated____________________________
[line 7: aligned right - text and line appx. 10 pt.]
Signed__________________________
[line 8: aligned right centered text under line appx. 8 pt.]
- --------------------------------
(Both must sign if joint owners)
[line 9, 10 and 11: aligned right 3 lines of text right of lines with centered
text]
Signature(s) __________________________
guaranteed Name of Guarantor
by: _____________________________
Signature of Officer/Title
[aligned left of lines 9-11
graphic box containing text appx. 8 pt.]
Signatures must be guaranteed by a financial institution of
the type described in the prospectus of the Fund.
[aligned right of lines 4-8 printed vertically appx. 8 pt.]
NOTICE: The signature(s) to this assignment must correspond
with the name(s) as written upon face of the certificate in every
particular without alteration or enlargement or any change
whatever.
[single line of text alinged left appx. 10 pt. bold]
PLEASE NOTE: This document contains a watermark when viewed at
an angle. It is invalid without this watermark:
[directly below text above aligned left appx. 18 pt. bold]
P I M C O
[Watermark in five rows vertically across page: PIMCO PIMCO
PIMCO
[bottom of certificate: line with text centered under appx.
16 pt.]
- ------------------------------------------------------------------------------
THIS SPACE MUST NOT BE COVERED IN ANY WAY
<PAGE>
PIMCO ADVISORS FUNDS
Description of Share Certificate for:
PIMCO ADVISORS SHORT-INTERMEDIATE FUND CLASS A SHARES
Class Share Certificate (8-1/2" x 11")
I. FACE OF CERTIFICATE (All text and other matter lies within
8-1/4" x 10-3/4" decorative border, 5/16" wide)
(upper left corner)- box with heading:NUMBER [of shares]
(upper center) - heading: CLASS A SHARES
(upper right corner)- heading: CP - [number]
(directly below upper right
corner heading:- box with heading: SHARES [amt. of shares]
(centered below boxes)
line 1: single line heading: [appx. 8 pt.]
ESTABLISHED UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
line 2: single line heading: [appx. 18pt.]
PIMCO ADVISORS FUNDS
line 3: single line heading: [appx. 18pt.]
CLASS A SHARES
line 4: single line heading: [appx. 8 pt]
PAR VALUE $.00001 PER SHARE
(at left) single line heading: [appx. 11 pt.]
THIS IS TO CERTIFY THAT
(at right)two line heading: [appx. 10 pt.]
SEE REVERSE FOR
CERTAIN DEFINITIONS
(at right directly below two line heading - box with content)
CUSIP 693387797
(at left appx half way down width of cert. - single line heading)
is the owner of
(at right appx half way down width of cert. - single line heading)
Class A Shares
(centered - text appx. 11pt)
of benficial interest in PIMCO Advisors Funds - PIMCO Advisors
Short-Intermediate Fund, par value $.00001 per share, fully paid
and nonassessable, which shares have been issued and are held
under and subject to terms and provisions of the Amended and
Restated Agreement and Declaration of Trust dated September 11,
1990, of PIMCO Advisors Funds, and all amendments thereto,
heretofore or hereafter made, copies of which are on file with
the Secretary of the Commonwealth of Massachusetts. [indent] No
transfer hereof will be of any effect as regards the Trustees of
PIMCO Advisors Funds until this certificate, properly endorsed or
assigned, has been surrendered and the transfer recorded upon the
books of said Trustees. [indent] This certificate is executed on
behalf of the Trustees as Trustees and not individually and the
obligations hereof are not binding only upon the assets and
property of the Fund. [indent] IN WITNESS WHEREOF the Trustees
under said Agreement and Declaration of Trust have caused the
following facsimile signatures to be affixed to this certificate
and a facsimile of their common seal to be hereto affixed by the
Transfer Agent.
(at right of text, printed vertically)
line 1: [appx 8 pt. bold]
Countersigned
line 2: [indented under line 1 appx 8 pt.]
SHAREHOLDER SERVICES INC.
line 3: [indented under line 2 appx 8 pt. bold]
Denver (Colo.) [space] Transfer Agent
line 4: [to left aligned under line 1 appx. 8 pt.]
By:
line 5: [spaced from line 4 indented under line 3 appx. 8 pt.]
Authorized Signature
(bottom left of certificate)
1-1/2" diameter facsimile seal
(top of seal: semicircle)
PIMCO ADVISORS FUNDS
(center of seal - two line text)
1983
MASSACHUSETTS
(bottom right - across from seal)
[text appx. 11 pt. bold]
Dated:
[spaced from text - signature line with text below line to
right] President FOR THE TRUSTEES
[spaced from text - signature line with text below line to
right] Treasurer
II. BACK OF CERTIFICATE (text reads from top to bottom of 8"x11" portrait
dimension)
[text appx. 8 pt.]
[indented] The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations.
[text appearing left side of page indented under above paragraph appx 8 pt.] TEN
COM - as tenants in common
TEN ENT - as tenants by the entirety
JT TEN WROS NOT TC - as joint tenants with
rights of survivorship and not
as tenants in common
[text appearing right side of page across from above text appx 8 pt.]
UNIF GIFT/TRANSFER MIN ACT - __________________ Custodian _______________
(Cust) (Minor)
UNDER UGMA/UTMA ___________________
(State)
[text - centered appx 8 pt.]
Additional abbreviations may also be used though
not in the above list.
[text - centered appx. 10 pt.]
For Value Received ................ hereby
sell(s), assign(s), and transfer(s) unto
[text appearing left of page appx. 8 pt]
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
AND PROVIDE CERTIFICATION
BY TRANSFEREE
[graphic: box for identifying number]
<PAGE>
PAGE 2 Back of certificate continued.
[Directly below graphic box: double spaced]
[line 1: with text centered under line]
- ---------------------------------------------------------------------
(Please print or type name and address of assignee)
[line 2: no text under line]
- ---------------------------------------------------------------------
[line 3: no text under line]
- ---------------------------------------------------------------------
[line 4: with text centered under line
- ---------------------------------------------------------------------
Class A Shares of beneficial interest represented by the within Certificate, and
do hereby irrevocably constitute and appoint [line 5: with text centered under
line
- ---------------------------------------------------------------------
Attorney to transfer the said shares on the books of the within named Fund
with full power of substitution in the premises.
[line 6: aligned left - text and line appx. 10 pt.]
Dated____________________________
[line 7: aligned right - text and line appx. 10 pt.]
Signed__________________________
[line 8: aligned right centered text under line appx. 8 pt.]
- --------------------------------
(Both must sign if joint owners)
[line 9, 10 and 11: aligned right 3 lines of text right of lines with centered
text]
Signature(s) __________________________
guaranteed Name of Guarantor
by: _____________________________
Signature of Officer/Title
[aligned left of lines 9-11
graphic box containing text appx. 8 pt.]
Signatures must be guaranteed by a financial institution of
the type described in the prospectus of the Fund.
[aligned right of lines 4-8 printed vertically appx. 8 pt.]
NOTICE: The signature(s) to this assignment must correspond
with the name(s) as written upon face of the certificate in every
particular without alteration or enlargement or any change
whatever.
[single line of text alinged left appx. 10 pt. bold]
PLEASE NOTE: This document contains a watermark when viewed at
an angle. It is invalid without this watermark:
[directly below text above aligned left appx. 18 pt. bold]
P I M C O
[Watermark in five rows vertically across page: PIMCO PIMCO
PIMCO
[bottom of certificate: line with text centered under appx.
16 pt.]
- -------------------------------------------------------------------------
THIS SPACE MUST NOT BE COVERED IN ANY WAY
<PAGE>
PIMCO ADVISORS FUNDS
Description of Share Certificate for:
PIMCO ADVISORS SHORT-INTERMEDIATE FUND CLASS B SHARES
Class Share Certificate (8-1/2" x 11")
I. FACE OF CERTIFICATE (All text and other matter lies within
8-1/4" x 10-3/4" decorative border, 5/16" wide)
(upper left corner)- box with heading:NUMBER [of shares]
(upper center) - heading: CLASS B SHARES
(upper right corner)- heading: CP - [number]
(directly below upper right
corner heading:- box with heading: SHARES [amt. of shares]
(centered below boxes)
line 1: single line heading: [appx. 8 pt.]
ESTABLISHED UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
line 2: single line heading: [appx. 18pt.]
PIMCO ADVISORS FUNDS
line 3: single line heading: [appx. 18pt.]
CLASS B SHARES
line 4: single line heading: [appx. 8 pt]
PAR VALUE $.00001 PER SHARE
(at left) single line heading: [appx. 11 pt.]
THIS IS TO CERTIFY THAT
(at right)two line heading: [appx. 10 pt.]
SEE REVERSE FOR
CERTAIN DEFINITIONS
(at right directly below two line heading - box with content)
CUSIP 693387565
(at left appx half way down width of cert. - single line heading)
is the owner of
(at right appx half way down width of cert. - single line heading)
Class B Shares
(centered - text appx. 11pt)
of benficial interest in PIMCO Advisors Funds - PIMCO Advisors
Short-Intermediate Fund, par value $.00001 per share, fully paid
and nonassessable, which shares have been issued and are held
under and subject to terms and provisions of the Amended and
Restated Agreement and Declaration of Trust dated September 11,
1990, of PIMCO Advisors Funds, and all amendments thereto,
heretofore or hereafter made, copies of which are on file with
the Secretary of the Commonwealth of Massachusetts. [indent] No
transfer hereof will be of any effect as regards the Trustees of
PIMCO Advisors Funds until this certificate, properly endorsed or
assigned, has been surrendered and the transfer recorded upon the
books of said Trustees. [indent] This certificate is executed on
behalf of the Trustees as Trustees and not individually and the
obligations hereof are not binding only upon the assets and
property of the Fund. [indent] IN WITNESS WHEREOF the Trustees
under said Agreement and Declaration of Trust have caused the
following facsimile signatures to be affixed to this certificate
and a facsimile of their common seal to be hereto affixed by the
Transfer Agent.
(at right of text, printed vertically)
line 1: [appx 8 pt. bold]
Countersigned
line 2: [indented under line 1 appx 8 pt.]
SHAREHOLDER SERVICES INC.
line 3: [indented under line 2 appx 8 pt. bold]
Denver (Colo.) [space] Transfer Agent
line 4: [to left aligned under line 1 appx. 8 pt.]
By:
line 5: [spaced from line 4 indented under line 3 appx. 8 pt.]
Authorized Signature
(bottom left of certificate)
1-1/2" diameter facsimile seal
(top of seal: semicircle)
PIMCO ADVISORS FUNDS
(center of seal - two line text)
1983
MASSACHUSETTS
(bottom right - across from seal)
[text appx. 11 pt. bold]
Dated:
[spaced from text - signature line with text below line to
right] President FOR THE TRUSTEES
[spaced from text - signature line with text below line to
right] Treasurer
II. BACK OF CERTIFICATE (text reads from top to bottom of 8"x11" portrait
dimension)
[text appx. 8 pt.]
[indented] The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations.
[text appearing left side of page indented under above paragraph appx 8 pt.] TEN
COM - as tenants in common
TEN ENT - as tenants by the entirety
JT TEN WROS NOT TC - as joint tenants with
rights of survivorship and not
as tenants in common
[text appearing right side of page across from above text appx 8 pt.]
UNIF GIFT/TRANSFER MIN ACT - __________________ Custodian _______________
(Cust) (Minor)
UNDER UGMA/UTMA ___________________
(State)
[text - centered appx 8 pt.]
Additional abbreviations may also be used though
not in the above list.
[text - centered appx. 10 pt.]
For Value Received ................ hereby
sell(s), assign(s), and transfer(s) unto
[text appearing left of page appx. 8 pt]
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
AND PROVIDE CERTIFICATION
BY TRANSFEREE
[graphic: box for identifying number]
<PAGE>
PAGE 2 Back of certificate continued.
[Directly below graphic box: double spaced]
[line 1: with text centered under line]
- ---------------------------------------------------------------------
(Please print or type name and address of assignee)
[line 2: no text under line]
- ---------------------------------------------------------------------
[line 3: no text under line]
- ---------------------------------------------------------------------
[line 4: with text centered under line
- ---------------------------------------------------------------------
Class B Shares of beneficial interest represented by the within Certificate, and
do hereby irrevocably constitute and appoint [line 5: with text centered under
line
- ---------------------------------------------------------------------
Attorney to transfer the said shares on the books of the within named Fund
with full power of substitution in the premises.
[line 6: aligned left - text and line appx. 10 pt.]
Dated____________________________
[line 7: aligned right - text and line appx. 10 pt.]
Signed__________________________
[line 8: aligned right centered text under line appx. 8 pt.]
- --------------------------------
(Both must sign if joint owners)
[line 9, 10 and 11: aligned right 3 lines of text right of lines with centered
text]
Signature(s) __________________________
guaranteed Name of Guarantor
by: _____________________________
Signature of Officer/Title
[aligned left of lines 9-11
graphic box containing text appx. 8 pt.]
Signatures must be guaranteed by a financial institution of
the type described in the prospectus of the Fund.
[aligned right of lines 4-8 printed vertically appx. 8 pt.]
NOTICE: The signature(s) to this assignment must correspond
with the name(s) as written upon face of the certificate in every
particular without alteration or enlargement or any change
whatever.
[single line of text alinged left appx. 10 pt. bold]
PLEASE NOTE: This document contains a watermark when viewed at
an angle. It is invalid without this watermark:
[directly below text above aligned left appx. 18 pt. bold]
P I M C O
[Watermark in five rows vertically across page: PIMCO PIMCO
PIMCO
[bottom of certificate: line with text centered under appx.
16 pt.]
- ----------------------------------------------------------------------------
THIS SPACE MUST NOT BE COVERED IN ANY WAY
<PAGE>
PIMCO ADVISORS FUNDS
Description of Share Certificate for:
PIMCO ADVISORS SHORT-INTERMEDIATE FUND CLASS C SHARES
Class Share Certificate (8-1/2" x 11")
I. FACE OF CERTIFICATE (All text and other matter lies within
8-1/4" x 10-3/4" decorative border, 5/16" wide)
(upper left corner)- box with heading:NUMBER [of shares]
(upper center) - heading: CLASS C SHARES
(upper right corner)- heading: CP - [number]
(directly below upper right
corner heading:- box with heading: SHARES [amt. of shares]
(centered below boxes)
line 1: single line heading: [appx. 8 pt.]
ESTABLISHED UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
line 2: single line heading: [appx. 18pt.]
PIMCO ADVISORS FUNDS
line 3: single line heading: [appx. 18pt.]
CLASS C SHARES
line 4: single line heading: [appx. 8 pt]
PAR VALUE $.00001 PER SHARE
(at left) single line heading: [appx. 11 pt.]
THIS IS TO CERTIFY THAT
(at right)two line heading: [appx. 10 pt.]
SEE REVERSE FOR
CERTAIN DEFINITIONS
(at right directly below two line heading - box with content)
CUSIP 693387789
(at left appx half way down width of cert. - single line heading)
is the owner of
(at right appx half way down width of cert. - single line heading)
Class C Shares
(centered - text appx. 11pt)
of benficial interest in PIMCO Advisors Funds - PIMCO Advisors
Short-Intermediate Fund, par value $.00001 per share, fully paid
and nonassessable, which shares have been issued and are held
under and subject to terms and provisions of the Amended and
Restated Agreement and Declaration of Trust dated September 11,
1990, of PIMCO Advisors Funds, and all amendments thereto,
heretofore or hereafter made, copies of which are on file with
the Secretary of the Commonwealth of Massachusetts. [indent] No
transfer hereof will be of any effect as regards the Trustees of
PIMCO Advisors Funds until this certificate, properly endorsed or
assigned, has been surrendered and the transfer recorded upon the
books of said Trustees. [indent] This certificate is executed on
behalf of the Trustees as Trustees and not individually and the
obligations hereof are not binding only upon the assets and
property of the Fund. [indent] IN WITNESS WHEREOF the Trustees
under said Agreement and Declaration of Trust have caused the
following facsimile signatures to be affixed to this certificate
and a facsimile of their common seal to be hereto affixed by the
Transfer Agent.
(at right of text, printed vertically)
line 1: [appx 8 pt. bold]
Countersigned
line 2: [indented under line 1 appx 8 pt.]
SHAREHOLDER SERVICES INC.
line 3: [indented under line 2 appx 8 pt. bold]
Denver (Colo.) [space] Transfer Agent
line 4: [to left aligned under line 1 appx. 8 pt.]
By:
line 5: [spaced from line 4 indented under line 3 appx. 8 pt.]
Authorized Signature
(bottom left of certificate)
1-1/2" diameter facsimile seal
(top of seal: semicircle)
PIMCO ADVISORS FUNDS
(center of seal - two line text)
1983
MASSACHUSETTS
(bottom right - across from seal)
[text appx. 11 pt. bold]
Dated:
[spaced from text - signature line with text below line to
right] President FOR THE TRUSTEES
[spaced from text - signature line with text below line to
right] Treasurer
II. BACK OF CERTIFICATE (text reads from top to bottom of 8"x11" portrait
dimension)
[text appx. 8 pt.]
[indented] The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations.
[text appearing left side of page indented under above paragraph appx 8 pt.] TEN
COM - as tenants in common
TEN ENT - as tenants by the entirety
JT TEN WROS NOT TC - as joint tenants with
rights of survivorship and not
as tenants in common
[text appearing right side of page across from above text appx 8 pt.]
UNIF GIFT/TRANSFER MIN ACT - __________________ Custodian _______________
(Cust) (Minor)
UNDER UGMA/UTMA ___________________
(State)
[text - centered appx 8 pt.]
Additional abbreviations may also be used though
not in the above list.
[text - centered appx. 10 pt.]
For Value Received ................ hereby
sell(s), assign(s), and transfer(s) unto
[text appearing left of page appx. 8 pt]
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
AND PROVIDE CERTIFICATION
BY TRANSFEREE
[graphic: box for identifying number]
<PAGE>
PAGE 2 Back of certificate continued.
[Directly below graphic box: double spaced]
[line 1: with text centered under line]
- ---------------------------------------------------------------------
(Please print or type name and address of assignee)
[line 2: no text under line]
- ---------------------------------------------------------------------
[line 3: no text under line]
- ---------------------------------------------------------------------
[line 4: with text centered under line
- ---------------------------------------------------------------------
Class C Shares of beneficial interest represented by the within Certificate, and
do hereby irrevocably constitute and appoint [line 5: with text centered under
line
- ---------------------------------------------------------------------
Attorney to transfer the said shares on the books of the within named Fund
with full power of substitution in the premises.
[line 6: aligned left - text and line appx. 10 pt.]
Dated____________________________
[line 7: aligned right - text and line appx. 10 pt.]
Signed__________________________
[line 8: aligned right centered text under line appx. 8 pt.]
- --------------------------------
(Both must sign if joint owners)
[line 9, 10 and 11: aligned right 3 lines of text right of lines with centered
text]
Signature(s) __________________________
guaranteed Name of Guarantor
by: _____________________________
Signature of Officer/Title
[aligned left of lines 9-11
graphic box containing text appx. 8 pt.]
Signatures must be guaranteed by a financial institution of
the type described in the prospectus of the Fund.
[aligned right of lines 4-8 printed vertically appx. 8 pt.]
NOTICE: The signature(s) to this assignment must correspond
with the name(s) as written upon face of the certificate in every
particular without alteration or enlargement or any change
whatever.
[single line of text alinged left appx. 10 pt. bold]
PLEASE NOTE: This document contains a watermark when viewed at
an angle. It is invalid without this watermark:
[directly below text above aligned left appx. 18 pt. bold]
P I M C O
[Watermark in five rows vertically across page: PIMCO PIMCO
PIMCO
[bottom of certificate: line with text centered under appx.
16 pt.]
- -------------------------------------------------------------------------------
THIS SPACE MUST NOT BE COVERED IN ANY WAY
<PAGE>
PIMCO ADVISORS FUNDS
Description of Share Certificate for:
PIMCO ADVISORS MONEY MARKET FUND CLASS A SHARES
Class Share Certificate (8-1/2" x 11")
I. FACE OF CERTIFICATE (All text and other matter lies within
8-1/4" x 10-3/4" decorative border, 5/16" wide)
(upper left corner)- box with heading:NUMBER [of shares]
(upper center) - heading: CLASS A SHARES
(upper right corner)- heading: CP - [number]
(directly below upper right
corner heading:- box with heading: SHARES [amt. of shares]
(centered below boxes)
line 1: single line heading: [appx. 8 pt.]
ESTABLISHED UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
line 2: single line heading: [appx. 18pt.]
PIMCO ADVISORS FUNDS
line 3: single line heading: [appx. 18pt.]
CLASS A SHARES
line 4: single line heading: [appx. 8 pt]
PAR VALUE $.00001 PER SHARE
(at left) single line heading: [appx. 11 pt.]
THIS IS TO CERTIFY THAT
(at right)two line heading: [appx. 10 pt.]
SEE REVERSE FOR
CERTAIN DEFINITIONS
(at right directly below two line heading - box with content)
CUSIP 693387706
(at left appx half way down width of cert. - single line heading)
is the owner of
(at right appx half way down width of cert. - single line heading)
Class A Shares
(centered - text appx. 11pt)
of benficial interest in PIMCO Advisors Funds - PIMCO Advisors
Money Market Fund, par value $.00001 per share, fully paid and
nonassessable, which shares have been issued and are held under
and subject to terms and provisions of the Amended and Restated
Agreement and Declaration of Trust dated September 11, 1990, of
PIMCO Advisors Funds, and all amendments thereto, heretofore or
hereafter made, copies of which are on file with the Secretary of
the Commonwealth of Massachusetts. [indent] No transfer hereof
will be of any effect as regards the Trustees of PIMCO Advisors
Funds until this certificate, properly endorsed or assigned, has
been surrendered and the transfer recorded upon the books of said
Trustees. [indent] This certificate is executed on behalf of the
Trustees as Trustees and not individually and the obligations
hereof are not binding only upon the assets and property of the
Fund. [indent] IN WITNESS WHEREOF the Trustees under said
Agreement and Declaration of Trust have caused the following
facsimile signatures to be affixed to this certificate and a
facsimile of their common seal to be hereto affixed by the
Transfer Agent.
(at right of text, printed vertically)
line 1: [appx 8 pt. bold]
Countersigned
line 2: [indented under line 1 appx 8 pt.]
SHAREHOLDER SERVICES INC.
line 3: [indented under line 2 appx 8 pt. bold]
Denver (Colo.) [space] Transfer Agent
line 4: [to left aligned under line 1 appx. 8 pt.]
By:
line 5: [spaced from line 4 indented under line 3 appx. 8 pt.]
Authorized Signature
(bottom left of certificate)
1-1/2" diameter facsimile seal
(top of seal: semicircle)
PIMCO ADVISORS FUNDS
(center of seal - two line text)
1983
MASSACHUSETTS
(bottom right - across from seal)
[text appx. 11 pt. bold]
Dated:
[spaced from text - signature line with text below line to
right] President FOR THE TRUSTEES
[spaced from text - signature line with text below line to
right] Treasurer
II. BACK OF CERTIFICATE (text reads from top to bottom of 8"x11" portrait
dimension)
[text appx. 8 pt.]
[indented] The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations.
[text appearing left side of page indented under above paragraph appx 8 pt.] TEN
COM - as tenants in common
TEN ENT - as tenants by the entirety
JT TEN WROS NOT TC - as joint tenants with
rights of survivorship and not
as tenants in common
[text appearing right side of page across from above text appx 8 pt.]
UNIF GIFT/TRANSFER MIN ACT - __________________ Custodian _______________
(Cust) (Minor)
UNDER UGMA/UTMA ___________________
(State)
[text - centered appx 8 pt.]
Additional abbreviations may also be used though
not in the above list.
[text - centered appx. 10 pt.]
For Value Received ................ hereby
sell(s), assign(s), and transfer(s) unto
[text appearing left of page appx. 8 pt]
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
AND PROVIDE CERTIFICATION
BY TRANSFEREE
[graphic: box for identifying number]
<PAGE>
PAGE 2 Back of certificate continued.
[Directly below graphic box: double spaced]
[line 1: with text centered under line]
- ---------------------------------------------------------------------
(Please print or type name and address of assignee)
[line 2: no text under line]
- ---------------------------------------------------------------------
[line 3: no text under line]
- ---------------------------------------------------------------------
[line 4: with text centered under line
- ---------------------------------------------------------------------
Class A Shares of beneficial interest represented by the within Certificate, and
do hereby irrevocably constitute and appoint [line 5: with text centered under
line
- ---------------------------------------------------------------------
Attorney to transfer the said shares on the books of the within named Fund
with full power of substitution in the premises.
[line 6: aligned left - text and line appx. 10 pt.]
Dated____________________________
[line 7: aligned right - text and line appx. 10 pt.]
Signed__________________________
[line 8: aligned right centered text under line appx. 8 pt.]
- --------------------------------
(Both must sign if joint owners)
[line 9, 10 and 11: aligned right 3 lines of text right of lines with centered
text]
Signature(s) __________________________
guaranteed Name of Guarantor
by: _____________________________
Signature of Officer/Title
[aligned left of lines 9-11
graphic box containing text appx. 8 pt.]
Signatures must be guaranteed by a financial institution of
the type described in the prospectus of the Fund.
[aligned right of lines 4-8 printed vertically appx. 8 pt.]
NOTICE: The signature(s) to this assignment must correspond
with the name(s) as written upon face of the certificate in every
particular without alteration or enlargement or any change
whatever.
[single line of text alinged left appx. 10 pt. bold]
PLEASE NOTE: This document contains a watermark when viewed at
an angle. It is invalid without this watermark:
[directly below text above aligned left appx. 18 pt. bold]
P I M C O
[Watermark in five rows vertically across page: PIMCO PIMCO
PIMCO
[bottom of certificate: line with text centered under appx.
16 pt.]
- -----------------------------------------------------------------------------
THIS SPACE MUST NOT BE COVERED IN ANY WAY
<PAGE>
PIMCO ADVISORS FUNDS
Description of Share Certificate for:
PIMCO ADVISORS MONEY MARKET FUND CLASS B SHARES
Class Share Certificate (8-1/2" x 11")
I. FACE OF CERTIFICATE (All text and other matter lies within
8-1/4" x 10-3/4" decorative border, 5/16" wide)
(upper left corner)- box with heading:NUMBER [of shares]
(upper center) - heading: CLASS B SHARES
(upper right corner)- heading: CP - [number]
(directly below upper right
corner heading:- box with heading: SHARES [amt. of shares]
(centered below boxes)
line 1: single line heading: [appx. 8 pt.]
ESTABLISHED UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
line 2: single line heading: [appx. 18pt.]
PIMCO ADVISORS FUNDS
line 3: single line heading: [appx. 18pt.]
CLASS B SHARES
line 4: single line heading: [appx. 8 pt]
PAR VALUE $.00001 PER SHARE
(at left) single line heading: [appx. 11 pt.]
THIS IS TO CERTIFY THAT
(at right)two line heading: [appx. 10 pt.]
SEE REVERSE FOR
CERTAIN DEFINITIONS
(at right directly below two line heading - box with content)
CUSIP 693387557
(at left appx half way down width of cert. - single line heading)
is the owner of
(at right appx half way down width of cert. - single line heading)
Class B Shares
(centered - text appx. 11pt)
of benficial interest in PIMCO Advisors Funds - PIMCO Advisors
Money Market Fund, par value $.00001 per share, fully paid and
nonassessable, which shares have been issued and are held under
and subject to terms and provisions of the Amended and Restated
Agreement and Declaration of Trust dated September 11, 1990, of
PIMCO Advisors Funds, and all amendments thereto, heretofore or
hereafter made, copies of which are on file with the Secretary of
the Commonwealth of Massachusetts. [indent] No transfer hereof
will be of any effect as regards the Trustees of PIMCO Advisors
Funds until this certificate, properly endorsed or assigned, has
been surrendered and the transfer recorded upon the books of said
Trustees. [indent] This certificate is executed on behalf of the
Trustees as Trustees and not individually and the obligations
hereof are not binding only upon the assets and property of the
Fund. [indent] IN WITNESS WHEREOF the Trustees under said
Agreement and Declaration of Trust have caused the following
facsimile signatures to be affixed to this certificate and a
facsimile of their common seal to be hereto affixed by the
Transfer Agent.
(at right of text, printed vertically)
line 1: [appx 8 pt. bold]
Countersigned
line 2: [indented under line 1 appx 8 pt.]
SHAREHOLDER SERVICES INC.
line 3: [indented under line 2 appx 8 pt. bold]
Denver (Colo.) [space] Transfer Agent
line 4: [to left aligned under line 1 appx. 8 pt.]
By:
line 5: [spaced from line 4 indented under line 3 appx. 8 pt.]
Authorized Signature
(bottom left of certificate)
1-1/2" diameter facsimile seal
(top of seal: semicircle)
PIMCO ADVISORS FUNDS
(center of seal - two line text)
1983
MASSACHUSETTS
(bottom right - across from seal)
[text appx. 11 pt. bold]
Dated:
[spaced from text - signature line with text below line to
right] President FOR THE TRUSTEES
[spaced from text - signature line with text below line to
right] Treasurer
II. BACK OF CERTIFICATE (text reads from top to bottom of 8"x11" portrait
dimension)
[text appx. 8 pt.]
[indented] The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations.
[text appearing left side of page indented under above paragraph appx 8 pt.] TEN
COM - as tenants in common
TEN ENT - as tenants by the entirety
JT TEN WROS NOT TC - as joint tenants with
rights of survivorship and not
as tenants in common
[text appearing right side of page across from above text appx 8 pt.]
UNIF GIFT/TRANSFER MIN ACT - __________________ Custodian _______________
(Cust) (Minor)
UNDER UGMA/UTMA ___________________
(State)
[text - centered appx 8 pt.]
Additional abbreviations may also be used though
not in the above list.
[text - centered appx. 10 pt.]
For Value Received ................ hereby
sell(s), assign(s), and transfer(s) unto
[text appearing left of page appx. 8 pt]
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
AND PROVIDE CERTIFICATION
BY TRANSFEREE
[graphic: box for identifying number]
<PAGE>
PAGE 2 Back of certificate continued.
[Directly below graphic box: double spaced]
[line 1: with text centered under line]
- ---------------------------------------------------------------------
(Please print or type name and address of assignee)
[line 2: no text under line]
- ---------------------------------------------------------------------
[line 3: no text under line]
- ---------------------------------------------------------------------
[line 4: with text centered under line
- ---------------------------------------------------------------------
Class B Shares of beneficial interest represented by the within Certificate, and
do hereby irrevocably constitute and appoint [line 5: with text centered under
line
- ---------------------------------------------------------------------
Attorney to transfer the said shares on the books of the within named Fund
with full power of substitution in the premises.
[line 6: aligned left - text and line appx. 10 pt.]
Dated____________________________
[line 7: aligned right - text and line appx. 10 pt.]
Signed__________________________
[line 8: aligned right centered text under line appx. 8 pt.]
- --------------------------------
(Both must sign if joint owners)
[line 9, 10 and 11: aligned right 3 lines of text right of lines with centered
text]
Signature(s) __________________________
guaranteed Name of Guarantor
by: _____________________________
Signature of Officer/Title
[aligned left of lines 9-11
graphic box containing text appx. 8 pt.]
Signatures must be guaranteed by a financial institution of
the type described in the prospectus of the Fund.
[aligned right of lines 4-8 printed vertically appx. 8 pt.]
NOTICE: The signature(s) to this assignment must correspond
with the name(s) as written upon face of the certificate in every
particular without alteration or enlargement or any change
whatever.
[single line of text alinged left appx. 10 pt. bold]
PLEASE NOTE: This document contains a watermark when viewed at
an angle. It is invalid without this watermark:
[directly below text above aligned left appx. 18 pt. bold]
P I M C O
[Watermark in five rows vertically across page: PIMCO PIMCO
PIMCO
[bottom of certificate: line with text centered under appx.
16 pt.]
- ---------------------------------------------------------------------------
THIS SPACE MUST NOT BE COVERED IN ANY WAY
<PAGE>
PIMCO ADVISORS FUNDS
Description of Share Certificate for:
PIMCO ADVISORS MONEY MARKET FUND CLASS C SHARES
Class Share Certificate (8-1/2" x 11")
I. FACE OF CERTIFICATE (All text and other matter lies within
8-1/4" x 10-3/4" decorative border, 5/16" wide)
(upper left corner)- box with heading:NUMBER [of shares]
(upper center) - heading: CLASS C SHARES
(upper right corner)- heading: CP - [number]
(directly below upper right
corner heading:- box with heading: SHARES [amt. of shares]
(centered below boxes)
line 1: single line heading: [appx. 8 pt.]
ESTABLISHED UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
line 2: single line heading: [appx. 18pt.]
PIMCO ADVISORS FUNDS
line 3: single line heading: [appx. 18pt.]
CLASS C SHARES
line 4: single line heading: [appx. 8 pt]
PAR VALUE $.00001 PER SHARE
(at left) single line heading: [appx. 11 pt.]
THIS IS TO CERTIFY THAT
(at right)two line heading: [appx. 10 pt.]
SEE REVERSE FOR
CERTAIN DEFINITIONS
(at right directly below two line heading - box with content)
CUSIP 693387805
(at left appx half way down width of cert. - single line heading)
is the owner of
(at right appx half way down width of cert. - single line heading)
Class C Shares
(centered - text appx. 11pt)
of benficial interest in PIMCO Advisors Funds - PIMCO Advisors
Money Market Fund, par value $.00001 per share, fully paid and
nonassessable, which shares have been issued and are held under
and subject to terms and provisions of the Amended and Restated
Agreement and Declaration of Trust dated September 11, 1990, of
PIMCO Advisors Funds, and all amendments thereto, heretofore or
hereafter made, copies of which are on file with the Secretary of
the Commonwealth of Massachusetts. [indent] No transfer hereof
will be of any effect as regards the Trustees of PIMCO Advisors
Funds until this certificate, properly endorsed or assigned, has
been surrendered and the transfer recorded upon the books of said
Trustees. [indent] This certificate is executed on behalf of the
Trustees as Trustees and not individually and the obligations
hereof are not binding only upon the assets and property of the
Fund. [indent] IN WITNESS WHEREOF the Trustees under said
Agreement and Declaration of Trust have caused the following
facsimile signatures to be affixed to this certificate and a
facsimile of their common seal to be hereto affixed by the
Transfer Agent.
(at right of text, printed vertically)
line 1: [appx 8 pt. bold]
Countersigned
line 2: [indented under line 1 appx 8 pt.]
SHAREHOLDER SERVICES INC.
line 3: [indented under line 2 appx 8 pt. bold]
Denver (Colo.) [space] Transfer Agent
line 4: [to left aligned under line 1 appx. 8 pt.]
By:
line 5: [spaced from line 4 indented under line 3 appx. 8 pt.]
Authorized Signature
(bottom left of certificate)
1-1/2" diameter facsimile seal
(top of seal: semicircle)
PIMCO ADVISORS FUNDS
(center of seal - two line text)
1983
MASSACHUSETTS
(bottom right - across from seal)
[text appx. 11 pt. bold]
Dated:
[spaced from text - signature line with text below line to
right] President FOR THE TRUSTEES
[spaced from text - signature line with text below line to
right] Treasurer
II. BACK OF CERTIFICATE (text reads from top to bottom of 8"x11" portrait
dimension)
[text appx. 8 pt.]
[indented] The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations.
[text appearing left side of page indented under above paragraph appx 8 pt.] TEN
COM - as tenants in common
TEN ENT - as tenants by the entirety
JT TEN WROS NOT TC - as joint tenants with
rights of survivorship and not
as tenants in common
[text appearing right side of page across from above text appx 8 pt.]
UNIF GIFT/TRANSFER MIN ACT - __________________ Custodian _______________
(Cust) (Minor)
UNDER UGMA/UTMA ___________________
(State)
[text - centered appx 8 pt.]
Additional abbreviations may also be used though
not in the above list.
[text - centered appx. 10 pt.]
For Value Received ................ hereby
sell(s), assign(s), and transfer(s) unto
[text appearing left of page appx. 8 pt]
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
AND PROVIDE CERTIFICATION
BY TRANSFEREE
[graphic: box for identifying number]
<PAGE>
PAGE 2 Back of certificate continued.
[Directly below graphic box: double spaced]
[line 1: with text centered under line]
- ---------------------------------------------------------------------
(Please print or type name and address of assignee)
[line 2: no text under line]
- ---------------------------------------------------------------------
[line 3: no text under line]
- ---------------------------------------------------------------------
[line 4: with text centered under line
- ---------------------------------------------------------------------
Class C Shares of beneficial interest represented by the within Certificate, and
do hereby irrevocably constitute and appoint [line 5: with text centered under
line
- ---------------------------------------------------------------------
Attorney to transfer the said shares on the books of the within named Fund
with full power of substitution in the premises.
[line 6: aligned left - text and line appx. 10 pt.]
Dated____________________________
[line 7: aligned right - text and line appx. 10 pt.]
Signed__________________________
[line 8: aligned right centered text under line appx. 8 pt.]
- --------------------------------
(Both must sign if joint owners)
[line 9, 10 and 11: aligned right 3 lines of text right of lines with centered
text]
Signature(s) __________________________
guaranteed Name of Guarantor
by: _____________________________
Signature of Officer/Title
[aligned left of lines 9-11
graphic box containing text appx. 8 pt.]
Signatures must be guaranteed by a financial institution of
the type described in the prospectus of the Fund.
[aligned right of lines 4-8 printed vertically appx. 8 pt.]
NOTICE: The signature(s) to this assignment must correspond
with the name(s) as written upon face of the certificate in every
particular without alteration or enlargement or any change
whatever.
[single line of text alinged left appx. 10 pt. bold]
PLEASE NOTE: This document contains a watermark when viewed at
an angle. It is invalid without this watermark:
[directly below text above aligned left appx. 18 pt. bold]
P I M C O
[Watermark in five rows vertically across page: PIMCO PIMCO
PIMCO
[bottom of certificate: line with text centered under appx.
16 pt.]
- -------------------------------------------------------------------------------
THIS SPACE MUST NOT BE COVERED IN ANY WAY
Exhibit 99.B5(a)
Management Contracts
<PAGE>
3007757.02
MANAGEMENT CONTRACT
[Equity Income Fund]
Management Contract executed as of November 16, 1994 between THOMSON
FUND GROUP, a Massachusetts business trust (the "Trust") on behalf of its
Thomson Equity Income Fund (the "Fund"), and PIMCO ADVISORS L.P., a Delaware
limited partnership (the "Manager").
WITNESSETH:
That in consideration of the mutual covenants herein contained, it is
agreed as follows:
1. SERVICES TO BE RENDERED BY MANAGER TO FUND.
(a) Subject always to the control of the Trustees of the Trust and to
such policies as the Trustees may determine, the Manager will, at its expense,
(i) furnish continuously an investment program for the Fund and will make
investment decisions on behalf of the Fund and place all orders for the purchase
and sale of portfolio securities and (ii) furnish office space and equipment,
provide bookkeeping and clerical services (excluding determination of net asset
value and shareholder accounting services) and pay all salaries, fees and
expenses of officers and Trustees of the Trust who are affiliated with the
Manager. In the performance of its duties, the Manager will comply with the
provisions of the Amended and Restated Agreement and Declaration of Trust and
By-laws of the Trust and its stated investment objectives, policies and
restrictions.
<PAGE>
-7-
(b) In the selection of brokers or dealers and the placing of orders
for the purchase and sale of portfolio investments for the Fund, the Manager
shall seek to obtain for the Fund the most favorable price and execution
available, except to the extent it may be permitted to pay higher brokerage
commissions for brokerage and research services as described below. In using its
best efforts to obtain for the Fund the most favorable price and execution
available, the Manager, bearing in mind the Fund's best interests at all times,
shall consider all factors it deems relevant, including by way of illustration,
price, the size of the transaction, the nature of the market for the security,
the amount of the commission, the timing of the transaction taking into account
market prices and trends, the reputation, experience and financial stability of
the broker or dealer involved and the quality of service rendered by the broker
or dealer in other transactions. Subject to such policies as the Trustees may
determine, the Manager shall not be deemed to have acted unlawfully or to have
breached any duty created by this Contract or otherwise solely by reason of its
having caused the Fund to pay a broker or dealer that provides brokerage and
research services to the Manager an amount of commission for effecting a
portfolio investment transaction in excess of the amount of commission another
broker or dealer would have charged for effecting that transaction, if the
Manager determines in good faith that such amount of commission was reasonable
in relation to the value of the brokerage and research services provided by such
broker or dealer, viewed in terms of either that particular transaction or the
Manager's overall responsibilities with respect to the Trust and to other
clients of the Manager as to which the Manager exercises investment discretion.
The Trust hereby agrees with the Manager and with any Sub-Adviser selected by
the Manager as provided in Section 1(c) hereof that any entity or person
associated with the Manager which is a member of a national securities exchange
is authorized to effect any transaction on such exchange for the account of the
Trust and the Fund which is permitted by Section 11(a) of the Securities
Exchange Act of 1934 and Rule 11a2-2(T) thereunder, and the Trust hereby
consents to the retention of compensation for such transactions in accordance
with Rule 11a2-2(T)(2)(iv).
(c) Subject to the provisions of the Agreement and Declaration of Trust
of the Trust and the Investment Company Act of 1940 (the "1940 Act"), the
Manager, at its expense, may select and contract with investment advisers (the
"Sub-Advisers") for the Fund. So long as Columbus Circle Investors serves as
Sub-Adviser to the Fund pursuant to a Sub-Adviser Agreement in substantially the
form attached hereto as Exhibit A (the "Sub-Adviser Agreement"), the obligation
of the Manager under this Contract with respect to the Fund shall be subject in
any event to the control of the Trustees of the Trust, to determine and review
with Columbus Circle Investors investment policies of the Fund and Columbus
Circle Investors shall have the obligation of furnishing continuously an
investment program and making investment decisions for the Fund, adhering to
applicable investment objectives, policies and restrictions and placing all
orders for the purchase and sale of portfolio securities for the Fund. The
Manager will compensate any Sub-Adviser of the Fund for its services to the
Fund. The Manager may terminate the services of the Sub-Adviser at any time in
its sole discretion, and shall at such time assume the responsibilities of such
Sub-Adviser unless and until a successor Sub-Adviser is selected.
(d) The Manager shall not be obligated to pay any expenses of or for
the Trust not expressly assumed by the Manager pursuant to this Section 1 other
than as provided in Section 3.
2. OTHER AGREEMENTS, ETC.
It is understood that any of the shareholders, Trustees, officers and
employees of the Trust may be a shareholder, director, officer or employee of,
or be otherwise interested in, the Manager, and in any person controlled by or
under common control with the Manager, and that the Manager and any person
controlled by or under common control with the Manager may have an interest in
the Trust. It is also understood that the Manager and persons controlled by or
under common control with the Manager have and may have advisory, management
service, distribution or other contracts with other organizations and persons,
and may have other interests and businesses.
3. COMPENSATION TO BE PAID BY THE TRUST TO THE MANAGER.
The Trust will pay to the Manager as compensation for the Manager's
services rendered, for the facilities furnished and for the expenses borne by
the Manager pursuant to Section 1, a fee, computed and paid monthly at the
annual rate of 0.75% of the average daily net asset value of the Fund up to $200
million and 0.70% of such net asset value in excess of $200 million. The average
daily net asset value of the Fund shall be determined by taking an average of
all of the determinations of such net asset value during such month at the close
of business on each business day during such month while this Contract is in
effect. Such fee shall be payable for each month within five (5) business days
after the end of such month.
In the event that expenses of the Fund for any fiscal year should
exceed the expense limitation on investment company expenses imposed by any
statute or regulatory authority of any jurisdiction in which shares of the Trust
are qualified for offer and sale, the compensation due the Manager for such
fiscal year shall be reduced by the amount of such excess by a reduction or
refund thereof. In the event that the expenses with respect to the Fund could
exceed any expense limitation which the Manager may, by written notice to the
Trust, voluntarily declare to be effective subject to such terms and conditions
as the Manager may prescribe in such notice, the compensation due the Manager
shall be reduced, and, if necessary, the Manager shall bear expenses with
respect to the Fund, to the extent required by such expense limitation.
If the Manager shall serve for less than the whole of a month, the
foregoing compensation shall be prorated.
4. ASSIGNMENT TERMINATES THIS CONTRACT; AMENDMENTS OF THIS CONTRACT.
This Contract shall automatically terminate, without the payment of any
penalty, in the event of its assignment; and this Contract shall not be amended
as to the Fund unless such amendment is approved at a meeting by the affirmative
vote of a majority of the outstanding shares of the Fund, and by the vote, cast
in person at a meeting called for the purpose of voting on such approval, of a
majority of the Trustees of the Trust who are not interested persons of the
Trust or of the Manager or of any Sub-Adviser of the Fund.
5. EFFECTIVE PERIOD AND TERMINATION OF THIS CONTRACT.
This Contract shall become effective upon its execution, and shall
remain in full force and effect as to each Fund continuously thereafter (unless
terminated automatically as set forth in Section 4) until terminated as follows:
(a) Either party hereto may at any time terminate this
Contract by not more than sixty days' written notice delivered or
mailed by registered mail, postage prepaid, to the other party, or
(b) If (i) the Trustees of the Trust or the shareholders by
the affirmative vote of a majority of the outstanding shares of the
Fund, and (ii) a majority of the Trustees of the Trust who are not
interested persons of the Trust or of the Manager, by vote cast in
person at a meeting called for the purpose of voting on such approval,
do not specifically approve at least annually the continuance of this
Contract, then this Contract shall automatically terminate at the close
of business on the second anniversary of its execution, or upon the
expiration of one year from the effective date of the last such
continuance, whichever is later; provided, however, that if the
continuance of this Contract is submitted to the shareholders of the
Fund for their approval and such shareholders fail to approve such
continuance of this Contract as provided herein, the Manager may
continue to serve hereunder in a manner consistent with the Investment
Company Act of 1940 and the Rules and Regulations thereunder.
Action by the Trust under (a) above may be taken either (i) by vote of
a majority of its Trustees, or (ii) by the affirmative vote of a majority of the
outstanding shares of the Fund.
Termination of this Contract pursuant to this Section 5 shall be
without the payment of any penalty.
6. CERTAIN DEFINITIONS.
For the purposes of this Contract, the "affirmative vote of a majority
of the outstanding shares" means the affirmative vote, at a duly called and held
meeting of shareholders, (a) of the holders of 67% or more of the shares of the
Fund present (in person or by proxy) and entitled to vote at such meeting, if
the holders of more than 50% of the outstanding shares of the Fund entitled to
vote at such meeting are present in person or by proxy, or (b) of the holders of
more than 50% of the outstanding shares of the Fund entitled to vote at such
meeting, whichever is less.
For the purposes of this Contract, the terms "affiliated person",
"control", "interested person" and "assignment" shall have their respective
meanings defined in the Investment Company Act of 1940 and the Rules and
Regulations thereunder, subject, however, to such exemptions as may be granted
by the Securities and Exchange Commission under said Act; the term "specifically
approve at least annually" shall be construed in a manner consistent with the
Investment Company Act of 1940 and the Rules and Regulations thereunder; and the
term "brokerage and research services" shall have the meaning given in the
Securities Exchange Act of 1934 and the Rules and Regulations thereunder.
7. NONLIABILITY OF MANAGER.
In the absence of willful misfeasance, bad faith or gross negligence on
the part of the Manager, or reckless disregard of its obligations and duties
hereunder, the Manager shall not be subject to any liability to the Trust, or to
any shareholder of the Trust, for any act or omission in the course of, or
connected with, rendering services hereunder.
8. LIMITATION OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS.
A copy of the Amended and Restated Agreement and Declaration of Trust
of the Trust is on file with the Secretary of The Commonwealth of Massachusetts,
and notice is hereby given that this instrument is executed on behalf of the
Trustees of the Trust as Trustees and not individually and that the obligations
of this instrument are not binding upon any of the Trustees or shareholders
individually but are binding only upon the assets and property of the Fund.
9. THE WORDS "CCI," "PACIFIC INVESTMENT MANAGEMENT COMPANY," "PFAMCO," "PIMCO"
OR "THOMSON".
The Manager owns the words "CCI," "Pacific Investment Management
Company," "PFAMCo," "PIMCO" and "Thomson" which may be used by the Trust only
with the consent of the Manager. The Manager consents to the use of the Trust of
the words "CCI," "Pacific Investment Management Company," "PFAMCo," "PIMCO" and
"Thomson," in such forms as the Manager shall in writing approve, but only on
condition and so long as (i) this Contract shall remain in full force and (ii)
the Trust shall fully perform, fulfill and comply with all provisions of this
Contract expressed herein to be performed, fulfilled or complied with by it. No
such name shall be used by the Trust at any time or in any place or for any
purposes or under any conditions except as in this section provided. The
foregoing authorization by the Manager to the Trust to use said name as part of
a business or name is not exclusive of the right of the Manager itself to use,
or to authorize others to use, the same; the Trust acknowledges and agrees that
as between the Manager and the Trust, the Manager has the exclusive right to so
authorize others to use the same; the Trust acknowledges and agrees that as
between the Manager and the Trust, the Manager has the exclusive right to so
use, or authorize others to use, said words and the Trust agrees to take such
action as may reasonably be requested by the Manager to give full effect to the
provisions of this section (including, without limitation, consenting to such
use of said words). Without limiting the generality of the foregoing, the Trust
agrees that, upon any termination of this Contract by either party or upon the
violation of any of its provisions by the Trust, the Trust will, at the request
of the Manager made within six months after the Manager has knowledge of such
termination or violation, use its best efforts to change the name of the Trust
so as to eliminate all reference, if any, to the words "CCI," "Pacific
Investment Management Company," "PFAMCo," "PIMCO" and "Thomson" and will not
thereafter transact any business in a name containing the words "CCI," "Pacific
Investment Management Company," "PFAMCo," "PIMCO" or "Thomson" in any form or
combination whatsoever, or designate itself as the same entity as or successor
to an entity of such name, or otherwise use the words "CCI," "Pacific Investment
Management Company," "PFAMCo," "PIMCO" or "Thomson" or any other reference to
the Manager. Such covenants on the part of the Trust shall be binding upon it,
its trustees, officers, stockholders, creditors and all other persons claiming
under or through it.
<PAGE>
IN WITNESS WHEREOF, THOMSON FUND GROUP and PIMCO ADVISORS L.P. have
each caused this instrument to be signed in duplicate in its behalf by its duly
authorized representative, all as of the day and year first above written.
THOMSON FUND GROUP
By: Robert A. Prindiville
PIMCO ADVISORS L.P.
By: PIMCO Partners, G.P., a California
general partnership, General Partner
By: PIMCO Partners, LLC, a California
limited liability company, General Partner
By: William S. Thompson
<PAGE>
3033747.01
MANAGEMENT CONTRACT
[Value Fund]
Management Contract executed as of May 11, 1995 between PIMCO ADVISORS
FUNDS, a Massachusetts business trust (the "Trust") on behalf of its Value Fund
(the "Fund"), and PIMCO ADVISORS L.P., a Delaware limited partnership (the
"Manager").
WITNESSETH:
That in consideration of the mutual covenants herein contained, it is
agreed as follows:
1. SERVICES TO BE RENDERED BY MANAGER TO FUND.
(a) Subject always to the control of the Trustees of the Trust and to
such policies as the Trustees may determine, the Manager will, at its expense,
(i) furnish continuously an investment program for the Fund and will make
investment decisions on behalf of the Fund and place all orders for the purchase
and sale of portfolio securities and (ii) furnish office space and equipment,
provide bookkeeping and clerical services (excluding determination of net asset
value and shareholder accounting services) and pay all salaries, fees and
expenses of officers and Trustees of the Trust who are affiliated with the
Manager. In the performance of its duties, the Manager will comply with the
provisions of the Amended and Restated Agreement and Declaration of Trust and
By-laws of the Trust and its stated investment objectives, policies and
restrictions.
<PAGE>
3033747.01
-7-
(b) In the selection of brokers or dealers and the placing of orders
for the purchase and sale of portfolio investments for the Fund, the Manager
shall seek to obtain for the Fund the most favorable price and execution
available, except to the extent it may be permitted to pay higher brokerage
commissions for brokerage and research services as described below. In using its
best efforts to obtain for the Fund the most favorable price and execution
available, the Manager, bearing in mind the Fund's best interests at all times,
shall consider all factors it deems relevant, including by way of illustration,
price, the size of the transaction, the nature of the market for the security,
the amount of the commission, the timing of the transaction taking into account
market prices and trends, the reputation, experience and financial stability of
the broker or dealer involved and the quality of service rendered by the broker
or dealer in other transactions. Subject to such policies as the Trustees may
determine, the Manager shall not be deemed to have acted unlawfully or to have
breached any duty created by this Contract or otherwise solely by reason of its
having caused the Fund to pay a broker or dealer that provides brokerage and
research services to the Manager an amount of commission for effecting a
portfolio investment transaction in excess of the amount of commission another
broker or dealer would have charged for effecting that transaction, if the
Manager determines in good faith that such amount of commission was reasonable
in relation to the value of the brokerage and research services provided by such
broker or dealer, viewed in terms of either that particular transaction or the
Manager's overall responsibilities with respect to the Trust and to other
clients of the Manager as to which the Manager exercises investment discretion.
The Trust hereby agrees with the Manager and with any Sub-Adviser selected by
the Manager as provided in Section 1(c) hereof that any entity or person
associated with the Manager which is a member of a national securities exchange
is authorized to effect any transaction on such exchange for the account of the
Trust and the Fund which is permitted by Section 11(a) of the Securities
Exchange Act of 1934 and Rule 11a2-2(T) thereunder, and the Trust hereby
consents to the retention of compensation for such transactions in accordance
with Rule 11a2-2(T)(2)(iv).
(c) Subject to the provisions of the Agreement and Declaration of Trust
of the Trust and the Investment Company Act of 1940 (the "1940 Act"), the
Manager, at its expense, may select and contract with investment advisers (the
"Sub-Advisers") for the Fund. So long as NFJ Investment Group serves as
Sub-Adviser to the Fund pursuant to a Sub-Adviser Agreement in substantially the
form attached hereto as Exhibit A (the "Sub-Adviser Agreement"), the obligation
of the Manager under this Contract with respect to the Fund shall be subject in
any event to the control of the Trustees of the Trust, to determine and review
with NFJ Investment Group investment policies of the Fund and NFJ Investment
Group shall have the obligation of furnishing continuously an investment program
and making investment decisions for the Fund, adhering to applicable investment
objectives, policies and restrictions and placing all orders for the purchase
and sale of portfolio securities for the Fund. The Manager will compensate any
Sub-Adviser of the Fund for its services to the Fund. The Manager may terminate
the services of the Sub-Adviser at any time in its sole discretion, and shall at
such time assume the responsibilities of such Sub-Adviser unless and until a
successor Sub-Adviser is selected.
(d) The Manager shall not be obligated to pay any expenses of or for
the Trust not expressly assumed by the Manager pursuant to this Section 1 other
than as provided in Section 3.
2. OTHER AGREEMENTS, ETC.
It is understood that any of the shareholders, Trustees, officers and
employees of the Trust may be a shareholder, director, officer or employee of,
or be otherwise interested in, the Manager, and in any person controlled by or
under common control with the Manager, and that the Manager and any person
controlled by or under common control with the Manager may have an interest in
the Trust. It is also understood that the Manager and persons controlled by or
under common control with the Manager have and may have advisory, management
service, distribution or other contracts with other organizations and persons,
and may have other interests and businesses.
3. COMPENSATION TO BE PAID BY THE TRUST TO THE MANAGER.
The Trust will pay to the Manager as compensation for the Manager's
services rendered, for the facilities furnished and for the expenses borne by
the Manager pursuant to Section 1, a fee, computed and paid monthly at the
annual rate of 0.70% of the average daily net asset value of the Fund. The
average daily net asset value of the Fund shall be determined by taking an
average of all of the determinations of such net asset value during such month
at the close of business on each business day during such month while this
Contract is in effect. Such fee shall be payable for each month within five (5)
business days after the end of such month.
In the event that expenses of the Fund for any fiscal year should
exceed the expense limitation on investment company expenses imposed by any
statute or regulatory authority of any jurisdiction in which shares of the Trust
are qualified for offer and sale, the compensation due the Manager for such
fiscal year shall be reduced by the amount of such excess by a reduction or
refund thereof. In the event that the expenses with respect to the Fund could
exceed any expense limitation which the Manager may, by written notice to the
Trust, voluntarily declare to be effective subject to such terms and conditions
as the Manager may prescribe in such notice, the compensation due the Manager
shall be reduced, and, if necessary, the Manager shall bear expenses with
respect to the Fund, to the extent required by such expense limitation.
If the Manager shall serve for less than the whole of a month, the
foregoing compensation shall be prorated.
4. ASSIGNMENT TERMINATES THIS CONTRACT; AMENDMENTS OF THIS CONTRACT.
This Contract shall automatically terminate, without the payment of any
penalty, in the event of its assignment; and this Contract shall not be amended
as to the Fund unless such amendment is approved at a meeting by the affirmative
vote of a majority of the outstanding shares of the Fund, and by the vote, cast
in person at a meeting called for the purpose of voting on such approval, of a
majority of the Trustees of the Trust who are not interested persons of the
Trust or of the Manager or of any Sub-Adviser of the Fund.
5. EFFECTIVE PERIOD AND TERMINATION OF THIS CONTRACT.
This Contract shall become effective upon its execution, and shall
remain in full force and effect as to each Fund continuously thereafter (unless
terminated automatically as set forth in Section 4) until terminated as follows:
(a) Either party hereto may at any time terminate this
Contract by not more than sixty days' written notice delivered or
mailed by registered mail, postage prepaid, to the other party, or
(b) If (i) the Trustees of the Trust or the shareholders by
the affirmative vote of a majority of the outstanding shares of the
Fund, and (ii) a majority of the Trustees of the Trust who are not
interested persons of the Trust or of the Manager, by vote cast in
person at a meeting called for the purpose of voting on such approval,
do not specifically approve at least annually the continuance of this
Contract, then this Contract shall automatically terminate at the close
of business on the second anniversary of its execution, or upon the
expiration of one year from the effective date of the last such
continuance, whichever is later; provided, however, that if the
continuance of this Contract is submitted to the shareholders of the
Fund for their approval and such shareholders fail to approve such
continuance of this Contract as provided herein, the Manager may
continue to serve hereunder in a manner consistent with the Investment
Company Act of 1940 and the Rules and Regulations thereunder.
Action by the Trust under (a) above may be taken either (i) by vote of
a majority of its Trustees, or (ii) by the affirmative vote of a majority of the
outstanding shares of the Fund.
Termination of this Contract pursuant to this Section 5 shall be
without the payment of any penalty.
6. CERTAIN DEFINITIONS.
For the purposes of this Contract, the "affirmative vote of a majority
of the outstanding shares" means the affirmative vote, at a duly called and held
meeting of shareholders, (a) of the holders of 67% or more of the shares of the
Fund present (in person or by proxy) and entitled to vote at such meeting, if
the holders of more than 50% of the outstanding shares of the Fund entitled to
vote at such meeting are present in person or by proxy, or (b) of the holders of
more than 50% of the outstanding shares of the Fund entitled to vote at such
meeting, whichever is less.
For the purposes of this Contract, the terms "affiliated person",
"control", "interested person" and "assignment" shall have their respective
meanings defined in the Investment Company Act of 1940 and the Rules and
Regulations thereunder, subject, however, to such exemptions as may be granted
by the Securities and Exchange Commission under said Act; the term "specifically
approve at least annually" shall be construed in a manner consistent with the
Investment Company Act of 1940 and the Rules and Regulations thereunder; and the
term "brokerage and research services" shall have the meaning given in the
Securities Exchange Act of 1934 and the Rules and Regulations thereunder.
7. NONLIABILITY OF MANAGER.
In the absence of willful misfeasance, bad faith or gross negligence on
the part of the Manager, or reckless disregard of its obligations and duties
hereunder, the Manager shall not be subject to any liability to the Trust, or to
any shareholder of the Trust, for any act or omission in the course of, or
connected with, rendering services hereunder.
8. LIMITATION OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS.
A copy of the Amended and Restated Agreement and Declaration of Trust
of the Trust is on file with the Secretary of The Commonwealth of Massachusetts,
and notice is hereby given that this instrument is executed on behalf of the
Trustees of the Trust as Trustees and not individually and that the obligations
of this instrument are not binding upon any of the Trustees or shareholders
individually but are binding only upon the assets and property of the Fund.
9. THE WORDS "CCI," "PACIFIC INVESTMENT MANAGEMENT COMPANY," "PFAMCO," "PIMCO,"
"NFJ," "CADENCE" OR "THOMSON".
The Manager owns the words "CCI," "Pacific Investment Management
Company," "PFAMCo," "PIMCO," "PIMCO Advisors," "NFJ," "Cadence" and "Thomson"
which may be used by the Trust only with the consent of the Manager. The Manager
consents to the use of the Trust of the words "CCI," "Pacific Investment
Management Company," "PFAMCo, "PIMCO," "NFJ," "Cadence" and "Thomson," in such
forms as the Manager shall in writing approve, but only on condition and so long
as (i) this Contract shall remain in full force and (ii) the Trust shall fully
perform, fulfill and comply with all provisions of this Contract expressed
herein to be performed, fulfilled or complied with by it. No such name shall be
used by the Trust at any time or in any place or for any purposes or under any
conditions except as in this section provided. The foregoing authorization by
the Manager to the Trust to use said name as part of a business or name is not
exclusive of the right of the Manager itself to use, or to authorize others to
use, the same; the Trust acknowledges and agrees that as between the Manager and
the Trust, the Manager has the exclusive right to so authorize others to use the
same; the Trust acknowledges and agrees that as between the Manager and the
Trust, the Manager has the exclusive right to so use, or authorize others to
use, said words and the Trust agrees to take such action as may reasonably be
requested by the Manager to give full effect to the provisions of this section
(including, without limitation, consenting to such use of said words). Without
limiting the generality of the foregoing, the Trust agrees that, upon any
termination of this Contract by either party or upon the violation of any of its
provisions by the Trust, the Trust will, at the request of the Manager made
within six months after the Manager has knowledge of such termination or
violation, use its best efforts to change the name of the Trust so as to
eliminate all reference, if any, to the words "CCI," "Pacific Investment
Management Company, " "PFAMCo," "PIMCO," "PIMCO Advisors," "NFJ," "Cadence" and
"Thomson" and will not thereafter transact any business in a name containing the
words "CCI," "Pacific Investment Management Company," "PFAMCo," "PIMCO," "NFJ,"
"Cadence" or "Thomson" in any form or combination whatsoever, or designate
itself as the same entity as or successor to an entity of such name, or
otherwise use the words "CCI," "Pacific Investment Management Company,"
"PFAMCo," "PIMCO," "PIMCO Advisors," "NFJ," "Cadence" or "Thomson" or any other
reference to the Manager. Such covenants on the part of the Trust shall be
binding upon it, its trustees, officers, stockholders, creditors and all other
persons claiming under or through it.
IN WITNESS WHEREOF, PIMCO ADVISORS FUNDS and PIMCO ADVISORS L.P. have
each caused this instrument to be signed in duplicate in its behalf by its duly
authorized representative, all as of the day and year first above written.
PIMCO ADVISORS FUNDS
By: Robert A. Prindiville
Title: President
PIMCO ADVISORS L.P.
By: Robert A. Prindiville
Title: Executive Vice President
<PAGE>
3007740.01
MANAGEMENT CONTRACT
[Growth Fund]
Management Contract executed as of November 16, 1994 between THOMSON
FUND GROUP, a Massachusetts business trust (the "Trust") on behalf of its
Thomson Growth Fund (the "Fund"), and PIMCO ADVISORS L.P., a Delaware limited
partnership (the "Manager").
WITNESSETH:
That in consideration of the mutual covenants herein contained, it is
agreed as follows:
1. SERVICES TO BE RENDERED BY MANAGER TO FUND.
(a) Subject always to the control of the Trustees of the Trust and to
such policies as the Trustees may determine, the Manager will, at its expense,
(i) furnish continuously an investment program for the Fund and will make
investment decisions on behalf of the Fund and place all orders for the purchase
and sale of portfolio securities and (ii) furnish office space and equipment,
provide bookkeeping and clerical services (excluding determination of net asset
value and shareholder accounting services) and pay all salaries, fees and
expenses of officers and Trustees of the Trust who are affiliated with the
Manager. In the performance of its duties, the Manager will comply with the
provisions of the Amended and Restated Agreement and Declaration of Trust and
By-laws of the Trust and its stated investment objectives, policies and
restrictions.
<PAGE>
-7-
(b) In the selection of brokers or dealers and the placing of orders
for the purchase and sale of portfolio investments for the Fund, the Manager
shall seek to obtain for the Fund the most favorable price and execution
available, except to the extent it may be permitted to pay higher brokerage
commissions for brokerage and research services as described below. In using its
best efforts to obtain for the Fund the most favorable price and execution
available, the Manager, bearing in mind the Fund's best interests at all times,
shall consider all factors it deems relevant, including by way of illustration,
price, the size of the transaction, the nature of the market for the security,
the amount of the commission, the timing of the transaction taking into account
market prices and trends, the reputation, experience and financial stability of
the broker or dealer involved and the quality of service rendered by the broker
or dealer in other transactions. Subject to such policies as the Trustees may
determine, the Manager shall not be deemed to have acted unlawfully or to have
breached any duty created by this Contract or otherwise solely by reason of its
having caused the Fund to pay a broker or dealer that provides brokerage and
research services to the Manager an amount of commission for effecting a
portfolio investment transaction in excess of the amount of commission another
broker or dealer would have charged for effecting that transaction, if the
Manager determines in good faith that such amount of commission was reasonable
in relation to the value of the brokerage and research services provided by such
broker or dealer, viewed in terms of either that particular transaction or the
Manager's overall responsibilities with respect to the Trust and to other
clients of the Manager as to which the Manager exercises investment discretion.
The Trust hereby agrees with the Manager and with any Sub-Adviser selected by
the Manager as provided in Section 1(c) hereof that any entity or person
associated with the Manager which is a member of a national securities exchange
is authorized to effect any transaction on such exchange for the account of the
Trust and the Fund which is permitted by Section 11(a) of the Securities
Exchange Act of 1934 and Rule 11a2-2(T) thereunder, and the Trust hereby
consents to the retention of compensation for such transactions in accordance
with Rule 11a2-2(T)(2)(iv).
(c) Subject to the provisions of the Agreement and Declaration of Trust
of the Trust and the Investment Company Act of 1940 (the "1940 Act"), the
Manager, at its expense, may select and contract with investment advisers (the
"Sub-Advisers") for the Fund. So long as Columbus Circle Investors serves as
Sub-Adviser to the Fund pursuant to a Sub-Adviser Agreement in substantially the
form attached hereto as Exhibit A (the "Sub-Adviser Agreement"), the obligation
of the Manager under this Contract with respect to the Fund shall be subject in
any event to the control of the Trustees of the Trust, to determine and review
with Columbus Circle Investors investment policies of the Fund and Columbus
Circle Investors shall have the obligation of furnishing continuously an
investment program and making investment decisions for the Fund, adhering to
applicable investment objectives, policies and restrictions and placing all
orders for the purchase and sale of portfolio securities for the Fund. The
Manager will compensate any Sub-Adviser of the Fund for its services to the
Fund. The Manager may terminate the services of the Sub-Adviser at any time in
its sole discretion, and shall at such time assume the responsibilities of such
Sub-Adviser unless and until a successor Sub-Adviser is selected.
(d) The Manager shall not be obligated to pay any expenses of or for
the Trust not expressly assumed by the Manager pursuant to this Section 1 other
than as provided in Section 3.
2. OTHER AGREEMENTS, ETC.
It is understood that any of the shareholders, Trustees, officers and
employees of the Trust may be a shareholder, director, officer or employee of,
or be otherwise interested in, the Manager, and in any person controlled by or
under common control with the Manager, and that the Manager and any person
controlled by or under common control with the Manager may have an interest in
the Trust. It is also understood that the Manager and persons controlled by or
under common control with the Manager have and may have advisory, management
service, distribution or other contracts with other organizations and persons,
and may have other interests and businesses.
3. COMPENSATION TO BE PAID BY THE TRUST TO THE MANAGER.
The Trust will pay to the Manager as compensation for the Manager's
services rendered, for the facilities furnished and for the expenses borne by
the Manager pursuant to Section 1, a fee, computed and paid monthly at the
annual rate of 0.70% of the average daily net asset value of the Fund up to $200
million and 0.65% of such net asset value in excess of $200 million. The average
daily net asset value of the Fund shall be determined by taking an average of
all of the determinations of such net asset value during such month at the close
of business on each business day during such month while this Contract is in
effect. Such fee shall be payable for each month within five (5) business days
after the end of such month.
In the event that expenses of the Fund for any fiscal year should
exceed the expense limitation on investment company expenses imposed by any
statute or regulatory authority of any jurisdiction in which shares of the Trust
are qualified for offer and sale, the compensation due the Manager for such
fiscal year shall be reduced by the amount of such excess by a reduction or
refund thereof. In the event that the expenses with respect to the Fund could
exceed any expense limitation which the Manager may, by written notice to the
Trust, voluntarily declare to be effective subject to such terms and conditions
as the Manager may prescribe in such notice, the compensation due the Manager
shall be reduced, and, if necessary, the Manager shall bear expenses with
respect to the Fund, to the extent required by such expense limitation.
If the Manager shall serve for less than the whole of a month, the
foregoing compensation shall be prorated.
4. ASSIGNMENT TERMINATES THIS CONTRACT; AMENDMENTS OF THIS CONTRACT.
This Contract shall automatically terminate, without the payment of any
penalty, in the event of its assignment; and this Contract shall not be amended
as to the Fund unless such amendment is approved at a meeting by the affirmative
vote of a majority of the outstanding shares of the Fund, and by the vote, cast
in person at a meeting called for the purpose of voting on such approval, of a
majority of the Trustees of the Trust who are not interested persons of the
Trust or of the Manager or of any Sub-Adviser of the Fund.
5. EFFECTIVE PERIOD AND TERMINATION OF THIS CONTRACT.
This Contract shall become effective upon its execution, and shall
remain in full force and effect as to each Fund continuously thereafter (unless
terminated automatically as set forth in Section 4) until terminated as follows:
(a) Either party hereto may at any time terminate this
Contract by not more than sixty days' written notice delivered or
mailed by registered mail, postage prepaid, to the other party, or
(b) If (i) the Trustees of the Trust or the shareholders by
the affirmative vote of a majority of the outstanding shares of the
Fund, and (ii) a majority of the Trustees of the Trust who are not
interested persons of the Trust or of the Manager, by vote cast in
person at a meeting called for the purpose of voting on such approval,
do not specifically approve at least annually the continuance of this
Contract, then this Contract shall automatically terminate at the close
of business on the second anniversary of its execution, or upon the
expiration of one year from the effective date of the last such
continuance, whichever is later; provided, however, that if the
continuance of this Contract is submitted to the shareholders of the
Fund for their approval and such shareholders fail to approve such
continuance of this Contract as provided herein, the Manager may
continue to serve hereunder in a manner consistent with the Investment
Company Act of 1940 and the Rules and Regulations thereunder.
Action by the Trust under (a) above may be taken either (i) by vote of
a majority of its Trustees, or (ii) by the affirmative vote of a majority of the
outstanding shares of the Fund.
Termination of this Contract pursuant to this Section 5 shall be
without the payment of any penalty.
6. CERTAIN DEFINITIONS.
For the purposes of this Contract, the "affirmative vote of a majority
of the outstanding shares" means the affirmative vote, at a duly called and held
meeting of shareholders, (a) of the holders of 67% or more of the shares of the
Fund present (in person or by proxy) and entitled to vote at such meeting, if
the holders of more than 50% of the outstanding shares of the Fund entitled to
vote at such meeting are present in person or by proxy, or (b) of the holders of
more than 50% of the outstanding shares of the Fund entitled to vote at such
meeting, whichever is less.
For the purposes of this Contract, the terms "affiliated person",
"control", "interested person" and "assignment" shall have their respective
meanings defined in the Investment Company Act of 1940 and the Rules and
Regulations thereunder, subject, however, to such exemptions as may be granted
by the Securities and Exchange Commission under said Act; the term "specifically
approve at least annually" shall be construed in a manner consistent with the
Investment Company Act of 1940 and the Rules and Regulations thereunder; and the
term "brokerage and research services" shall have the meaning given in the
Securities Exchange Act of 1934 and the Rules and Regulations thereunder.
7. NONLIABILITY OF MANAGER.
In the absence of willful misfeasance, bad faith or gross negligence on
the part of the Manager, or reckless disregard of its obligations and duties
hereunder, the Manager shall not be subject to any liability to the Trust, or to
any shareholder of the Trust, for any act or omission in the course of, or
connected with, rendering services hereunder.
8. LIMITATION OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS.
A copy of the Amended and Restated Agreement and Declaration of Trust
of the Trust is on file with the Secretary of The Commonwealth of Massachusetts,
and notice is hereby given that this instrument is executed on behalf of the
Trustees of the Trust as Trustees and not individually and that the obligations
of this instrument are not binding upon any of the Trustees or shareholders
individually but are binding only upon the assets and property of the Fund.
9. THE WORDS "CCI," "PACIFIC INVESTMENT MANAGEMENT COMPANY," "PFAMCO," "PIMCO"
OR "THOMSON".
The Manager owns the words "CCI," "Pacific Investment Management
Company," "PFAMCo," "PIMCO" and "Thomson" which may be used by the Trust only
with the consent of the Manager. The Manager consents to the use of the Trust of
the words "CCI," "Pacific Investment Management Company," "PFAMCo," "PIMCO" and
"Thomson," in such forms as the Manager shall in writing approve, but only on
condition and so long as (i) this Contract shall remain in full force and (ii)
the Trust shall fully perform, fulfill and comply with all provisions of this
Contract expressed herein to be performed, fulfilled or complied with by it. No
such name shall be used by the Trust at any time or in any place or for any
purposes or under any conditions except as in this section provided. The
foregoing authorization by the Manager to the Trust to use said name as part of
a business or name is not exclusive of the right of the Manager itself to use,
or to authorize others to use, the same; the Trust acknowledges and agrees that
as between the Manager and the Trust, the Manager has the exclusive right to so
authorize others to use the same; the Trust acknowledges and agrees that as
between the Manager and the Trust, the Manager has the exclusive right to so
use, or authorize others to use, said words and the Trust agrees to take such
action as may reasonably be requested by the Manager to give full effect to the
provisions of this section (including, without limitation, consenting to such
use of said words). Without limiting the generality of the foregoing, the Trust
agrees that, upon any termination of this Contract by either party or upon the
violation of any of its provisions by the Trust, the Trust will, at the request
of the Manager made within six months after the Manager has knowledge of such
termination or violation, use its best efforts to change the name of the Trust
so as to eliminate all reference, if any, to the words "CCI," "Pacific
Investment Management Company, " "PFAMCo," "PIMCO" and "Thomson" and will not
thereafter transact any business in a name containing the words "CCI," "Pacific
Investment Management Company," "PFAMCo," "PIMCO" or "Thomson" in any form or
combination whatsoever, or designate itself as the same entity as or successor
to an entity of such name, or otherwise use the words "CCI," "Pacific Investment
Management Company," "PFAMCo," "PIMCO" or "Thomson" or any other reference to
the Manager. Such covenants on the part of the Trust shall be binding upon it,
its trustees, officers, stockholders, creditors and all other persons claiming
under or through it.
<PAGE>
IN WITNESS WHEREOF, THOMSON FUND GROUP and PIMCO ADVISORS L.P. have
each caused this instrument to be signed in duplicate in its behalf by its duly
authorized representative, all as of the day and year first above written.
THOMSON FUND GROUP
By: Robert A. Prindiville
PIMCO ADVISORS L.P.
By: PIMCO Partners, G.P., a California
general partnership, General Partner
By: PIMCO Partners, LLC, a California
limited liability company, General Partner
By: William S. Thompson
<PAGE>
3007762.02
MANAGEMENT CONTRACT
[Target Fund]
Management Contract executed as of November 16, 1994 between THOMSON
FUND GROUP, a Massachusetts business trust (the "Trust"), on behalf of its
THOMSON TARGET FUND (the "Fund"), and PIMCO ADVISORS L.P., a Delaware limited
partnership (the "Manager").
Witnesseth:
That in consideration of the mutual covenants herein contained, it is
agreed as follows:
1. SERVICES TO BE RENDERED BY MANAGER TO FUND.
(a) Subject always to the control of the Trustees of the Trust and to
such policies as the Trustees may determine, the Manager will, at its expense,
(i) furnish continuously an investment program for the Fund and will make
investment decisions on behalf of the Fund and place all orders for the purchase
and sale of portfolio securities and (ii) furnish office space and equipment,
provide bookkeeping and clerical services (excluding determination of net asset
value and shareholder accounting services) and pay all salaries, fees and
expenses of officers and Trustees of the Trust who are affiliated with the
Manager. In the performance of its duties, the Manager will comply with the
provisions of the Amended and Restated Agreement and Declaration of Trust and
By-laws of the Trust and its stated investment objectives, policies and
restrictions.
<PAGE>
-7-
(b) In the selection of brokers or dealers and the placing of orders
for the purchase and sale of portfolio investments for the Fund, the Manager
shall seek to obtain for the Fund the most favorable price and execution
available, except to the extent it may be permitted to pay higher brokerage
commissions for brokerage and research services as described below. In using its
best efforts to obtain for the Fund the most favorable price and execution
available, the Manager, bearing in mind the Fund's best interests at all times,
shall consider all factors it deems relevant, including by way of illustration,
price, the size of the transaction, the nature of the market for the security,
the amount of the commission, the timing of the transaction taking into account
market prices and trends, the reputation, experience and financial stability of
the broker or dealer involved and the quality of service rendered by the broker
or dealer in other transactions. Subject to such policies as the Trustees may
determine, the Manager shall not be deemed to have acted unlawfully or to have
breached any duty created by this Contract or otherwise solely by reason of its
having caused the Fund to pay a broker or dealer that provides brokerage and
research services to the Manager an amount of commission for effecting a
portfolio investment transaction in excess of the amount of commission another
broker or dealer would have charged for effecting that transaction, if the
Manager determines in good faith that such amount of commission was reasonable
in relation to the value of the brokerage and research services provided by such
broker or dealer, viewed in terms of either that particular transaction or the
Manager's overall responsibilities with respect to the Trust and to other
clients of the Manager as to which the Manager exercises investment discretion.
The Trust hereby agrees with the Manager and with any Sub-Adviser selected by
the Manager as provided in Section 1(c) hereof that any entity or person
associated with the Manager which is a member of a national securities exchange
is authorized to effect any transaction on such exchange for the account of the
Trust and the Fund which is permitted by Section 11(a) of the Securities
Exchange Act of 1934 and Rule 11a2-2(T) thereunder, and the Trust hereby
consents to the retention of compensation for such transactions in accordance
with Rule 11a2-2(T)(2)(iv).
(c) Subject to the provisions of the Agreement and Declaration of Trust
of the Trust and the Investment Company Act of 1940 (the "1940 Act"), the
Manager, at its expense, may select and contract with investment advisers (the
"Sub-Advisers") for the Fund. So long as Columbus Circle Investors serves as
Sub-Adviser to the Fund pursuant to a Sub-Adviser Agreement in substantially the
form attached hereto as Exhibit A (the "Sub-Adviser Agreement"), the obligation
of the Manager under this Contract with respect to the Fund shall be subject in
any event to the control of the Trustees of the Trust, to determine and review
with Columbus Circle Investors investment policies of the Fund and Columbus
Circle Investors shall have the obligation of furnishing continuously an
investment program and making investment decisions for the Fund, adhering to
applicable investment objectives, policies and restrictions and placing all
orders for the purchase and sale of portfolio securities for the Fund. The
Manager will compensate any Sub-Adviser of the Fund for its services to the
Fund. The Manager may terminate the services of the Sub-Adviser at any time in
its sole discretion, and shall at such time assume the responsibilities of such
Sub-Adviser unless and until a successor Sub-Adviser is selected.
(d) The Manager shall not be obligated to pay any expenses of or for
the Trust not expressly assumed by the Manager pursuant to this Section 1 other
than as provided in Section 3.
2. OTHER AGREEMENTS, ETC.
It is understood that any of the shareholders, Trustees, officers and
employees of the Trust may be a shareholder, director, officer or employee of,
or be otherwise interested in, the Manager, and in any person controlled by or
under common control with the Manager, and that the Manager and any person
controlled by or under common control with the Manager may have an interest in
the Trust. It is also understood that the Manager and persons controlled by or
under common control with the Manager have and may have advisory, management
service, distribution or other contracts with other organizations and persons,
and may have other interests and businesses.
3. COMPENSATION TO BE PAID BY THE TRUST TO THE MANAGER.
The Trust will pay to the Manager as compensation for the Manager's
services rendered, for the facilities furnished and for the expenses borne by
the Manager pursuant to Section 1, a fee, computed and paid monthly at the
annual rate of 0.75% of the average daily net asset value of the Fund up to $200
million and 0.70% of such net asset value in excess of $200 million. The average
daily net asset value of the Fund shall be determined by taking an average of
all of the determinations of such net asset value during such month at the close
of business on each business day during such month while this Contract is in
effect. Such fee shall be payable for each month within five (5) business days
after the end of such month.
In the event that expenses of the Fund for any fiscal year should
exceed the expense limitation on investment company expenses imposed by any
statute or regulatory authority of any jurisdiction in which shares of the Trust
are qualified for offer and sale, the compensation due the Manager for such
fiscal year shall be reduced by the amount of such excess by a reduction or
refund thereof. In the event that the expenses with respect to the Fund could
exceed any expense limitation which the Manager may, by written notice to the
Trust, voluntarily declare to be effective subject to such terms and conditions
as the Manager may prescribe in such notice, the compensation due the Manager
shall be reduced, and, if necessary, the Manager shall bear expenses with
respect to the Fund, to the extent required by such expense limitation.
If the Manager shall serve for less than the whole of a month, the
foregoing compensation shall be prorated.
4. ASSIGNMENT TERMINATES THIS CONTRACT; AMENDMENTS OF THIS CONTRACT.
This Contract shall automatically terminate, without the payment of any
penalty, in the event of its assignment; and this Contract shall not be amended
as to the Fund unless such amendment is approved at a meeting by the affirmative
vote of a majority of the outstanding shares of the Fund, and by the vote, cast
in person at a meeting called for the purpose of voting on such approval, of a
majority of the Trustees of the Trust who are not interested persons of the
Trust or of the Manager or of any Sub-Adviser of the Fund.
5. EFFECTIVE PERIOD AND TERMINATION OF THIS CONTRACT.
This Contract shall become effective upon its execution, and shall
remain in full force and effect as to each Fund continuously thereafter (unless
terminated automatically as set forth in Section 4) until terminated as follows:
(a) Either party hereto may at any time terminate this
Contract by not more than sixty days' written notice delivered or
mailed by registered mail, postage prepaid, to the other party, or
(b) If (i) the Trustees of the Trust or the shareholders by
the affirmative vote of a majority of the outstanding shares of the
Fund, and (ii) a majority of the Trustees of the Trust who are not
interested persons of the Trust or of the Manager, by vote cast in
person at a meeting called for the purpose of voting on such approval,
do not specifically approve at least annually the continuance of this
Contract, then this Contract shall automatically terminate at the close
of business on the second anniversary of its execution, or upon the
expiration of one year from the effective date of the last such
continuance, whichever is later; provided, however, that if the
continuance of this Contract is submitted to the shareholders of the
Fund for their approval and such shareholders fail to approve such
continuance of this Contract as provided herein, the Manager may
continue to serve hereunder in a manner consistent with the Investment
Company Act of 1940 and the Rules and Regulations thereunder.
Action by the Trust under (a) above may be taken either (i) by vote of
a majority of its Trustees, or (ii) by the affirmative vote of a majority of the
outstanding shares of the Fund.
Termination of this Contract pursuant to this Section 5 shall be
without the payment of any penalty.
6. CERTAIN DEFINITIONS.
For the purposes of this Contract, the "affirmative vote of a majority
of the outstanding shares" means the affirmative vote, at a duly called and held
meeting of shareholders, (a) of the holders of 67% or more of the shares of the
Fund present (in person or by proxy) and entitled to vote at such meeting, if
the holders of more than 50% of the outstanding shares of the Fund entitled to
vote at such meeting are present in person or by proxy, or (b) of the holders of
more than 50% of the outstanding shares of the Fund entitled to vote at such
meeting, whichever is less.
For the purposes of this Contract, the terms "affiliated person",
"control", "interested person" and "assignment" shall have their respective
meanings defined in the Investment Company Act of 1940 and the Rules and
Regulations thereunder, subject, however, to such exemptions as may be granted
by the Securities and Exchange Commission under said Act; the term "specifically
approve at least annually" shall be construed in a manner consistent with the
Investment Company Act of 1940 and the Rules and Regulations thereunder; and the
term "brokerage and research services" shall have the meaning given in the
Securities Exchange Act of 1934 and the Rules and Regulations thereunder.
7. NONLIABILITY OF MANAGER.
In the absence of willful misfeasance, bad faith or gross negligence on
the part of the Manager, or reckless disregard of its obligations and duties
hereunder, the Manager shall not be subject to any liability to the Trust, or to
any shareholder of the Trust, for any act or omission in the course of, or
connected with, rendering services hereunder.
8. LIMITATION OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS.
A copy of the Amended and Restated Agreement and Declaration of Trust
of the Trust is on file with the Secretary of The Commonwealth of Massachusetts,
and notice is hereby given that this instrument is executed on behalf of the
Trustees of the Trust as Trustees and not individually and that the obligations
of this instrument are not binding upon any of the Trustees or shareholders
individually but are binding only upon the assets and property of the Fund.
9. THE WORDS "CCI," "PACIFIC INVESTMENT MANAGEMENT COMPANY," "PFAMCO," "PIMCO"
OR "THOMSON".
The Manager owns the words "CCI," "Pacific Investment Management
Company," "PFAMCo," "PIMCO" and "Thomson" which may be used by the Trust only
with the consent of the Manager. The Manager consents to the use of the Trust of
the words "CCI," "Pacific Investment Management Company," "PFAMCo," "PIMCO" and
"Thomson," in such forms as the Manager shall in writing approve, but only on
condition and so long as (i) this Contract shall remain in full force and (ii)
the Trust shall fully perform, fulfill and comply with all provisions of this
Contract expressed herein to be performed, fulfilled or complied with by it. No
such name shall be used by the Trust at any time or in any place or for any
purposes or under any conditions except as in this section provided. The
foregoing authorization by the Manager to the Trust to use said name as part of
a business or name is not exclusive of the right of the Manager itself to use,
or to authorize others to use, the same; the Trust acknowledges and agrees that
as between the Manager and the Trust, the Manager has the exclusive right to so
authorize others to use the same; the Trust acknowledges and agrees that as
between the Manager and the Trust, the Manager has the exclusive right to so
use, or authorize others to use, said words and the Trust agrees to take such
action as may reasonably be requested by the Manager to give full effect to the
provisions of this section (including, without limitation, consenting to such
use of said words). Without limiting the generality of the foregoing, the Trust
agrees that, upon any termination of this Contract by either party or upon the
violation of any of its provisions by the Trust, the Trust will, at the request
of the Manager made within six months after the Manager has knowledge of such
termination or violation, use its best efforts to change the name of the Trust
so as to eliminate all reference, if any, to the words "CCI," "Pacific
Investment Management Company, " "PFAMCo," "PIMCO" and "Thomson" and will not
thereafter transact any business in a name containing the words "CCI," "Pacific
Investment Management Company," "PFAMCo," "PIMCO" or "Thomson" in any form or
combination whatsoever, or designate itself as the same entity as or successor
to an entity of such name, or otherwise use the words "CCI," "Pacific Investment
Management Company," "PFAMCo," "PIMCO" or "Thomson" or any other reference to
the Manager. Such covenants on the part of the Trust shall be binding upon it,
its trustees, officers, stockholders, creditors and all other persons claiming
under or through it.
<PAGE>
IN WITNESS WHEREOF, THOMSON FUND GROUP and PIMCO ADVISORS L.P. have
each caused this instrument to be signed in duplicate in its behalf by its duly
authorized representative, all as of the day and year first above written.
THOMSON FUND GROUP
By: Robert A. Prindiville
PIMCO ADVISORS L.P.
By: PIMCO Partners, G.P., a California
general partnership, General Partner
By: PIMCO Partners, LLC, a California
limited liability company, General Partner
By: William S. Thompson
<PAGE>
3033748.01
MANAGEMENT CONTRACT
Discovery Fund
Management Contract executed as of May 11, 1995 between PIMCO ADVISORS
FUNDS, a Massachusetts business trust (the "Trust") on behalf of its Discovery
Fund (the "Fund"), and PIMCO ADVISORS L.P., a Delaware limited partnership (the
"Manager").
WITNESSETH:
That in consideration of the mutual covenants herein contained, it is
agreed as follows:
1. SERVICES TO BE RENDERED BY MANAGER TO FUND.
(a) Subject always to the control of the Trustees of the Trust and to
such policies as the Trustees may determine, the Manager will, at its expense,
(i) furnish continuously an investment program for the Fund and will make
investment decisions on behalf of the Fund and place all orders for the purchase
and sale of portfolio securities and (ii) furnish office space and equipment,
provide bookkeeping and clerical services (excluding determination of net asset
value and shareholder accounting services) and pay all salaries, fees and
expenses of officers and Trustees of the Trust who are affiliated with the
Manager. In the performance of its duties, the Manager will comply with the
provisions of the Amended and Restated Agreement and Declaration of Trust and
By-laws of the Trust and its stated investment objectives, policies and
restrictions.
<PAGE>
-7-
(b) In the selection of brokers or dealers and the placing of orders
for the purchase and sale of portfolio investments for the Fund, the Manager
shall seek to obtain for the Fund the most favorable price and execution
available, except to the extent it may be permitted to pay higher brokerage
commissions for brokerage and research services as described below. In using its
best efforts to obtain for the Fund the most favorable price and execution
available, the Manager, bearing in mind the Fund's best interests at all times,
shall consider all factors it deems relevant, including by way of illustration,
price, the size of the transaction, the nature of the market for the security,
the amount of the commission, the timing of the transaction taking into account
market prices and trends, the reputation, experience and financial stability of
the broker or dealer involved and the quality of service rendered by the broker
or dealer in other transactions. Subject to such policies as the Trustees may
determine, the Manager shall not be deemed to have acted unlawfully or to have
breached any duty created by this Contract or otherwise solely by reason of its
having caused the Fund to pay a broker or dealer that provides brokerage and
research services to the Manager an amount of commission for effecting a
portfolio investment transaction in excess of the amount of commission another
broker or dealer would have charged for effecting that transaction, if the
Manager determines in good faith that such amount of commission was reasonable
in relation to the value of the brokerage and research services provided by such
broker or dealer, viewed in terms of either that particular transaction or the
Manager's overall responsibilities with respect to the Trust and to other
clients of the Manager as to which the Manager exercises investment discretion.
The Trust hereby agrees with the Manager and with any Sub-Adviser selected by
the Manager as provided in Section 1(c) hereof that any entity or person
associated with the Manager which is a member of a national securities exchange
is authorized to effect any transaction on such exchange for the account of the
Trust and the Fund which is permitted by Section 11(a) of the Securities
Exchange Act of 1934 and Rule 11a2-2(T) thereunder, and the Trust hereby
consents to the retention of compensation for such transactions in accordance
with Rule 11a2-2(T)(2)(iv).
(c) Subject to the provisions of the Agreement and Declaration of Trust
of the Trust and the Investment Company Act of 1940 (the "1940 Act"), the
Manager, at its expense, may select and contract with investment advisers (the
"Sub-Advisers") for the Fund. So long as Cadence Capital Managment serves as
Sub-Adviser to the Fund pursuant to a Sub-Adviser Agreement in substantially the
form attached hereto as Exhibit A (the "Sub-Adviser Agreement"), the obligation
of the Manager under this Contract with respect to the Fund shall be subject in
any event to the control of the Trustees of the Trust, to determine and review
with Cadence Capital Managment investment policies of the Fund and Cadence
Capital Managment shall have the obligation of furnishing continuously an
investment program and making investment decisions for the Fund, adhering to
applicable investment objectives, policies and restrictions and placing all
orders for the purchase and sale of portfolio securities for the Fund. The
Manager will compensate any Sub-Adviser of the Fund for its services to the
Fund. The Manager may terminate the services of the Sub-Adviser at any time in
its sole discretion, and shall at such time assume the responsibilities of such
Sub-Adviser unless and until a successor Sub-Adviser is selected.
(d) The Manager shall not be obligated to pay any expenses of or for
the Trust not expressly assumed by the Manager pursuant to this Section 1 other
than as provided in Section 3.
2. OTHER AGREEMENTS, ETC.
It is understood that any of the shareholders, Trustees, officers and
employees of the Trust may be a shareholder, director, officer or employee of,
or be otherwise interested in, the Manager, and in any person controlled by or
under common control with the Manager, and that the Manager and any person
controlled by or under common control with the Manager may have an interest in
the Trust. It is also understood that the Manager and persons controlled by or
under common control with the Manager have and may have advisory, management
service, distribution or other contracts with other organizations and persons,
and may have other interests and businesses.
3. COMPENSATION TO BE PAID BY THE TRUST TO THE MANAGER.
The Trust will pay to the Manager as compensation for the Manager's
services rendered, for the facilities furnished and for the expenses borne by
the Manager pursuant to Section 1, a fee, computed and paid monthly at the
annual rate of 0.75% of the average daily net asset value of the Fund up to $200
million and 0.70% of such net asset value in excess of $200 million. The average
daily net asset value of the Fund shall be determined by taking an average of
all of the determinations of such net asset value during such month at the close
of business on each business day during such month while this Contract is in
effect. Such fee shall be payable for each month within five (5) business days
after the end of such month.
In the event that expenses of the Fund for any fiscal year should
exceed the expense limitation on investment company expenses imposed by any
statute or regulatory authority of any jurisdiction in which shares of the Trust
are qualified for offer and sale, the compensation due the Manager for such
fiscal year shall be reduced by the amount of such excess by a reduction or
refund thereof. In the event that the expenses with respect to the Fund could
exceed any expense limitation which the Manager may, by written notice to the
Trust, voluntarily declare to be effective subject to such terms and conditions
as the Manager may prescribe in such notice, the compensation due the Manager
shall be reduced, and, if necessary, the Manager shall bear expenses with
respect to the Fund, to the extent required by such expense limitation.
If the Manager shall serve for less than the whole of a month, the
foregoing compensation shall be prorated.
4. ASSIGNMENT TERMINATES THIS CONTRACT; AMENDMENTS OF THIS CONTRACT.
This Contract shall automatically terminate, without the payment of any
penalty, in the event of its assignment; and this Contract shall not be amended
as to the Fund unless such amendment is approved at a meeting by the affirmative
vote of a majority of the outstanding shares of the Fund, and by the vote, cast
in person at a meeting called for the purpose of voting on such approval, of a
majority of the Trustees of the Trust who are not interested persons of the
Trust or of the Manager or of any Sub-Adviser of the Fund.
5. EFFECTIVE PERIOD AND TERMINATION OF THIS CONTRACT.
This Contract shall become effective upon its execution, and shall
remain in full force and effect as to each Fund continuously thereafter (unless
terminated automatically as set forth in Section 4) until terminated as follows:
(a) Either party hereto may at any time terminate this
Contract by not more than sixty days' written notice delivered or
mailed by registered mail, postage prepaid, to the other party, or
(b) If (i) the Trustees of the Trust or the shareholders by
the affirmative vote of a majority of the outstanding shares of the
Fund, and (ii) a majority of the Trustees of the Trust who are not
interested persons of the Trust or of the Manager, by vote cast in
person at a meeting called for the purpose of voting on such approval,
do not specifically approve at least annually the continuance of this
Contract, then this Contract shall automatically terminate at the close
of business on the second anniversary of its execution, or upon the
expiration of one year from the effective date of the last such
continuance, whichever is later; provided, however, that if the
continuance of this Contract is submitted to the shareholders of the
Fund for their approval and such shareholders fail to approve such
continuance of this Contract as provided herein, the Manager may
continue to serve hereunder in a manner consistent with the Investment
Company Act of 1940 and the Rules and Regulations thereunder.
Action by the Trust under (a) above may be taken either (i) by vote of
a majority of its Trustees, or (ii) by the affirmative vote of a majority of the
outstanding shares of the Fund.
Termination of this Contract pursuant to this Section 5 shall be
without the payment of any penalty.
6. CERTAIN DEFINITIONS.
For the purposes of this Contract, the "affirmative vote of a majority
of the outstanding shares" means the affirmative vote, at a duly called and held
meeting of shareholders, (a) of the holders of 67% or more of the shares of the
Fund present (in person or by proxy) and entitled to vote at such meeting, if
the holders of more than 50% of the outstanding shares of the Fund entitled to
vote at such meeting are present in person or by proxy, or (b) of the holders of
more than 50% of the outstanding shares of the Fund entitled to vote at such
meeting, whichever is less.
For the purposes of this Contract, the terms "affiliated person",
"control", "interested person" and "assignment" shall have their respective
meanings defined in the Investment Company Act of 1940 and the Rules and
Regulations thereunder, subject, however, to such exemptions as may be granted
by the Securities and Exchange Commission under said Act; the term "specifically
approve at least annually" shall be construed in a manner consistent with the
Investment Company Act of 1940 and the Rules and Regulations thereunder; and the
term "brokerage and research services" shall have the meaning given in the
Securities Exchange Act of 1934 and the Rules and Regulations thereunder.
7. NONLIABILITY OF MANAGER.
In the absence of willful misfeasance, bad faith or gross negligence on
the part of the Manager, or reckless disregard of its obligations and duties
hereunder, the Manager shall not be subject to any liability to the Trust, or to
any shareholder of the Trust, for any act or omission in the course of, or
connected with, rendering services hereunder.
8. LIMITATION OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS.
A copy of the Amended and Restated Agreement and Declaration of Trust
of the Trust is on file with the Secretary of The Commonwealth of Massachusetts,
and notice is hereby given that this instrument is executed on behalf of the
Trustees of the Trust as Trustees and not individually and that the obligations
of this instrument are not binding upon any of the Trustees or shareholders
individually but are binding only upon the assets and property of the Fund.
9. THE WORDS "CCI," "PACIFIC INVESTMENT MANAGEMENT COMPANY," "PFAMCO,"
"PIMCO," "NFJ," "CADENCE" OR "THOMSON".
The Manager owns the words "CCI," "Pacific Investment Management
Company," "PFAMCo," "PIMCO," "PIMCO Advisors," "NFJ," "Cadence" and "Thomson"
which may be used by the Trust only with the consent of the Manager. The Manager
consents to the use of the Trust of the words "CCI," "Pacific Investment
Management Company," "PFAMCo, "PIMCO," "NFJ," "Cadence" and "Thomson," in such
forms as the Manager shall in writing approve, but only on condition and so long
as (i) this Contract shall remain in full force and (ii) the Trust shall fully
perform, fulfill and comply with all provisions of this Contract expressed
herein to be performed, fulfilled or complied with by it. No such name shall be
used by the Trust at any time or in any place or for any purposes or under any
conditions except as in this section provided. The foregoing authorization by
the Manager to the Trust to use said name as part of a business or name is not
exclusive of the right of the Manager itself to use, or to authorize others to
use, the same; the Trust acknowledges and agrees that as between the Manager and
the Trust, the Manager has the exclusive right to so authorize others to use the
same; the Trust acknowledges and agrees that as between the Manager and the
Trust, the Manager has the exclusive right to so use, or authorize others to
use, said words and the Trust agrees to take such action as may reasonably be
requested by the Manager to give full effect to the provisions of this section
(including, without limitation, consenting to such use of said words). Without
limiting the generality of the foregoing, the Trust agrees that, upon any
termination of this Contract by either party or upon the violation of any of its
provisions by the Trust, the Trust will, at the request of the Manager made
within six months after the Manager has knowledge of such termination or
violation, use its best efforts to change the name of the Trust so as to
eliminate all reference, if any, to the words "CCI," "Pacific Investment
Management Company, " "PFAMCo," "PIMCO," "NFJ," "Cadence" and "Thomson" and will
not thereafter transact any business in a name containing the words "CCI,"
"Pacific Investment Management Company," "PFAMCo," "PIMCO," "PIMCO Advisors,"
"NFJ," "Cadence" or "Thomson" in any form or combination whatsoever, or
designate itself as the same entity as or successor to an entity of such name,
or otherwise use the words "CCI," "Pacific Investment Management Company,"
"PFAMCo," "PIMCO," "PIMCO Advisors," "NFJ," "Cadence" or "Thomson" or any other
reference to the Manager. Such covenants on the part of the Trust shall be
binding upon it, its trustees, officers, stockholders, creditors and all other
persons claiming under or through it.
IN WITNESS WHEREOF, PIMCO ADVISORS FUNDS and PIMCO ADVISORS L.P. have
each caused this instrument to be signed in duplicate in its behalf by its duly
authorized representative, all as of the day and year first above written.
PIMCO ADVISORS FUNDS
By: Robert A. Prindiville
Title: President
PIMCO ADVISORS L.P.
By: Robert A. Prindiville
Title: Executive Vice President
<PAGE>
MANAGEMENT CONTRACT
[Opportunity Fund]
Management Contract executed as of November 16, 1994 between THOMSON
FUND GROUP, a Massachusetts business trust (the "Trust") on behalf of its
Thomson Opportunity Fund (the "Fund"), and PIMCO ADVISORS L.P., a Delaware
limited partnership (the "Manager").
WITNESSETH:
That in consideration of the mutual covenants herein contained, it is
agreed as follows:
1. SERVICES TO BE RENDERED BY MANAGER TO FUND.
(a) Subject always to the control of the Trustees of the Trust and to
such policies as the Trustees may determine, the Manager will, at its expense,
(i) furnish continuously an investment program for the Fund and will make
investment decisions on behalf of the Fund and place all orders for the purchase
and sale of portfolio securities and (ii) furnish office space and equipment,
provide bookkeeping and clerical services (excluding determination of net asset
value and shareholder accounting services) and pay all salaries, fees and
expenses of officers and Trustees of the Trust who are affiliated with the
Manager. In the performance of its duties, the Manager will comply with the
provisions of the Amended and Restated Agreement and Declaration of Trust and
By-laws of the Trust and its stated investment objectives, policies and
restrictions.
<PAGE>
-5-
(b) In the selection of brokers or dealers and the placing of orders
for the purchase and sale of portfolio investments for the Fund, the Manager
shall seek to obtain for the Fund the most favorable price and execution
available, except to the extent it may be permitted to pay higher brokerage
commissions for brokerage and research services as described below. In using its
best efforts to obtain for the Fund the most favorable price and execution
available, the Manager, bearing in mind the Fund's best interests at all times,
shall consider all factors it deems relevant, including by way of illustration,
price, the size of the transaction, the nature of the market for the security,
the amount of the commission, the timing of the transaction taking into account
market prices and trends, the reputation, experience and financial stability of
the broker or dealer involved and the quality of service rendered by the broker
or dealer in other transactions. Subject to such policies as the Trustees may
determine, the Manager shall not be deemed to have acted unlawfully or to have
breached any duty created by this Contract or otherwise solely by reason of its
having caused the Fund to pay a broker or dealer that provides brokerage and
research services to the Manager an amount of commission for effecting a
portfolio investment transaction in excess of the amount of commission another
broker or dealer would have charged for effecting that transaction, if the
Manager determines in good faith that such amount of commission was reasonable
in relation to the value of the brokerage and research services provided by such
broker or dealer, viewed in terms of either that particular transaction or the
Manager's overall responsibilities with respect to the Trust and to other
clients of the Manager as to which the Manager exercises investment discretion.
The Trust hereby agrees with the Manager and with any Sub-Adviser selected by
the Manager as provided in Section 1(c) hereof that any entity or person
associated with the Manager which is a member of a national securities exchange
is authorized to effect any transaction on such exchange for the account of the
Trust and the Fund which is permitted by Section 11(a) of the Securities
Exchange Act of 1934 and Rule 11a2-2(T) thereunder, and the Trust hereby
consents to the retention of compensation for such transactions in accordance
with Rule 11a2-2(T)(2)(iv).
(c) Subject to the provisions of the Agreement and Declaration of Trust
of the Trust and the Investment Company Act of 1940 (the "1940 Act"), the
Manager, at its expense, may select and contract with investment advisers (the
"Sub-Advisers") for the Fund. So long as Columbus Circle Investors serves as
Sub-Adviser to the Fund pursuant to a Sub-Adviser Agreement in substantially the
form attached hereto as Exhibit A (the "Sub-Adviser Agreement"), the obligation
of the Manager under this Contract with respect to the Fund shall be subject in
any event to the control of the Trustees of the Trust, to determine and review
with Columbus Circle Investors investment policies of the Fund and Columbus
Circle Investors shall have the obligation of furnishing continuously an
investment program and making investment decisions for the Fund, adhering to
applicable investment objectives, policies and restrictions and placing all
orders for the purchase and sale of portfolio securities for the Fund. The
Manager will compensate any Sub-Adviser of the Fund for its services to the
Fund. The Manager may terminate the services of the Sub-Adviser at any time in
its sole discretion, and shall at such time assume the responsibilities of such
Sub-Adviser unless and until a successor Sub-Adviser is selected.
(d) The Manager shall not be obligated to pay any expenses of or for
the Trust not expressly assumed by the Manager pursuant to this Section 1 other
than as provided in Section 3.
2. OTHER AGREEMENTS, ETC.
It is understood that any of the shareholders, Trustees, officers and
employees of the Trust may be a shareholder, director, officer or employee of,
or be otherwise interested in, the Manager, and in any person controlled by or
under common control with the Manager, and that the Manager and any person
controlled by or under common control with the Manager may have an interest in
the Trust. It is also understood that the Manager and persons controlled by or
under common control with the Manager have and may have advisory, management
service, distribution or other contracts with other organizations and persons,
and may have other interests and businesses.
3. COMPENSATION TO BE PAID BY THE TRUST TO THE MANAGER.
The Trust will pay to the Manager as compensation for the Manager's
services rendered, for the facilities furnished and for the expenses borne by
the Manager pursuant to Section 1, a fee, computed and paid monthly at the
annual rate of 0.75% of the average daily net asset value of the Fund up to $200
million and 0.70% of such net asset value in excess of $200 million. The average
daily net asset value of the Fund shall be determined by taking an average of
all of the determinations of such net asset value during such month at the close
of business on each business day during such month while this Contract is in
effect. Such fee shall be payable for each month within five (5) business days
after the end of such month.
In the event that expenses of the Fund for any fiscal year should
exceed the expense limitation on investment company expenses imposed by any
statute or regulatory authority of any jurisdiction in which shares of the Trust
are qualified for offer and sale, the compensation due the Manager for such
fiscal year shall be reduced by the amount of such excess by a reduction or
refund thereof. In the event that the expenses with respect to the Fund could
exceed any expense limitation which the Manager may, by written notice to the
Trust, voluntarily declare to be effective subject to such terms and conditions
as the Manager may prescribe in such notice, the compensation due the Manager
shall be reduced, and, if necessary, the Manager shall bear expenses with
respect to the Fund, to the extent required by such expense limitation.
If the Manager shall serve for less than the whole of a month, the
foregoing compensation shall be prorated.
4. ASSIGNMENT TERMINATES THIS CONTRACT; AMENDMENTS OF THIS CONTRACT.
This Contract shall automatically terminate, without the payment of any
penalty, in the event of its assignment; and this Contract shall not be amended
as to the Fund unless such amendment is approved at a meeting by the affirmative
vote of a majority of the outstanding shares of the Fund, and by the vote, cast
in person at a meeting called for the purpose of voting on such approval, of a
majority of the Trustees of the Trust who are not interested persons of the
Trust or of the Manager or of any Sub-Adviser of the Fund.
5. EFFECTIVE PERIOD AND TERMINATION OF THIS CONTRACT.
This Contract shall become effective upon its execution, and shall
remain in full force and effect as to each Fund continuously thereafter (unless
terminated automatically as set forth in Section 4) until terminated as follows:
(a) Either party hereto may at any time terminate this
Contract by not more than sixty days' written notice delivered or
mailed by registered mail, postage prepaid, to the other party, or
(b) If (i) the Trustees of the Trust or the shareholders by
the affirmative vote of a majority of the outstanding shares of the
Fund, and (ii) a majority of the Trustees of the Trust who are not
interested persons of the Trust or of the Manager, by vote cast in
person at a meeting called for the purpose of voting on such approval,
do not specifically approve at least annually the continuance of this
Contract, then this Contract shall automatically terminate at the close
of business on the second anniversary of its execution, or upon the
expiration of one year from the effective date of the last such
continuance, whichever is later; provided, however, that if the
continuance of this Contract is submitted to the shareholders of the
Fund for their approval and such shareholders fail to approve such
continuance of this Contract as provided herein, the Manager may
continue to serve hereunder in a manner consistent with the Investment
Company Act of 1940 and the Rules and Regulations thereunder.
Action by the Trust under (a) above may be taken either (i) by vote of
a majority of its Trustees, or (ii) by the affirmative vote of a majority of the
outstanding shares of the Fund.
Termination of this Contract pursuant to this Section 5 shall be
without the payment of any penalty.
6. CERTAIN DEFINITIONS.
For the purposes of this Contract, the "affirmative vote of a majority
of the outstanding shares" means the affirmative vote, at a duly called and held
meeting of shareholders, (a) of the holders of 67% or more of the shares of the
Fund present (in person or by proxy) and entitled to vote at such meeting, if
the holders of more than 50% of the outstanding shares of the Fund entitled to
vote at such meeting are present in person or by proxy, or (b) of the holders of
more than 50% of the outstanding shares of the Fund entitled to vote at such
meeting, whichever is less.
For the purposes of this Contract, the terms "affiliated person",
"control", "interested person" and "assignment" shall have their respective
meanings defined in the Investment Company Act of 1940 and the Rules and
Regulations thereunder, subject, however, to such exemptions as may be granted
by the Securities and Exchange Commission under said Act; the term "specifically
approve at least annually" shall be construed in a manner consistent with the
Investment Company Act of 1940 and the Rules and Regulations thereunder; and the
term "brokerage and research services" shall have the meaning given in the
Securities Exchange Act of 1934 and the Rules and Regulations thereunder.
7. NONLIABILITY OF MANAGER.
In the absence of willful misfeasance, bad faith or gross negligence on
the part of the Manager, or reckless disregard of its obligations and duties
hereunder, the Manager shall not be subject to any liability to the Trust, or to
any shareholder of the Trust, for any act or omission in the course of, or
connected with, rendering services hereunder.
8. LIMITATION OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS.
A copy of the Amended and Restated Agreement and Declaration of Trust
of the Trust is on file with the Secretary of The Commonwealth of Massachusetts,
and notice is hereby given that this instrument is executed on behalf of the
Trustees of the Trust as Trustees and not individually and that the obligations
of this instrument are not binding upon any of the Trustees or shareholders
individually but are binding only upon the assets and property of the Fund.
9. THE WORDS "CCI," "PACIFIC INVESTMENT MANAGEMENT COMPANY," "PFAMCO,"
"PIMCO" OR "THOMSON".
The Manager owns the words "CCI," "Pacific Investment Management
Company," "PFAMCo," "PIMCO" and "Thomson" which may be used by the Trust only
with the consent of the Manager. The Manager consents to the use of the Trust of
the words "CCI," "Pacific Investment Management Company," "PFAMCo," "PIMCO" and
"Thomson," in such forms as the Manager shall in writing approve, but only on
condition and so long as (i) this Contract shall remain in full force and (ii)
the Trust shall fully perform, fulfill and comply with all provisions of this
Contract expressed herein to be performed, fulfilled or complied with by it. No
such name shall be used by the Trust at any time or in any place or for any
purposes or under any conditions except as in this section provided. The
foregoing authorization by the Manager to the Trust to use said name as part of
a business or name is not exclusive of the right of the Manager itself to use,
or to authorize others to use, the same; the Trust acknowledges and agrees that
as between the Manager and the Trust, the Manager has the exclusive right to so
authorize others to use the same; the Trust acknowledges and agrees that as
between the Manager and the Trust, the Manager has the exclusive right to so
use, or authorize others to use, said words and the Trust agrees to take such
action as may reasonably be requested by the Manager to give full effect to the
provisions of this section (including, without limitation, consenting to such
use of said words). Without limiting the generality of the foregoing, the Trust
agrees that, upon any termination of this Contract by either party or upon the
violation of any of its provisions by the Trust, the Trust will, at the request
of the Manager made within six months after the Manager has knowledge of such
termination or violation, use its best efforts to change the name of the Trust
so as to eliminate all reference, if any, to the words "CCI," "Pacific
Investment Management Company, " "PFAMCo," "PIMCO" and "Thomson" and will not
thereafter transact any business in a name containing the words "CCI," "Pacific
Investment Management Company," "PFAMCo," "PIMCO" or "Thomson" in any form or
combination whatsoever, or designate itself as the same entity as or successor
to an entity of such name, or otherwise use the words "CCI," "Pacific Investment
Management Company," "PFAMCo," "PIMCO" or "Thomson" or any other reference to
the Manager. Such covenants on the part of the Trust shall be binding upon it,
its trustees, officers, stockholders, creditors and all other persons claiming
under or through it.
<PAGE>
IN WITNESS WHEREOF, THOMSON FUND GROUP and PIMCO ADVISORS L.P. have
each caused this instrument to be signed in duplicate in its behalf by its duly
authorized representative, all as of the day and year first above written.
THOMSON FUND GROUP
By: Robert A. Prindiville
PIMCO ADVISORS L.P.
By: PIMCO Partners, G.P., a California
general partnership, General Partner
By: PIMCO Partners, LLC, a California
limited liability company, General Partner
By: William S. Thompson
<PAGE>
3008032.01
MANAGEMENT CONTRACT
[Innovation Fund]
Management Contract executed as of November 15, 1994 between PIMCO
ADVISORS FUNDS, a Massachusetts business trust (the "Trust") on behalf of its
PIMCO Advisors Innovation Fund (the "Fund"), and PIMCO ADVISORS L.P., a Delaware
limited partnership (the "Manager").
WITNESSETH:
That in consideration of the mutual covenants herein contained, it is
agreed as follows:
1. SERVICES TO BE RENDERED BY MANAGER TO FUND.
(a) Subject always to the control of the Trustees of the Trust and to
such policies as the Trustees may determine, the Manager will, at its expense,
(i) furnish continuously an investment program for the Fund and will make
investment decisions on behalf of the Fund and place all orders for the purchase
and sale of portfolio securities and (ii) furnish office space and equipment,
provide bookkeeping and clerical services (excluding determination of net asset
value and shareholder accounting services) and pay all salaries, fees and
expenses of officers and Trustees of the Trust who are affiliated with the
Manager. In the performance of its duties, the Manager will comply with the
provisions of the Amended and Restated Agreement and Declaration of Trust and
By-laws of the Trust and its stated investment objectives, policies and
restrictions.
<PAGE>
-7-
(b) In the selection of brokers or dealers and the placing of orders
for the purchase and sale of portfolio investments for the Fund, the Manager
shall seek to obtain for the Fund the most favorable price and execution
available, except to the extent it may be permitted to pay higher brokerage
commissions for brokerage and research services as described below. In using its
best efforts to obtain for the Fund the most favorable price and execution
available, the Manager, bearing in mind the Fund's best interests at all times,
shall consider all factors it deems relevant, including by way of illustration,
price, the size of the transaction, the nature of the market for the security,
the amount of the commission, the timing of the transaction taking into account
market prices and trends, the reputation, experience and financial stability of
the broker or dealer involved and the quality of service rendered by the broker
or dealer in other transactions. Subject to such policies as the Trustees may
determine, the Manager shall not be deemed to have acted unlawfully or to have
breached any duty created by this Contract or otherwise solely by reason of its
having caused the Fund to pay a broker or dealer that provides brokerage and
research services to the Manager an amount of commission for effecting a
portfolio investment transaction in excess of the amount of commission another
broker or dealer would have charged for effecting that transaction, if the
Manager determines in good faith that such amount of commission was reasonable
in relation to the value of the brokerage and research services provided by such
broker or dealer, viewed in terms of either that particular transaction or the
Manager's overall responsibilities with respect to the Trust and to other
clients of the Manager as to which the Manager exercises investment discretion.
The Trust hereby agrees with the Manager and with any Sub-Adviser selected by
the Manager as provided in Section 1(c) hereof that any entity or person
associated with the Manager which is a member of a national securities exchange
is authorized to effect any transaction on such exchange for the account of the
Trust and the Fund which is permitted by Section 11(a) of the Securities
Exchange Act of 1934 and Rule 11a2-2(T) thereunder, and the Trust hereby
consents to the retention of compensation for such transactions in accordance
with Rule 11a2-2(T)(2)(iv).
(c) Subject to the provisions of the Agreement and Declaration of Trust
of the Trust and the Investment Company Act of 1940 (the "1940 Act"), the
Manager, at its expense, may select and contract with investment advisers (the
"Sub-Advisers") for the Fund. So long as Columbus Circle Investors serves as
Sub-Adviser to the Fund pursuant to a Sub-Adviser Agreement in substantially the
form attached hereto as Exhibit A (the "Sub-Adviser Agreement"), the obligation
of the Manager under this Contract with respect to the Fund shall be subject in
any event to the control of the Trustees of the Trust, to determine and review
with Columbus Circle Investors investment policies of the Fund and Columbus
Circle Investors shall have the obligation of furnishing continuously an
investment program and making investment decisions for the Fund, adhering to
applicable investment objectives, policies and restrictions and placing all
orders for the purchase and sale of portfolio securities for the Fund. The
Manager will compensate any Sub-Adviser of the Fund for its services to the
Fund. The Manager may terminate the services of the Sub-Adviser at any time in
its sole discretion, and shall at such time assume the responsibilities of such
Sub-Adviser unless and until a successor Sub-Adviser is selected.
(d) The Manager shall not be obligated to pay any expenses of or for
the Trust not expressly assumed by the Manager pursuant to this Section 1 other
than as provided in Section 3.
2. OTHER AGREEMENTS, ETC.
It is understood that any of the shareholders, Trustees, officers and
employees of the Trust may be a shareholder, director, officer or employee of,
or be otherwise interested in, the Manager, and in any person controlled by or
under common control with the Manager, and that the Manager and any person
controlled by or under common control with the Manager may have an interest in
the Trust. It is also understood that the Manager and persons controlled by or
under common control with the Manager have and may have advisory, management
service, distribution or other contracts with other organizations and persons,
and may have other interests and businesses.
3. COMPENSATION TO BE PAID BY THE TRUST TO THE MANAGER.
The Trust will pay to the Manager as compensation for the Manager's
services rendered, for the facilities furnished and for the expenses borne by
the Manager pursuant to Section 1, a fee, computed and paid monthly at the
annual rate of 0.75% of the average daily net asset value of the Fund up to $200
million and 0.70% of such net asset value in excess of $200 million. The average
daily net asset value of the Fund shall be determined by taking an average of
all of the determinations of such net asset value during such month at the close
of business on each business day during such month while this Contract is in
effect. Such fee shall be payable for each month within five (5) business days
after the end of such month.
In the event that expenses of the Fund for any fiscal year should
exceed the expense limitation on investment company expenses imposed by any
statute or regulatory authority of any jurisdiction in which shares of the Trust
are qualified for offer and sale, the compensation due the Manager for such
fiscal year shall be reduced by the amount of such excess by a reduction or
refund thereof. In the event that the expenses with respect to the Fund could
exceed any expense limitation which the Manager may, by written notice to the
Trust, voluntarily declare to be effective subject to such terms and conditions
as the Manager may prescribe in such notice, the compensation due the Manager
shall be reduced, and, if necessary, the Manager shall bear expenses with
respect to the Fund, to the extent required by such expense limitation.
If the Manager shall serve for less than the whole of a month, the
foregoing compensation shall be prorated.
4. ASSIGNMENT TERMINATES THIS CONTRACT; AMENDMENTS OF THIS CONTRACT.
This Contract shall automatically terminate, without the payment of any
penalty, in the event of its assignment; and this Contract shall not be amended
as to the Fund unless such amendment is approved at a meeting by the affirmative
vote of a majority of the outstanding shares of the Fund, and by the vote, cast
in person at a meeting called for the purpose of voting on such approval, of a
majority of the Trustees of the Trust who are not interested persons of the
Trust or of the Manager or of any Sub-Adviser of the Fund.
5. EFFECTIVE PERIOD AND TERMINATION OF THIS CONTRACT.
This Contract shall become effective upon its execution, and shall
remain in full force and effect as to each Fund continuously thereafter (unless
terminated automatically as set forth in Section 4) until terminated as follows:
(a) Either party hereto may at any time terminate this
Contract by not more than sixty days' written notice delivered or
mailed by registered mail, postage prepaid, to the other party, or
(b) If (i) the Trustees of the Trust or the shareholders by
the affirmative vote of a majority of the outstanding shares of the
Fund, and (ii) a majority of the Trustees of the Trust who are not
interested persons of the Trust or of the Manager, by vote cast in
person at a meeting called for the purpose of voting on such approval,
do not specifically approve at least annually the continuance of this
Contract, then this Contract shall automatically terminate at the close
of business on the second anniversary of its execution, or upon the
expiration of one year from the effective date of the last such
continuance, whichever is later; provided, however, that if the
continuance of this Contract is submitted to the shareholders of the
Fund for their approval and such shareholders fail to approve such
continuance of this Contract as provided herein, the Manager may
continue to serve hereunder in a manner consistent with the Investment
Company Act of 1940 and the Rules and Regulations thereunder.
Action by the Trust under (a) above may be taken either (i) by vote of
a majority of its Trustees, or (ii) by the affirmative vote of a majority of the
outstanding shares of the Fund.
Termination of this Contract pursuant to this Section 5 shall be
without the payment of any penalty.
6. CERTAIN DEFINITIONS.
For the purposes of this Contract, the "affirmative vote of a majority
of the outstanding shares" means the affirmative vote, at a duly called and held
meeting of shareholders, (a) of the holders of 67% or more of the shares of the
Fund present (in person or by proxy) and entitled to vote at such meeting, if
the holders of more than 50% of the outstanding shares of the Fund entitled to
vote at such meeting are present in person or by proxy, or (b) of the holders of
more than 50% of the outstanding shares of the Fund entitled to vote at such
meeting, whichever is less.
For the purposes of this Contract, the terms "affiliated person",
"control", "interested person" and "assignment" shall have their respective
meanings defined in the Investment Company Act of 1940 and the Rules and
Regulations thereunder, subject, however, to such exemptions as may be granted
by the Securities and Exchange Commission under said Act; the term "specifically
approve at least annually" shall be construed in a manner consistent with the
Investment Company Act of 1940 and the Rules and Regulations thereunder; and the
term "brokerage and research services" shall have the meaning given in the
Securities Exchange Act of 1934 and the Rules and Regulations thereunder.
7. NONLIABILITY OF MANAGER.
In the absence of willful misfeasance, bad faith or gross negligence on
the part of the Manager, or reckless disregard of its obligations and duties
hereunder, the Manager shall not be subject to any liability to the Trust, or to
any shareholder of the Trust, for any act or omission in the course of, or
connected with, rendering services hereunder.
8. LIMITATION OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS.
A copy of the Amended and Restated Agreement and Declaration of Trust
of the Trust is on file with the Secretary of The Commonwealth of Massachusetts,
and notice is hereby given that this instrument is executed on behalf of the
Trustees of the Trust as Trustees and not individually and that the obligations
of this instrument are not binding upon any of the Trustees or shareholders
individually but are binding only upon the assets and property of the Fund.
9. THE WORDS "CCI," "PACIFIC INVESTMENT MANAGEMENT COMPANY," "PFAMCO,"
"PIMCO" OR "THOMSON".
The Manager owns the words "CCI," "Pacific Investment Management
Company," "PFAMCo," "PIMCO" and "Thomson" which may be used by the Trust only
with the consent of the Manager. The Manager consents to the use of the Trust of
the words "CCI," "Pacific Investment Management Company," "PFAMCo," "PIMCO" and
"Thomson," in such forms as the Manager shall in writing approve, but only on
condition and so long as (i) this Contract shall remain in full force and (ii)
the Trust shall fully perform, fulfill and comply with all provisions of this
Contract expressed herein to be performed, fulfilled or complied with by it. No
such name shall be used by the Trust at any time or in any place or for any
purposes or under any conditions except as in this section provided. The
foregoing authorization by the Manager to the Trust to use said name as part of
a business or name is not exclusive of the right of the Manager itself to use,
or to authorize others to use, the same; the Trust acknowledges and agrees that
as between the Manager and the Trust, the Manager has the exclusive right to so
authorize others to use the same; the Trust acknowledges and agrees that as
between the Manager and the Trust, the Manager has the exclusive right to so
use, or authorize others to use, said words and the Trust agrees to take such
action as may reasonably be requested by the Manager to give full effect to the
provisions of this section (including, without limitation, consenting to such
use of said words). Without limiting the generality of the foregoing, the Trust
agrees that, upon any termination of this Contract by either party or upon the
violation of any of its provisions by the Trust, the Trust will, at the request
of the Manager made within six months after the Manager has knowledge of such
termination or violation, use its best efforts to change the name of the Trust
so as to eliminate all reference, if any, to the words "CCI," "Pacific
Investment Management Company, " "PFAMCo," "PIMCO" and "Thomson" and will not
thereafter transact any business in a name containing the words "CCI," "Pacific
Investment Management Company," "PFAMCo," "PIMCO" or "Thomson" in any form or
combination whatsoever, or designate itself as the same entity as or successor
to an entity of such name, or otherwise use the words "CCI," "Pacific Investment
Management Company," "PFAMCo," "PIMCO" or "Thomson" or any other reference to
the Manager. Such covenants on the part of the Trust shall be binding upon it,
its trustees, officers, stockholders, creditors and all other persons claiming
under or through it.
IN WITNESS WHEREOF, PIMCO ADVISORS FUNDS and PIMCO ADVISORS L.P. have
each caused this instrument to be signed in duplicate in its behalf by its duly
authorized representative, all as of the day and year first above written.
PIMCO ADVISORS FUNDS
By: Robert A. Prindiville
PIMCO ADVISORS L.P.
By: PIMCO Partners, G.P., a California
general partnership, General Partner
By: PIMCO Partners, LLC, a California
limited liability company, General Partner
By: William Cvengros
Title: Chief Executive Officer
<PAGE>
3007769.02
MANAGEMENT CONTRACT
[International Fund]
Management Contract executed as of November 16, 1994, between THOMSON
FUND GROUP, a Massachusetts business trust (the "Trust") on behalf of its
International Fund (the "Fund"), and PIMCO ADVISORS L.P., a Delaware limited
partnership (the "Manager").
WITNESSETH:
That in consideration of the mutual covenants herein contained, it is
agreed as follows:
1. SERVICES TO BE RENDERED BY MANAGER TO FUND.
(a) Subject always to the control of the Trustees of the Trust and to
such policies as the Trustees may determine, the Manager will, at its expense,
(i) furnish continuously an investment program for the Fund and will make
investment decisions on behalf of the Fund and place all orders for the purchase
and sale of portfolio securities and (ii) furnish office space and equipment,
provide bookkeeping and clerical services, including determination of net asset
value (but excluding shareholder accounting services) and pay all salaries, fees
and expenses of officers and Trustees of the Trust who are affiliated with the
Manager. In the performance of its duties, the Manager will comply with the
provisions of the Trust's Amended and Restated Agreement and Declaration of
Trust and By-laws, as in effect from time to time, and its stated investment
objectives, policies and restrictions.
<PAGE>
-5-
(b) In the selection of brokers or dealers and the placing of orders
for the purchase and sale of portfolio investments for the Fund, the Manager
shall seek to obtain for the Fund the most favorable price and execution
available, except to the extent it may be permitted to pay higher brokerage
commissions for brokerage and research services as described below. In using its
best efforts to obtain for the Fund the most favorable price and execution
available, the Manager, bearing in mind the Fund's best interests at all times,
shall consider all factors it deems relevant, including by way of illustration,
price, the size of the transaction, the nature of the market for the security,
the amount of the commission, the timing of the transaction taking into account
market prices and trends, the reputation, experience and financial stability of
the broker and dealer involved and the quality of service rendered by the broker
or dealer in other transactions. Subject to such policies as the Trustees may
determine, the Manager shall not be deemed to have acted unlawfully or to have
breached any duty created by this Contract or otherwise solely by reason of its
having caused the Fund to pay a broker or dealer that provides brokerage and
research services to the Manager an amount of commission for effecting a
portfolio investment transaction in excess of the amount of commission another
broker or dealer would have charged for effecting that transaction, if the
Manager determines in good faith that such amount of commission was reasonable
in relation to the value of the brokerage and research services provided by such
broker or dealer, viewed in terms of either that particular transaction or the
Manager's overall responsibilities with respect to the Trust and to other
clients of the Manager as to which the Manager exercises investment discretion.
The Trust hereby agrees with the Manager and with any Sub-Adviser selected by
the Manager as provided in Section 1(c) hereof that any entity or person
associated with the Manager which is a member of a national securities exchange
is authorized to effect any transaction on such exchange for the account of the
Trust and any Fund thereof which is permitted by Section 11(a) of the Securities
Exchange Act of 1934 and Rule 11a2-2(T) thereunder, and the Trust hereby
consents to the retention of compensation for such transactions in accordance
with Rule 11a2-2(T)(2)(iv).
(c) Subject to the provisions of the Amended and Restated Agreement and
Declaration of Trust of the Trust and the Investment Company Act of 1940 (the
"1940 Act"), the Manager, at its expense, may select and contract with
investment advisers (the "Sub-Advisers") for the Fund. So long as Blairlogie
Capital Management Partnership ("Blairlogie") serves as Sub-Adviser to the Fund
pursuant to the Sub-Adviser Agreement in substantially the form attached hereto
as Exhibit A (the "Sub-Adviser Agreement"), the obligation of the Manager under
this Contract with respect to the Fund shall be, subject in any event to the
control of the Trustees of the Trust, to determine and review with Blairlogie
investment policies of the Fund and Blairlogie shall have the obligation of
furnishing continuously an investment program and making investment decisions
for the Fund, adhering to applicable investment objectives, policies and
restrictions and placing all orders for the purchase and sale of portfolio
securities for the Fund. The Manager will compensate any Sub-Adviser of the Fund
for its services to the Fund. The Manager may terminate the services of the
Sub-Adviser at any time in its sole discretion, and shall at such time assume
the responsibilities of such Sub-Adviser unless and until a successor
Sub-Adviser is selected.
(d) The Manager shall not be obligated to pay any expenses of or for
the Trust not expressly assumed by the Manager pursuant to this Section 1.
2. OTHER AGREEMENTS, ETC.
It is understood that any of the shareholders, Trustees, officers and
employees of the Trust may be a shareholder, director, officer or employee of,
or be otherwise interested in, the Manager, and in any person controlled by or
under common control with the Manager, and that the Manager and any person
controlled by or under common control with the Manager may have an interest in
the Trust. It is also understood that the Manager and persons controlled by or
under common control with the Manager have and may have advisory, management
service, distribution or other contracts with other organizations and persons,
and may have other interests and businesses.
3. COMPENSATION TO BE PAID BY THE TRUST TO THE MANAGER.
The Trust will pay to the Manager as compensation for the Manager's
services rendered, for the facilities furnished and for the expenses borne by
the Manager pursuant to Section 1, a fee, computed and paid monthly at the rate
of 0.8% of the average daily net asset value of the Fund. The fee shall be paid
from the assets of the Fund. The average daily net asset value of the Fund shall
be determined by taking an average of all of the determinations of such net
asset value during such month at the close of business on each business day
during such month while this Contract is in effect. Such fee shall be payable
for each month within five (5) business days after the end of such month.
In the event that expenses of the Fund for any fiscal year should
exceed the expense limitation on investment company expenses imposed by any
statute or regulatory authority of any jurisdiction in which shares of the Trust
are qualified for offer and sale, the compensation due the Manager for such
fiscal year shall be reduced by the amount of such excess by a reduction or
refund thereof. In the event that the expenses with respect to the Fund could
exceed any expense limitation which the Manager may, by written notice to the
Trust, voluntarily declare to be effective subject to such terms and conditions
as the Manager may prescribe in such notice, the compensation due the Manager
shall be reduced, and, if necessary, the Manager shall bear expenses with
respect to the Fund, to the extent required by such expense limitation.
If the Manager shall serve for less than the whole of a month, the
foregoing compensation shall be prorated.
4. ASSIGNMENT TERMINATES THIS CONTRACT; AMENDMENTS OF THIS CONTRACT.
This Contract shall automatically terminate, without the payment of any
penalty, in the event of its assignment; and this Contract shall not be amended
unless such amendment is approved at a meeting by the affirmative vote of a
majority of the outstanding shares of the Fund, and by the vote, cast in person
at a meeting called for the purpose of voting on such approval, of a majority of
the Trustees of the Trust who are not interested persons of the Trust or of the
Manager or of any Sub-Adviser of the Fund.
5. EFFECTIVE PERIOD AND TERMINATION OF THIS CONTRACT.
This Contract shall become effective upon its execution, and shall
remain in full force and effect continuously thereafter (unless terminated
automatically as set forth in Section 4) until terminated as follows:
(a) Either party hereto may at any time terminate this
Contract by not more than sixty days' written notice delivered or
mailed by registered mail, postage prepaid, to the other party, or
(b) If (i) the Trustees of the Trust or the shareholders of
the affirmative vote of a majority of the outstanding shares of the
Fund, and (ii) a majority of the Trustees of the Trust who are not
interested persons of the Trust or of the Manager, by vote cast in
person at a meeting called for the purpose of voting on such approval,
do not specifically approve at least annually the continuance of this
Contract, then this Contract shall automatically terminate at the close
of business on the second anniversary of its execution, or upon the
expiration of one year from the effective date of the last such
continuance, whichever is later; provided, however, that if the
continuance of this Contract is submitted to the shareholders of the
Fund for their approval and such shareholders fail to approve such
continuance of this Contract as provided herein, the Manager may
continue to serve hereunder in a manner consistent with the 1940 Act
and the rules and regulations thereunder.
Action by the Trust under (a) above may be taken either (i) by vote of
a majority of its Trustees, or (ii) by the affirmative vote of a majority of the
outstanding shares of the Fund.
Termination of this Contract pursuant to this Section 5 shall be
without the payment of any penalty.
6. CERTAIN DEFINITIONS.
For the purposes of this Contract, the "affirmative vote of a majority
of the outstanding shares" means the affirmative vote, at a duly called and held
meeting of shareholders, (a) of the holders of 67% or more of the shares of the
Fund present (in person or by proxy) and entitled to vote at such meeting, if
the holders of more than 50% of the outstanding shares of the Fund entitled to
vote at such meeting are present in person or by proxy, or (b) of the holders of
more than 50% of the outstanding shares of the Fund entitled to vote at such
meeting, whichever is less.
For the purposes of this Contract, the terms "affiliated person",
"control", "interested person" and "assignment" shall have their respective
meanings defined in the 1940 Act and the rules and regulations thereunder,
subject, however to such exemptions as may be granted by the Securities and
Exchange Commission under said Act; the term "specifically approve at least
annually" shall be construed in a manner consistent with the 1940 Act and the
rules and regulations thereunder; and the term "brokerage and research services"
shall have the meaning given in the Securities Exchange Act of 1934 and the
rules and regulations thereunder.
7. NONLIABILITY OF MANAGER.
In the absence of willful misfeasance, bad faith or gross negligence on
the part of the Manager, or reckless disregard of its obligations and duties
hereunder, the Manager shall not be subject to any liability to the Trust, or to
any shareholder of the Trust, for any act or omission in the course of, or
connected with, rendering services hereunder.
8. LIMITATION OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS.
A copy of the Amended and Restated Agreement and Declaration of Trust
of the Trust is on file with the Secretary of The Commonwealth of Massachusetts,
and notice is hereby given that this instrument is executed on behalf of the
Trustees of the Trust as Trustees and not individually and that the obligations
of this instrument are not binding upon any of the Trustees or shareholders
individually but are binding only upon the assets and property of the Fund.
9. THE WORDS "CCI," "PACIFIC INVESTMENT MANAGEMENT COMPANY," "PFAMCO,"
"PIMCO" OR "THOMSON".
The Manager owns the words "CCI," "Pacific Investment Management
Company," "PFAMCo," "PIMCO" and "Thomson" which may be used by the Trust only
with the consent of the Manager. The Manager consents to the use of the Trust of
the words "CCI," "Pacific Investment Management Company," "PFAMCo," "PIMCO" and
"Thomson," in such forms as the Manager shall in writing approve, but only on
condition and so long as (i) this Contract shall remain in full force and (ii)
the Trust shall fully perform, fulfill and comply with all provisions of this
Contract expressed herein to be performed, fulfilled or complied with by it. No
such name shall be used by the Trust at any time or in any place or for any
purposes or under any conditions except as in this section provided. The
foregoing authorization by the Manager to the Trust to use said name as part of
a business or name is not exclusive of the right of the Manager itself to use,
or to authorize others to use, the same; the Trust acknowledges and agrees that
as between the Manager and the Trust, the Manager has the exclusive right to so
authorize others to use the same; the Trust acknowledges and agrees that as
between the Manager and the Trust, the Manager has the exclusive right to so
use, or authorize others to use, said words and the Trust agrees to take such
action as may reasonably be requested by the Manager to give full effect to the
provisions of this section (including, without limitation, consenting to such
use of said words). Without limiting the generality of the foregoing, the Trust
agrees that, upon any termination of this Contract by either party or upon the
violation of any of its provisions by the Trust, the Trust will, at the request
of the Manager made within six months after the Manager has knowledge of such
termination or violation, use its best efforts to change the name of the Trust
so as to eliminate all reference, if any, to the words "CCI," "Pacific
Investment Management Company, " "PFAMCo," "PIMCO" and "Thomson" and will not
thereafter transact any business in a name containing the words "CCI," "Pacific
Investment Management Company," "PFAMCo," "PIMCO" or "Thomson" in any form or
combination whatsoever, or designate itself as the same entity as or successor
to an entity of such name, or otherwise use the words "CCI," "Pacific Investment
Management Company," "PFAMCo," "PIMCO" or "Thomson" or any other reference to
the Manager. Such covenants on the part of the Trust shall be binding upon it,
its trustees, officers, stockholders, creditors and all other persons claiming
under or through it.
<PAGE>
IN WITNESS WHEREOF, THOMSON FUND GROUP and PIMCO ADVISORS L.P. have
each caused this instrument to be signed on duplicate in its behalf by its duly
authorized representative, all as of the day and year first above written.
THOMSON FUND GROUP
By: Robert A. Prindiville
PIMCO ADVISORS L.P.
By: PIMCO Partners, G.P., a California
general partnership, General Partner
By: PIMCO Partners, LLC, a California
limited liability company, General Partner
By: William S. Thompson
<PAGE>
MANAG-PR
MANAGEMENT CONTRACT
[Precious Metals and
Natural Resources Fund]
Management Contract executed as of November 16, 1994, between THOMSON
FUND GROUP, a Massachusetts business trust (the "Trust") on behalf of its
Precious Metals and Natural Resources Fund (the "Fund"), and PIMCO ADVISORS
L.P., a Delaware limited partnership (the "Manager").
WITNESSETH:
That in consideration of the mutual covenants herein contained, it is
agreed as follows:
1. SERVICES TO BE RENDERED BY MANAGER TO FUND.
(a) Subject always to the control of the Trustees of the Trust and to
such policies as the Trustees may determine, the Manager will, at its expense,
(i) furnish continuously an investment program for the Fund and will make
investment decisions on behalf of the Fund and place all orders for the purchase
and sale of portfolio securities and (ii) furnish office space and equipment,
provide bookkeeping and clerical services, including determination of net asset
value (but excluding shareholder accounting services) and pay all salaries, fees
and expenses of officers and Trustees of the Trust who are affiliated with the
Manager. In the performance of its duties, the Manager will comply with the
provisions of the Trust's Amended and Restated Agreement and Declaration of
Trust and By-laws, as in effect from time to time, and its stated investment
objectives, policies and restrictions.
<PAGE>
MANAG-PR
-8-
(b) In the selection of brokers or dealers and the placing of orders
for the purchase and sale of portfolio investments for the Fund, the Manager
shall seek to obtain for the Fund the most favorable price and execution
available, except to the extent it may be permitted to pay higher brokerage
commissions for brokerage and research services as described below. In using its
best efforts to obtain for the Fund the most favorable price and execution
available, the Manager, bearing in mind the Fund's best interests at all times,
shall consider all factors it deems relevant, including by way of illustration,
price, the size of the transaction, the nature of the market for the security,
the amount of the commission, the timing of the transaction taking into account
market prices and trends, the reputation, experience and financial stability of
the broker or dealer involved and the quality of service rendered by the broker
or dealer in other transactions. Subject to such policies as the Trustees may
determine, the Manager shall not be deemed to have acted unlawfully or to have
breached any duty created by this Contract or otherwise solely by reason of its
having caused the Fund to pay a broker or dealer that provides brokerage and
research services to the Manager an amount of commission for effecting a
portfolio investment transaction in excess of the amount of commission another
broker or dealer would have charged for effecting that transaction, if the
Manager determines in good faith that such amount of commission was reasonable
in relation to the value of the brokerage and research services provided by such
broker or dealer, viewed in terms of either that particular transaction or the
Manager's overall responsibilities with respect to the Trust and to other
clients of the Manager as to which the Manager exercises investment discretion.
The Trust hereby agrees with the Manager and with any Sub-Adviser selected by
the Manager as provided in Section 1(c) hereof that any entity or person
associated with the Manager which is a member of a national securities exchange
is authorized to effect any transaction on such exchange for the account of the
Trust and any Fund thereof which is permitted by Section 11(a) of the Securities
Exchange Act of 1934 and Rule 11a2-2(T) thereunder, and the Trust hereby
consents to the retention of compensation for such transactions in accordance
with Rule 11a2-2(T)(2)(iv).
(c) Subject to the provisions of the Amended and Restated Agreement and
Declaration of Trust of the Trust and the Investment Company Act of 1940 (the
"1940 Act"), the Manager, at its expense, may select and contract with
investment advisers (the "Sub-Advisers") for the Fund. So long as Van Eck
Associates Corporation ("Van Eck") serves as Sub-Adviser to the Fund pursuant to
a Sub-Adviser Agreement in substantially the form attached hereto as Exhibit A
(the "Sub-Adviser Agreement"), the obligation of the Manager under this Contract
with respect to the Fund shall be, subject in any event to the control of the
Trustees of the Trust, to determine and review with Van Eck investment policies
of the Fund and Van Eck shall have the obligation of furnishing continuously an
investment program and making investment decisions for the Fund, adhering to
applicable investment objectives, policies and restrictions and placing all
orders for the purchase and sale of portfolio securities for the Fund. The
Manager will compensate any Sub-Adviser of the Fund for its services to the
Fund. The Manager may terminate the services of the Sub-Adviser at any time in
its sole discretion, and shall at such time assume the responsibilities of such
Sub-Adviser unless and until a successor Sub-Adviser is selected.
(d) The Manager shall not be obligated to pay any expenses of or for
the Trust not expressly assumed by the Manager pursuant to this Section 1.
2. OTHER AGREEMENTS, ETC.
It is understood that any of the shareholders, Trustees, officers and
employees of the Trust may be a shareholder, director, officer or employee of,
or be otherwise interested in, the Manager, and in any person controlled by or
under common control with the Manager, and that the Manager and any person
controlled by or under common control with the Manager may have an interest in
the Trust. It is also understood that the Manager and persons controlled by or
under common control with the Manager have and may have advisory, management
service, distribution or other contracts with other organizations and persons,
and may have other interests and businesses.
3. COMPENSATION TO BE PAID BY THE TRUST TO THE MANAGER.
The Trust will pay to the Manager as compensation for the Manager's
services rendered, for the facilities furnished and for the expenses borne by
the Manager pursuant to Section 1, a fee, computed and paid monthly at the rate
of 0.75% of the average daily net asset value of the Fund up to $200 million and
0.70% of such net asset value in excess of $200 million. The fee shall be paid
from the assets of the Fund. The average daily net asset value of the Fund shall
be determined by taking an average of all of the determinations of such net
asset value during such month at the close of business on each business day
during such month while this Contract is in effect. Such fee shall be payable
for each month within five (5) business days after the end of such month.
In the event that expenses of the Fund for any fiscal year should
exceed the expense limitation on investment company expenses imposed by any
statute or regulatory authority of any jurisdiction in which shares of the Trust
are qualified for offer and sale, the compensation due the Manager for such
fiscal year shall be reduced by, or the Manager shall refund to the Fund, an
amount equal to the excess of expenses over the relevant limitation. In the
event that the expenses with respect to the Fund could exceed any expense
limitation which the Manager may, by written notice to the Trust, voluntarily
declare to be effective subject to such terms and conditions as the Manager may
prescribe in such notice, the compensation due the Manager shall be reduced,
and, if necessary, the Manager shall bear expenses with respect to the Fund, to
the extent required by such expense limitation.
If the Manager shall serve for less than the whole of a month, the
foregoing compensation shall be prorated.
4. ASSIGNMENT TERMINATES THIS CONTRACT; AMENDMENTS OF THIS CONTRACT.
This Contract shall automatically terminate, without the payment of any
penalty, in the event of its assignment; and this Contract shall not be amended
unless such amendment is approved at a meeting by the affirmative vote of a
majority of the outstanding shares of the Fund, and by the vote, cast in person
at a meeting called for the purpose of voting on such approval, of a majority of
the Trustees of the Trust who are not interested persons of the Trust or of the
Manager or of any Sub-Adviser of the Fund.
5. EFFECTIVE PERIOD AND TERMINATION OF THIS CONTRACT.
This Contract shall become effective upon its execution, and shall
remain in full force and effect continuously thereafter (unless terminated
automatically as set forth in Section 4) until terminated as follows:
(a) Either party hereto may at any time terminate this
Contract by not more than sixty days' written notice delivered or
mailed by registered mail, postage prepaid, to the other party, or
(b) If (i) the Trustees of the Trust or the shareholders by
the affirmative vote of a majority of the outstanding shares of the
Fund, and (ii) a majority of the Trustees of the Trust who are not
interested persons of the Trust or of the Manager, by vote cast in
person at a meeting called for the purpose of voting on such approval,
do not specifically approve at least annually the continuance of this
Contract, then this Contract shall automatically terminate at the close
of business on the second anniversary of its execution, or upon the
expiration of one year from the effective date of the last such
continuance, whichever is later; provided, however, that if the
continuance of this Contract is submitted to the shareholders of the
Fund for their approval and such shareholders fail to approve such
continuance of this Contract as provided herein, the Manager may
continue to serve hereunder in a manner consistent with the 1940 Act
and the rules and regulations thereunder.
Action by the Trust under (a) above may be taken either (i) by vote of
a majority of its Trustees, or (ii) by the affirmative vote of a majority of the
outstanding shares of the Fund.
Termination of this Contract pursuant to this Section 5 shall be
without the payment of any penalty.
6. CERTAIN DEFINITIONS.
For the purposes of this Contract, the "affirmative vote of a majority
of the outstanding shares" means the affirmative vote, at a duly called and held
meeting of shareholders, (a) of the holders of 67% or more of the shares of the
Fund present (in person or by proxy) and entitled to vote at such meeting, if
the holders of more than 50% of the outstanding shares of the Fund entitled to
vote at such meeting are present in person or by proxy, or (b) of the holders of
more than 50% of the outstanding shares of the Fund entitled to vote at such
meeting, whichever is less.
For the purposes of this Contract, the terms "affiliated person",
"control", "interested person" and "assignment" shall have their respective
meanings defined in the 1940 Act and the rules and regulations thereunder,
subject, however, to such exemptions as may be granted by the Securities and
Exchange Commission under said Act; the term "specifically approve at least
annually" shall be construed in a manner consistent with the 1940 Act and the
rules and regulations thereunder; and the term "brokerage and research services"
shall have the meaning given in the Securities Exchange Act of 1934 and the
rules and regulations thereunder.
7. NONLIABILITY OF MANAGER.
In the absence of willful misfeasance, bad faith or gross negligence on
the part of the Manager, or reckless disregard of its obligations and duties
hereunder, the Manager shall not be subject to any liability to the Trust, or to
any shareholder of the Trust, for any act or omission in the course of, or
connected with, rendering services hereunder.
8. LIMITATION OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS.
A copy of the Amended and Restated Agreement and Declaration of Trust
of the Trust is on file with the Secretary of The Commonwealth of Massachusetts,
and notice is hereby given that this instrument is executed on behalf of the
Trustees of the Trust as Trustees and not individually and that the obligations
of this instrument are not binding upon any of the Trustees or shareholders
individually but are binding only upon the assets and property of the Fund.
9. THE WORDS "CCI," "PACIFIC INVESTMENT MANAGEMENT COMPANY," "PFAMCO,"
"PIMCO" OR "THOMSON".
The Manager owns the words "CCI," "Pacific Investment Management
Company," "PFAMCo," "PIMCO" and "Thomson" which may be used by the Trust only
with the consent of the Manager. The Manager consents to the use of the Trust of
the words "CCI," "Pacific Investment Management Company," "PFAMCo," "PIMCO" and
"Thomson," in such forms as the Manager shall in writing approve, but only on
condition and so long as (i) this Contract shall remain in full force and (ii)
the Trust shall fully perform, fulfill and comply with all provisions of this
Contract expressed herein to be performed, fulfilled or complied with by it. No
such name shall be used by the Trust at any time or in any place or for any
purposes or under any conditions except as in this section provided. The
foregoing authorization by the Manager to the Trust to use said name as part of
a business or name is not exclusive of the right of the Manager itself to use,
or to authorize others to use, the same; the Trust acknowledges and agrees that
as between the Manager and the Trust, the Manager has the exclusive right to so
authorize others to use the same; the Trust acknowledges and agrees that as
between the Manager and the Trust, the Manager has the exclusive right to so
use, or authorize others to use, said words and the Trust agrees to take such
action as may reasonably be requested by the Manager to give full effect to the
provisions of this section (including, without limitation, consenting to such
use of said words). Without limiting the generality of the foregoing, the Trust
agrees that, upon any termination of this Contract by either party or upon the
violation of any of its provisions by the Trust, the Trust will, at the request
of the Manager made within six months after the Manager has knowledge of such
termination or violation, use its best efforts to change the name of the Trust
so as to eliminate all reference, if any, to the words "CCI," "Pacific
Investment Management Company, " "PFAMCo," "PIMCO" and "Thomson" and will not
thereafter transact any business in a name containing the words "CCI," "Pacific
Investment Management Company," "PFAMCo," "PIMCO" or "Thomson" in any form or
combination whatsoever, or designate itself as the same entity as or successor
to an entity of such name, or otherwise use the words "CCI," "Pacific Investment
Management Company," "PFAMCo," "PIMCO" or "Thomson" or any other reference to
the Manager. Such covenants on the part of the Trust shall be binding upon it,
its trustees, officers, stockholders, creditors and all other persons claiming
under or through it.
<PAGE>
IN WITNESS WHEREOF, THOMSON FUND GROUP and PIMCO ADVISORS L.P. have
each caused this instrument to be signed in duplicate in its behalf by its duly
authorized representative, all as of the day and year first above written.
THOMSON FUND GROUP
By: Robert A. Prindiville
PIMCO ADVISORS L.P.
By: PIMCO Partners, G.P., a California
general partnership, General Partner
By: PIMCO Partners, LLC, a California
limited liability company, General Partner
By: William S. Thompson
<PAGE>
MANAGEMENT CONTRACT
Global Income Fund
Management Contract executed as of September 28, 1995 between PIMCO
ADVISORS FUNDS, a Massachusetts business trust (the "Trust") on behalf of its
Global Income Fund (the "Fund"), and PIMCO ADVISORS L.P., a Delaware limited
partnership (the "Manager").
WITNESSETH:
That in consideration of the mutual covenants herein contained, it is
agreed as follows:
1. SERVICES TO BE RENDERED BY MANAGER TO FUND.
(a) Subject always to the control of the Trustees of the Trust
and to such policies as the Trustees may determine, the
Manager will, at its expense, (i) furnish continuously an
investment program for the Fund and will make investment
decisions on behalf of the Fund and place all orders for the
purchase and sale of portfolio securities and (ii) furnish
office space and equipment, provide bookkeeping and clerical
services (excluding determination of net asset value and
shareholder accounting services) and pay all salaries, fees
and expenses of officers and Trustees of the Trust who are
affiliated with the Manager. In the performance of its
duties, the Manager will comply with the provisions of the
Amended and Restated Agreement and Declaration of Trust and
By-laws of the Trust and its stated investment objectives,
policies and restrictions.
(b) In the selection of brokers or dealers and the placing of
orders for the purchase and sale of portfolio investments for
the Fund, the Manager shall seek to obtain for the Fund the
most favorable price and execution available, except to the
extent it may be permitted to pay higher brokerage
commissions for brokerage and research services as described
below. In using its best efforts to obtain for the Fund the
most favorable price and execution available, the Manager,
bearing in mind the Fund's best interests at all times, shall
consider all factors it deems relevant, including by way of
illustration, price, the size of the transaction, the nature
of the market for the security, the amount of the commission,
the timing of the transaction taking into account market
prices and trends, the reputation, experience and financial
stability of the broker or dealer involved and the quality of
service rendered by the broker or dealer in other
transactions. Subject to such policies as the Trustees may
determine, the Manager shall not be deemed to have acted
-1-
<PAGE>
unlawfully or to have breached any duty created by this
Contract or otherwise solely by reason of its having caused
the Fund to pay a broker or dealer that provides brokerage
and research services to the Manager an amount of commission
for effecting a portfolio investment transaction in excess of
the amount of commission another broker or dealer would have
charged for effecting that transaction, if the Manager
determines in good faith that such amount of commission was
reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer, viewed
in terms of either that particular transaction or the
Manager's overall responsibilities with respect to the Trust
and to other clients of the Manager as to which the Manager
exercises investment discretion. The Trust hereby agrees with
the Manager and with any Sub-Adviser selected by the Manager
as provided in Section 1(c) hereof that any entity or person
associated with the Manager which is a member of a national
securities exchange is authorized to effect any transaction
on such exchange for the account of the Trust and the Fund
which is permitted by Section 11(a) of the Securities
Exchange Act of 1934.
(c) Subject to the provisions of the Agreement and Declaration of
Trust of the Trust and the Investment Company Act of 1940
(the "1940 Act"), the Manager, at its expense, may select and
contract with investment advisers (the "Sub-Advisers") for
the Fund. So long as Pacific Investment Management Company
serves as Sub-Adviser to the Fund pursuant to a Sub-Adviser
Agreement in substantially the form attached hereto as
Exhibit A (the "Sub-Adviser Agreement"), the obligation of
the Manager under this Contract with respect to the Fund
shall be subject in any event to the control of the Trustees
of the Trust, to determine and review with investment
policies of the Fund and Pacific Investment Management
Company shall have the obligation of furnishing continuously
an investment program and making investment decisions for the
Fund, adhering to applicable investment objectives, policies
and restrictions and placing all orders for the purchase and
sale of portfolio securities for the Fund. The Manager will
compensate any Sub-Adviser of the Fund for its services to
the Fund. The Manager may terminate the services of the
Sub-Adviser at any time in its sole discretion, and shall at
such time assume the responsibilities of such Sub-Adviser
unless and until a successor Sub-Adviser is selected.
(d) The Manager shall not be obligated to pay any expenses of or
for the Trust not expressly assumed by the Manager pursuant
to this Section 1 other than as provided in Section 3.
-2-
<PAGE>
2. OTHER AGREEMENTS, ETC.
It is understood that any of the shareholders, Trustees, officers and
employees of the Trust may be a shareholder, director, officer or
employee of, or be otherwise interested in, the Manager, and in any
person controlled by or under common control with the Manager, and that
the Manager and any person controlled by or under common control with
the Manager may have an interest in the Trust. It is also understood
that the Manager and persons controlled by or under common control with
the Manager have and may have advisory, management service,
distribution or other contracts with other organizations and persons,
and may have other interests and businesses.
3. COMPENSATION TO BE PAID BY THE TRUST TO THE MANAGER.
The Trust will pay to the Manager as compensation for the Manager's
services rendered, for the facilities furnished and for the expenses
borne by the Manager pursuant to Section 1, a fee, computed and paid
monthly at the annual rate of 0.70% of the average daily net asset
value of the Fund up to $250 million and 0.60% of such net asset value
in excess of $250 million. The average daily net asset value of the
Fund shall be determined by taking an average of all of the
determinations of such net asset value during such month at the close
of business on each business day during such month while this Contract
is in effect. Such fee shall be payable for each month within five (5)
business days after the end of such month.
In the event that expenses of the Fund for any fiscal year should
exceed the expense limitation on investment company expenses imposed by
any statute or regulatory authority of any jurisdiction in which shares
of the Trust are qualified for offer and sale, the compensation due the
Manager for such fiscal year shall be reduced by the amount of such
excess by a reduction or refund thereof. In the event that the expenses
with respect to the Fund could exceed any expense limitation which the
Manager may, by written notice to the Trust, voluntarily declare to be
effective subject to such terms and conditions as the Manager may
prescribe in such notice, the compensation due the Manager shall be
reduced, and, if necessary, the Manager shall bear expenses with
respect to the Fund, to the extent required by such expense limitation.
If the Manager shall serve for less than the whole of a month, the
foregoing compensation shall be prorated.
-3-
<PAGE>
4. ASSIGNMENT TERMINATES THIS CONTRACT; AMENDMENTS OF THIS
CONTRACT.
This Contract shall automatically terminate, without the payment of any
penalty, in the event of its assignment; and this Contract shall not be
amended as to the Fund unless such amendment is approved at a meeting
by the affirmative vote of a majority of the outstanding shares of the
Fund, and by the vote, cast in person at a meeting called for the
purpose of voting on such approval, of a majority of the Trustees of
the Trust who are not interested persons of the Trust or of the Manager
or of any Sub-Adviser of the Fund.
5. EFFECTIVE PERIOD AND TERMINATION OF THIS CONTRACT.
This Contract shall become effective upon its execution, and shall
remain in full force and effect as to each Fund continuously thereafter
(unless terminated automatically as set forth in Section 4) until
terminated as follows:
(a) Either party hereto may at any time terminate this Contract
by not more than sixty days' written notice delivered or
mailed by registered mail, postage prepaid, to the other
party, or
(b) If (i) the Trustees of the Trust or the shareholders by the
affirmative vote of a majority of the outstanding shares of
the Fund, and (ii) a majority of the Trustees of the Trust
who are not interested persons of the Trust or of the
Manager, by vote cast in person at a meeting called for the
purpose of voting on such approval, do not specifically
approve at least annually the continuance of this Contract,
then this Contract shall automatically terminate at the close
of business on the second anniversary of its execution, or
upon the expiration of one year from the effective date of
the last such continuance, whichever is later; provided,
however, that if the continuance of this Contract is
submitted to the shareholders of the Fund for their approval
and such shareholders fail to approve such continuance of
this Contract as provided herein, the Manager may continue to
serve hereunder in a manner consistent with the Investment
Company Act of 1940 and the Rules and Regulations thereunder.
Action by the Trust under (a) above may be taken either (i)
by vote of a majority of its Trustees, or (ii) by the
affirmative vote of a majority of the outstanding shares of
the Fund.
-4-
<PAGE>
Termination of this Contract pursuant to this Section 5 shall
be without the payment of any penalty.
6. CERTAIN DEFINITIONS.
For the purposes of this Contract, the "affirmative vote of a majority
of the outstanding shares" means the affirmative vote, at a duly called
and held meeting of shareholders, (a) of the holders of 67% or more of
the shares of the Fund present (in person or by proxy) and entitled to
vote at such meeting, if the holders of more than 50% of the
outstanding shares of the Fund entitled to vote at such meeting are
present in person or by proxy, or (b) of the holders of more than 50%
of the outstanding shares of the Fund entitled to vote at such meeting,
whichever is less.
For the purposes of this Contract, the terms "affiliated person",
"control", "interested person" and "assignment" shall have their
respective meanings defined in the Investment Company Act of 1940 and
the Rules and Regulations thereunder, subject, however, to such
exemptions as may be granted by the Securities and Exchange Commission
under said Act; the term "specifically approve at least annually" shall
be construed in a manner consistent with the Investment Company Act of
1940 and the Rules and Regulations thereunder; and the term "brokerage
and research services" shall have the meaning given in the Securities
Exchange Act of 1934 and the Rules and Regulations thereunder.
7. NONLIABILITY OF MANAGER.
In the absence of willful misfeasance, bad faith or gross negligence on
the part of the Manager, or reckless disregard of its obligations and
duties hereunder, the Manager shall not be subject to any liability to
the Trust, or to any shareholder of the Trust, for any act or omission
in the course of, or connected with, rendering services hereunder.
8. LIMITATION OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS.
A copy of the Amended and Restated Agreement and Declaration of Trust
of the Trust is on file with the Secretary of The Commonwealth of
Massachusetts, and notice is hereby given that this instrument is
executed on behalf of the Trustees of the Trust as Trustees and not
-5-
<PAGE>
individually and that the obligations of this instrument are not
binding upon any of the Trustees or shareholders individually but are
binding only upon the assets and property of the Fund.
9. THE WORDS "CCI," "PACIFIC INVESTMENT MANAGEMENT COMPANY,"
"PFAMCO," "PIMCO," "NFJ," "CADENCE" OR "THOMSON".
The Manager owns the words "CCI," "Pacific Investment Management
Company," "PFAMCo," "PIMCO," "PIMCO Advisors," "NFJ," "Cadence" and
"Thomson" which may be used by the Trust only with the consent of the
Manager. The Manager consents to the use of the Trust of the words
"CCI," "Pacific Investment Management Company," "PFAMCo, "PIMCO,"
"NFJ," "Cadence" and "Thomson," in such forms as the Manager shall in
writing approve, but only on condition and so long as (i) this Contract
shall remain in full force and (ii) the Trust shall fully perform,
fulfill and comply with all provisions of this Contract expressed
herein to be performed, fulfilled or complied with by it. No such name
shall be used by the Trust at any time or in any place or for any
purposes or under any conditions except as in this section provided.
The foregoing authorization by the Manager to the Trust to use said
name as part of a business or name is not exclusive of the right of the
Manager itself to use, or to authorize others to use, the same; the
Trust acknowledges and agrees that as between the Manager and the
Trust, the Manager has the exclusive right to so authorize others to
use the same; the Trust acknowledges and agrees that as between the
Manager and the Trust, the Manager has the exclusive right to so use,
or authorize others to use, said words and the Trust agrees to take
such action as may reasonably be requested by the Manager to give full
effect to the provisions of this section (including, without
limitation, consenting to such use of said words). Without limiting the
generality of the foregoing, the Trust agrees that, upon any
termination of this Contract by either party or upon the violation of
any of its provisions by the Trust, the Trust will, at the request of
the Manager made within six months after the Manager has knowledge of
such termination or violation, use its best efforts to change the name
of the Trust so as to eliminate all reference, if any, to the words
"CCI," "Pacific Investment Management Company, " "PFAMCo," "PIMCO,"
"NFJ," "Cadence" and "Thomson" and will not thereafter transact any
business in a name containing the words "CCI," "Pacific Investment
Management Company," "PFAMCo," "PIMCO," "PIMCO Advisors," "NFJ,"
"Cadence" or "Thomson" in any form or combination whatsoever, or
designate itself as the same entity as or successor to an entity of
such name, or otherwise use the words "CCI," "Pacific Investment
Management Company," "PFAMCo," "PIMCO," "PIMCO Advisors," "NFJ,"
"Cadence" or "Thomson" or any other reference to the
-6-
<PAGE>
Manager. Such covenants on the part of the Trust shall be binding upon
it, its trustees, officers, stockholders, creditors and all other
persons claiming under or through it.
IN WITNESS WHEREOF, PIMCO ADVISORS FUNDS and PIMCO ADVISORS L.P. have
each caused this instrument to be signed in duplicate in its behalf by its duly
authorized representative, all as of the day and year first above written.
PIMCO ADVISORS FUNDS
By: Robert A. Prindiville
Title: President
PIMCO ADVISORS L.P.
By: William Cvengros
Title: Chairman
-7-
<PAGE>
3007647.02
MANAGEMENT CONTRACT
[Income Fund]
Management Contract executed as of November 16, 1994 between THOMSON
FUND GROUP, a Massachusetts business trust (the "Trust") on behalf of its
Thomson Income Fund (the "Fund"), and PIMCO ADVISORS L.P., a Delaware limited
partnership (the "Manager").
WITNESSETH:
That in consideration of the mutual covenants herein contained, it is
agreed as follows:
1. SERVICES TO BE RENDERED BY MANAGER TO FUND.
(a) Subject always to the control of the Trustees of the Trust and to
such policies as the Trustees may determine, the Manager will, at its expense,
(i) furnish continuously an investment program for the Fund and will make
investment decisions on behalf of the Fund and place all orders for the purchase
and sale of portfolio securities and (ii) furnish office space and equipment,
provide bookkeeping and clerical services (excluding determination of net asset
value and shareholder accounting services) and pay all salaries, fees and
expenses of officers and Trustees of the Trust who are affiliated with the
Manager. In the performance of its duties, the Manager will comply with the
provisions of the Amended and Restated Agreement and Declaration of Trust and
By-laws of the Trust and its stated investment objectives, policies and
restrictions.
<PAGE>
3007647.02
-7-
(b) In the selection of brokers or dealers and the placing of orders
for the purchase and sale of portfolio investments for the Fund, the Manager
shall seek to obtain for the Fund the most favorable price and execution
available, except to the extent it may be permitted to pay higher brokerage
commissions for brokerage and research services as described below. In using its
best efforts to obtain for the Fund the most favorable price and execution
available, the Manager, bearing in mind the Fund's best interests at all times,
shall consider all factors it deems relevant, including by way of illustration,
price, the size of the transaction, the nature of the market for the security,
the amount of the commission, the timing of the transaction taking into account
market prices and trends, the reputation, experience and financial stability of
the broker or dealer involved and the quality of service rendered by the broker
or dealer in other transactions. Subject to such policies as the Trustees may
determine, the Manager shall not be deemed to have acted unlawfully or to have
breached any duty created by this Contract or otherwise solely by reason of its
having caused the Fund to pay a broker or dealer that provides brokerage and
research services to the Manager an amount of commission for effecting a
portfolio investment transaction in excess of the amount of commission another
broker or dealer would have charged for effecting that transaction, if the
Manager determines in good faith that such amount of commission was reasonable
in relation to the value of the brokerage and research services provided by such
broker or dealer, viewed in terms of either that particular transaction or the
Manager's overall responsibilities with respect to the Trust and to other
clients of the Manager as to which the Manager exercises investment discretion.
The Trust hereby agrees with the Manager and with any Sub-Adviser selected by
the Manager as provided in Section 1(c) hereof that any entity or person
associated with the Manager which is a member of a national securities exchange
is authorized to effect any transaction on such exchange for the account of the
Trust and the Fund which is permitted by Section 11(a) of the Securities
Exchange Act of 1934 and Rule 11a2-2(T) thereunder, and the Trust hereby
consents to the retention of compensation for such transactions in accordance
with Rule 11a2-2(T)(2)(iv).
(c) Subject to the provisions of the Agreement and Declaration of Trust
of the Trust and the Investment Company Act of 1940 (the "1940 Act"), the
Manager, at its expense, may select and contract with investment advisers (the
"Sub-Advisers") for the Fund. So long as Pacific Investment Management Company
serves as Sub-Adviser to the Fund pursuant to a Sub-Adviser Agreement in
substantially the form attached hereto as Exhibit A (the "Sub-Adviser
Agreement"), the obligation of the Manager under this Contract with respect to
the Fund shall be subject in any event to the control of the Trustees of the
Trust, to determine and review with Pacific Investment Management Company
investment policies of the Fund and Pacific Investment Management Company shall
have the obligation of furnishing continuously an investment program and making
investment decisions for the Fund, adhering to applicable investment objectives,
policies and restrictions and placing all orders for the purchase and sale of
portfolio securities for the Fund. The Manager will compensate any Sub-Adviser
of the Fund for its services to the Fund. The Manager may terminate the services
of the Sub-Adviser at any time in its sole discretion, and shall at such time
assume the responsibilities of such Sub-Adviser unless and until a successor
Sub-Adviser is selected.
(d) The Manager shall not be obligated to pay any expenses of or for
the Trust not expressly assumed by the Manager pursuant to this Section 1 other
than as provided in Section 3.
2. OTHER AGREEMENTS, ETC.
It is understood that any of the shareholders, Trustees, officers and
employees of the Trust may be a shareholder, director, officer or employee of,
or be otherwise interested in, the Manager, and in any person controlled by or
under common control with the Manager, and that the Manager and any person
controlled by or under common control with the Manager may have an interest in
the Trust. It is also understood that the Manager and persons controlled by or
under common control with the Manager have and may have advisory, management
service, distribution or other contracts with other organizations and persons,
and may have other interests and businesses.
3. COMPENSATION TO BE PAID BY THE TRUST TO THE MANAGER.
The Trust will pay to the Manager as compensation for the Manager's
services rendered, for the facilities furnished and for the expenses borne by
the Manager pursuant to Section 1, a fee, computed and paid monthly at the
annual rate of 0.60% of the average net asset value of the Fund up to $250
million and 0.50% of such net asset value in excess of $250 million. The average
daily net asset value of the Fund shall be determined by taking an average of
all of the determinations of such net asset value during such month at the close
of business on each business day during such month while this Contract is in
effect. Such fee shall be payable for each month within five (5) business days
after the end of such month.
In the event that expenses of the Fund for any fiscal year should
exceed the expense limitation on investment company expenses imposed by any
statute or regulatory authority of any jurisdiction in which shares of the Trust
are qualified for offer and sale, the compensation due the Manager for such
fiscal year shall be reduced by the amount of such excess by a reduction or
refund thereof. In the event that the expenses with respect to the Fund could
exceed any expense limitation which the Manager may, by written notice to the
Trust, voluntarily declare to be effective subject to such terms and conditions
as the Manager may prescribe in such notice, the compensation due the Manager
shall be reduced, and, if necessary, the Manager shall bear expenses with
respect to the Fund, to the extent required by such expense limitation.
If the Manager shall serve for less than the whole of a month, the
foregoing compensation shall be prorated.
4. ASSIGNMENT TERMINATES THIS CONTRACT; AMENDMENTS OF THIS CONTRACT.
This Contract shall automatically terminate, without the payment of any
penalty, in the event of its assignment; and this Contract shall not be amended
as to the Fund unless such amendment is approved at a meeting by the affirmative
vote of a majority of the outstanding shares of the Fund, and by the vote, cast
in person at a meeting called for the purpose of voting on such approval, of a
majority of the Trustees of the Trust who are not interested persons of the
Trust or of the Manager or of any Sub-Adviser of the Fund.
5. EFFECTIVE PERIOD AND TERMINATION OF THIS CONTRACT.
This Contract shall become effective upon its execution, and shall
remain in full force and effect as to each Fund continuously thereafter (unless
terminated automatically as set forth in Section 4) until terminated as follows:
(a) Either party hereto may at any time terminate this
Contract by not more than sixty days' written notice delivered or
mailed by registered mail, postage prepaid, to the other party, or
(b) If (i) the Trustees of the Trust or the shareholders by
the affirmative vote of a majority of the outstanding shares of the
Fund, and (ii) a majority of the Trustees of the Trust who are not
interested persons of the Trust or of the Manager, by vote cast in
person at a meeting called for the purpose of voting on such approval,
do not specifically approve at least annually the continuance of this
Contract, then this Contract shall automatically terminate at the close
of business on the second anniversary of its execution, or upon the
expiration of one year from the effective date of the last such
continuance, whichever is later; provided, however, that if the
continuance of this Contract is submitted to the shareholders of the
Fund for their approval and such shareholders fail to approve such
continuance of this Contract as provided herein, the Manager may
continue to serve hereunder in a manner consistent with the Investment
Company Act of 1940 and the Rules and Regulations thereunder.
Action by the Trust under (a) above may be taken either (i) by vote of
a majority of its Trustees, or (ii) by the affirmative vote of a majority of the
outstanding shares of the Fund.
Termination of this Contract pursuant to this Section 5 shall be
without the payment of any penalty.
6. CERTAIN DEFINITIONS.
For the purposes of this Contract, the "affirmative vote of a majority
of the outstanding shares" means the affirmative vote, at a duly called and held
meeting of shareholders, (a) of the holders of 67% or more of the shares of the
Fund present (in person or by proxy) and entitled to vote at such meeting, if
the holders of more than 50% of the outstanding shares of the Fund entitled to
vote at such meeting are present in person or by proxy, or (b) of the holders of
more than 50% of the outstanding shares of the Fund entitled to vote at such
meeting, whichever is less.
For the purposes of this Contract, the terms "affiliated person",
"control", "interested person" and "assignment" shall have their respective
meanings defined in the Investment Company Act of 1940 and the Rules and
Regulations thereunder, subject, however, to such exemptions as may be granted
by the Securities and Exchange Commission under said Act; the term "specifically
approve at least annually" shall be construed in a manner consistent with the
Investment Company Act of 1940 and the Rules and Regulations thereunder; and the
term "brokerage and research services" shall have the meaning given in the
Securities Exchange Act of 1934 and the Rules and Regulations thereunder.
7. NONLIABILITY OF MANAGER.
In the absence of willful misfeasance, bad faith or gross negligence on
the part of the Manager, or reckless disregard of its obligations and duties
hereunder, the Manager shall not be subject to any liability to the Trust, or to
any shareholder of the Trust, for any act or omission in the course of, or
connected with, rendering services hereunder.
8. LIMITATION OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS.
A copy of the Amended and Restated Agreement and Declaration of Trust
of the Trust is on file with the Secretary of The Commonwealth of Massachusetts,
and notice is hereby given that this instrument is executed on behalf of the
Trustees of the Trust as Trustees and not individually and that the obligations
of this instrument are not binding upon any of the Trustees or shareholders
individually but are binding only upon the assets and property of the Fund.
9. THE WORDS "CCI," "PACIFIC INVESTMENT MANAGEMENT COMPANY," "PFAMCO,"
"PIMCO" OR "THOMSON".
The Manager owns the words "CCI," "Pacific Investment Management
Company," "PFAMCo," "PIMCO" and "Thomson" which may be used by the Trust only
with the consent of the Manager. The Manager consents to the use of the Trust of
the words "CCI," "Pacific Investment Management Company," "PFAMCo," "PIMCO" and
"Thomson," in such forms as the Manager shall in writing approve, but only on
condition and so long as (i) this Contract shall remain in full force and (ii)
the Trust shall fully perform, fulfill and comply with all provisions of this
Contract expressed herein to be performed, fulfilled or complied with by it. No
such name shall be used by the Trust at any time or in any place or for any
purposes or under any conditions except as in this section provided. The
foregoing authorization by the Manager to the Trust to use said name as part of
a business or name is not exclusive of the right of the Manager itself to use,
or to authorize others to use, the same; the Trust acknowledges and agrees that
as between the Manager and the Trust, the Manager has the exclusive right to so
authorize others to use the same; the Trust acknowledges and agrees that as
between the Manager and the Trust, the Manager has the exclusive right to so
use, or authorize others to use, said words and the Trust agrees to take such
action as may reasonably be requested by the Manager to give full effect to the
provisions of this section (including, without limitation, consenting to such
use of said words). Without limiting the generality of the foregoing, the Trust
agrees that, upon any termination of this Contract by either party or upon the
violation of any of its provisions by the Trust, the Trust will, at the request
of the Manager made within six months after the Manager has knowledge of such
termination or violation, use its best efforts to change the name of the Trust
so as to eliminate all reference, if any, to the words "CCI," "Pacific
Investment Management Company, " "PFAMCo," "PIMCO" and "Thomson" and will not
thereafter transact any business in a name containing the words "CCI," "Pacific
Investment Management Company," "PFAMCo," "PIMCO" or "Thomson" in any form or
combination whatsoever, or designate itself as the same entity as or successor
to an entity of such name, or otherwise use the words "CCI," "Pacific Investment
Management Company," "PFAMCo," "PIMCO" or "Thomson" or any other reference to
the Manager. Such covenants on the part of the Trust shall be binding upon it,
its trustees, officers, stockholders, creditors and all other persons claiming
under or through it.
<PAGE>
IN WITNESS WHEREOF, THOMSON FUND GROUP and PIMCO ADVISORS L.P. have
each caused this instrument to be signed in duplicate in its behalf by its duly
authorized representative, all as of the day and year first above written.
THOMSON FUND GROUP
By: Robert A. Prindiville
PIMCO ADVISORS L.P.
By: PIMCO Partners, G.P., a California
general partnership, General Partner
By: PIMCO Partners, LLC, a California
limited liability company, General Partner
By: William S. Thompson
<PAGE>
3008057.01
MANAGEMENT CONTRACT
[Total Return Income Fund]
Management Contract executed as of November 16, 1994 between PIMCO
Advisors Funds, a Massachusetts business trust (the "Trust") on behalf of its
PIMCO Advisors Total Return Income Fund (the "Fund"), and PIMCO ADVISORS L.P., a
Delaware limited partnership (the "Manager").
WITNESSETH:
That in consideration of the mutual covenants herein contained, it is
agreed as follows:
1. SERVICES TO BE RENDERED BY MANAGER TO FUND.
(a) Subject always to the control of the Trustees of the Trust and to
such policies as the Trustees may determine, the Manager will, at its expense,
(i) furnish continuously an investment program for the Fund and will make
investment decisions on behalf of the Fund and place all orders for the purchase
and sale of portfolio securities and (ii) furnish office space and equipment,
provide bookkeeping and clerical services (excluding determination of net asset
value and shareholder accounting services) and pay all salaries, fees and
expenses of officers and Trustees of the Trust who are affiliated with the
Manager. In the performance of its duties, the Manager will comply with the
provisions of the Amended and Restated Agreement and Declaration of Trust and
By-laws of the Trust and its stated investment objectives, policies and
restrictions.
<PAGE>
3008057.01
-7-
(b) In the selection of brokers or dealers and the placing of orders
for the purchase and sale of portfolio investments for the Fund, the Manager
shall seek to obtain for the Fund the most favorable price and execution
available, except to the extent it may be permitted to pay higher brokerage
commissions for brokerage and research services as described below. In using its
best efforts to obtain for the Fund the most favorable price and execution
available, the Manager, bearing in mind the Fund's best interests at all times,
shall consider all factors it deems relevant, including by way of illustration,
price, the size of the transaction, the nature of the market for the security,
the amount of the commission, the timing of the transaction taking into account
market prices and trends, the reputation, experience and financial stability of
the broker or dealer involved and the quality of service rendered by the broker
or dealer in other transactions. Subject to such policies as the Trustees may
determine, the Manager shall not be deemed to have acted unlawfully or to have
breached any duty created by this Contract or otherwise solely by reason of its
having caused the Fund to pay a broker or dealer that provides brokerage and
research services to the Manager an amount of commission for effecting a
portfolio investment transaction in excess of the amount of commission another
broker or dealer would have charged for effecting that transaction, if the
Manager determines in good faith that such amount of commission was reasonable
in relation to the value of the brokerage and research services provided by such
broker or dealer, viewed in terms of either that particular transaction or the
Manager's overall responsibilities with respect to the Trust and to other
clients of the Manager as to which the Manager exercises investment discretion.
The Trust hereby agrees with the Manager and with any Sub-Adviser selected by
the Manager as provided in Section 1(c) hereof that any entity or person
associated with the Manager which is a member of a national securities exchange
is authorized to effect any transaction on such exchange for the account of the
Trust and the Fund which is permitted by Section 11(a) of the Securities
Exchange Act of 1934 and Rule 11a2-2(T) thereunder, and the Trust hereby
consents to the retention of compensation for such transactions in accordance
with Rule 11a2-2(T)(2)(iv).
(c) Subject to the provisions of the Agreement and Declaration of Trust
of the Trust and the Investment Company Act of 1940 (the "1940 Act"), the
Manager, at its expense, may select and contract with investment advisers (the
"Sub-Advisers") for the Fund. So long as Pacific Investment Management Company
serves as Sub-Adviser to the Fund pursuant to a Sub-Adviser Agreement in
substantially the form attached hereto as Exhibit A (the "Sub-Adviser
Agreement"), the obligation of the Manager under this Contract with respect to
the Fund shall be subject in any event to the control of the Trustees of the
Trust, to determine and review with Pacific Investment Management Company
investment policies of the Fund and Pacific Investment Management Company shall
have the obligation of furnishing continuously an investment program and making
investment decisions for the Fund, adhering to applicable investment objectives,
policies and restrictions and placing all orders for the purchase and sale of
portfolio securities for the Fund. The Manager will compensate any Sub-Adviser
of the Fund for its services to the Fund. The Manager may terminate the services
of the Sub-Adviser at any time in its sole discretion, and shall at such time
assume the responsibilities of such Sub-Adviser unless and until a successor
Sub-Adviser is selected.
(d) The Manager shall not be obligated to pay any expenses of or for
the Trust not expressly assumed by the Manager pursuant to this Section 1 other
than as provided in Section 3.
2. OTHER AGREEMENTS, ETC.
It is understood that any of the shareholders, Trustees, officers and
employees of the Trust may be a shareholder, director, officer or employee of,
or be otherwise interested in, the Manager, and in any person controlled by or
under common control with the Manager, and that the Manager and any person
controlled by or under common control with the Manager may have an interest in
the Trust. It is also understood that the Manager and persons controlled by or
under common control with the Manager have and may have advisory, management
service, distribution or other contracts with other organizations and persons,
and may have other interests and businesses.
3. COMPENSATION TO BE PAID BY THE TRUST TO THE MANAGER.
The Trust will pay to the Manager as compensation for the Manager's
services rendered, for the facilities furnished and for the expenses borne by
the Manager pursuant to Section 1, a fee, computed and paid monthly at the
annual rate of 0.60% of the average daily net asset value of the Fund up to $250
million and 0.50% of such net asset value in excess of $250 million. The average
daily net asset value of the Fund shall be determined by taking an average of
all of the determinations of such net asset value during such month at the close
of business on each business day during such month while this Contract is in
effect. Such fee shall be payable for each month within five (5) business days
after the end of such month.
In the event that expenses of the Fund for any fiscal year should
exceed the expense limitation on investment company expenses imposed by any
statute or regulatory authority of any jurisdiction in which shares of the Trust
are qualified for offer and sale, the compensation due the Manager for such
fiscal year shall be reduced by the amount of such excess by a reduction or
refund thereof. In the event that the expenses with respect to the Fund could
exceed any expense limitation which the Manager may, by written notice to the
Trust, voluntarily declare to be effective subject to such terms and conditions
as the Manager may prescribe in such notice, the compensation due the Manager
shall be reduced, and, if necessary, the Manager shall bear expenses with
respect to the Fund, to the extent required by such expense limitation.
If the Manager shall serve for less than the whole of a month, the
foregoing compensation shall be prorated.
4. ASSIGNMENT TERMINATES THIS CONTRACT; AMENDMENTS OF THIS CONTRACT.
This Contract shall automatically terminate, without the payment of any
penalty, in the event of its assignment; and this Contract shall not be amended
as to the Fund unless such amendment is approved at a meeting by the affirmative
vote of a majority of the outstanding shares of the Fund, and by the vote, cast
in person at a meeting called for the purpose of voting on such approval, of a
majority of the Trustees of the Trust who are not interested persons of the
Trust or of the Manager or of any Sub-Adviser of the Fund.
5. EFFECTIVE PERIOD AND TERMINATION OF THIS CONTRACT.
This Contract shall become effective upon its execution, and shall
remain in full force and effect as to each Fund continuously thereafter (unless
terminated automatically as set forth in Section 4) until terminated as follows:
(a) Either party hereto may at any time terminate this
Contract by not more than sixty days' written notice delivered or
mailed by registered mail, postage prepaid, to the other party, or
(b) If (i) the Trustees of the Trust or the shareholders by
the affirmative vote of a majority of the outstanding shares of the
Fund, and (ii) a majority of the Trustees of the Trust who are not
interested persons of the Trust or of the Manager, by vote cast in
person at a meeting called for the purpose of voting on such approval,
do not specifically approve at least annually the continuance of this
Contract, then this Contract shall automatically terminate at the close
of business on the second anniversary of its execution, or upon the
expiration of one year from the effective date of the last such
continuance, whichever is later; provided, however, that if the
continuance of this Contract is submitted to the shareholders of the
Fund for their approval and such shareholders fail to approve such
continuance of this Contract as provided herein, the Manager may
continue to serve hereunder in a manner consistent with the Investment
Company Act of 1940 and the Rules and Regulations thereunder.
Action by the Trust under (a) above may be taken either (i) by vote of
a majority of its Trustees, or (ii) by the affirmative vote of a majority of the
outstanding shares of the Fund.
Termination of this Contract pursuant to this Section 5 shall be
without the payment of any penalty.
6. CERTAIN DEFINITIONS.
For the purposes of this Contract, the "affirmative vote of a majority
of the outstanding shares" means the affirmative vote, at a duly called and held
meeting of shareholders, (a) of the holders of 67% or more of the shares of the
Fund present (in person or by proxy) and entitled to vote at such meeting, if
the holders of more than 50% of the outstanding shares of the Fund entitled to
vote at such meeting are present in person or by proxy, or (b) of the holders of
more than 50% of the outstanding shares of the Fund entitled to vote at such
meeting, whichever is less.
For the purposes of this Contract, the terms "affiliated person",
"control", "interested person" and "assignment" shall have their respective
meanings defined in the Investment Company Act of 1940 and the Rules and
Regulations thereunder, subject, however, to such exemptions as may be granted
by the Securities and Exchange Commission under said Act; the term "specifically
approve at least annually" shall be construed in a manner consistent with the
Investment Company Act of 1940 and the Rules and Regulations thereunder; and the
term "brokerage and research services" shall have the meaning given in the
Securities Exchange Act of 1934 and the Rules and Regulations thereunder.
7. NONLIABILITY OF MANAGER.
In the absence of willful misfeasance, bad faith or gross negligence on
the part of the Manager, or reckless disregard of its obligations and duties
hereunder, the Manager shall not be subject to any liability to the Trust, or to
any shareholder of the Trust, for any act or omission in the course of, or
connected with, rendering services hereunder.
8. LIMITATION OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS.
A copy of the Amended and Restated Agreement and Declaration of Trust
of the Trust is on file with the Secretary of The Commonwealth of Massachusetts,
and notice is hereby given that this instrument is executed on behalf of the
Trustees of the Trust as Trustees and not individually and that the obligations
of this instrument are not binding upon any of the Trustees or shareholders
individually but are binding only upon the assets and property of the Fund.
9. THE WORDS "CCI," "PACIFIC INVESTMENT MANAGEMENT COMPANY," "PFAMCO,"
"PIMCO" OR "THOMSON".
The Manager owns the words "CCI," "Pacific Investment Management
Company," "PFAMCo," "PIMCO" and "Thomson" which may be used by the Trust only
with the consent of the Manager. The Manager consents to the use of the Trust of
the words "CCI," "Pacific Investment Management Company," "PFAMCo," "PIMCO" and
"Thomson," in such forms as the Manager shall in writing approve, but only on
condition and so long as (i) this Contract shall remain in full force and (ii)
the Trust shall fully perform, fulfill and comply with all provisions of this
Contract expressed herein to be performed, fulfilled or complied with by it. No
such name shall be used by the Trust at any time or in any place or for any
purposes or under any conditions except as in this section provided. The
foregoing authorization by the Manager to the Trust to use said name as part of
a business or name is not exclusive of the right of the Manager itself to use,
or to authorize others to use, the same; the Trust acknowledges and agrees that
as between the Manager and the Trust, the Manager has the exclusive right to so
authorize others to use the same; the Trust acknowledges and agrees that as
between the Manager and the Trust, the Manager has the exclusive right to so
use, or authorize others to use, said words and the Trust agrees to take such
action as may reasonably be requested by the Manager to give full effect to the
provisions of this section (including, without limitation, consenting to such
use of said words). Without limiting the generality of the foregoing, the Trust
agrees that, upon any termination of this Contract by either party or upon the
violation of any of its provisions by the Trust, the Trust will, at the request
of the Manager made within six months after the Manager has knowledge of such
termination or violation, use its best efforts to change the name of the Trust
so as to eliminate all reference, if any, to the words "CCI," "Pacific
Investment Management Company, " "PFAMCo," "PIMCO" and "Thomson" and will not
thereafter transact any business in a name containing the words "CCI," "Pacific
Investment Management Company," "PFAMCo," "PIMCO" or "Thomson" in any form or
combination whatsoever, or designate itself as the same entity as or successor
to an entity of such name, or otherwise use the words "CCI," "Pacific Investment
Management Company," "PFAMCo," "PIMCO" or "Thomson" or any other reference to
the Manager. Such covenants on the part of the Trust shall be binding upon it,
its trustees, officers, stockholders, creditors and all other persons claiming
under or through it.
<PAGE>
IN WITNESS WHEREOF, PIMCO Advisors Funds and PIMCO ADVISORS L.P. have
each caused this instrument to be signed in duplicate in its behalf by its duly
authorized representative, all as of the day and year first above written.
PIMCO ADVISORS FUNDS
By: Robert A. Prindiville
PIMCO ADVISORS L.P.
By: PIMCO Partners, G.P., a California
general partnership, General Partner
By: PIMCO Partners, LLC, a California
limited liability company, General Partner
By: William S. Thompson
<PAGE>
3007665.02
MANAGEMENT CONTRACT
[Tax Exempt Fund]
Management Contract executed as of November 16, 1994 between THOMSON
FUND GROUP, a Massachusetts business trust (the "Trust") on behalf of its
Thomson Tax Exempt Fund (the "Fund"), and PIMCO ADVISORS L.P., a Delaware
limited partnership (the "Manager").
WITNESSETH:
That in consideration of the mutual covenants herein contained, it is
agreed as follows:
1. SERVICES TO BE RENDERED BY MANAGER TO FUND.
(a) Subject always to the control of the Trustees of the Trust and to
such policies as the Trustees may determine, the Manager will, at its expense,
(i) furnish continuously an investment program for the Fund and will make
investment decisions on behalf of the Fund and place all orders for the purchase
and sale of portfolio securities and (ii) furnish office space and equipment,
provide bookkeeping and clerical services (excluding determination of net asset
value and shareholder accounting services) and pay all salaries, fees and
expenses of officers and Trustees of the Trust who are affiliated with the
Manager. In the performance of its duties, the Manager will comply with the
provisions of the Amended and Restated Agreement and Declaration of Trust and
By-laws of the Trust and its stated investment objectives, policies and
restrictions.
<PAGE>
3007665.02
-7-
(b) In the selection of brokers or dealers and the placing of orders
for the purchase and sale of portfolio investments for the Fund, the Manager
shall seek to obtain for the Fund the most favorable price and execution
available, except to the extent it may be permitted to pay higher brokerage
commissions for brokerage and research services as described below. In using its
best efforts to obtain for the Fund the most favorable price and execution
available, the Manager, bearing in mind the Fund's best interests at all times,
shall consider all factors it deems relevant, including by way of illustration,
price, the size of the transaction, the nature of the market for the security,
the amount of the commission, the timing of the transaction taking into account
market prices and trends, the reputation, experience and financial stability of
the broker or dealer involved and the quality of service rendered by the broker
or dealer in other transactions. Subject to such policies as the Trustees may
determine, the Manager shall not be deemed to have acted unlawfully or to have
breached any duty created by this Contract or otherwise solely by reason of its
having caused the Fund to pay a broker or dealer that provides brokerage and
research services to the Manager an amount of commission for effecting a
portfolio investment transaction in excess of the amount of commission another
broker or dealer would have charged for effecting that transaction, if the
Manager determines in good faith that such amount of commission was reasonable
in relation to the value of the brokerage and research services provided by such
broker or dealer, viewed in terms of either that particular transaction or the
Manager's overall responsibilities with respect to the Trust and to other
clients of the Manager as to which the Manager exercises investment discretion.
The Trust hereby agrees with the Manager and with any Sub-Adviser selected by
the Manager as provided in Section 1(c) hereof that any entity or person
associated with the Manager which is a member of a national securities exchange
is authorized to effect any transaction on such exchange for the account of the
Trust and the Fund which is permitted by Section 11(a) of the Securities
Exchange Act of 1934 and Rule 11a2-2(T) thereunder, and the Trust hereby
consents to the retention of compensation for such transactions in accordance
with Rule 11a2-2(T)(2)(iv).
(c) Subject to the provisions of the Agreement and Declaration of Trust
of the Trust and the Investment Company Act of 1940 (the "1940 Act"), the
Manager, at its expense, may select and contract with investment advisers (the
"Sub-Advisers") for the Fund. So long as Columbus Circle Investors serves as
Sub-Adviser to the Fund pursuant to a Sub-Adviser Agreement in substantially the
form attached hereto as Exhibit A (the "Sub-Adviser Agreement"), the obligation
of the Manager under this Contract with respect to the Fund shall be subject in
any event to the control of the Trustees of the Trust, to determine and review
with Columbus Circle Investors investment policies of the Fund and Columbus
Circle Investors shall have the obligation of furnishing continuously an
investment program and making investment decisions for the Fund, adhering to
applicable investment objectives, policies and restrictions and placing all
orders for the purchase and sale of portfolio securities for the Fund. The
Manager will compensate any Sub-Adviser of the Fund for its services to the
Fund. The Manager may terminate the services of the Sub-Adviser at any time in
its sole discretion, and shall at such time assume the responsibilities of such
Sub-Adviser unless and until a successor Sub-Adviser is selected.
(d) The Manager shall not be obligated to pay any expenses of or for
the Trust not expressly assumed by the Manager pursuant to this Section 1 other
than as provided in Section 3.
2. OTHER AGREEMENTS, ETC.
It is understood that any of the shareholders, Trustees, officers and
employees of the Trust may be a shareholder, director, officer or employee of,
or be otherwise interested in, the Manager, and in any person controlled by or
under common control with the Manager, and that the Manager and any person
controlled by or under common control with the Manager may have an interest in
the Trust. It is also understood that the Manager and persons controlled by or
under common control with the Manager have and may have advisory, management
service, distribution or other contracts with other organizations and persons,
and may have other interests and businesses.
3. COMPENSATION TO BE PAID BY THE TRUST TO THE MANAGER.
The Trust will pay to the Manager as compensation for the Manager's
services rendered, for the facilities furnished and for the expenses borne by
the Manager pursuant to Section 1, a fee, computed and paid monthly at the
annual rate of 0.60% of the average daily net asset value of the Fund. The
average daily net asset value of the Fund shall be determined by taking an
average of all of the determinations of such net asset value during such month
at the close of business on each business day during such month while this
Contract is in effect. Such fee shall be payable for each month within five (5)
business days after the end of such month.
In the event that expenses of the Fund for any fiscal year should
exceed the expense limitation on investment company expenses imposed by any
statute or regulatory authority of any jurisdiction in which shares of the Trust
are qualified for offer and sale, the compensation due the Manager for such
fiscal year shall be reduced by the amount of such excess by a reduction or
refund thereof. In the event that the expenses with respect to the Fund could
exceed any expense limitation which the Manager may, by written notice to the
Trust, voluntarily declare to be effective subject to such terms and conditions
as the Manager may prescribe in such notice, the compensation due the Manager
shall be reduced, and, if necessary, the Manager shall bear expenses with
respect to the Fund, to the extent required by such expense limitation.
If the Manager shall serve for less than the whole of a month, the
foregoing compensation shall be prorated.
4. ASSIGNMENT TERMINATES THIS CONTRACT; AMENDMENTS OF THIS CONTRACT.
This Contract shall automatically terminate, without the payment of any
penalty, in the event of its assignment; and this Contract shall not be amended
as to the Fund unless such amendment is approved at a meeting by the affirmative
vote of a majority of the outstanding shares of the Fund, and by the vote, cast
in person at a meeting called for the purpose of voting on such approval, of a
majority of the Trustees of the Trust who are not interested persons of the
Trust or of the Manager or of any Sub-Adviser of the Fund.
5. EFFECTIVE PERIOD AND TERMINATION OF THIS CONTRACT.
This Contract shall become effective upon its execution, and shall
remain in full force and effect as to each Fund continuously thereafter (unless
terminated automatically as set forth in Section 4) until terminated as follows:
(a) Either party hereto may at any time terminate this
Contract by not more than sixty days' written notice delivered or
mailed by registered mail, postage prepaid, to the other party, or
(b) If (i) the Trustees of the Trust or the shareholders by
the affirmative vote of a majority of the outstanding shares of the
Fund, and (ii) a majority of the Trustees of the Trust who are not
interested persons of the Trust or of the Manager, by vote cast in
person at a meeting called for the purpose of voting on such approval,
do not specifically approve at least annually the continuance of this
Contract, then this Contract shall automatically terminate at the close
of business on the second anniversary of its execution, or upon the
expiration of one year from the effective date of the last such
continuance, whichever is later; provided, however, that if the
continuance of this Contract is submitted to the shareholders of the
Fund for their approval and such shareholders fail to approve such
continuance of this Contract as provided herein, the Manager may
continue to serve hereunder in a manner consistent with the Investment
Company Act of 1940 and the Rules and Regulations thereunder.
Action by the Trust under (a) above may be taken either (i) by vote of
a majority of its Trustees, or (ii) by the affirmative vote of a majority of the
outstanding shares of the Fund.
Termination of this Contract pursuant to this Section 5 shall be
without the payment of any penalty.
6. CERTAIN DEFINITIONS.
For the purposes of this Contract, the "affirmative vote of a majority
of the outstanding shares" means the affirmative vote, at a duly called and held
meeting of shareholders, (a) of the holders of 67% or more of the shares of the
Fund present (in person or by proxy) and entitled to vote at such meeting, if
the holders of more than 50% of the outstanding shares of the Fund entitled to
vote at such meeting are present in person or by proxy, or (b) of the holders of
more than 50% of the outstanding shares of the Fund entitled to vote at such
meeting, whichever is less.
For the purposes of this Contract, the terms "affiliated person",
"control", "interested person" and "assignment" shall have their respective
meanings defined in the Investment Company Act of 1940 and the Rules and
Regulations thereunder, subject, however, to such exemptions as may be granted
by the Securities and Exchange Commission under said Act; the term "specifically
approve at least annually" shall be construed in a manner consistent with the
Investment Company Act of 1940 and the Rules and Regulations thereunder; and the
term "brokerage and research services" shall have the meaning given in the
Securities Exchange Act of 1934 and the Rules and Regulations thereunder.
7. NONLIABILITY OF MANAGER.
In the absence of willful misfeasance, bad faith or gross negligence on
the part of the Manager, or reckless disregard of its obligations and duties
hereunder, the Manager shall not be subject to any liability to the Trust, or to
any shareholder of the Trust, for any act or omission in the course of, or
connected with, rendering services hereunder.
8. LIMITATION OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS.
A copy of the Amended and Restated Agreement and Declaration of Trust
of the Trust is on file with the Secretary of The Commonwealth of Massachusetts,
and notice is hereby given that this instrument is executed on behalf of the
Trustees of the Trust as Trustees and not individually and that the obligations
of this instrument are not binding upon any of the Trustees or shareholders
individually but are binding only upon the assets and property of the Fund.
9. THE WORDS "CCI," "PACIFIC INVESTMENT MANAGEMENT COMPANY," "PFAMCO,"
"PIMCO" OR "THOMSON".
The Manager owns the words "CCI," "Pacific Investment Management
Company," "PFAMCo," "PIMCO" and "Thomson" which may be used by the Trust only
with the consent of the Manager. The Manager consents to the use of the Trust of
the words "CCI," "Pacific Investment Management Company," "PFAMCo," "PIMCO" and
"Thomson," in such forms as the Manager shall in writing approve, but only on
condition and so long as (i) this Contract shall remain in full force and (ii)
the Trust shall fully perform, fulfill and comply with all provisions of this
Contract expressed herein to be performed, fulfilled or complied with by it. No
such name shall be used by the Trust at any time or in any place or for any
purposes or under any conditions except as in this section provided. The
foregoing authorization by the Manager to the Trust to use said name as part of
a business or name is not exclusive of the right of the Manager itself to use,
or to authorize others to use, the same; the Trust acknowledges and agrees that
as between the Manager and the Trust, the Manager has the exclusive right to so
authorize others to use the same; the Trust acknowledges and agrees that as
between the Manager and the Trust, the Manager has the exclusive right to so
use, or authorize others to use, said words and the Trust agrees to take such
action as may reasonably be requested by the Manager to give full effect to the
provisions of this section (including, without limitation, consenting to such
use of said words). Without limiting the generality of the foregoing, the Trust
agrees that, upon any termination of this Contract by either party or upon the
violation of any of its provisions by the Trust, the Trust will, at the request
of the Manager made within six months after the Manager has knowledge of such
termination or violation, use its best efforts to change the name of the Trust
so as to eliminate all reference, if any, to the words "CCI," "Pacific
Investment Management Company, " "PFAMCo," "PIMCO" and "Thomson" and will not
thereafter transact any business in a name containing the words "CCI," "Pacific
Investment Management Company," "PFAMCo," "PIMCO" or "Thomson" in any form or
combination whatsoever, or designate itself as the same entity as or successor
to an entity of such name, or otherwise use the words "CCI," "Pacific Investment
Management Company," "PFAMCo," "PIMCO" or "Thomson" or any other reference to
the Manager. Such covenants on the part of the Trust shall be binding upon it,
its trustees, officers, stockholders, creditors and all other persons claiming
under or through it.
IN WITNESS WHEREOF, THOMSON FUND GROUP and PIMCO ADVISORS L.P. have
each caused this instrument to be signed in duplicate in its behalf by its duly
authorized representative, all as of the day and year first above written.
THOMSON FUND GROUP
By: Robert A. Prindiville
PIMCO ADVISORS L.P.
By: PIMCO Partners, G.P., a California
general partnership, General Partner
By: PIMCO Partners, LLC, a California
limited liability company, General Partner
By: William S. Thompson
<PAGE>
3007626.02
MANAGEMENT CONTRACT
[U.S. Government Fund]
Management Contract executed as of November 16, 1994 between THOMSON
FUND GROUP, a Massachusetts business trust (the "Trust") on behalf of its
Thomson U.S. Government Fund (the "Fund"), and PIMCO ADVISORS L.P., a Delaware
limited partnership (the "Manager").
WITNESSETH:
That in consideration of the mutual covenants herein contained, it is
agreed as follows:
1. SERVICES TO BE RENDERED BY MANAGER TO FUND.
(a) Subject always to the control of the Trustees of the Trust and to
such policies as the Trustees may determine, the Manager will, at its expense,
(i) furnish continuously an investment program for the Fund and will make
investment decisions on behalf of the Fund and place all orders for the purchase
and sale of portfolio securities and (ii) furnish office space and equipment,
provide bookkeeping and clerical services (excluding determination of net asset
value and shareholder accounting services) and pay all salaries, fees and
expenses of officers and Trustees of the Trust who are affiliated with the
Manager. In the performance of its duties, the Manager will comply with the
provisions of the Amended and Restated Agreement and Declaration of Trust and
By-laws of the Trust and its stated investment objectives, policies and
restrictions.
<PAGE>
3007626.02
-7-
(b) In the selection of brokers or dealers and the placing of orders
for the purchase and sale of portfolio investments for the Fund, the Manager
shall seek to obtain for the Fund the most favorable price and execution
available, except to the extent it may be permitted to pay higher brokerage
commissions for brokerage and research services as described below. In using its
best efforts to obtain for the Fund the most favorable price and execution
available, the Manager, bearing in mind the Fund's best interests at all times,
shall consider all factors it deems relevant, including by way of illustration,
price, the size of the transaction, the nature of the market for the security,
the amount of the commission, the timing of the transaction taking into account
market prices and trends, the reputation, experience and financial stability of
the broker or dealer involved and the quality of service rendered by the broker
or dealer in other transactions. Subject to such policies as the Trustees may
determine, the Manager shall not be deemed to have acted unlawfully or to have
breached any duty created by this Contract or otherwise solely by reason of its
having caused the Fund to pay a broker or dealer that provides brokerage and
research services to the Manager an amount of commission for effecting a
portfolio investment transaction in excess of the amount of commission another
broker or dealer would have charged for effecting that transaction, if the
Manager determines in good faith that such amount of commission was reasonable
in relation to the value of the brokerage and research services provided by such
broker or dealer, viewed in terms of either that particular transaction or the
Manager's overall responsibilities with respect to the Trust and to other
clients of the Manager as to which the Manager exercises investment discretion.
The Trust hereby agrees with the Manager and with any Sub-Adviser selected by
the Manager as provided in Section 1(c) hereof that any entity or person
associated with the Manager which is a member of a national securities exchange
is authorized to effect any transaction on such exchange for the account of the
Trust and the Fund which is permitted by Section 11(a) of the Securities
Exchange Act of 1934 and Rule 11a2-2(T) thereunder, and the Trust hereby
consents to the retention of compensation for such transactions in accordance
with Rule 11a2-2(T)(2)(iv).
(c) Subject to the provisions of the Agreement and Declaration of Trust
of the Trust and the Investment Company Act of 1940 (the "1940 Act"), the
Manager, at its expense, may select and contract with investment advisers (the
"Sub-Advisers") for the Fund. So long as Pacific Investment Management Company
serves as Sub-Adviser to the Fund pursuant to a Sub-Adviser Agreement in
substantially the form attached hereto as Exhibit A (the "Sub-Adviser
Agreement"), the obligation of the Manager under this Contract with respect to
the Fund shall be subject in any event to the control of the Trustees of the
Trust, to determine and review with Pacific Investment Management Company
investment policies of the Fund and Pacific Investment Management Company shall
have the obligation of furnishing continuously an investment program and making
investment decisions for the Fund, adhering to applicable investment objectives,
policies and restrictions and placing all orders for the purchase and sale of
portfolio securities for the Fund. The Manager will compensate any Sub-Adviser
of the Fund for its services to the Fund. The Manager may terminate the services
of the Sub-Adviser at any time in its sole discretion, and shall at such time
assume the responsibilities of such Sub-Adviser unless and until a successor
Sub-Adviser is selected.
(d) The Manager shall not be obligated to pay any expenses of or for
the Trust not expressly assumed by the Manager pursuant to this Section 1 other
than as provided in Section 3.
2. OTHER AGREEMENTS, ETC.
It is understood that any of the shareholders, Trustees, officers and
employees of the Trust may be a shareholder, director, officer or employee of,
or be otherwise interested in, the Manager, and in any person controlled by or
under common control with the Manager, and that the Manager and any person
controlled by or under common control with the Manager may have an interest in
the Trust. It is also understood that the Manager and persons controlled by or
under common control with the Manager have and may have advisory, management
service, distribution or other contracts with other organizations and persons,
and may have other interests and businesses.
3. COMPENSATION TO BE PAID BY THE TRUST TO THE MANAGER.
The Trust will pay to the Manager as compensation for the Manager's
services rendered, for the facilities furnished and for the expenses borne by
the Manager pursuant to Section 1, a fee, computed and paid monthly at the
annual rate of 0.60% of the average daily net asset value of the Fund up to $250
million and 0.50% of such net asset value in excess of $250 million. The average
daily net asset value of the Fund shall be determined by taking an average of
all of the determinations of such net asset value during such month at the close
of business on each business day during such month while this Contract is in
effect. Such fee shall be payable for each month within five (5) business days
after the end of such month.
In the event that expenses of the Fund for any fiscal year should
exceed the expense limitation on investment company expenses imposed by any
statute or regulatory authority of any jurisdiction in which shares of the Trust
are qualified for offer and sale, the compensation due the Manager for such
fiscal year shall be reduced by the amount of such excess by a reduction or
refund thereof. In the event that the expenses with respect to the Fund could
exceed any expense limitation which the Manager may, by written notice to the
Trust, voluntarily declare to be effective subject to such terms and conditions
as the Manager may prescribe in such notice, the compensation due the Manager
shall be reduced, and, if necessary, the Manager shall bear expenses with
respect to the Fund, to the extent required by such expense limitation.
If the Manager shall serve for less than the whole of a month, the
foregoing compensation shall be prorated.
4. ASSIGNMENT TERMINATES THIS CONTRACT; AMENDMENTS OF THIS CONTRACT.
This Contract shall automatically terminate, without the payment of any
penalty, in the event of its assignment; and this Contract shall not be amended
as to the Fund unless such amendment is approved at a meeting by the affirmative
vote of a majority of the outstanding shares of the Fund, and by the vote, cast
in person at a meeting called for the purpose of voting on such approval, of a
majority of the Trustees of the Trust who are not interested persons of the
Trust or of the Manager or of any Sub-Adviser of the Fund.
5. EFFECTIVE PERIOD AND TERMINATION OF THIS CONTRACT.
This Contract shall become effective upon its execution, and shall
remain in full force and effect as to each Fund continuously thereafter (unless
terminated automatically as set forth in Section 4) until terminated as follows:
(a) Either party hereto may at any time terminate this
Contract by not more than sixty days' written notice delivered or
mailed by registered mail, postage prepaid, to the other party, or
(b) If (i) the Trustees of the Trust or the shareholders by
the affirmative vote of a majority of the outstanding shares of the
Fund, and (ii) a majority of the Trustees of the Trust who are not
interested persons of the Trust or of the Manager, by vote cast in
person at a meeting called for the purpose of voting on such approval,
do not specifically approve at least annually the continuance of this
Contract, then this Contract shall automatically terminate at the close
of business on the second anniversary of its execution, or upon the
expiration of one year from the effective date of the last such
continuance, whichever is later; provided, however, that if the
continuance of this Contract is submitted to the shareholders of the
Fund for their approval and such shareholders fail to approve such
continuance of this Contract as provided herein, the Manager may
continue to serve hereunder in a manner consistent with the Investment
Company Act of 1940 and the Rules and Regulations thereunder.
Action by the Trust under (a) above may be taken either (i) by vote of
a majority of its Trustees, or (ii) by the affirmative vote of a majority of the
outstanding shares of the Fund.
Termination of this Contract pursuant to this Section 5 shall be
without the payment of any penalty.
6. CERTAIN DEFINITIONS.
For the purposes of this Contract, the "affirmative vote of a majority
of the outstanding shares" means the affirmative vote, at a duly called and held
meeting of shareholders, (a) of the holders of 67% or more of the shares of the
Fund present (in person or by proxy) and entitled to vote at such meeting, if
the holders of more than 50% of the outstanding shares of the Fund entitled to
vote at such meeting are present in person or by proxy, or (b) of the holders of
more than 50% of the outstanding shares of the Fund entitled to vote at such
meeting, whichever is less.
For the purposes of this Contract, the terms "affiliated person",
"control", "interested person" and "assignment" shall have their respective
meanings defined in the Investment Company Act of 1940 and the Rules and
Regulations thereunder, subject, however, to such exemptions as may be granted
by the Securities and Exchange Commission under said Act; the term "specifically
approve at least annually" shall be construed in a manner consistent with the
Investment Company Act of 1940 and the Rules and Regulations thereunder; and the
term "brokerage and research services" shall have the meaning given in the
Securities Exchange Act of 1934 and the Rules and Regulations thereunder.
7. NONLIABILITY OF MANAGER.
In the absence of willful misfeasance, bad faith or gross negligence on
the part of the Manager, or reckless disregard of its obligations and duties
hereunder, the Manager shall not be subject to any liability to the Trust, or to
any shareholder of the Trust, for any act or omission in the course of, or
connected with, rendering services hereunder.
8. LIMITATION OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS.
A copy of the Amended and Restated Agreement and Declaration of Trust
of the Trust is on file with the Secretary of The Commonwealth of Massachusetts,
and notice is hereby given that this instrument is executed on behalf of the
Trustees of the Trust as Trustees and not individually and that the obligations
of this instrument are not binding upon any of the Trustees or shareholders
individually but are binding only upon the assets and property of the Fund.
9. THE WORDS "CCI," "PACIFIC INVESTMENT MANAGEMENT COMPANY," "PFAMCO,"
"PIMCO" OR "THOMSON".
The Manager owns the words "CCI," "Pacific Investment Management
Company," "PFAMCo," "PIMCO" and "Thomson" which may be used by the Trust only
with the consent of the Manager. The Manager consents to the use of the Trust of
the words "CCI," "Pacific Investment Management Company," "PFAMCo," "PIMCO" and
"Thomson," in such forms as the Manager shall in writing approve, but only on
condition and so long as (i) this Contract shall remain in full force and (ii)
the Trust shall fully perform, fulfill and comply with all provisions of this
Contract expressed herein to be performed, fulfilled or complied with by it. No
such name shall be used by the Trust at any time or in any place or for any
purposes or under any conditions except as in this section provided. The
foregoing authorization by the Manager to the Trust to use said name as part of
a business or name is not exclusive of the right of the Manager itself to use,
or to authorize others to use, the same; the Trust acknowledges and agrees that
as between the Manager and the Trust, the Manager has the exclusive right to so
authorize others to use the same; the Trust acknowledges and agrees that as
between the Manager and the Trust, the Manager has the exclusive right to so
use, or authorize others to use, said words and the Trust agrees to take such
action as may reasonably be requested by the Manager to give full effect to the
provisions of this section (including, without limitation, consenting to such
use of said words). Without limiting the generality of the foregoing, the Trust
agrees that, upon any termination of this Contract by either party or upon the
violation of any of its provisions by the Trust, the Trust will, at the request
of the Manager made within six months after the Manager has knowledge of such
termination or violation, use its best efforts to change the name of the Trust
so as to eliminate all reference, if any, to the words "CCI," "Pacific
Investment Management Company, " "PFAMCo," "PIMCO" and "Thomson" and will not
thereafter transact any business in a name containing the words "CCI," "Pacific
Investment Management Company," "PFAMCo," "PIMCO" or "Thomson" in any form or
combination whatsoever, or designate itself as the same entity as or successor
to an entity of such name, or otherwise use the words "CCI," "Pacific Investment
Management Company," "PFAMCo," "PIMCO" or "Thomson" or any other reference to
the Manager. Such covenants on the part of the Trust shall be binding upon it,
its trustees, officers, stockholders, creditors and all other persons claiming
under or through it.
<PAGE>
IN WITNESS WHEREOF, THOMSON FUND GROUP and PIMCO ADVISORS L.P. have
each caused this instrument to be signed in duplicate in its behalf by its duly
authorized representative, all as of the day and year first above written.
THOMSON FUND GROUP
By: Robert A. Prindiville
PIMCO ADVISORS L.P.
By: PIMCO Partners, G.P., a California
general partnership, General Partner
By: PIMCO Partners, LLC, a California
limited liability company, General Partner
By: William S. Thompson
<PAGE>
3007641.02
MANAGEMENT CONTRACT
[Short-Intermediate Government Fund]
Management Contract executed as of November 16, 1994 between THOMSON
FUND GROUP, a Massachusetts business trust (the "Trust"), on behalf of its
THOMSON SHORT-INTERMEDIATE GOVERNMENT FUND (the "Fund"), and PIMCO ADVISORS
L.P., a Delaware limited partnership (the "Manager").
WITNESSETH:
That in consideration of the mutual covenants herein contained, it is
agreed as follows:
1. SERVICES TO BE RENDERED BY MANAGER TO FUND.
(a) Subject always to the control of the Trustees of the Trust and to
such policies as the Trustees may determine, the Manager will, at its expense,
(i) furnish continuously an investment program for the Fund and will make
investment decisions on behalf of the Fund and place all orders for the purchase
and sale of portfolio securities and (ii) furnish office space and equipment,
provide bookkeeping and clerical services (excluding determination of net asset
value and shareholder accounting services) and pay all salaries, fees and
expenses of officers and Trustees of the Trust who are affiliated with the
Manager. In the performance of its duties, the Manager will comply with the
provisions of the Amended and Restated Agreement and Declaration of Trust and
By-laws of the Trust and its stated investment objectives, policies and
restrictions.
<PAGE>
3007641.02
-7-
(b) In the selection of brokers or dealers and the placing of orders
for the purchase and sale of portfolio investments for the Fund, the Manager
shall seek to obtain for the Fund the most favorable price and execution
available, except to the extent it may be permitted to pay higher brokerage
commissions for brokerage and research services as described below. In using its
best efforts to obtain for the Fund the most favorable price and execution
available, the Manager, bearing in mind the Fund's best interests at all times,
shall consider all factors it deems relevant, including by way of illustration,
price, the size of the transaction, the nature of the market for the security,
the amount of the commission, the timing of the transaction taking into account
market prices and trends, the reputation, experience and financial stability of
the broker or dealer involved and the quality of service rendered by the broker
or dealer in other transactions. Subject to such policies as the Trustees may
determine, the Manager shall not be deemed to have acted unlawfully or to have
breached any duty created by this Contract or otherwise solely by reason of its
having caused the Fund to pay a broker or dealer that provides brokerage and
research services to the Manager an amount of commission for effecting a
portfolio investment transaction in excess of the amount of commission another
broker or dealer would have charged for effecting that transaction, if the
Manager determines in good faith that such amount of commission was reasonable
in relation to the value of the brokerage and research services provided by such
broker or dealer, viewed in terms of either that particular transaction or the
Manager's overall responsibilities with respect to the Trust and to other
clients of the Manager as to which the Manager exercises investment discretion.
The Trust hereby agrees with the Manager and with any Sub-Adviser selected by
the Manager as provided in Section 1(c) hereof that any entity or person
associated with the Manager which is a member of a national securities exchange
is authorized to effect any transaction on such exchange for the account of the
Trust and the Fund which is permitted by Section 11(a) of the Securities
Exchange Act of 1934 and Rule 11a2-2(T) thereunder, and the Trust hereby
consents to the retention of compensation for such transactions in accordance
with Rule 11a2-2(T)(2)(iv).
(c) Subject to the provisions of the Agreement and Declaration of Trust
of the Trust and the Investment Company Act of 1940 (the "1940 Act"), the
Manager, at its expense, may select and contract with investment advisers (the
"Sub-Advisers") for the Fund. So long as Pacific Investment Management Company
serves as Sub-Adviser to the Fund pursuant to a Sub-Adviser Agreement in
substantially the form attached hereto as Exhibit A (the "Sub-Adviser
Agreement"), the obligation of the Manager under this Contract with respect to
the Fund shall be subject in any event to the control of the Trustees of the
Trust, to determine and review with Pacific Investment Management Company
investment policies of the Fund and Pacific Investment Management Company shall
have the obligation of furnishing continuously an investment program and making
investment decisions for the Fund, adhering to applicable investment objectives,
policies and restrictions and placing all orders for the purchase and sale of
portfolio securities for the Fund. The Manager will compensate any Sub-Adviser
of the Fund for its services to the Fund. The Manager may terminate the services
of the Sub-Adviser at any time in its sole discretion, and shall at such time
assume the responsibilities of such Sub-Adviser unless and until a successor
Sub-Adviser is selected.
(d) The Manager shall not be obligated to pay any expenses of or for
the Trust not expressly assumed by the Manager pursuant to this Section 1 other
than as provided in Section 3.
2. OTHER AGREEMENTS, ETC.
It is understood that any of the shareholders, Trustees, officers and
employees of the Trust may be a shareholder, director, officer or employee of,
or be otherwise interested in, the Manager, and in any person controlled by or
under common control with the Manager, and that the Manager and any person
controlled by or under common control with the Manager may have an interest in
the Trust. It is also understood that the Manager and persons controlled by or
under common control with the Manager have and may have advisory, management
service, distribution or other contracts with other organizations and persons,
and may have other interests and businesses.
3. COMPENSATION TO BE PAID BY THE TRUST TO THE MANAGER.
The Trust will pay to the Manager as compensation for the Manager's
services rendered, for the facilities furnished and for the expenses borne by
the Manager pursuant to Section 1, a fee, computed and paid monthly at the
annual rate of 0.50% of the average daily net asset value of the Fund up to $250
million, 0.45% of the next $250 million of such net asset value and 0.40% of
such net asset value in excess of $500 million. The average daily net asset
value of the Fund shall be determined by taking an average of all of the
determinations of such net asset value during such month at the close of
business on each business day during such month while this Contract is in
effect. Such fee shall be payable for each month within five (5) business days
after the end of such month.
In the event that expenses of the Fund for any fiscal year should
exceed the expense limitation on investment company expenses imposed by any
statute or regulatory authority of any jurisdiction in which shares of the Trust
are qualified for offer and sale, the compensation due the Manager for such
fiscal year shall be reduced by the amount of such excess by a reduction or
refund thereof. In the event that the expenses with respect to the Fund could
exceed any expense limitation which the Manager may, by written notice to the
Trust, voluntarily declare to be effective subject to such terms and conditions
as the Manager may prescribe in such notice, the compensation due the Manager
shall be reduced, and, if necessary, the Manager shall bear expenses with
respect to the Fund, to the extent required by such expense limitation.
If the Manager shall serve for less than the whole of a month, the
foregoing compensation shall be prorated.
4. ASSIGNMENT TERMINATES THIS CONTRACT; AMENDMENTS OF THIS CONTRACT.
This Contract shall automatically terminate, without the payment of any
penalty, in the event of its assignment; and this Contract shall not be amended
as to the Fund unless such amendment is approved at a meeting by the affirmative
vote of a majority of the outstanding shares of the Fund, and by the vote, cast
in person at a meeting called for the purpose of voting on such approval, of a
majority of the Trustees of the Trust who are not interested persons of the
Trust or of the Manager or of any Sub-Adviser of the Fund.
5. EFFECTIVE PERIOD AND TERMINATION OF THIS CONTRACT.
This Contract shall become effective upon its execution, and shall
remain in full force and effect as to each Fund continuously thereafter (unless
terminated automatically as set forth in Section 4) until terminated as follows:
(a) Either party hereto may at any time terminate this
Contract by not more than sixty days' written notice delivered or
mailed by registered mail, postage prepaid, to the other party, or
(b) If (i) the Trustees of the Trust or the shareholders by
the affirmative vote of a majority of the outstanding shares of the
Fund, and (ii) a majority of the Trustees of the Trust who are not
interested persons of the Trust or of the Manager, by vote cast in
person at a meeting called for the purpose of voting on such approval,
do not specifically approve at least annually the continuance of this
Contract, then this Contract shall automatically terminate at the close
of business on the second anniversary of its execution, or upon the
expiration of one year from the effective date of the last such
continuance, whichever is later; provided, however, that if the
continuance of this Contract is submitted to the shareholders of the
Fund for their approval and such shareholders fail to approve such
continuance of this Contract as provided herein, the Manager may
continue to serve hereunder in a manner consistent with the Investment
Company Act of 1940 and the Rules and Regulations thereunder.
Action by the Trust under (a) above may be taken either (i) by vote of
a majority of its Trustees, or (ii) by the affirmative vote of a majority of the
outstanding shares of the Fund.
Termination of this Contract pursuant to this Section 5 shall be
without the payment of any penalty.
6. CERTAIN DEFINITIONS.
For the purposes of this Contract, the "affirmative vote of a majority
of the outstanding shares" means the affirmative vote, at a duly called and held
meeting of shareholders, (a) of the holders of 67% or more of the shares of the
Fund present (in person or by proxy) and entitled to vote at such meeting, if
the holders of more than 50% of the outstanding shares of the Fund entitled to
vote at such meeting are present in person or by proxy, or (b) of the holders of
more than 50% of the outstanding shares of the Fund entitled to vote at such
meeting, whichever is less.
For the purposes of this Contract, the terms "affiliated person",
"control", "interested person" and "assignment" shall have their respective
meanings defined in the Investment Company Act of 1940 and the Rules and
Regulations thereunder, subject, however, to such exemptions as may be granted
by the Securities and Exchange Commission under said Act; the term "specifically
approve at least annually" shall be construed in a manner consistent with the
Investment Company Act of 1940 and the Rules and Regulations thereunder; and the
term "brokerage and research services" shall have the meaning given in the
Securities Exchange Act of 1934 and the Rules and Regulations thereunder.
7. NONLIABILITY OF MANAGER.
In the absence of willful misfeasance, bad faith or gross negligence on
the part of the Manager, or reckless disregard of its obligations and duties
hereunder, the Manager shall not be subject to any liability to the Trust, or to
any shareholder of the Trust, for any act or omission in the course of, or
connected with, rendering services hereunder.
8. LIMITATION OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS.
A copy of the Amended and Restated Agreement and Declaration of Trust
of the Trust is on file with the Secretary of The Commonwealth of Massachusetts,
and notice is hereby given that this instrument is executed on behalf of the
Trustees of the Trust as Trustees and not individually and that the obligations
of this instrument are not binding upon any of the Trustees or shareholders
individually but are binding only upon the assets and property of the Fund.
9. THE WORDS "CCI," "PACIFIC INVESTMENT MANAGEMENT COMPANY," "PFAMCO,"
"PIMCO" OR "THOMSON".
The Manager owns the words "CCI," "Pacific Investment Management
Company," "PFAMCo," "PIMCO" and "Thomson" which may be used by the Trust only
with the consent of the Manager. The Manager consents to the use of the Trust of
the words "CCI," "Pacific Investment Management Company," "PFAMCo," "PIMCO" and
"Thomson," in such forms as the Manager shall in writing approve, but only on
condition and so long as (i) this Contract shall remain in full force and (ii)
the Trust shall fully perform, fulfill and comply with all provisions of this
Contract expressed herein to be performed, fulfilled or complied with by it. No
such name shall be used by the Trust at any time or in any place or for any
purposes or under any conditions except as in this section provided. The
foregoing authorization by the Manager to the Trust to use said name as part of
a business or name is not exclusive of the right of the Manager itself to use,
or to authorize others to use, the same; the Trust acknowledges and agrees that
as between the Manager and the Trust, the Manager has the exclusive right to so
authorize others to use the same; the Trust acknowledges and agrees that as
between the Manager and the Trust, the Manager has the exclusive right to so
use, or authorize others to use, said words and the Trust agrees to take such
action as may reasonably be requested by the Manager to give full effect to the
provisions of this section (including, without limitation, consenting to such
use of said words). Without limiting the generality of the foregoing, the Trust
agrees that, upon any termination of this Contract by either party or upon the
violation of any of its provisions by the Trust, the Trust will, at the request
of the Manager made within six months after the Manager has knowledge of such
termination or violation, use its best efforts to change the name of the Trust
so as to eliminate all reference, if any, to the words "CCI," "Pacific
Investment Management Company, " "PFAMCo," "PIMCO" and "Thomson" and will not
thereafter transact any business in a name containing the words "CCI," "Pacific
Investment Management Company," "PFAMCo," "PIMCO" or "Thomson" in any form or
combination whatsoever, or designate itself as the same entity as or successor
to an entity of such name, or otherwise use the words "CCI," "Pacific Investment
Management Company," "PFAMCo," "PIMCO" or "Thomson" or any other reference to
the Manager. Such covenants on the part of the Trust shall be binding upon it,
its trustees, officers, stockholders, creditors and all other persons claiming
under or through it.
<PAGE>
IN WITNESS WHEREOF, THOMSON FUND GROUP and PIMCO ADVISORS L.P. have
each caused this instrument to be signed in duplicate in its behalf by its duly
authorized representative, all as of the day and year first above written.
THOMSON FUND GROUP
By: Robert A. Prindiville
PIMCO ADVISORS L.P.
By: PIMCO Partners, G.P., a California
general partnership, General Partner
By: PIMCO Partners, LLC, a California
limited liability company, General Partner
By: William S. Thompson
<PAGE>
3007719.02
MANAGEMENT CONTRACT
[Money Market Fund]
Management Contract executed as of November 16, 1994 between THOMSON
FUND GROUP, a Massachusetts business trust (the "Trust") on behalf of its
Thomson Money Market Fund (the "Fund"), and PIMCO ADVISORS L.P., a Delaware
limited partnership (the "Manager").
Witnesseth:
That in consideration of the mutual covenants herein contained, it is
agreed as follows:
1. SERVICES TO BE RENDERED BY MANAGER TO FUND.
(a) Subject always to the control of the Trustees of the Trust and to
such policies as the Trustees may determine, the Manager will, at its expense,
(i) furnish continuously an investment program for the Fund and will make
investment decisions on behalf of the Fund and place all orders for the purchase
and sale of portfolio securities and (ii) furnish office space and equipment,
provide bookkeeping and clerical services (excluding determination of net asset
value and shareholder accounting services) and pay all salaries, fees and
expenses of officers and Trustees of the Trust who are affiliated with the
Manager. In the performance of its duties, the Manager will comply with the
provisions of the Amended and Restated Agreement and Declaration of Trust and
By-laws of the Trust and its stated investment objectives, policies and
restrictions.
<PAGE>
3007719.02
-7-
(b) In the selection of brokers or dealers and the placing of orders
for the purchase and sale of portfolio investments for the Fund, the Manager
shall seek to obtain for the Fund the most favorable price and execution
available, except to the extent it may be permitted to pay higher brokerage
commissions for brokerage and research services as described below. In using its
best efforts to obtain for the Fund the most favorable price and execution
available, the Manager, bearing in mind the Fund's best interests at all times,
shall consider all factors it deems relevant, including by way of illustration,
price, the size of the transaction, the nature of the market for the security,
the amount of the commission, the timing of the transaction taking into account
market prices and trends, the reputation, experience and financial stability of
the broker or dealer involved and the quality of service rendered by the broker
or dealer in other transactions. Subject to such policies as the Trustees may
determine, the Manager shall not be deemed to have acted unlawfully or to have
breached any duty created by this Contract or otherwise solely by reason of its
having caused the Fund to pay a broker or dealer that provides brokerage and
research services to the Manager an amount of commission for effecting a
portfolio investment transaction in excess of the amount of commission another
broker or dealer would have charged for effecting that transaction, if the
Manager determines in good faith that such amount of commission was reasonable
in relation to the value of the brokerage and research services provided by such
broker or dealer, viewed in terms of either that particular transaction or the
Manager's overall responsibilities with respect to the Trust and to other
clients of the Manager as to which the Manager exercises investment discretion.
The Trust hereby agrees with the Manager and with any Sub-Adviser selected by
the Manager as provided in Section 1(c) hereof that any entity or person
associated with the Manager which is a member of a national securities exchange
is authorized to effect any transaction on such exchange for the account of the
Trust and the Fund which is permitted by Section 11(a) of the Securities
Exchange Act of 1934 and Rule 11a2-2(T) thereunder, and the Trust hereby
consents to the retention of compensation for such transactions in accordance
with Rule 11a2-2(T)(2)(iv).
(c) Subject to the provisions of the Agreement and Declaration of Trust
of the Trust and the Investment Company Act of 1940 (the "1940 Act"), the
Manager, at its expense, may select and contract with investment advisers (the
"Sub-Advisers") for the Fund. So long as Columbus Circle Investors serves as
Sub-Adviser to the Fund pursuant to a Sub-Adviser Agreement in substantially the
form attached hereto as Exhibit A (the "Sub-Adviser Agreement"), the obligation
of the Manager under this Contract with respect to the Fund shall be subject in
any event to the control of the Trustees of the Trust, to determine and review
with Columbus Circle Investors investment policies of the Fund and Columbus
Circle Investors shall have the obligation of furnishing continuously an
investment program and making investment decisions for the Fund, adhering to
applicable investment objectives, policies and restrictions and placing all
orders for the purchase and sale of portfolio securities for the Fund. The
Manager will compensate any Sub-Adviser of the Fund for its services to the
Fund. The Manager may terminate the services of the Sub-Adviser at any time in
its sole discretion, and shall at such time assume the responsibilities of such
Sub-Adviser unless and until a successor Sub-Adviser is selected.
(d) The Manager shall not be obligated to pay any expenses of or for
the Trust not expressly assumed by the Manager pursuant to this Section 1 other
than as provided in Section 3.
2. OTHER AGREEMENTS, ETC.
It is understood that any of the shareholders, Trustees, officers and
employees of the Trust may be a shareholder, director, officer or employee of,
or be otherwise interested in, the Manager, and in any person controlled by or
under common control with the Manager, and that the Manager and any person
controlled by or under common control with the Manager may have an interest in
the Trust. It is also understood that the Manager and persons controlled by or
under common control with the Manager have and may have advisory, management
service, distribution or other contracts with other organizations and persons,
and may have other interests and businesses.
3. COMPENSATION TO BE PAID BY THE TRUST TO THE MANAGER.
The Trust will pay to the Manager as compensation for the Manager's
services rendered, for the facilities furnished and for the expenses borne by
the Manager pursuant to Section 1, a fee, computed and paid monthly at the
annual rate of 0.50% of the average daily net asset value of the Fund up to $250
million and 0.40% of such net asset value in excess of $250 million. The average
daily net asset value of the Fund shall be determined by taking an average of
all of the determinations of such net asset value during such month at the close
of business on each business day during such month while this Contract is in
effect. Such fee shall be payable for each month within five (5) business days
after the end of such month.
In the event that expenses of the Fund for any fiscal year should
exceed the expense limitation on investment company expenses imposed by any
statute or regulatory authority of any jurisdiction in which shares of the Trust
are qualified for offer and sale, the compensation due the Manager for such
fiscal year shall be reduced by the amount of such excess by a reduction or
refund thereof. In the event that the expenses with respect to the Fund could
exceed any expense limitation which the Manager may, by written notice to the
Trust, voluntarily declare to be effective subject to such terms and conditions
as the Manager may prescribe in such notice, the compensation due the Manager
shall be reduced, and, if necessary, the Manager shall bear expenses with
respect to the Fund, to the extent required by such expense limitation.
If the Manager shall serve for less than the whole of a month, the
foregoing compensation shall be prorated.
4. ASSIGNMENT TERMINATES THIS CONTRACT; AMENDMENTS OF THIS CONTRACT.
This Contract shall automatically terminate, without the payment of any
penalty, in the event of its assignment; and this Contract shall not be amended
as to the Fund unless such amendment is approved at a meeting by the affirmative
vote of a majority of the outstanding shares of the Fund, and by the vote, cast
in person at a meeting called for the purpose of voting on such approval, of a
majority of the Trustees of the Trust who are not interested persons of the
Trust or of the Manager or of any Sub-Adviser of the Fund.
5. EFFECTIVE PERIOD AND TERMINATION OF THIS CONTRACT.
This Contract shall become effective upon its execution, and shall
remain in full force and effect as to each Fund continuously thereafter (unless
terminated automatically as set forth in Section 4) until terminated as follows:
(a) Either party hereto may at any time terminate this
Contract by not more than sixty days' written notice delivered or
mailed by registered mail, postage prepaid, to the other party, or
(b) If (i) the Trustees of the Trust or the shareholders by
the affirmative vote of a majority of the outstanding shares of the
Fund, and (ii) a majority of the Trustees of the Trust who are not
interested persons of the Trust or of the Manager, by vote cast in
person at a meeting called for the purpose of voting on such approval,
do not specifically approve at least annually the continuance of this
Contract, then this Contract shall automatically terminate at the close
of business on the second anniversary of its execution, or upon the
expiration of one year from the effective date of the last such
continuance, whichever is later; provided, however, that if the
continuance of this Contract is submitted to the shareholders of the
Fund for their approval and such shareholders fail to approve such
continuance of this Contract as provided herein, the Manager may
continue to serve hereunder in a manner consistent with the Investment
Company Act of 1940 and the Rules and Regulations thereunder.
Action by the Trust under (a) above may be taken either (i) by vote of
a majority of its Trustees, or (ii) by the affirmative vote of a majority of the
outstanding shares of the Fund.
Termination of this Contract pursuant to this Section 5 shall be
without the payment of any penalty.
6. CERTAIN DEFINITIONS.
For the purposes of this Contract, the "affirmative vote of a majority
of the outstanding shares" means the affirmative vote, at a duly called and held
meeting of shareholders, (a) of the holders of 67% or more of the shares of the
Fund present (in person or by proxy) and entitled to vote at such meeting, if
the holders of more than 50% of the outstanding shares of the Fund entitled to
vote at such meeting are present in person or by proxy, or (b) of the holders of
more than 50% of the outstanding shares of the Fund entitled to vote at such
meeting, whichever is less.
For the purposes of this Contract, the terms "affiliated person",
"control", "interested person" and "assignment" shall have their respective
meanings defined in the Investment Company Act of 1940 and the Rules and
Regulations thereunder, subject, however, to such exemptions as may be granted
by the Securities and Exchange Commission under said Act; the term "specifically
approve at least annually" shall be construed in a manner consistent with the
Investment Company Act of 1940 and the Rules and Regulations thereunder; and the
term "brokerage and research services" shall have the meaning given in the
Securities Exchange Act of 1934 and the Rules and Regulations thereunder.
7. NONLIABILITY OF MANAGER.
In the absence of willful misfeasance, bad faith or gross negligence on
the part of the Manager, or reckless disregard of its obligations and duties
hereunder, the Manager shall not be subject to any liability to the Trust, or to
any shareholder of the Trust, for any act or omission in the course of, or
connected with, rendering services hereunder.
8. LIMITATION OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS.
A copy of the Amended and Restated Agreement and Declaration of Trust
of the Trust is on file with the Secretary of The Commonwealth of Massachusetts,
and notice is hereby given that this instrument is executed on behalf of the
Trustees of the Trust as Trustees and not individually and that the obligations
of this instrument are not binding upon any of the Trustees or shareholders
individually but are binding only upon the assets and property of the Fund.
9. THE WORDS "CCI," "PACIFIC INVESTMENT MANAGEMENT COMPANY," "PFAMCO,"
"PIMCO" OR "THOMSON".
The Manager owns the words "CCI," "Pacific Investment Management
Company," "PFAMCo," "PIMCO" and "Thomson" which may be used by the Trust only
with the consent of the Manager. The Manager consents to the use of the Trust of
the words "CCI," "Pacific Investment Management Company," "PFAMCo," "PIMCO" and
"Thomson," in such forms as the Manager shall in writing approve, but only on
condition and so long as (i) this Contract shall remain in full force and (ii)
the Trust shall fully perform, fulfill and comply with all provisions of this
Contract expressed herein to be performed, fulfilled or complied with by it. No
such name shall be used by the Trust at any time or in any place or for any
purposes or under any conditions except as in this section provided. The
foregoing authorization by the Manager to the Trust to use said name as part of
a business or name is not exclusive of the right of the Manager itself to use,
or to authorize others to use, the same; the Trust acknowledges and agrees that
as between the Manager and the Trust, the Manager has the exclusive right to so
authorize others to use the same; the Trust acknowledges and agrees that as
between the Manager and the Trust, the Manager has the exclusive right to so
use, or authorize others to use, said words and the Trust agrees to take such
action as may reasonably be requested by the Manager to give full effect to the
provisions of this section (including, without limitation, consenting to such
use of said words). Without limiting the generality of the foregoing, the Trust
agrees that, upon any termination of this Contract by either party or upon the
violation of any of its provisions by the Trust, the Trust will, at the request
of the Manager made within six months after the Manager has knowledge of such
termination or violation, use its best efforts to change the name of the Trust
so as to eliminate all reference, if any, to the words "CCI," "Pacific
Investment Management Company, " "PFAMCo," "PIMCO" and "Thomson" and will not
thereafter transact any business in a name containing the words "CCI," "Pacific
Investment Management Company," "PFAMCo," "PIMCO" or "Thomson" in any form or
combination whatsoever, or designate itself as the same entity as or successor
to an entity of such name, or otherwise use the words "CCI," "Pacific Investment
Management Company," "PFAMCo," "PIMCO" or "Thomson" or any other reference to
the Manager. Such covenants on the part of the Trust shall be binding upon it,
its trustees, officers, stockholders, creditors and all other persons claiming
under or through it.
<PAGE>
IN WITNESS WHEREOF, THOMSON FUND GROUP and PIMCO ADVISORS L.P. have
each caused this instrument to be signed in duplicate in its behalf by its duly
authorized representative, all as of the day and year first above written.
THOMSON FUND GROUP
By: Robert A. Prindiville
PIMCO ADVISORS L.P.
By: PIMCO Partners, G.P., a California
general partnership, General Partner
By: PIMCO Partners, LLC, a California
limited liability company, General Partner
By: William S. Thompson
Exhibit 99.B5(b)
Sub-Adviser Agreements
<PAGE>
3008037.01
SUB-ADVISER AGREEMENT
[Equity Income Fund]
Sub-Adviser Agreement executed as of November 16, 1994 between PIMCO
ADVISORS L.P., a Delaware limited partnership (the "Manager"), and Columbus
Circle Investors, a Delaware general partnership (the "Sub-Adviser").
WITNESSETH:
That in consideration of the mutual covenants herein contained, it is
agreed as follows:
1. SERVICES TO BE RENDERED BY SUB-ADVISER TO THE TRUST.
(a) Subject always to the control of the Trustees of Thomson Fund
Group, a Massachusetts business trust, the Sub-Adviser, at its
expense, will furnish continuously an investment program for
the Equity Income Fund series of the Trust (the "Fund") and
will make investment decisions on behalf of the Fund and place
all orders for the purchase and sale of portfolio securities
and all other investments. In the performance of its duties,
the Sub-Adviser (1) will comply with the provisions of the
Trust's Agreement and Declaration of Trust and By-laws,
including any amendments thereto (upon receipt of such
amendments by the Sub-Adviser), and the investment objectives,
policies and restrictions of the Fund as set forth in its
current Prospectus and Statement of Additional Information
(copies of which will be supplied to the Sub-Adviser upon
filing with the SEC), (2) will use its best efforts to
safeguard and promote the welfare of the Fund, (3) will comply
with other policies which the Trustees or the Manager, as the
case may be, may from time to time determine as promptly as
practicable after such policies have been communicated to the
Sub-Adviser in writing, and (4) shall exercise the same care
and diligence expected of the Trustees. The Sub-Adviser and
the Manager shall each make its officers and employees
available to the other from time to time at reasonable times
to review investment policies of the Fund and to consult with
each other regarding investment affairs of the Fund.
(b) The Sub-Adviser, at its expense, will furnish (i) all
necessary investment and management facilities, including
salaries of personnel, required for it to execute its duties
hereunder faithfully and (ii) administrative facilities,
including bookkeeping, clerical personnel and equipment
necessary for the efficient conduct of the investment affairs
of the Fund, including verification and oversight of the
pricing of the Fund's portfolio (but excluding determination
of net asset value and shareholder accounting services).
<PAGE>
3008037.01
-7-
(c) In the selection of brokers or dealers and the placing of
orders for the purchase and sale of portfolio investments for
the Fund, the Sub-Adviser shall use its best efforts to obtain
for the Fund the most favorable price and execution available,
except to the extent it may be permitted to pay higher
brokerage commissions for brokerage and research services as
described below. In using its best efforts to obtain for the
Fund the most favorable price and execution available, the
Sub-Adviser, bearing in mind the Fund's best interests at all
times, shall consider all factors it deems relevant,
including, by way of illustration, price, the size of the
transaction, the nature of the market for the security, the
amount of the commission, the timing of the transaction taking
into account market prices and trends, the reputation,
experience and financial stability of the broker or dealer
involved and the quality of service rendered by the broker or
dealer in other transactions. Subject to such policies as the
Trustees of the Trust may determine and communicate to the
Sub-Adviser in writing, the Sub-Adviser shall not be deemed to
have acted unlawfully or to have breached any duty created by
this Agreement or otherwise solely by reason of its having
caused the Trust to pay a broker or dealer that provides
brokerage and research services to the Sub-Adviser or its
affiliates an amount of commission for effecting a portfolio
investment transaction in excess of the amount of commission
another border or dealer would have charged for effecting that
transaction, if the Sub-Adviser determines in good faith that
such amount of commission was reasonable in relation to the
value of the brokerage and research services provided by such
broker or dealer, viewed in terms of either that particular
transaction or the Sub-Adviser's overall responsibilities with
respect to the Trust and to other clients of the Sub-Adviser
and its affiliates as to which the Sub-Adviser and its
affiliates exercise investment discretion. The Trust agrees
that any entity or person associated with the Sub-Adviser or
its affiliates which is a member of a national securities
exchange is authorized to effect any transaction on such
exchange for the account of the Trust and any Fund thereof
which is permitted by Section 11(a) of the Securities Exchange
Act of 1934, as amended (the "1934 Act") and Rule 11a2-2(T)
thereunder, and the Trust has consented to the retention of
compensation for such transactions in accordance with Rule
11a2-2(T)(2)(iv).
(d) The Sub-Adviser shall not be obligated to pay any expenses of
or for the Fund not expressly assumed by the Sub-Adviser
pursuant to this Section 1.
2. OTHER AGREEMENTS, ETC.
It is understood that any of the shareholders, Trustees, officers and
employees of the Trust may be a shareholder, director, officer or
employee of, or be otherwise interested in, the Sub-Adviser, and in any
person controlled by or under common control with the Sub-Adviser, and
that the Sub-Adviser and any person controlled by or under common
control with the Sub-Adviser may have an interest in the Trust. It is
also understood that the Sub-Adviser and persons controlled by or under
common control with the Sub-Adviser have and may have advisory,
management service or other contracts with other organizations and
persons, and may have other interests and businesses.
3. COMPENSATION TO BE PAID BY THE MANAGER TO THE SUB-ADVISER.
The Manager will pay the Sub-Adviser as compensation for the
Sub-Adviser's services rendered and for the expenses borne by the
Sub-Adviser pursuant to Section 1, a fee computed and paid monthly at
the annual rate of 0.375% of the average daily net asset value of the
Fund up to $200 million, and 0.35% of such net asset value in excess of
$200 million. Such fee shall be payable for each month within 10
business days after the end of such month.
If the Sub-Adviser shall serve for less than the whole of a month, the
foregoing compensation shall be prorated.
4. ASSIGNMENT TERMINATES THIS AGREEMENT; AMENDMENTS OF THIS CONTRACT.
This Agreement shall automatically terminate, without the payment of
any penalty, in the event of its assignment or in the event that the
Management Contract between the Manager and the Trust shall have
terminated for any reason; and this Agreement shall not be amended
unless such amendment be approved at a meeting by the affirmative vote
of a majority of the outstanding shares of the Fund, and by the vote,
cast in person at a meeting called for the purpose of voting on such
approval, of a majority of the Trustees of the Trust who are not
interested persons of the Trust or of the Manager or the Sub-Adviser.
5. EFFECTIVE PERIOD AND TERMINATION OF THIS AGREEMENT.
This Agreement shall become effective upon its execution, and shall
remain in full force and effect as to the Fund continuously thereafter
(unless terminated automatically as set forth in Section 4) until
terminated as follows:
(a) The Trust may at any time terminate this Agreement by written
notice delivered or mailed by registered mail, postage
prepaid, to the Manager and the Sub-Adviser, or
(b) If (i) the Trustees of the Trust or the shareholders by the
affirmative vote of a majority of the outstanding shares of
the Fund, and (ii) a majority of the Trustees of the Trust who
are not interested persons of the Trust or of the Manager or
of the Sub-Adviser, by vote cast in person at a meeting called
for the purpose of voting on such approval, do not
specifically approve at least annually the continuance of this
Agreement, then this Agreement shall automatically terminate
at the close of business on the second anniversary of its
execution, or upon the expiration of one year from the
effective date of the last such continuance, whichever is
later; provided, however, that if the continuance of this
Agreement is submitted to the shareholders of the Fund for
their approval and such shareholders fail to approve such
continuance of this Agreement as provided herein, the
Sub-Adviser may continue to serve hereunder in a manner
consistent with the Investment Company Act of 1940 and the
rules and regulations thereunder, or
(c) The manager may at any time terminate this Agreement by not
less than 60 days' written notice delivered or mailed by
registered mail, postage prepaid, to the Sub-Adviser, and the
Sub-Adviser may at any time terminate this Agreement by not
less than 180 days' written notice delivered or mailed by
registered mail, postage prepaid, to the Manager.
Action by the Trust under (a) above may be taken either (i) by
vote of a majority of the Trustees, or (ii) by the affirmative
vote of a majority of the outstanding shares of the Fund.
Termination of this Agreement pursuant to this Section 5 shall
be without the payment of any penalty.
6. CERTAIN INFORMATION.
The Sub-Adviser shall promptly notify the Manager in writing of the
occurrence of any of the following events: (a) the Sub-Adviser shall
fail to be registered as an investment adviser under the Investment
Advisers Act of 1940, as amended from time to time, and under the laws
of any jurisdiction in which the Sub-Adviser is required to be
registered as an investment adviser in order to perform its obligations
under this agreement or any other agreement concerning the provision of
investment advisory services to the Trust, (b) the Sub-Adviser shall
have been served or otherwise have notice of any action, suit,
proceeding, inquiry or investigation, at law or in equity, before or by
any court, public board or body, involving the affairs of the Trust,
(c) there is a change in control of the Sub-Adviser or any parent of
the Sub-Adviser within the meaning of the Investment Company Act of
1940, as amended (the "1940 Act"), (d) there is a material adverse
change in the business or financial position of the Sub-Adviser or (e)
the Chairman of the Sub-Adviser or the portfolio manager of the Fun
shall have been changed.
7. CERTAIN DEFINITIONS.
For the purposes of this Agreement, the "affirmative vote of a majority
of the outstanding shares" means the affirmative vote, at a duly called
and held meeting of shareholders, (a) of the holders of 67% or more of
the shares of the Fund, as the case may be, present (in person or by
proxy) and entitled to vote at such meeting, if the holders of more
than 50% of the outstanding shares of the Fund, as the case may be,
entitled to vote at such meeting are present in person or by proxy, or
(b) of the holders of more than 50% of the outstanding shares of the
Fund, as the case may be, entitled to vote at such meeting, whichever
is less.
For the purposes of this Agreement, the terms "affiliated person,"
"control," "interested person" and "assignment" shall have their
respective meanings defined in the 1940 Act; the term "specifically
approve at least annually" shall be construed in a manner consistent
with the 1940 Act and the rules and regulations thereunder, subject,
however, to such exemptions as may be granted by the Securities and
Exchange Commission under the 1940 Act and the rules and regulations
thereunder; and the term "brokerage and research services" shall be the
meaning given in the 1934 Act and the rules and regulations thereunder.
8. NONLIABILITY OF SUB-ADVISER.
Notwithstanding any other provisions of this Agreement, in the absence
of willful misfeasance, bad faith or gross negligence on the part of
the Sub-Adviser, or reckless disregard of its obligations and duties
hereunder, the Sub-Adviser, including its officers, directors and
shareholders, shall not be subject to any liability to the Manager, to
the Trust, to the Fund, or to any shareholder, officer, director or
Trustee thereof, for any act or omission in the course of, or connected
with, rendering services hereunder.
9. EXERCISE OF VOTING RIGHTS.
Except with the agreement or on the specific instructions of the
Trustees of the Trust or the Manager, the Sub-Adviser shall not
exercise or procure the exercise of any voting right attaching to
investments of the Fund.
<PAGE>
IN WITNESS WHEREOF, PIMCO ADVISORS L.P. and COLUMBUS CIRCLE INVESTORS
have each caused this instrument to be signed in duplicate on its behalf by its
duly authorized representative, all as of the day and year first above written.
PIMCO ADVISORS L.P. COLUMBUS CIRCLE INVESTORS
(formerly Thomson Advisory Group L.P.)
By: I. F. Smith
By: PIMCO Partners, G.P., a California
general partnership, General Partner
By: PIMCO Partners, LLC, a California
limited liability company, General Partner
By: William S. Thompson
Accepted and agreed to as of the day and year first above written:
THOMSON FUND GROUP
By: Robert A. Prindiville
<PAGE>
A copy of the Agreement and Declaration of Trust of the Trust is on
file with the Secretary of The Commonwealth of Massachusetts, and notice is
hereby given that this instrument is executed on behalf of the Trustees of the
Trust as Trustees and not individually and that the obligations of this
instrument are not binding upon any of the Trustees or shareholders individually
but are binding upon the assets property of the Fund.
<PAGE>
3033786.01
SUB-ADVISER AGREEMENT
[Value Fund]
Sub-Adviser Agreement executed as of May 11, 1995 between PIMCO
ADVISORS L.P., a Delaware limited partnership (the "Manager"), and NFJ
INVESTMENT GROUP, a Delaware general partnership (the "Sub-Adviser").
WITNESSETH:
That in consideration of the mutual covenants herein contained, it is
agreed as follows:
1. SERVICES TO BE RENDERED BY SUB-ADVISER TO THE TRUST.
(a) Subject always to the control of the Trustees of PIMCO
Advisors Funds (the "Trust"), a Massachusetts business trust,
the Sub-Adviser, at its expense, will furnish continuously an
investment program for the Value Fund series of the Trust (the
"Fund") and will make investment decisions on behalf of the
Fund and place all orders for the purchase and sale of
portfolio securities and all other investments. In the
performance of its duties, the Sub-Adviser (1) will comply
with the provisions of the Trust's Agreement and Declaration
of Trust and By-laws, including any amendments thereto (upon
receipt of such amendments by the Sub-Adviser), and the
investment objectives, policies and restrictions of the Fund
as set forth in its current Prospectus and Statement of
Additional Information (copies of which will be supplied to
the Sub-Adviser upon filing with the SEC), (2) will use its
best efforts to safeguard and promote the welfare of the Fund,
(3) will comply with other policies which the Trustees or the
Manager, as the case may be, may from time to time determine
as promptly as practicable after such policies have been
communicated to the Sub-Adviser in writing, and (4) shall
exercise the same care and diligence expected of the Trustees.
The Sub-Adviser and the Manager shall each make its officers
and employees available to the other from time to time at
reasonable times to review investment policies of the Fund and
to consult with each other regarding investment affairs of the
Fund.
(b) The Sub-Adviser, at its expense, will furnish (i) all
necessary investment and management facilities, including
salaries of personnel, required for it to execute its duties
hereunder faithfully and (ii) administrative facilities,
including bookkeeping, clerical personnel and equipment
necessary for the efficient conduct of the investment affairs
of the Fund, including verification and oversight of the
pricing of the Fund's portfolio (but excluding determination
of net asset value and shareholder accounting services).
<PAGE>
3033786.01
-4-
(c) In the selection of brokers or dealers and the placing of
orders for the purchase and sale of portfolio investments for
the Fund, the Sub-Adviser shall use its best efforts to obtain
for the Fund the most favorable price and execution available,
except to the extent it may be permitted to pay higher
brokerage commissions for brokerage and research services as
described below. In using its best efforts to obtain for the
Fund the most favorable price and execution available, the
Sub-Adviser, bearing in mind the Fund's best interests at all
times, shall consider all factors it deems relevant,
including, by way of illustration, price, the size of the
transaction, the nature of the market for the security, the
amount of the commission, the timing of the transaction taking
into account market prices and trends, the reputation,
experience and financial stability of the broker or dealer
involved and the quality of service rendered by the broker or
dealer in other transactions. Subject to such policies as the
Trustees of the Trust may determine and communicate to the
Sub-Adviser in writing, the Sub-Adviser shall not be deemed to
have acted unlawfully or to have breached any duty created by
this Agreement or otherwise solely by reason of its having
caused the Trust to pay a broker or dealer that provides
brokerage and research services to the Sub-Adviser or its
affiliates an amount of commission for effecting a portfolio
investment transaction in excess of the amount of commission
another broker or dealer would have charged for effecting that
transaction, if the Sub-Adviser determines in good faith that
such amount of commission was reasonable in relation to the
value of the brokerage and research services provided by such
broker or dealer, viewed in terms of either that particular
transaction or the Sub-Adviser's overall responsibilities with
respect to the Trust and to other clients of the Sub-Adviser
and its affiliates as to which the Sub-Adviser and its
affiliates exercise investment discretion. The Trust agrees
that any entity or person associated with the Sub-Adviser or
its affiliates which is a member of a national securities
exchange is authorized to effect any transaction on such
exchange for the account of the Trust and any Fund thereof
which is permitted by Section 11(a) of the Securities Exchange
Act of 1934, as amended (the "1934 Act") and Rule 11a2-2(T)
thereunder, and the Trust has consented to the retention of
compensation for such transactions in accordance with Rule
11a2-2(T)(2)(iv).
(d) The Sub-Adviser shall not be obligated to pay any expenses of
or for the Fund not expressly assumed by the Sub-Adviser
pursuant to this Section 1.
2. OTHER AGREEMENTS, ETC.
It is understood that any of the shareholders, Trustees, officers and
employees of the Trust may be a shareholder, director, officer or
employee of, or be otherwise interested in, the Sub-Adviser, and in any
person controlled by or under common control with the Sub-Adviser, and
that the Sub-Adviser and any person controlled by or under common
control with the Sub-Adviser may have an interest in the Trust. It is
also understood that the Sub-Adviser and persons controlled by or under
common control with the Sub-Adviser have and may have advisory,
management service or other contracts with other organizations and
persons, and may have other interests and businesses.
3. COMPENSATION TO BE PAID BY THE MANAGER TO THE SUB-ADVISER.
The Manager will pay the Sub-Adviser as compensation for the
Sub-Adviser's services rendered and for the expenses borne by the
Sub-Adviser pursuant to Section 1, a fee computed and paid monthly at
the annual rate of 0.35% of the average daily net asset value of the
Fund. Such fee shall be payable for each month within 10 business days
after the end of such month.
If the Sub-Adviser shall serve for less than the whole of a month, the
foregoing compensation shall be prorated.
4. ASSIGNMENT TERMINATES THIS AGREEMENT; AMENDMENTS OF THIS CONTRACT.
This Agreement shall automatically terminate, without the payment of
any penalty, in the event of its assignment or in the event that the
Management Contract between the Manager and the Trust shall have
terminated for any reason; and this Agreement shall not be amended
unless such amendment be approved at a meeting by the affirmative vote
of a majority of the outstanding shares of the Fund, and by the vote,
cast in person at a meeting called for the purpose of voting on such
approval, of a majority of the Trustees of the Trust who are not
interested persons of the Trust or of the Manager or the Sub-Adviser.
5. EFFECTIVE PERIOD AND TERMINATION OF THIS AGREEMENT.
This Agreement shall become effective upon its execution, and shall
remain in full force and effect as to the Fund continuously thereafter
(unless terminated automatically as set forth in Section 4) until
terminated as follows:
(a) The Trust may at any time terminate this Agreement by written
notice delivered or mailed by registered mail, postage
prepaid, to the Manager and the Sub-Adviser, or
(b) If (i) the Trustees of the Trust or the shareholders by the
affirmative vote of a majority of the outstanding shares of
the Fund, and (ii) a majority of the Trustees of the Trust who
are not interested persons of the Trust or of the Manager or
of the Sub-Adviser, by vote cast in person at a meeting called
for the purpose of voting on such approval, do not
specifically approve at least annually the continuance of this
Agreement, then this Agreement shall automatically terminate
at the close of business on the second anniversary of its
execution, or upon the expiration of one year from the
effective date of the last such continuance, whichever is
later; provided, however, that if the continuance of this
Agreement is submitted to the shareholders of the Fund for
their approval and such shareholders fail to approve such
continuance of this Agreement as provided herein, the
Sub-Adviser may continue to serve hereunder in a manner
consistent with the Investment Company Act of 1940 and the
rules and regulations thereunder, or
(c) The Manager may at any time terminate this Agreement by not
less than 60 days' written notice delivered or mailed by
registered mail, postage prepaid, to the Sub-Adviser, and the
Sub-Adviser may at any time terminate this Agreement by not
less than 180 days' written notice delivered or mailed by
registered mail, postage prepaid, to the Manager.
Action by the Trust under (a) above may be taken either (i) by
vote of a majority of the Trustees, or (ii) by the affirmative
vote of a majority of the outstanding shares of the Fund.
Termination of this Agreement pursuant to this Section 5 shall
be without the payment of any penalty.
6. CERTAIN INFORMATION.
The Sub-Adviser shall promptly notify the Manager in writing of the
occurrence of any of the following events: (a) the Sub-Adviser shall
fail to be registered as an investment adviser under the Investment
Advisers Act of 1940, as amended from time to time, and under the laws
of any jurisdiction in which the Sub-Adviser is required to be
registered as an investment adviser in order to perform its obligations
under this agreement or any other agreement concerning the provision of
investment advisory services to the Trust, (b) the Sub-Adviser shall
have been served or otherwise have notice of any action, suit,
proceeding, inquiry or investigation, at law or in equity, before or by
any court, public board or body, involving the affairs of the Trust,
(c) there is a change in control of the Sub-Adviser or any parent of
the Sub-Adviser within the meaning of the Investment Company Act of
1940, as amended (the "1940 Act"), (d) there is a material adverse
change in the business or financial position of the Sub-Adviser or (e)
the Chairman of the Sub-Adviser or the portfolio manager of the Fund
shall have been changed.
7. CERTAIN DEFINITIONS.
For the purposes of this Agreement, the "affirmative vote of a majority
of the outstanding shares" means the affirmative vote, at a duly called
and held meeting of shareholders, (a) of the holders of 67% or more of
the shares of the Fund, as the case may be, present (in person or by
proxy) and entitled to vote at such meeting, if the holders of more
than 50% of the outstanding shares of the Fund, as the case may be,
entitled to vote at such meeting are present in person or by proxy, or
(b) of the holders of more than 50% of the outstanding shares of the
Fund, as the case may be, entitled to vote at such meeting, whichever
is less.
For the purposes of this Agreement, the terms "affiliated person,"
"control," "interested person" and "assignment" shall have their
respective meanings defined in the 1940 Act; the term "specifically
approve at least annually" shall be construed in a manner consistent
with the 1940 Act and the rules and regulations thereunder, subject,
however, to such exemptions as may be granted by the Securities and
Exchange Commission under the 1940 Act and the rules and regulations
thereunder; and the term "brokerage and research services" shall be the
meaning given in the 1934 Act and the rules and regulations thereunder.
8. NONLIABILITY OF SUB-ADVISER.
Notwithstanding any other provisions of this Agreement, in the absence
of willful misfeasance, bad faith or gross negligence on the part of
the Sub-Adviser, or reckless disregard of its obligations and duties
hereunder, the Sub-Adviser, including its officers, directors and
shareholders, shall not be subject to any liability to the Manager, to
the Trust, to the Fund, or to any shareholder, officer, director or
Trustee thereof, for any act or omission in the course of, or connected
with, rendering services hereunder.
9. EXERCISE OF VOTING RIGHTS.
Except with the agreement or on the specific instructions of the
Trustees of the Trust or the Manager, the Sub-Adviser shall not
exercise or procure the exercise of any voting right attaching to
investments of the Fund.
<PAGE>
IN WITNESS WHEREOF, PIMCO ADVISORS L.P. and NFJ INVESTMENT GROUP have
each caused this instrument to be signed in duplicate on its behalf by its duly
authorized representative, all as of the day and year first above written.
PIMCO ADVISORS L.P. NFJ INVESTMENT GROUP
By: Robert A. Prindiville By: John L. Johnson
Title: Managing Director
Accepted and agreed to as of the day and year first above written:
PIMCO Advisors Funds
By: Robert A. Prindiville
A copy of the Agreement and Declaration of Trust of the Trust is on
file with the Secretary of The Commonwealth of Massachusetts, and notice is
hereby given that this instrument is executed on behalf of the Trustees of the
Trust as Trustees and not individually and that the obligations of this
instrument are not binding upon any of the Trustees or shareholders individually
but are binding upon the assets property of the Fund.
<PAGE>
3008087.01
SUB-ADVISER AGREEMENT
[Growth Fund]
Sub-Adviser Agreement executed as of November 16, 1994 between PIMCO
ADVISORS L.P., a Delaware limited partnership (the "Manager"), and Columbus
Circle Investors, a Delaware general partnership (the "Sub-Adviser").
WITNESSETH:
That in consideration of the mutual covenants herein contained, it is
agreed as follows:
1. SERVICES TO BE RENDERED BY SUB-ADVISER TO THE TRUST.
(a) Subject always to the control of the Trustees of Thomson Fund
Group, a Massachusetts business trust, the Sub-Adviser, at its
expense, will furnish continuously an investment program for
the Growth Fund series of the Trust (the "Fund") and will make
investment decisions on behalf of the Fund and place all
orders for the purchase and sale of portfolio securities and
all other investments. In the performance of its duties, the
Sub-Adviser (1) will comply with the provisions of the Trust's
Agreement and Declaration of Trust and By-laws, including any
amendments thereto (upon receipt of such amendments by the
Sub-Adviser), and the investment objectives, policies and
restrictions of the Fund as set forth in its current
Prospectus and Statement of Additional Information (copies of
which will be supplied to the Sub-Adviser upon filing with the
SEC), (2) will use its best efforts to safeguard and promote
the welfare of the Fund, (3) will comply with other policies
which the Trustees or the Manager, as the case may be, may
from time to time determine as promptly as practicable after
such policies have been communicated to the Sub-Adviser in
writing, and (4) shall exercise the same care and diligence
expected of the Trustees. The Sub-Adviser and the Manager
shall each make its officers and employees available to the
other from time to time at reasonable times to review
investment policies of the Fund and to consult with each other
regarding investment affairs of the Fund.
(b) The Sub-Adviser, at its expense, will furnish (i) all
necessary investment and management facilities, including
salaries of personnel, required for it to execute its duties
hereunder faithfully and (ii) administrative facilities,
including bookkeeping, clerical personnel and equipment
necessary for the efficient conduct of the investment affairs
of the Fund, including verification and oversight of the
pricing of the Fund's portfolio (but excluding determination
of net asset value and shareholder accounting services).
<PAGE>
3008087.01
-7-
(c) In the selection of brokers or dealers and the placing of
orders for the purchase and sale of portfolio investments for
the Fund, the Sub-Adviser shall use its best efforts to obtain
for the Fund the most favorable price and execution available,
except to the extent it may be permitted to pay higher
brokerage commissions for brokerage and research services as
described below. In using its best efforts to obtain for the
Fund the most favorable price and execution available, the
Sub-Adviser, bearing in mind the Fund's best interests at all
times, shall consider all factors it deems relevant,
including, by way of illustration, price, the size of the
transaction, the nature of the market for the security, the
amount of the commission, the timing of the transaction taking
into account market prices and trends, the reputation,
experience and financial stability of the broker or dealer
involved and the quality of service rendered by the broker or
dealer in other transactions. Subject to such policies as the
Trustees of the Trust may determine and communicate to the
Sub-Adviser in writing, the Sub-Adviser shall not be deemed to
have acted unlawfully or to have breached any duty created by
this Agreement or otherwise solely by reason of its having
caused the Trust to pay a broker or dealer that provides
brokerage and research services to the Sub-Adviser or its
affiliates an amount of commission for effecting a portfolio
investment transaction in excess of the amount of commission
another border or dealer would have charged for effecting that
transaction, if the Sub-Adviser determines in good faith that
such amount of commission was reasonable in relation to the
value of the brokerage and research services provided by such
broker or dealer, viewed in terms of either that particular
transaction or the Sub-Adviser's overall responsibilities with
respect to the Trust and to other clients of the Sub-Adviser
and its affiliates as to which the Sub-Adviser and its
affiliates exercise investment discretion. The Trust agrees
that any entity or person associated with the Sub-Adviser or
its affiliates which is a member of a national securities
exchange is authorized to effect any transaction on such
exchange for the account of the Trust and any Fund thereof
which is permitted by Section 11(a) of the Securities Exchange
Act of 1934, as amended (the "1934 Act") and Rule 11a2-2(T)
thereunder, and the Trust has consented to the retention of
compensation for such transactions in accordance with Rule
11a2-2(T)(2)(iv).
(d) The Sub-Adviser shall not be obligated to pay any expenses of
or for the Fund not expressly assumed by the Sub-Adviser
pursuant to this Section 1.
2. OTHER AGREEMENTS, ETC.
It is understood that any of the shareholders, Trustees, officers and
employees of the Trust may be a shareholder, director, officer or
employee of, or be otherwise interested in, the Sub-Adviser, and in any
person controlled by or under common control with the Sub-Adviser, and
that the Sub-Adviser and any person controlled by or under common
control with the Sub-Adviser may have an interest in the Trust. It is
also understood that the Sub-Adviser and persons controlled by or under
common control with the Sub-Adviser have and may have advisory,
management service or other contracts with other organizations and
persons, and may have other interests and businesses.
3. COMPENSATION TO BE PAID BY THE MANAGER TO THE SUB-ADVISER.
The Manager will pay the Sub-Adviser as compensation for the
Sub-Adviser's services rendered and for the expenses borne by the
Sub-Adviser pursuant to Section 1, a fee computed and paid monthly at
the annual rate of 0.35% of the average daily net asset value of the
Fund up to $200 million, and 0.325% of such net asset value in excess
of $200 million . Such fee shall be payable for each month within 10
business days after the end of such month.
If the Sub-Adviser shall serve for less than the whole of a month, the
foregoing compensation shall be prorated.
4. ASSIGNMENT TERMINATES THIS AGREEMENT; AMENDMENTS OF THIS CONTRACT.
This Agreement shall automatically terminate, without the payment of
any penalty, in the event of its assignment or in the event that the
Management Contract between the Manager and the Trust shall have
terminated for any reason; and this Agreement shall not be amended
unless such amendment be approved at a meeting by the affirmative vote
of a majority of the outstanding shares of the Fund, and by the vote,
cast in person at a meeting called for the purpose of voting on such
approval, of a majority of the Trustees of the Trust who are not
interested persons of the Trust or of the Manager or the Sub-Adviser.
5. EFFECTIVE PERIOD AND TERMINATION OF THIS AGREEMENT.
This Agreement shall become effective upon its execution, and shall
remain in full force and effect as to the Fund continuously thereafter
(unless terminated automatically as set forth in Section 4) until
terminated as follows:
(a) The Trust may at any time terminate this Agreement by written
notice delivered or mailed by registered mail, postage
prepaid, to the Manager and the Sub-Adviser, or
(b) If (i) the Trustees of the Trust or the shareholders by the
affirmative vote of a majority of the outstanding shares of
the Fund, and (ii) a majority of the Trustees of the Trust who
are not interested persons of the Trust or of the Manager or
of the Sub-Adviser, by vote cast in person at a meeting called
for the purpose of voting on such approval, do not
specifically approve at least annually the continuance of this
Agreement, then this Agreement shall automatically terminate
at the close of business on the second anniversary of its
execution, or upon the expiration of one year from the
effective date of the last such continuance, whichever is
later; provided, however, that if the continuance of this
Agreement is submitted to the shareholders of the Fund for
their approval and such shareholders fail to approve such
continuance of this Agreement as provided herein, the
Sub-Adviser may continue to serve hereunder in a manner
consistent with the Investment Company Act of 1940 and the
rules and regulations thereunder, or
(c) The Manager may at any time terminate this Agreement by not
less than 60 days' written notice delivered or mailed by
registered mail, postage prepaid, to the Sub-Adviser, and the
Sub-Adviser may at any time terminate this Agreement by not
less than 180 days' written notice delivered or mailed by
registered mail, postage prepaid, to the Manager.
Action by the Trust under (a) above may be taken either (i) by
vote of a majority of the Trustees, or (ii) by the affirmative
vote of a majority of the outstanding shares of the Fund.
Termination of this Agreement pursuant to this Section 5 shall
be without the payment of any penalty.
6. CERTAIN INFORMATION.
The Sub-Adviser shall promptly notify the Manager in writing of the
occurrence of any of the following events: (a) the Sub-Adviser shall
fail to be registered as an investment adviser under the Investment
Advisers Act of 1940, as amended from time to time, and under the laws
of any jurisdiction in which the Sub-Adviser is required to be
registered as an investment adviser in order to perform its obligations
under this agreement or any other agreement concerning the provision of
investment advisory services to the Trust, (b) the Sub-Adviser shall
have been served or otherwise have notice of any action, suit,
proceeding, inquiry or investigation, at law or in equity, before or by
any court, public board or body, involving the affairs of the Trust,
(c) there is a change in control of the Sub-Adviser or any parent of
the Sub-Adviser within the meaning of the Investment Company Act of
1940, as amended (the "1940 Act"), (d) there is a material adverse
change in the business or financial position of the Sub-Adviser or (e)
the Chairman of the Sub-Adviser or the portfolio manager of the Fun
shall have been changed.
7. CERTAIN DEFINITIONS.
For the purposes of this Agreement, the "affirmative vote of a majority
of the outstanding shares" means the affirmative vote, at a duly called
and held meeting of shareholders, (a) of the holders of 67% or more of
the shares of the Fund, as the case may be, present (in person or by
proxy) and entitled to vote at such meeting, if the holders of more
than 50% of the outstanding shares of the Fund, as the case may be,
entitled to vote at such meeting are present in person or by proxy, or
(b) of the holders of more than 50% of the outstanding shares of the
Fund, as the case may be, entitled to vote at such meeting, whichever
is less.
For the purposes of this Agreement, the terms "affiliated person,"
"control," "interested person" and "assignment" shall have their
respective meanings defined in the 1940 Act; the term "specifically
approve at least annually" shall be construed in a manner consistent
with the 1940 Act and the rules and regulations thereunder, subject,
however, to such exemptions as may be granted by the Securities and
Exchange Commission under the 1940 Act and the rules and regulations
thereunder; and the term "brokerage and research services" shall be the
meaning given in the 1934 Act and the rules and regulations thereunder.
8. NONLIABILITY OF SUB-ADVISER.
Notwithstanding any other provisions of this Agreement, in the absence
of willful misfeasance, bad faith or gross negligence on the part of
the Sub-Adviser, or reckless disregard of its obligations and duties
hereunder, the Sub-Adviser, including its officers, directors and
shareholders, shall not be subject to any liability to the Manager, to
the Trust, to the Fund, or to any shareholder, officer, director or
Trustee thereof, for any act or omission in the course of, or connected
with, rendering services hereunder.
9. EXERCISE OF VOTING RIGHTS.
Except with the agreement or on the specific instructions of the
Trustees of the Trust or the Manager, the Sub-Adviser shall not
exercise or procure the exercise of any voting right attaching to
investments of the Fund.
<PAGE>
IN WITNESS WHEREOF, PIMCO ADVISORS L.P. and COLUMBUS CIRCLE INVESTORS
have each caused this instrument to be signed in duplicate on its behalf by its
duly authorized representative, all as of the day and year first above written.
PIMCO ADVISORS L.P. COLUMBUS CIRCLE INVESTORS
(formerly Thomson Advisory Group L.P.)
By: I. F. Smith
By: PIMCO Partners, G.P., a California
general partnership, General Partner
By: PIMCO Partners, LLC, a California
limited liability company, General Partner
By: William S. Thompson
Accepted and agreed to as of the day and year first above written:
THOMSON FUND GROUP
By: Robert A. Prindiville
<PAGE>
A copy of the Agreement and Declaration of Trust of the Trust is on
file with the Secretary of The Commonwealth of Massachusetts, and notice is
hereby given that this instrument is executed on behalf of the Trustees of the
Trust as Trustees and not individually and that the obligations of this
instrument are not binding upon any of the Trustees or shareholders individually
but are binding upon the assets property of the Fund.
<PAGE>
3008081.01
SUB-ADVISER AGREEMENT
[Target Fund]
Sub-Adviser Agreement executed as of November 16, 1994 between PIMCO
ADVISORS L.P., a Delaware limited partnership (the "Manager"), and Columbus
Circle Investors, a Delaware general partnership (the "Sub-Adviser").
WITNESSETH:
That in consideration of the mutual covenants herein contained, it is
agreed as follows:
1. SERVICES TO BE RENDERED BY SUB-ADVISER TO THE TRUST.
(a) Subject always to the control of the Trustees of Thomson Fund
Group, a Massachusetts business trust, the Sub-Adviser, at its
expense, will furnish continuously an investment program for
the Target Fund series of the Trust (the "Fund") and will make
investment decisions on behalf of the Fund and place all
orders for the purchase and sale of portfolio securities and
all other investments. In the performance of its duties, the
Sub-Adviser (1) will comply with the provisions of the Trust's
Agreement and Declaration of Trust and By-laws, including any
amendments thereto (upon receipt of such amendments by the
Sub-Adviser), and the investment objectives, policies and
restrictions of the Fund as set forth in its current
Prospectus and Statement of Additional Information (copies of
which will be supplied to the Sub-Adviser upon filing with the
SEC), (2) will use its best efforts to safeguard and promote
the welfare of the Fund, (3) will comply with other policies
which the Trustees or the Manager, as the case may be, may
from time to time determine as promptly as practicable after
such policies have been communicated to the Sub-Adviser in
writing, and (4) shall exercise the same care and diligence
expected of the Trustees. The Sub-Adviser and the Manager
shall each make its officers and employees available to the
other from time to time at reasonable times to review
investment policies of the Fund and to consult with each other
regarding investment affairs of the Fund.
(b) The Sub-Adviser, at its expense, will furnish (i) all
necessary investment and management facilities, including
salaries of personnel, required for it to execute its duties
hereunder faithfully and (ii) administrative facilities,
including bookkeeping, clerical personnel and equipment
necessary for the efficient conduct of the investment affairs
of the Fund, including verification and oversight of the
pricing of the Fund's portfolio (but excluding determination
of net asset value and shareholder accounting services).
<PAGE>
3008081.01
-7-
(c) In the selection of brokers or dealers and the placing of
orders for the purchase and sale of portfolio investments for
the Fund, the Sub-Adviser shall use its best efforts to obtain
for the Fund the most favorable price and execution available,
except to the extent it may be permitted to pay higher
brokerage commissions for brokerage and research services as
described below. In using its best efforts to obtain for the
Fund the most favorable price and execution available, the
Sub-Adviser, bearing in mind the Fund's best interests at all
times, shall consider all factors it deems relevant,
including, by way of illustration, price, the size of the
transaction, the nature of the market for the security, the
amount of the commission, the timing of the transaction taking
into account market prices and trends, the reputation,
experience and financial stability of the broker or dealer
involved and the quality of service rendered by the broker or
dealer in other transactions. Subject to such policies as the
Trustees of the Trust may determine and communicate to the
Sub-Adviser in writing, the Sub-Adviser shall not be deemed to
have acted unlawfully or to have breached any duty created by
this Agreement or otherwise solely by reason of its having
caused the Trust to pay a broker or dealer that provides
brokerage and research services to the Sub-Adviser or its
affiliates an amount of commission for effecting a portfolio
investment transaction in excess of the amount of commission
another border or dealer would have charged for effecting that
transaction, if the Sub-Adviser determines in good faith that
such amount of commission was reasonable in relation to the
value of the brokerage and research services provided by such
broker or dealer, viewed in terms of either that particular
transaction or the Sub-Adviser's overall responsibilities with
respect to the Trust and to other clients of the Sub-Adviser
and its affiliates as to which the Sub-Adviser and its
affiliates exercise investment discretion. The Trust agrees
that any entity or person associated with the Sub-Adviser or
its affiliates which is a member of a national securities
exchange is authorized to effect any transaction on such
exchange for the account of the Trust and any Fund thereof
which is permitted by Section 11(a) of the Securities Exchange
Act of 1934, as amended (the "1934 Act") and Rule 11a2-2(T)
thereunder, and the Trust has consented to the retention of
compensation for such transactions in accordance with Rule
11a2-2(T)(2)(iv).
(d) The Sub-Adviser shall not be obligated to pay any expenses of
or for the Fund not expressly assumed by the Sub-Adviser
pursuant to this Section 1.
2. OTHER AGREEMENTS, ETC.
It is understood that any of the shareholders, Trustees, officers and
employees of the Trust may be a shareholder, director, officer or
employee of, or be otherwise interested in, the Sub-Adviser, and in any
person controlled by or under common control with the Sub-Adviser, and
that the Sub-Adviser and any person controlled by or under common
control with the Sub-Adviser may have an interest in the Trust. It is
also understood that the Sub-Adviser and persons controlled by or under
common control with the Sub-Adviser have and may have advisory,
management service or other contracts with other organizations and
persons, and may have other interests and businesses.
3. COMPENSATION TO BE PAID BY THE MANAGER TO THE SUB-ADVISER.
The Manager will pay the Sub-Adviser as compensation for the
Sub-Adviser's services rendered and for the expenses borne by the
Sub-Adviser pursuant to Section 1, a fee computed and paid monthly at
the annual rate of 0.375% of the average daily net asset value of the
Fund up to $200 million, and 0.35% of such net asset value in excess of
$200 million. Such fee shall be payable for each month within 10
business days after the end of such month.
If the Sub-Adviser shall serve for less than the whole of a month, the
foregoing compensation shall be prorated.
4. ASSIGNMENT TERMINATES THIS AGREEMENT; AMENDMENTS OF THIS CONTRACT.
This Agreement shall automatically terminate, without the payment of
any penalty, in the event of its assignment or in the event that the
Management Contract between the Manager and the Trust shall have
terminated for any reason; and this Agreement shall not be amended
unless such amendment be approved at a meeting by the affirmative vote
of a majority of the outstanding shares of the Fund, and by the vote,
cast in person at a meeting called for the purpose of voting on such
approval, of a majority of the Trustees of the Trust who are not
interested persons of the Trust or of the Manager or the Sub-Adviser.
5. EFFECTIVE PERIOD AND TERMINATION OF THIS AGREEMENT.
This Agreement shall become effective upon its execution, and shall
remain in full force and effect as to the Fund continuously thereafter
(unless terminated automatically as set forth in Section 4) until
terminated as follows:
(a) The Trust may at any time terminate this Agreement by written
notice delivered or mailed by registered mail, postage
prepaid, to the Manager and the Sub-Adviser, or
(b) If (i) the Trustees of the Trust or the shareholders by the
affirmative vote of a majority of the outstanding shares of
the Fund, and (ii) a majority of the Trustees of the Trust who
are not interested persons of the Trust or of the Manager or
of the Sub-Adviser, by vote cast in person at a meeting called
for the purpose of voting on such approval, do not
specifically approve at least annually the continuance of this
Agreement, then this Agreement shall automatically terminate
at the close of business on the second anniversary of its
execution, or upon the expiration of one year from the
effective date of the last such continuance, whichever is
later; provided, however, that if the continuance of this
Agreement is submitted to the shareholders of the Fund for
their approval and such shareholders fail to approve such
continuance of this Agreement as provided herein, the
Sub-Adviser may continue to serve hereunder in a manner
consistent with the Investment Company Act of 1940 and the
rules and regulations thereunder, or
(c) The manager may at any time terminate this Agreement by not
less than 60 days' written notice delivered or mailed by
registered mail, postage prepaid, to the Sub-Adviser, and the
Sub-Adviser may at any time terminate this Agreement by not
less than 180 days' written notice delivered or mailed by
registered mail, postage prepaid, to the Manager.
Action by the Trust under (a) above may be taken either (i) by
vote of a majority of the Trustees, or (ii) by the affirmative
vote of a majority of the outstanding shares of the Fund.
Termination of this Agreement pursuant to this Section 5 shall
be without the payment of any penalty.
6. CERTAIN INFORMATION.
The Sub-Adviser shall promptly notify the Manager in writing of the
occurrence of any of the following events: (a) the Sub-Adviser shall
fail to be registered as an investment adviser under the Investment
Advisers Act of 1940, as amended from time to time, and under the laws
of any jurisdiction in which the Sub-Adviser is required to be
registered as an investment adviser in order to perform its obligations
under this agreement or any other agreement concerning the provision of
investment advisory services to the Trust, (b) the Sub-Adviser shall
have been served or otherwise have notice of any action, suit,
proceeding, inquiry or investigation, at law or in equity, before or by
any court, public board or body, involving the affairs of the Trust,
(c) there is a change in control of the Sub-Adviser or any parent of
the Sub-Adviser within the meaning of the Investment Company Act of
1940, as amended (the "1940 Act"), (d) there is a material adverse
change in the business or financial position of the Sub-Adviser or (e)
the Chairman of the Sub-Adviser or the portfolio manager of the Fun
shall have been changed.
7. CERTAIN DEFINITIONS.
For the purposes of this Agreement, the "affirmative vote of a majority
of the outstanding shares" means the affirmative vote, at a duly called
and held meeting of shareholders, (a) of the holders of 67% or more of
the shares of the Fund, as the case may be, present (in person or by
proxy) and entitled to vote at such meeting, if the holders of more
than 50% of the outstanding shares of the Fund, as the case may be,
entitled to vote at such meeting are present in person or by proxy, or
(b) of the holders of more than 50% of the outstanding shares of the
Fund, as the case may be, entitled to vote at such meeting, whichever
is less.
For the purposes of this Agreement, the terms "affiliated person,"
"control," "interested person" and "assignment" shall have their
respective meanings defined in the 1940 Act; the term "specifically
approve at least annually" shall be construed in a manner consistent
with the 1940 Act and the rules and regulations thereunder, subject,
however, to such exemptions as may be granted by the Securities and
Exchange Commission under the 1940 Act and the rules and regulations
thereunder; and the term "brokerage and research services" shall be the
meaning given in the 1934 Act and the rules and regulations thereunder.
8. NONLIABILITY OF SUB-ADVISER.
Notwithstanding any other provisions of this Agreement, in the absence
of willful misfeasance, bad faith or gross negligence on the part of
the Sub-Adviser, or reckless disregard of its obligations and duties
hereunder, the Sub-Adviser, including its officers, directors and
shareholders, shall not be subject to any liability to the Manager, to
the Trust, to the Fund, or to any shareholder, officer, director or
Trustee thereof, for any act or omission in the course of, or connected
with, rendering services hereunder.
9. EXERCISE OF VOTING RIGHTS.
Except with the agreement or on the specific instructions of the
Trustees of the Trust or the Manager, the Sub-Adviser shall not
exercise or procure the exercise of any voting right attaching to
investments of the Fund.
<PAGE>
IN WITNESS WHEREOF, PIMCO ADVISORS L.P. and COLUMBUS CIRCLE INVESTORS
have each caused this instrument to be signed in duplicate on its behalf by its
duly authorized representative, all as of the day and year first above written.
PIMCO ADVISORS L.P. COLUMBUS CIRCLE INVESTORS
(formerly Thomson Advisory Group L.P.)
By: I.F. Smith
By: PIMCO Partners, G.P., a California
general partnership, General Partner
By: PIMCO Partners, LLC, a California
limited liability company, General Partner
By: William S. Thompson
Accepted and agreed to as of the day and year first above written:
THOMSON FUND GROUP
By: Robert A. Prindiville
<PAGE>
A copy of the Agreement and Declaration of Trust of the Trust is on
file with the Secretary of The Commonwealth of Massachusetts, and notice is
hereby given that this instrument is executed on behalf of the Trustees of the
Trust as Trustees and not individually and that the obligations of this
instrument are not binding upon any of the Trustees or shareholders individually
but are binding upon the assets property of the Fund.
<PAGE>
3033805.01
SUB-ADVISER AGREEMENT
[Discovery Fund]
Sub-Adviser Agreement executed as of May 11, 1995 between PIMCO
ADVISORS L.P., a Delaware limited partnership (the "Manager"), and Cadence
Capital Management, a Delaware general partnership (the "Sub-Adviser").
WITNESSETH:
That in consideration of the mutual covenants herein contained, it is
agreed as follows:
1. SERVICES TO BE RENDERED BY SUB-ADVISER TO THE TRUST.
(a) Subject always to the control of the Trustees of PIMCO
Advisors Funds (the "Trust"), a Massachusetts business trust,
the Sub-Adviser, at its expense, will furnish continuously an
investment program for the Discovery Fund series of the Trust
(the "Fund") and will make investment decisions on behalf of
the Fund and place all orders for the purchase and sale of
portfolio securities and all other investments. In the
performance of its duties, the Sub-Adviser (1) will comply
with the provisions of the Trust's Agreement and Declaration
of Trust and By-laws, including any amendments thereto (upon
receipt of such amendments by the Sub-Adviser), and the
investment objectives, policies and restrictions of the Fund
as set forth in its current Prospectus and Statement of
Additional Information (copies of which will be supplied to
the Sub-Adviser upon filing with the SEC), (2) will use its
best efforts to safeguard and promote the welfare of the Fund,
(3) will comply with other policies which the Trustees or the
Manager, as the case may be, may from time to time determine
as promptly as practicable after such policies have been
communicated to the Sub-Adviser in writing, and (4) shall
exercise the same care and diligence expected of the Trustees.
The Sub-Adviser and the Manager shall each make its officers
and employees available to the other from time to time at
reasonable times to review investment policies of the Fund and
to consult with each other regarding investment affairs of the
Fund.
(b) The Sub-Adviser, at its expense, will furnish (i) all
necessary investment and management facilities, including
salaries of personnel, required for it to execute its duties
hereunder faithfully and (ii) administrative facilities,
including bookkeeping, clerical personnel and equipment
necessary for the efficient conduct of the investment affairs
of the Fund, including verification and oversight of the
pricing of the Fund's portfolio (but excluding determination
of net asset value and shareholder accounting services).
<PAGE>
3033805.01
-6-
(c) In the selection of brokers or dealers and the placing of
orders for the purchase and sale of portfolio investments for
the Fund, the Sub-Adviser shall use its best efforts to obtain
for the Fund the most favorable price and execution available,
except to the extent it may be permitted to pay higher
brokerage commissions for brokerage and research services as
described below. In using its best efforts to obtain for the
Fund the most favorable price and execution available, the
Sub-Adviser, bearing in mind the Fund's best interests at all
times, shall consider all factors it deems relevant,
including, by way of illustration, price, the size of the
transaction, the nature of the market for the security, the
amount of the commission, the timing of the transaction taking
into account market prices and trends, the reputation,
experience and financial stability of the broker or dealer
involved and the quality of service rendered by the broker or
dealer in other transactions. Subject to such policies as the
Trustees of the Trust may determine and communicate to the
Sub-Adviser in writing, the Sub-Adviser shall not be deemed to
have acted unlawfully or to have breached any duty created by
this Agreement or otherwise solely by reason of its having
caused the Trust to pay a broker or dealer that provides
brokerage and research services to the Sub-Adviser or its
affiliates an amount of commission for effecting a portfolio
investment transaction in excess of the amount of commission
another broker or dealer would have charged for effecting that
transaction, if the Sub-Adviser determines in good faith that
such amount of commission was reasonable in relation to the
value of the brokerage and research services provided by such
broker or dealer, viewed in terms of either that particular
transaction or the Sub-Adviser's overall responsibilities with
respect to the Trust and to other clients of the Sub-Adviser
and its affiliates as to which the Sub-Adviser and its
affiliates exercise investment discretion. The Trust agrees
that any entity or person associated with the Sub-Adviser or
its affiliates which is a member of a national securities
exchange is authorized to effect any transaction on such
exchange for the account of the Trust and any Fund thereof
which is permitted by Section 11(a) of the Securities Exchange
Act of 1934, as amended (the "1934 Act") and Rule 11a2-2(T)
thereunder, and the Trust has consented to the retention of
compensation for such transactions in accordance with Rule
11a2-2(T)(2)(iv).
(d) The Sub-Adviser shall not be obligated to pay any expenses of
or for the Fund not expressly assumed by the Sub-Adviser
pursuant to this Section 1.
2. OTHER AGREEMENTS, ETC.
It is understood that any of the shareholders, Trustees, officers and
employees of the Trust may be a shareholder, director, officer or
employee of, or be otherwise interested in, the Sub-Adviser, and in any
person controlled by or under common control with the Sub-Adviser, and
that the Sub-Adviser and any person controlled by or under common
control with the Sub-Adviser may have an interest in the Trust. It is
also understood that the Sub-Adviser and persons controlled by or under
common control with the Sub-Adviser have and may have advisory,
management service or other contracts with other organizations and
persons, and may have other interests and businesses.
3. COMPENSATION TO BE PAID BY THE MANAGER TO THE SUB-ADVISER.
The Manager will pay the Sub-Adviser as compensation for the
Sub-Adviser's services rendered and for the expenses borne by the
Sub-Adviser pursuant to Section 1, a fee computed and paid monthly at
the annual rate of 0.375% of the average daily net asset value of the
Fund up to $200 million and 0.350% of such net asset value in excess of
$200 million. Such fee shall be payable for each month within 10
business days after the end of such month.
If the Sub-Adviser shall serve for less than the whole of a month, the
foregoing compensation shall be prorated.
4. ASSIGNMENT TERMINATES THIS AGREEMENT; AMENDMENTS OF THIS CONTRACT.
This Agreement shall automatically terminate, without the payment of
any penalty, in the event of its assignment or in the event that the
Management Contract between the Manager and the Trust shall have
terminated for any reason; and this Agreement shall not be amended
unless such amendment be approved at a meeting by the affirmative vote
of a majority of the outstanding shares of the Fund, and by the vote,
cast in person at a meeting called for the purpose of voting on such
approval, of a majority of the Trustees of the Trust who are not
interested persons of the Trust or of the Manager or the Sub-Adviser.
5. EFFECTIVE PERIOD AND TERMINATION OF THIS AGREEMENT.
This Agreement shall become effective upon its execution, and shall
remain in full force and effect as to the Fund continuously thereafter
(unless terminated automatically as set forth in Section 4) until
terminated as follows:
(a) The Trust may at any time terminate this Agreement by written
notice delivered or mailed by registered mail, postage
prepaid, to the Manager and the Sub-Adviser, or
(b) If (i) the Trustees of the Trust or the shareholders by the
affirmative vote of a majority of the outstanding shares of
the Fund, and (ii) a majority of the Trustees of the Trust who
are not interested persons of the Trust or of the Manager or
of the Sub-Adviser, by vote cast in person at a meeting called
for the purpose of voting on such approval, do not
specifically approve at least annually the continuance of this
Agreement, then this Agreement shall automatically terminate
at the close of business on the second anniversary of its
execution, or upon the expiration of one year from the
effective date of the last such continuance, whichever is
later; provided, however, that if the continuance of this
Agreement is submitted to the shareholders of the Fund for
their approval and such shareholders fail to approve such
continuance of this Agreement as provided herein, the
Sub-Adviser may continue to serve hereunder in a manner
consistent with the Investment Company Act of 1940 and the
rules and regulations thereunder, or
(c) The Manager may at any time terminate this Agreement by not
less than 60 days' written notice delivered or mailed by
registered mail, postage prepaid, to the Sub-Adviser, and the
Sub-Adviser may at any time terminate this Agreement by not
less than 180 days' written notice delivered or mailed by
registered mail, postage prepaid, to the Manager.
Action by the Trust under (a) above may be taken either (i) by
vote of a majority of the Trustees, or (ii) by the affirmative
vote of a majority of the outstanding shares of the Fund.
Termination of this Agreement pursuant to this Section 5 shall
be without the payment of any penalty.
6. CERTAIN INFORMATION.
The Sub-Adviser shall promptly notify the Manager in writing of the
occurrence of any of the following events: (a) the Sub-Adviser shall
fail to be registered as an investment adviser under the Investment
Advisers Act of 1940, as amended from time to time, and under the laws
of any jurisdiction in which the Sub-Adviser is required to be
registered as an investment adviser in order to perform its obligations
under this agreement or any other agreement concerning the provision of
investment advisory services to the Trust, (b) the Sub-Adviser shall
have been served or otherwise have notice of any action, suit,
proceeding, inquiry or investigation, at law or in equity, before or by
any court, public board or body, involving the affairs of the Trust,
(c) there is a change in control of the Sub-Adviser or any parent of
the Sub-Adviser within the meaning of the Investment Company Act of
1940, as amended (the "1940 Act"), (d) there is a material adverse
change in the business or financial position of the Sub-Adviser or (e)
the Chairman of the Sub-Adviser or the portfolio manager of the Fund
shall have been changed.
7. CERTAIN DEFINITIONS.
For the purposes of this Agreement, the "affirmative vote of a majority
of the outstanding shares" means the affirmative vote, at a duly called
and held meeting of shareholders, (a) of the holders of 67% or more of
the shares of the Fund, as the case may be, present (in person or by
proxy) and entitled to vote at such meeting, if the holders of more
than 50% of the outstanding shares of the Fund, as the case may be,
entitled to vote at such meeting are present in person or by proxy, or
(b) of the holders of more than 50% of the outstanding shares of the
Fund, as the case may be, entitled to vote at such meeting, whichever
is less.
For the purposes of this Agreement, the terms "affiliated person,"
"control," "interested person" and "assignment" shall have their
respective meanings defined in the 1940 Act; the term "specifically
approve at least annually" shall be construed in a manner consistent
with the 1940 Act and the rules and regulations thereunder, subject,
however, to such exemptions as may be granted by the Securities and
Exchange Commission under the 1940 Act and the rules and regulations
thereunder; and the term "brokerage and research services" shall be the
meaning given in the 1934 Act and the rules and regulations thereunder.
8. NONLIABILITY OF SUB-ADVISER.
Notwithstanding any other provisions of this Agreement, in the absence
of willful misfeasance, bad faith or gross negligence on the part of
the Sub-Adviser, or reckless disregard of its obligations and duties
hereunder, the Sub-Adviser, including its officers, directors and
shareholders, shall not be subject to any liability to the Manager, to
the Trust, to the Fund, or to any shareholder, officer, director or
Trustee thereof, for any act or omission in the course of, or connected
with, rendering services hereunder.
9. EXERCISE OF VOTING RIGHTS.
Except with the agreement or on the specific instructions of the
Trustees of the Trust or the Manager, the Sub-Adviser shall not
exercise or procure the exercise of any voting right attaching to
investments of the Fund.
<PAGE>
IN WITNESS WHEREOF, PIMCO ADVISORS L.P. and CADENCE CAPITAL MANAGEMENT
have each caused this instrument to be signed in duplicate on its behalf by its
duly authorized representative, all as of the day and year first above written.
PIMCO ADVISORS L.P. CADENCE CAPITAL MANAGEMENT
By: Robert A. Prindiville By: David B. Breed
Title: Chief Executive Officer
Accepted and agreed to as of the day and year first above written:
PIMCO Advisors Funds
By: Robert A. Prindiville
A copy of the Agreement and Declaration of Trust of the Trust is on
file with the Secretary of The Commonwealth of Massachusetts, and notice is
hereby given that this instrument is executed on behalf of the Trustees of the
Trust as Trustees and not individually and that the obligations of this
instrument are not binding upon any of the Trustees or shareholders individually
but are binding upon the assets property of the Fund.
<PAGE>
3008083.01
SUB-ADVISER AGREEMENT
[Opportunity Fund]
Sub-Adviser Agreement executed as of November 16, 1994 between PIMCO
ADVISORS L.P., a Delaware limited partnership (the "Manager"), and Columbus
Circle Investors, a Delaware general partnership (the "Sub-Adviser").
WITNESSETH:
That in consideration of the mutual covenants herein contained, it is
agreed as follows:
1. SERVICES TO BE RENDERED BY SUB-ADVISER TO THE TRUST.
(a) Subject always to the control of the Trustees of Thomson Fund
Group, a Massachusetts business trust, the Sub-Adviser, at its
expense, will furnish continuously an investment program for
the Opportunity Fund series of the Trust (the "Fund") and will
make investment decisions on behalf of the Fund and place all
orders for the purchase and sale of portfolio securities and
all other investments. In the performance of its duties, the
Sub-Adviser (1) will comply with the provisions of the Trust's
Agreement and Declaration of Trust and By-laws, including any
amendments thereto (upon receipt of such amendments by the
Sub-Adviser), and the investment objectives, policies and
restrictions of the Fund as set forth in its current
Prospectus and Statement of Additional Information (copies of
which will be supplied to the Sub-Adviser upon filing with the
SEC), (2) will use its best efforts to safeguard and promote
the welfare of the Fund, (3) will comply with other policies
which the Trustees or the Manager, as the case may be, may
from time to time determine as promptly as practicable after
such policies have been communicated to the Sub-Adviser in
writing, and (4) shall exercise the same care and diligence
expected of the Trustees. The Sub-Adviser and the Manager
shall each make its officers and employees available to the
other from time to time at reasonable times to review
investment policies of the Fund and to consult with each other
regarding investment affairs of the Fund.
(b) The Sub-Adviser, at its expense, will furnish (i) all
necessary investment and management facilities, including
salaries of personnel, required for it to execute its duties
hereunder faithfully and (ii) administrative facilities,
including bookkeeping, clerical personnel and equipment
necessary for the efficient conduct of the investment affairs
of the Fund, including verification and oversight of the
pricing of the Fund's portfolio (but excluding determination
of net asset value and shareholder accounting services).
<PAGE>
3008083.01
-3-
(c) In the selection of brokers or dealers and the placing of
orders for the purchase and sale of portfolio investments for
the Fund, the Sub-Adviser shall use its best efforts to obtain
for the Fund the most favorable price and execution available,
except to the extent it may be permitted to pay higher
brokerage commissions for brokerage and research services as
described below. In using its best efforts to obtain for the
Fund the most favorable price and execution available, the
Sub-Adviser, bearing in mind the Fund's best interests at all
times, shall consider all factors it deems relevant,
including, by way of illustration, price, the size of the
transaction, the nature of the market for the security, the
amount of the commission, the timing of the transaction taking
into account market prices and trends, the reputation,
experience and financial stability of the broker or dealer
involved and the quality of service rendered by the broker or
dealer in other transactions. Subject to such policies as the
Trustees of the Trust may determine and communicate to the
Sub-Adviser in writing, the Sub-Adviser shall not be deemed to
have acted unlawfully or to have breached any duty created by
this Agreement or otherwise solely by reason of its having
caused the Trust to pay a broker or dealer that provides
brokerage and research services to the Sub-Adviser or its
affiliates an amount of commission for effecting a portfolio
investment transaction in excess of the amount of commission
another border or dealer would have charged for effecting that
transaction, if the Sub-Adviser determines in good faith that
such amount of commission was reasonable in relation to the
value of the brokerage and research services provided by such
broker or dealer, viewed in terms of either that particular
transaction or the Sub-Adviser's overall responsibilities with
respect to the Trust and to other clients of the Sub-Adviser
and its affiliates as to which the Sub-Adviser and its
affiliates exercise investment discretion. The Trust agrees
that any entity or person associated with the Sub-Adviser or
its affiliates which is a member of a national securities
exchange is authorized to effect any transaction on such
exchange for the account of the Trust and any Fund thereof
which is permitted by Section 11(a) of the Securities Exchange
Act of 1934, as amended (the "1934 Act") and Rule 11a2-2(T)
thereunder, and the Trust has consented to the retention of
compensation for such transactions in accordance with Rule
11a2-2(T)(2)(iv).
(d) The Sub-Adviser shall not be obligated to pay any expenses of
or for the Fund not expressly assumed by the Sub-Adviser
pursuant to this Section 1.
2. OTHER AGREEMENTS, ETC.
It is understood that any of the shareholders, Trustees, officers and
employees of the Trust may be a shareholder, director, officer or
employee of, or be otherwise interested in, the Sub-Adviser, and in any
person controlled by or under common control with the Sub-Adviser, and
that the Sub-Adviser and any person controlled by or under common
control with the Sub-Adviser may have an interest in the Trust. It is
also understood that the Sub-Adviser and persons controlled by or under
common control with the Sub-Adviser have and may have advisory,
management service or other contracts with other organizations and
persons, and may have other interests and businesses.
3. COMPENSATION TO BE PAID BY THE MANAGER TO THE SUB-ADVISER.
The Manager will pay the Sub-Adviser as compensation for the
Sub-Adviser's services rendered and for the expenses borne by the
Sub-Adviser pursuant to Section 1, a fee computed and paid monthly at
the annual rate of 0.375% of the average daily net asset value of the
Fund up to $200 million, and 0.35% of such net asset value in excess of
$200 million. Such fee shall be payable for each month within 10
business days after the end of such month.
If the Sub-Adviser shall serve for less than the whole of a month, the
foregoing compensation shall be prorated.
4. ASSIGNMENT TERMINATES THIS AGREEMENT; AMENDMENTS OF THIS CONTRACT.
This Agreement shall automatically terminate, without the payment of
any penalty, in the event of its assignment or in the event that the
Management Contract between the Manager and the Trust shall have
terminated for any reason; and this Agreement shall not be amended
unless such amendment be approved at a meeting by the affirmative vote
of a majority of the outstanding shares of the Fund, and by the vote,
cast in person at a meeting called for the purpose of voting on such
approval, of a majority of the Trustees of the Trust who are not
interested persons of the Trust or of the Manager or the Sub-Adviser.
5. EFFECTIVE PERIOD AND TERMINATION OF THIS AGREEMENT.
This Agreement shall become effective upon its execution, and shall
remain in full force and effect as to the Fund continuously thereafter
(unless terminated automatically as set forth in Section 4) until
terminated as follows:
(a) The Trust may at any time terminate this Agreement by written
notice delivered or mailed by registered mail, postage
prepaid, to the Manager and the Sub-Adviser, or
(b) If (i) the Trustees of the Trust or the shareholders by the
affirmative vote of a majority of the outstanding shares of
the Fund, and (ii) a majority of the Trustees of the Trust who
are not interested persons of the Trust or of the Manager or
of the Sub-Adviser, by vote cast in person at a meeting called
for the purpose of voting on such approval, do not
specifically approve at least annually the continuance of this
Agreement, then this Agreement shall automatically terminate
at the close of business on the second anniversary of its
execution, or upon the expiration of one year from the
effective date of the last such continuance, whichever is
later; provided, however, that if the continuance of this
Agreement is submitted to the shareholders of the Fund for
their approval and such shareholders fail to approve such
continuance of this Agreement as provided herein, the
Sub-Adviser may continue to serve hereunder in a manner
consistent with the Investment Company Act of 1940 and the
rules and regulations thereunder, or
(c) The Manager may at any time terminate this Agreement by not
less than 60 days' written notice delivered or mailed by
registered mail, postage prepaid, to the Sub-Adviser, and the
Sub-Adviser may at any time terminate this Agreement by not
less than 180 days' written notice delivered or mailed by
registered mail, postage prepaid, to the Manager.
Action by the Trust under (a) above may be taken either (i) by
vote of a majority of the Trustees, or (ii) by the affirmative
vote of a majority of the outstanding shares of the Fund.
Termination of this Agreement pursuant to this Section 5 shall
be without the payment of any penalty.
6. CERTAIN INFORMATION.
The Sub-Adviser shall promptly notify the Manager in writing of the
occurrence of any of the following events: (a) the Sub-Adviser shall
fail to be registered as an investment adviser under the Investment
Advisers Act of 1940, as amended from time to time, and under the laws
of any jurisdiction in which the Sub-Adviser is required to be
registered as an investment adviser in order to perform its obligations
under this agreement or any other agreement concerning the provision of
investment advisory services to the Trust, (b) the Sub-Adviser shall
have been served or otherwise have notice of any action, suit,
proceeding, inquiry or investigation, at law or in equity, before or by
any court, public board or body, involving the affairs of the Trust,
(c) there is a change in control of the Sub-Adviser or any parent of
the Sub-Adviser within the meaning of the Investment Company Act of
1940, as amended (the "1940 Act"), (d) there is a material adverse
change in the business or financial position of the Sub-Adviser or (e)
the Chairman of the Sub-Adviser or the portfolio manager of the Fun
shall have been changed.
7. CERTAIN DEFINITIONS.
For the purposes of this Agreement, the "affirmative vote of a majority
of the outstanding shares" means the affirmative vote, at a duly called
and held meeting of shareholders, (a) of the holders of 67% or more of
the shares of the Fund, as the case may be, present (in person or by
proxy) and entitled to vote at such meeting, if the holders of more
than 50% of the outstanding shares of the Fund, as the case may be,
entitled to vote at such meeting are present in person or by proxy, or
(b) of the holders of more than 50% of the outstanding shares of the
Fund, as the case may be, entitled to vote at such meeting, whichever
is less.
For the purposes of this Agreement, the terms "affiliated person,"
"control," "interested person" and "assignment" shall have their
respective meanings defined in the 1940 Act; the term "specifically
approve at least annually" shall be construed in a manner consistent
with the 1940 Act and the rules and regulations thereunder, subject,
however, to such exemptions as may be granted by the Securities and
Exchange Commission under the 1940 Act and the rules and regulations
thereunder; and the term "brokerage and research services" shall be the
meaning given in the 1934 Act and the rules and regulations thereunder.
8. NONLIABILITY OF SUB-ADVISER.
Notwithstanding any other provisions of this Agreement, in the absence
of willful misfeasance, bad faith or gross negligence on the part of
the Sub-Adviser, or reckless disregard of its obligations and duties
hereunder, the Sub-Adviser, including its officers, directors and
shareholders, shall not be subject to any liability to the Manager, to
the Trust, to the Fund, or to any shareholder, officer, director or
Trustee thereof, for any act or omission in the course of, or connected
with, rendering services hereunder.
9. EXERCISE OF VOTING RIGHTS.
Except with the agreement or on the specific instructions of the
Trustees of the Trust or the Manager, the Sub-Adviser shall not
exercise or procure the exercise of any voting right attaching to
investments of the Fund.
<PAGE>
IN WITNESS WHEREOF, PIMCO ADVISORS L.P. and COLUMBUS CIRCLE INVESTORS
have each caused this instrument to be signed in duplicate on its behalf by its
duly authorized representative, all as of the day and year first above written.
PIMCO ADVISORS L.P. COLUMBUS CIRCLE INVESTORS
(formerly Thomson Advisory Group L.P.)
By: I. F. Smith
By: PIMCO Partners, G.P., a California Title:
general partnership, General Partner
By: PIMCO Partners, LLC, a California
limited liability company, General Partner
By: William S. Thompson
Accepted and agreed to as of the day and year first above written:
THOMSON FUND GROUP
By: Robert A. Prindiville
<PAGE>
A copy of the Agreement and Declaration of Trust of the Trust is on
file with the Secretary of The Commonwealth of Massachusetts, and notice is
hereby given that this instrument is executed on behalf of the Trustees of the
Trust as Trustees and not individually and that the obligations of this
instrument are not binding upon any of the Trustees or shareholders individually
but are binding upon the assets property of the Fund.
<PAGE>
3008108.01
SUB-ADVISER AGREEMENT
[Innovation Fund]
Sub-Adviser Agreement executed as of November 16, 1994 between PIMCO
ADVISORS L.P., a Delaware limited partnership (the "Manager"), and Columbus
Circle Investors, a Delaware general partnership (the "Sub-Adviser").
WITNESSETH:
That in consideration of the mutual covenants herein contained, it is
agreed as follows:
1. SERVICES TO BE RENDERED BY SUB-ADVISER TO THE TRUST.
(a) Subject always to the control of the Trustees of Thomson Fund
Group, a Massachusetts business trust, the Sub-Adviser, at its
expense, will furnish continuously an investment program for
the Innovation Fund series of the Trust (the "Fund") and will
make investment decisions on behalf of the Fund and place all
orders for the purchase and sale of portfolio securities and
all other investments. In the performance of its duties, the
Sub-Adviser (1) will comply with the provisions of the Trust's
Agreement and Declaration of Trust and By-laws, including any
amendments thereto (upon receipt of such amendments by the
Sub-Adviser), and the investment objectives, policies and
restrictions of the Fund as set forth in its current
Prospectus and Statement of Additional Information (copies of
which will be supplied to the Sub-Adviser upon filing with the
SEC), (2) will use its best efforts to safeguard and promote
the welfare of the Fund, (3) will comply with other policies
which the Trustees or the Manager, as the case may be, may
from time to time determine as promptly as practicable after
such policies have been communicated to the Sub-Adviser in
writing, and (4) shall exercise the same care and diligence
expected of the Trustees. The Sub-Adviser and the Manager
shall each make its officers and employees available to the
other from time to time at reasonable times to review
investment policies of the Fund and to consult with each other
regarding investment affairs of the Fund.
(b) The Sub-Adviser, at its expense, will furnish (i) all
necessary investment and management facilities, including
salaries of personnel, required for it to execute its duties
hereunder faithfully and (ii) administrative facilities,
including bookkeeping, clerical personnel and equipment
necessary for the efficient conduct of the investment affairs
of the Fund, including verification and oversight of the
pricing of the Fund's portfolio (but excluding determination
of net asset value and shareholder accounting services).
<PAGE>
3008108.01
-7-
(c) In the selection of brokers or dealers and the placing of
orders for the purchase and sale of portfolio investments for
the Fund, the Sub-Adviser shall use its best efforts to obtain
for the Fund the most favorable price and execution available,
except to the extent it may be permitted to pay higher
brokerage commissions for brokerage and research services as
described below. In using its best efforts to obtain for the
Fund the most favorable price and execution available, the
Sub-Adviser, bearing in mind the Fund's best interests at all
times, shall consider all factors it deems relevant,
including, by way of illustration, price, the size of the
transaction, the nature of the market for the security, the
amount of the commission, the timing of the transaction taking
into account market prices and trends, the reputation,
experience and financial stability of the broker or dealer
involved and the quality of service rendered by the broker or
dealer in other transactions. Subject to such policies as the
Trustees of the Trust may determine and communicate to the
Sub-Adviser in writing, the Sub-Adviser shall not be deemed to
have acted unlawfully or to have breached any duty created by
this Agreement or otherwise solely by reason of its having
caused the Trust to pay a broker or dealer that provides
brokerage and research services to the Sub-Adviser or its
affiliates an amount of commission for effecting a portfolio
investment transaction in excess of the amount of commission
another border or dealer would have charged for effecting that
transaction, if the Sub-Adviser determines in good faith that
such amount of commission was reasonable in relation to the
value of the brokerage and research services provided by such
broker or dealer, viewed in terms of either that particular
transaction or the Sub-Adviser's overall responsibilities with
respect to the Trust and to other clients of the Sub-Adviser
and its affiliates as to which the Sub-Adviser and its
affiliates exercise investment discretion. The Trust agrees
that any entity or person associated with the Sub-Adviser or
its affiliates which is a member of a national securities
exchange is authorized to effect any transaction on such
exchange for the account of the Trust and any Fund thereof
which is permitted by Section 11(a) of the Securities Exchange
Act of 1934, as amended (the "1934 Act") and Rule 11a2-2(T)
thereunder, and the Trust has consented to the retention of
compensation for such transactions in accordance with Rule
11a2-2(T)(2)(iv).
(d) The Sub-Adviser shall not be obligated to pay any expenses of
or for the Fund not expressly assumed by the Sub-Adviser
pursuant to this Section 1.
2. OTHER AGREEMENTS, ETC.
It is understood that any of the shareholders, Trustees, officers and
employees of the Trust may be a shareholder, director, officer or
employee of, or be otherwise interested in, the Sub-Adviser, and in any
person controlled by or under common control with the Sub-Adviser, and
that the Sub-Adviser and any person controlled by or under common
control with the Sub-Adviser may have an interest in the Trust. It is
also understood that the Sub-Adviser and persons controlled by or under
common control with the Sub-Adviser have and may have advisory,
management service or other contracts with other organizations and
persons, and may have other interests and businesses.
3. COMPENSATION TO BE PAID BY THE MANAGER TO THE SUB-ADVISER.
The Manager will pay the Sub-Adviser as compensation for the
Sub-Adviser's services rendered and for the expenses borne by the
Sub-Adviser pursuant to Section 1, a fee computed and paid monthly at
the annual rate of 0.375% of the average daily net asset value of the
Fund up to $200 million, and 0.35% of such net asset value in excess of
$200 million. Such fee shall be payable for each month within 10
business days after the end of such month.
If the Sub-Adviser shall serve for less than the whole of a month, the
foregoing compensation shall be prorated.
4. ASSIGNMENT TERMINATES THIS AGREEMENT; AMENDMENTS OF THIS CONTRACT.
This Agreement shall automatically terminate, without the payment of
any penalty, in the event of its assignment or in the event that the
Management Contract between the Manager and the Trust shall have
terminated for any reason; and this Agreement shall not be amended
unless such amendment be approved at a meeting by the affirmative vote
of a majority of the outstanding shares of the Fund, and by the vote,
cast in person at a meeting called for the purpose of voting on such
approval, of a majority of the Trustees of the Trust who are not
interested persons of the Trust or of the Manager or the Sub-Adviser.
5. EFFECTIVE PERIOD AND TERMINATION OF THIS AGREEMENT.
This Agreement shall become effective upon its execution, and shall
remain in full force and effect as to the Fund continuously thereafter
(unless terminated automatically as set forth in Section 4) until
terminated as follows:
(a) The Trust may at any time terminate this Agreement by written
notice delivered or mailed by registered mail, postage
prepaid, to the Manager and the Sub-Adviser, or
(b) If (i) the Trustees of the Trust or the shareholders by the
affirmative vote of a majority of the outstanding shares of
the Fund, and (ii) a majority of the Trustees of the Trust who
are not interested persons of the Trust or of the Manager or
of the Sub-Adviser, by vote cast in person at a meeting called
for the purpose of voting on such approval, do not
specifically approve at least annually the continuance of this
Agreement, then this Agreement shall automatically terminate
at the close of business on the second anniversary of its
execution, or upon the expiration of one year from the
effective date of the last such continuance, whichever is
later; provided, however, that if the continuance of this
Agreement is submitted to the shareholders of the Fund for
their approval and such shareholders fail to approve such
continuance of this Agreement as provided herein, the
Sub-Adviser may continue to serve hereunder in a manner
consistent with the Investment Company Act of 1940 and the
rules and regulations thereunder, or
(c) The Manager may at any time terminate this Agreement by not
less than 60 days' written notice delivered or mailed by
registered mail, postage prepaid, to the Sub-Adviser, and the
Sub-Adviser may at any time terminate this Agreement by not
less than 180 days' written notice delivered or mailed by
registered mail, postage prepaid, to the Manager.
Action by the Trust under (a) above may be taken either (i) by
vote of a majority of the Trustees, or (ii) by the affirmative
vote of a majority of the outstanding shares of the Fund.
Termination of this Agreement pursuant to this Section 5 shall
be without the payment of any penalty.
6. CERTAIN INFORMATION.
The Sub-Adviser shall promptly notify the Manager in writing of the
occurrence of any of the following events: (a) the Sub-Adviser shall
fail to be registered as an investment adviser under the Investment
Advisers Act of 1940, as amended from time to time, and under the laws
of any jurisdiction in which the Sub-Adviser is required to be
registered as an investment adviser in order to perform its obligations
under this agreement or any other agreement concerning the provision of
investment advisory services to the Trust, (b) the Sub-Adviser shall
have been served or otherwise have notice of any action, suit,
proceeding, inquiry or investigation, at law or in equity, before or by
any court, public board or body, involving the affairs of the Trust,
(c) there is a change in control of the Sub-Adviser or any parent of
the Sub-Adviser within the meaning of the Investment Company Act of
1940, as amended (the "1940 Act"), (d) there is a material adverse
change in the business or financial position of the Sub-Adviser or (e)
the Chairman of the Sub-Adviser or the portfolio manager of the Fun
shall have been changed.
7. CERTAIN DEFINITIONS.
For the purposes of this Agreement, the "affirmative vote of a majority
of the outstanding shares" means the affirmative vote, at a duly called
and held meeting of shareholders, (a) of the holders of 67% or more of
the shares of the Fund, as the case may be, present (in person or by
proxy) and entitled to vote at such meeting, if the holders of more
than 50% of the outstanding shares of the Fund, as the case may be,
entitled to vote at such meeting are present in person or by proxy, or
(b) of the holders of more than 50% of the outstanding shares of the
Fund, as the case may be, entitled to vote at such meeting, whichever
is less.
For the purposes of this Agreement, the terms "affiliated person,"
"control," "interested person" and "assignment" shall have their
respective meanings defined in the 1940 Act; the term "specifically
approve at least annually" shall be construed in a manner consistent
with the 1940 Act and the rules and regulations thereunder, subject,
however, to such exemptions as may be granted by the Securities and
Exchange Commission under the 1940 Act and the rules and regulations
thereunder; and the term "brokerage and research services" shall be the
meaning given in the 1934 Act and the rules and regulations thereunder.
8. NONLIABILITY OF SUB-ADVISER.
Notwithstanding any other provisions of this Agreement, in the absence
of willful misfeasance, bad faith or gross negligence on the part of
the Sub-Adviser, or reckless disregard of its obligations and duties
hereunder, the Sub-Adviser, including its officers, directors and
shareholders, shall not be subject to any liability to the Manager, to
the Trust, to the Fund, or to any shareholder, officer, director or
Trustee thereof, for any act or omission in the course of, or connected
with, rendering services hereunder.
9. EXERCISE OF VOTING RIGHTS.
Except with the agreement or on the specific instructions of the
Trustees of the Trust or the Manager, the Sub-Adviser shall not
exercise or procure the exercise of any voting right attaching to
investments of the Fund.
<PAGE>
IN WITNESS WHEREOF, PIMCO ADVISORS L.P. and COLUMBUS CIRCLE INVESTORS
have each caused this instrument to be signed in duplicate on its behalf by its
duly authorized representative, all as of the day and year first above written.
PIMCO ADVISORS L.P. COLUMBUS CIRCLE INVESTORS
(formerly Thomson Advisory Group L.P.)
By: I. F. Smith
By: PIMCO Partners, G.P., a California
general partnership, General Partner
By: PIMCO Partners, LLC, a California
limited liability company, General Partner
By: William S. Thompson
Accepted and agreed to as of the day and year first above written:
THOMSON FUND GROUP
By: Robert A. Prindiville
<PAGE>
A copy of the Agreement and Declaration of Trust of the Trust is on
file with the Secretary of The Commonwealth of Massachusetts, and notice is
hereby given that this instrument is executed on behalf of the Trustees of the
Trust as Trustees and not individually and that the obligations of this
instrument are not binding upon any of the Trustees or shareholders individually
but are binding upon the assets property of the Fund.
<PAGE>
3007812.01
SUB-ADVISER AGREEMENT
[International Fund]
Sub-Adviser Agreement executed as of November 15, 1994 between PIMCO
ADVISORS L.P., a Delaware limited partnership (the "Manager"), and Blairlogie
Capital Management, a United Kingdom limited partnership (the "Sub-Adviser").
WITNESSETH:
That in consideration of the mutual covenants herein contained, it is
agreed as follows:
1. SERVICES TO BE RENDERED BY SUB-ADVISER TO THE TRUST.
(a) Subject always to the control of the Trustees of Thomson Fund
Group (the "Trust"), a Massachusetts business trust, the
Sub-Adviser, at its expense, will furnish continuously an
investment program for the Thomson International Fund series
of the Trust (the "Fund") and will make investment decisions
on behalf of the Fund and place all orders for the purchase
and sale of portfolio securities and all other investments. In
the performance of its duties, the Sub-Adviser (1) will comply
with the provisions of the Trust's Amended and Restated
Agreement and Declaration of Trust and By-laws, including any
amendments thereto, (upon receipt of such amendments by the
Sub-Adviser), and the investment objectives, policies and
restrictions of the Fund as set forth in its current
Prospectus and Statement of Additional Information (copies of
which will be supplied to the Sub-Adviser upon filing with the
SEC), (2) will use its best efforts to safeguard and promote
the welfare of the Fund in carrying out the Fund's investment
program, (3) will comply with other policies which the
Trustees or the Manager, as the case may be, may from time to
time determine as promptly as practicable after such policies
have been communicated to the Sub-Adviser in writing, and (4)
shall exercise the same care and diligence expected of the
Trustees. The Sub-Adviser and the Manager shall each make its
officers and employees available to the other from time to
time at reasonable times to review investment policies of the
Fund and to consult with each other regarding the investment
affairs of the Fund.
(b) The Sub-Adviser, at its expense, will furnish (i) all
necessary investment and management facilities, including
salaries of personnel, required for it to execute its duties
hereunder faithfully and (ii) administrative facilities,
including bookkeeping, clerical personnel and equipment
necessary for the efficient conduct of the investment affairs
of the Fund, including verification and oversight of the
pricing of the Fund's portfolio (but excluding determination
of net asset value and shareholder accounting services).
<PAGE>
3007812.01
-2-
(c) In the selection of brokers or dealers and the placing of
orders for the purchase and sale of portfolio investments for
the Fund, the Sub-Adviser shall use its best efforts to obtain
for the Fund the most favorable price and execution available,
except to the extent it may be permitted to pay higher
brokerage commissions for brokerage and research services as
described below. In using its best efforts to obtain for the
Fund the most favorable price and execution available, the
Sub-Adviser, bearing in mind the Fund's best interests at all
times, shall consider all factors it deems relevant,
including, by way of illustration, price, the size of the
transaction, the nature of the market for the security, the
amount of the commission, the timing of the transaction taking
into account market prices and trends, the reputation,
experience and financial stability of the broker or dealer
involved and the quality of service rendered by the broker or
dealer in other transactions. Subject to such policies as the
Trustees of the Trust may determine and communicate to the
Sub-Adviser in writing, the Sub-Adviser shall not be deemed to
have acted unlawfully or to have breached any duty created by
this Agreement or otherwise solely by reason of its having
caused the Fund to pay a broker or dealer that provides
brokerage and research services to the Sub-Adviser or its
affiliates an amount of commission for effecting a portfolio
investment transaction in excess of the amount of commission
another broker or dealer would have charged for effecting that
transaction, if the Sub-Adviser determines in good faith that
such amount of commission was reasonable in relation to the
value of the brokerage and research services provided by such
broker or dealer, viewed in terms of either that particular
transaction or the Sub-Adviser's overall responsibilities with
respect to the Fund and to other clients of the Sub-Adviser
and its affiliates as to which the Sub-Adviser or its
affiliates exercise investment discretion. The Trust agrees
that any entity or person associated with the Sub-Adviser or
its affiliates which is a member of a national securities
exchange is authorized to effect any transaction on such
exchange for the account of the Trust and any Fund thereof
which is permitted by Section 11(a) of the Securities Exchange
Act of 1934, as amended (the "1934 Act") and Rule 11a2-2(T)
thereunder, and the Trust has consented to the retention of
compensation for such transactions in accordance with Rule
11a2-2(T)(2)(iv).
(d) The Sub-Adviser shall not be obligated to pay any expenses of
or for the Fund not expressly assumed by the Sub-Adviser
pursuant to this Section 1.
(e) Nothing herein shall be considered as constituting the
Sub-Adviser as an agent for the Manager or the Fund or the
Trust or as anything other than an independent contractor with
respect to the Manager or the Fund or the Trust.
2. OTHER AGREEMENTS, ETC.
It is understood that any of the shareholders, Trustees, officers and
employees of the Trust may be a shareholder, director, officer or
employee of, or be otherwise interested in, the Sub-Adviser, and in any
person controlled by or under common control with the Sub-Adviser, and
that the Sub-Adviser may have an interest in the Trust. It is also
understood that the Sub-Adviser and persons controlled by or under
common control with the Sub-Adviser have and may have advisory,
management service or other contracts with other organizations and
persons, and may have other interests and businesses; provided,
however, that, without the prior consent of the Manager, neither the
Sub-Adviser nor any of its affiliates operating under the Blairlogie
name shall undertake to act as investment adviser or sub-adviser for
any other U.S. registered investment company that has substantially
similar investment policies to the Fund and that is not sponsored or
managed by the Sub-Adviser or one of its affiliates.
3. COMPENSATION TO BE PAID BY THE MANAGER TO THE SUB-ADVISER.
The Manager will pay to the Sub-Adviser as compensation for the
Sub-Adviser's services rendered and for the expenses borne by the
Sub-Adviser pursuant to Section 1, a fee computed and paid monthly at
the annual rate of 0.400% of the average daily net asset value of the
Fund. Such fee shall be payable for each month within 10 business days
after the end of such month.
If the Sub-Adviser shall serve for less than the whole of a month, the
foregoing compensation shall be prorated.
4. ASSIGNMENT TERMINATES THIS AGREEMENT; AMENDMENTS OF THIS CONTRACT.
This Agreement shall automatically terminate, without the payment of
any penalty, in the event of its assignment or in the event that the
Management Contract between the Manager and the Trust shall have
terminated for any reason; and this Agreement shall not be amended
unless such amendment be approved at a meeting by the affirmative vote
of a majority of the outstanding shares of the Fund, and by the vote,
cast in person at a meeting called for the purpose of voting on such
approval, of a majority of the Trustees of the Trust who are not
interested persons of the Trust or of the Manager or of the
Sub-Adviser.
5. EFFECTIVE PERIOD AND TERMINATION OF THIS AGREEMENT.
This Agreement shall become effective upon its execution, and shall
remain in full force and effect as to the Fund continuously thereafter
(unless terminated automatically as set forth in Section 4) until
terminated as follows:
(a) The Trust may at any time terminate this Agreement by written
notice delivered or mailed by registered mail, postage
prepaid, to the Manager and the Sub-Adviser, or
(b) If (i) the Trustees of the Trust or the shareholders by the
affirmative vote of a majority of the outstanding shares of
the Fund, and (ii) a majority of the Trustees of the Trust who
are not interested persons of the Trust or of the Manager or
of the Sub-Adviser, by vote cast in person at a meeting called
for the purpose of voting on such approval, do not
specifically approve at least annually the continuance of this
Agreement, then this Agreement shall automatically terminate
at the close of business on the second anniversary of its
execution, or upon the expiration of one year from the
effective date of the last such continuance, whichever is
later; provided, however, that if the continuance of this
Agreement is submitted to the shareholders of the Fund for
their approval and such shareholders fail to approve such
continuance of this Agreement as provided herein, the
Sub-Adviser may continue to serve hereunder in a manner
consistent with the Investment Company Act of 1940 and the
rules and regulations thereunder, or
(c) The Manager may at any time terminate this Agreement by not
less than 45 days' written notice delivered or mailed by
registered mail, postage prepaid, to the Sub-Adviser, and the
Sub-Adviser may at any time terminate this Agreement by not
less than 180 days' written notice delivered or mailed by
registered mail, postage prepaid, to the Manager.
Action by the Trust under (a) above may be taken either (i) by
vote of a majority of its Trustees, or (ii) by the affirmative
vote of a majority of the outstanding shares of the Fund.
Termination of this Agreement pursuant to this Section 5 shall
be without the payment of any penalty.
6. CERTAIN INFORMATION.
The Sub-Adviser shall promptly notify the Manager in writing of the
occurrence of any of the following events: (a) the Sub-Adviser shall
fail to be registered as an investment adviser under the Investment
Advisers Act of 1940, as amended from time to time, and under the laws
of any jurisdiction in which the Sub-Adviser is required to be
registered as an investment adviser in order to perform its obligations
under this Agreement or any other agreement concerning the provision of
investment advisory services to the Trust, (b) the Sub-Adviser shall be
disqualified from serving as investment adviser to the Fund pursuant to
Section 9 of the 1940 Act, or otherwise, (c) the Sub-Adviser shall have
been served or otherwise have notice of any action, suit, proceeding,
inquiry or investigation, at law or in equity, before or by any court,
public board or body, involving the affairs of the Trust, (d) there is
a change in control of the Sub-Adviser or any parent of the Sub-Adviser
within the meaning of the Investment Company Act of 1940, as amended
(the "1940 Act"), (e) there is a material adverse change in the
business or financial position of the Sub-Adviser or (f) the Chairman
of the Sub-Adviser or the portfolio manager of the Fund shall have
changed.
7. CERTAIN DEFINITIONS.
For the purposes of this Agreement, the "affirmative vote of a majority
of the outstanding shares" means the affirmative vote, at a duly called
and held meeting of shareholders, (a) of the holders of 67% or more of
the shares of the Fund, as the case may be, present (in person or by
proxy) and entitled to vote at such meeting, if the holders of more
than 50% of the outstanding shares of the Fund, as the case may be,
entitled to vote at such meeting are present in person or by proxy, or
(b) of the holders of more than 50% of the outstanding shares of the
Fund, as the case may be, entitled to vote at such meeting, whichever
is less.
For the purposes of this Agreement, the terms "affiliated person",
"control", "interested person" and "assignment" shall have their
respective meanings defined in the 1940 Act and the rules and
regulations thereunder, subject, however, to such exemptions as may be
granted by the Securities and Exchange Commission under the 1940 Act;
the term "specifically approve at least annually" shall be construed in
a manner consistent with the 1940 Act and the rules and regulations
thereunder; and the term "brokerage and research services" shall have
the meaning given in the 1934 Act and the rules and regulations
thereunder.
8. NONLIABILITY OF SUB-ADVISER.
Notwithstanding any other provision of this Agreement, in the absence
of willful misfeasance, bad faith or gross negligence on the part of
the Sub-Adviser, or reckless disregard of its obligations and duties
hereunder, the Sub-Adviser, including its officers, directors and
shareholders, shall not be subject to any liability to the Manager, to
the Trust, to the Fund, or to any shareholder, officer, director or
Trustee thereof, for any act or omission in the course of, or connected
with, rendering services hereunder.
9. EXERCISE OF VOTING RIGHTS.
Except as instructed otherwise by the Trustees of the Trust or the
Manager, the Sub-Adviser shall at its discretion exercise or procure
the exercise of any voting right attaching to investments of the Fund.
10. REPORTS.
During the term of this Agreement, the Manager agrees to use its best
efforts (a) to furnish to the Sub-Adviser a reasonable time prior to
the use thereof all prospectuses (as described in Section 10(a) of the
Securities Act of 1933), proxy statements and reports to stockholders
which describe the Sub-Adviser or its ownership, business or investment
processes in any way that is materially different from the "Agreed
Disclosure" (which for this purpose means either (i) the prospectus
(including any prospectus supplement) or (ii) the most recent amendment
to the Trust's registration statement under the Securities Act of 1933
depending on whether, on the relevant date, the prospectus or the
amendment was more recently filed with the SEC) and (b) not to use any
such material (to the extent it relates to the Sub-Adviser) if the
Sub-Adviser objects promptly in writing and the Manager reasonably
concludes that the description of the Sub-Adviser or its ownership,
business or investment process is materially misleading or inaccurate.
<PAGE>
IN WITNESS WHEREOF, PIMCO ADVISORS L.P. and BLAIRLOGIE CAPITAL
MANAGEMENT have each caused this instrument to be signed in duplicate on its
behalf by its duly authorized representative, all as of the day and year first
above written.
PIMCO ADVISORS L.P.
(formerly Thomson Advisory Group L.P.)
By: PIMCO Partners, G.P., a California
general partnership, General Partner
By: PIMCO Partners, LLC, a California
limited liability company, General Partner
By: William S. Thompson
BLAIRLOGIE CAPITAL MANAGEMENT
By: Gavin R. Dobson
Title: Chief Executive Officer
Accepted and agreed to as of the day and year first above written:
THOMSON FUND GROUP
By: Robert A. Prindiville
A copy of the Amended and Restated Agreement and Declaration of Trust
of the Trust is on file with the Secretary of The Commonwealth of Massachusetts,
and notice is hereby given that this instrument is executed on behalf of the
Trustees of the Trust as Trustees and not individually and that the obligations
of this instrument are not binding upon any of the Trustees or shareholders
individually but are binding upon the assets and property of the Fund.
<PAGE>
3007630.01
SUB-ADVISER AGREEMENT
[Precious Metals and Natural Resources Fund]
Sub-Adviser Agreement executed as of November 16, 1994 between PIMCO
ADVISORS L.P., a Delaware limited partnership (the "Manager"), and VAN ECK
ASSOCIATES CORPORATION, a Delaware corporation (the "Sub-Adviser").
WITNESSETH:
That in consideration of the mutual covenants herein contained, it is
agreed as follows:
1. SERVICES TO BE RENDERED BY SUB-ADVISER TO THE TRUST
(a) Subject always to the control of the Trustees of Thomson Fund
Group (the "Trust"), a Massachusetts business trust, the
Sub-Adviser, at its expense, will furnish continuously an
investment program for the Thomson Precious Metals and Natural
Resources Fund series of the Trust (the "Fund") and will make
investment decisions on behalf of the Fund and place all
orders for the purchase and sale of portfolio securities and
all other investments. In the performance of its duties, the
Sub-Adviser (1) will comply with the provisions of the Trust's
Amended and Restated Agreement and Declaration of Trust and
By-laws, including any amendments thereto, (upon receipt of
such amendments by the Sub-Adviser), and the investment
objectives, policies and restrictions of the Fund as set forth
in its current Prospectus and Statement of Additional
Information, (copies of which will be supplied to the
Sub-Adviser upon filing with the SEC), (2) will use its best
efforts to safeguard and promote the welfare of the Fund, (3)
will comply with other policies which the Trustees or the
Manager, as the case may be, may from time to time determine
as promptly as practicable after such policies have been
communicated to the Sub-Adviser in writing, and (4) shall
exercise the same care and diligence expected of the Trustees.
The Sub-Adviser and the Manager shall each make its officers
and employees available to the other from time to time at
reasonable times to review investment policies of the Fund and
to consult with each other regarding the investment affairs of
the Fund.
(b) The Sub-Adviser, at its expense, will furnish (i) all
necessary investment and management facilities, including
salaries of personnel, required for it to execute its duties
hereunder faithfully and (ii) administrative facilities,
including bookkeeping, clerical personnel and equipment
necessary for the efficient conduct of the investment affairs
of the Fund, including verification and oversight of the
pricing of the Fund's portfolio (but excluding determination
of net asset value and shareholder accounting services).
<PAGE>
3007630.01
-6-
(c) In the selection of brokers or dealers and the placing of
orders for the purchase and sale of portfolio investments for
the Fund, the Sub-Adviser shall use its best efforts to obtain
for the Fund the most favorable price and execution available,
except to the extent it may be permitted to pay higher
brokerage commissions for brokerage and research services as
described below. In using its best efforts to obtain for the
Fund the most favorable price and execution available, the
Sub-Adviser, bearing in mind the Fund's best interests at all
times, shall consider all factors it deems relevant,
including, by way of illustration, price, the size of the
transaction, the nature of the market for the security, the
amount of the commission, the timing of the transaction taking
into account market prices and trends, the reputation,
experience and financial stability of the broker or dealer
involved and the quality of service rendered by the broker or
dealer in other transactions. Subject to such policies as the
Trustee of the Trust may determine and communicate to the
Sub-Adviser in writing, the Sub-Adviser shall not be deemed to
have acted unlawfully or to have breached any duty created by
this Agreement or otherwise solely by reason of its having
caused the Fund to pay a broker or dealer that provides
brokerage and research services to the Sub-Adviser or its
affiliates an amount of commission for effecting a portfolio
investment transaction in excess of the amount of commission
another broker or dealer would have charged for effecting that
transaction, if the Sub-Adviser determines in good faith that
such amount of commission was reasonable in relation to the
value of the brokerage and research services provided by such
broker or dealer, viewed in terms of either that particular
transaction or the Sub-Adviser's overall responsibilities with
respect to the Fund and to other clients of the Sub-Adviser
and its affiliates as to which the Sub-Adviser or its
affiliates exercise investment discretion. The Trust agrees
that any entity or person associated with the Sub-Adviser or
its affiliates which is a member of a national securities
exchange is authorized to effect any transaction on such
exchange for the account of the Trust and any Fund thereof
which is permitted by Section 11(a) of the Securities Exchange
Act of 1934, as amended (the "1934 Act") and Rule 11a2-2(T)
thereunder, and the Trust has consented to the retention of
compensation for such transactions in accordance with Rule
11a2-2(T)(2)(iv).
(d) The Sub-Adviser shall not be obligated to pay any expenses of
or for the Fund not expressly assumed by the Sub-Adviser
pursuant to this Section 1.
2. OTHER AGREEMENTS, ETC.
It is understood that any of the shareholders, Trustees, officers and
employees of the Trust may be a shareholder, director, officer or
employee of, or be otherwise interested in, the Sub-Adviser, and in any
person controlled by or under common control with the Sub-Adviser, and
that the Sub-Adviser may have an interest in the Trust. It is also
understood that the Sub-Adviser and persons controlled by or under
common control with the Sub-Adviser have and may have advisory,
management service or other contracts with other organizations and
persons, and may have other interests and businesses; provided,
however, that neither the Sub-Adviser nor any of its affiliates
operating under the Van Eck name shall undertake to act as investment
adviser or sub-adviser for any other registered investment company that
is not sponsored or managed by the Sub-Adviser or one of its affiliates
except upon not less than 60 days' prior notice in writing to the
Manager and the Trust.
3. COMPENSATION TO BE PAID BY THE MANAGER TO THE SUB-ADVISER.
The Manager will pay to the Sub-Adviser as compensation for the
Sub-Adviser's services rendered and for the expenses borne by the
Sub-Adviser pursuant to Section 1, a fee computed and paid monthly at
the annual rate of 0.375% of the average daily net asset value of the
Fund up to $200 million, and 0.35% of such net asset value in excess of
$200 million. Such fee shall be payable for each month within 10
business days after the end of such month.
If the Sub-Adviser shall serve for less than the whole of a month, the
foregoing compensation shall be prorated.
4. ASSIGNMENT TERMINATES THIS AGREEMENT; AMENDMENTS OF THIS CONTRACT.
This Agreement shall automatically terminate, without the payment of
any penalty, in the event of its assignment or in the event that the
Management Contract between the Manager and the Trust shall have
terminated for any reason; and this Agreement shall not be amended
unless such amendment be approved at a meeting by the affirmative vote
of a majority of the outstanding shares of the Fund, and by the vote,
cast in person at a meeting called for the purpose of voting on such
approval, of a majority of the Trustees of the Trust who are not
interested persons of the Trust or of the Manager or of the
Sub-Adviser.
5. EFFECTIVE PERIOD AND TERMINATION OF THIS AGREEMENT.
This Agreement shall become effective upon its execution, and shall
remain in full force and effect as to the Fund continuously thereafter
(unless terminated automatically as set forth in Section 4) until
terminated as follows:
(a) The Trust may at any time terminate this Agreemen by written
notice delivered or mailed by registered mail, postage
prepaid, to the Manager and the Sub-Adviser, or
(b) If (i) the Trustees of the Trust or the shareholders by the
affirmative vote of a majority of the outstanding shares of
the Fund, and (ii) a majority of the Trustees of the Trust who
are not interested persons of the Trust or of the Manager or
of the Sub-Adviser, by vote cast in person at a meeting called
for the purpose of voting on such approval, do not
specifically approve at least annually the continuance of this
Agreement, then this Agreement shall automatically terminate
at the close of business on the second anniversary of its
execution, or upon the expiration of one year from the
effective date of the last such continuance, whichever is
later; provided, however, that if the continuance of this
Agreement is submitted to the shareholders of the Fund for
their approval and such shareholders fail to approve such
continuance of this Agreement as provided herein, the
Sub-Adviser may continue to serve hereunder in a manner
consistent with the Investment Company Act of 1940 and the
rules and regulations thereunder, or
(c) The Manger may at any time terminate this Agreement by not
less than 60 days' written notice delivered or mailed by
registered mail, postage prepaid, to the Sub-Adviser, and the
Sub-Adviser may at any time terminate this Agreement by not
less than 180 days' written notice delivered or mailed by
registered mail, postage prepaid, to the Manager.
Action by the Trust under (a) above may be taken either (i) by
vote of a majority of the Trustees, or (ii) by the affirmative
vote of a majority of the outstanding shares of the Fund.
Termination of this Agreement pursuant to this Section 5 shall
be without the payment of any penalty.
6. CERTAIN INFORMATION
The Sub-Adviser shall promptly notify the Manager in writing of the
occurrence of any of the following events: (a) the Sub-Adviser shall
fail to be registered as an investment adviser under the Investment
Advisers Act of 1940, as amended from time to time, and under the laws
of any jurisdiction in which the Sub-Adviser is required to be
registered as an investment adviser in order to perform its obligations
under this Agreement or any other agreement concerning the provision of
investment advisory services to the Trust, (b) the Sub-Adviser shall
have been served or otherwise have notice of any action, suit,
proceeding, inquiry or investigation, at law or in equity, before or by
any court, public board or body, involving the affairs of the Trust,
(c) there is a change in control of the Sub-Adviser or any parent of
the Sub-Adviser within the meaning of the Investment Company Act of
1940, as amended (the "1940 Act"), (d) there is a material adverse
change in the business or financial position of the Sub-Adviser or (e)
the Chairman of the Sub-Adviser or the portfolio manager of the Fund
shall have changed.
7. CERTAIN DEFINITIONS.
For the purposes of this Agreement, the "affirmative vote of a majority
of the outstanding shares" means the affirmative vote, at a duly called
and held meeting of shareholders, (a) of the holders of 67% or more of
the shares of the Fund, as the case may be, present (in person or by
proxy) and entitled to vote at such meeting, if the holders of more
than 50% of the outstanding shares of the Fund, as the case may be,
entitled to vote at such meeting are present in person or by proxy, or
(b) of the holders of more than 50% of the outstanding shares of the
Fund, as the case may be, entitled to vote at such meeting, whichever
is less.
For the purposes of this Agreement, the terms "affiliated person",
"control", "interested person" and "assignment" shall have their
respective meanings defined in the 1940 Act and the rules and
regulations thereunder, subject, however, to such exemptions as may be
granted by the Securities and Exchange Commission under the 1940 Act;
the term "specifically approve at least annually" shall be construed in
a manner consistent with the 1940 Act and the rules and regulations
thereunder; and the term "brokerage and research services" shall have
the meaning given in the 1934 Act and the rules and regulations
thereunder.
8. NONLIABILITY OF SUB-ADVISER.
Notwithstanding any other provision of this agreement, in the absence
of willful misfeasance, bad faith or gross negligence on the part of
the Sub-Adviser, or reckless disregard of its obligations and duties
hereunder, the Sub-Adviser, including its officers, directors and
shareholders, shall not be subject to any liability to the Manger, to
the Trust, to the Fund, or to any shareholder, officer, director or
Trustee thereof, for any act or omission in the course of, or connected
with, rendering services hereunder.
9. EXERCISE OF VOTING RIGHTS.
Except with the agreement or on the specific instructions of the
Trustees of the Trust or the Manager, the Sub-Adviser shall not
exercise or procure the exercise of any voting right attaching to
investments of the Fund.
<PAGE>
IN WITNESS WHEREOF, PIMCO ADVISORS L.P. and VAN ECK ASSOCIATES
CORPORATION have each caused this instrument to be signed in duplicate on its
behalf by its duly authorized representative, all as of the day and year first
above written.
PIMCO ADVISORS L.P.
(formerly Thomson Advisory Group L.P.)
By: PIMCO Partners, G.P., a California
general partnership, General Partner
By: PIMCO Partners, LLC, a California
limited liability company, General Partner
By: William S. Thompson
VAN ECK ASSOCIATES CORPORATION
By: Roger A. Lawson
Title: President
Accepted and agreed to as of the day and year first above written:
THOMSON FUND GROUP
By: Robert A. Prindiville
<PAGE>
A copy of the Amended and Restated Agreement and Declaration of Trust
of the Trust is on file with the Secretary of The Commonwealth of Massachusetts,
and notice is hereby given that this instrument is executed on behalf of the
Trustees of the Trust as Trustees and not individually and that the obligations
of this instrument are not binding upon any of the Trustees or shareholders
individually but are binding upon the assets and property of the Fund.
<PAGE>
SUB-ADVISER AGREEMENT
[Global Income Fund]
Sub-Adviser Agreement executed as of September 28, 1995 between PIMCO
ADVISORS L.P., a Delaware limited partnership (the "Manager"), and PACIFIC
INVESTMENT MANAGEMENT COMPANY, a Delaware general partnership (the "Sub-
Adviser").
WITNESSETH:
That in consideration of the mutual covenants herein contained, it is
agreed as follows:
1. SERVICES TO BE RENDERED BY SUB-ADVISER TO THE TRUST.
(a) Subject always to the control of the Trustees of PIMCO
Advisors Funds (the "Trust"), a Massachusetts business trust,
the Sub-Adviser, at its expense, will furnish continuously an
investment program for the Global Income Fund series of the
Trust (the "Fund") and will make investment decisions on
behalf of the Fund and place all orders for the purchase and
sale of portfolio securities and all other investments. In
the performance of its duties, the Sub-Adviser (1) will
comply with the provisions of the Trust's Agreement and
Declaration of Trust and By-laws, including any amendments
thereto (upon receipt of such amendments by the Sub-Adviser),
and the investment objectives, policies and restrictions of
the Fund as set forth in its current Prospectus and Statement
of Additional Information (copies of which will be supplied
to the Sub-Adviser upon filing with the SEC), (2) will use
its best efforts to safeguard and promote the welfare of the
Fund, (3) will comply with other policies which the Trustees
or the Manager, as the case may be, may from time to time
determine as promptly as practicable after such policies have
been communicated to the Sub-Adviser in writing, and (4)
shall exercise the same care and diligence expected of the
Trustees. The Sub-Adviser and the Manager shall each make its
officers and employees available to the other from time to
time at reasonable times to review investment policies of the
Fund and to consult with each other regarding investment
affairs of the Fund.
(b) The Sub-Adviser, at its expense, will furnish (i) all
necessary investment and management facilities, including
salaries of personnel, required for it to execute its duties
hereunder faithfully and (ii) administrative facilities,
including bookkeeping, clerical personnel and equipment
necessary for the efficient conduct of the investment affairs
of the Fund, including verification and oversight of the
pricing of the Fund's portfolio (but excluding determination
of net asset value and shareholder accounting services).
-1-
<PAGE>
(c) In the selection of brokers or dealers and the placing of
orders for the purchase and sale of portfolio investments for
the Fund, the Sub-Adviser shall use its best efforts to
obtain for the Fund the most favorable price and execution
available, except to the extent it may be permitted to pay
higher brokerage commissions for brokerage and research
services as described below. In using its best efforts to
obtain for the Fund the most favorable price and execution
available, the Sub-Adviser, bearing in mind the Fund's best
interests at all times, shall consider all factors it deems
relevant, including, by way of illustration, price, the size
of the transaction, the nature of the market for the
security, the amount of the commission, the timing of the
transaction taking into account market prices and trends, the
reputation, experience and financial stability of the broker
or dealer involved and the quality of service rendered by the
broker or dealer in other transactions. Subject to such
policies as the Trustees of the Trust may determine and
communicate to the Sub-Adviser in writing, the Sub-Adviser
shall not be deemed to have acted unlawfully or to have
breached any duty created by this Agreement or otherwise
solely by reason of its having caused the Trust to pay a
broker or dealer that provides brokerage and research
services to the Sub-Adviser or its affiliates an amount of
commission for effecting a portfolio investment transaction
in excess of the amount of commission another broker or
dealer would have charged for effecting that transaction, if
the Sub-Adviser determines in good faith that such amount of
commission was reasonable in relation to the value of the
brokerage and research services provided by such broker or
dealer, viewed in terms of either that particular transaction
or the Sub-Adviser's overall responsibilities with respect to
the Trust and to other clients of the Sub-Adviser and its
affiliates as to which the Sub-Adviser and its affiliates
exercise investment discretion. The Trust agrees that any
entity or person associated with the Sub-Adviser or its
affiliates which is a member of a national securities
exchange is expressly authorized to effect any transaction on
such exchange for the account of the Trust and any Fund
thereof which is permitted by Section 11(a) of the Securities
Exchange Act of 1934.
(d) The Sub-Adviser shall not be obligated to pay any expenses of
or for the Fund not expressly assumed by the Sub-Adviser
pursuant to this Section 1.
2. OTHER AGREEMENTS, ETC.
It is understood that any of the shareholders, Trustees, officers and
employees of the Trust may be a shareholder, director, officer or
employee of, or be otherwise interested in, the Sub-Adviser, and in any
person controlled by or under common control with the Sub-Adviser, and
that the Sub-Adviser and any person controlled by or under common
control with the Sub-Adviser may have an interest in the Trust. It is
also understood that the Sub-Adviser and persons controlled by or under
common control with the Sub-Adviser
-2-
<PAGE>
have and may have advisory, management service or other contracts with
other organizations and persons, and may have other interests and
businesses.
3. COMPENSATION TO BE PAID BY THE MANAGER TO THE SUB-ADVISER.
The Manager will pay the Sub-Adviser as compensation for the
Sub-Adviser's services rendered and for the expenses borne by the
Sub-Adviser pursuant to Section 1, a fee computed and paid monthly at
the annual rate of 0.35% of the average daily net asset value of the
Fund up to $250 million and 0.30% of such net assets in excess of $250
million. Such fee shall be payable for each month within 10 business
days after the end of such month.
If the Sub-Adviser shall serve for less than the whole of a month, the
foregoing compensation shall be prorated.
4. ASSIGNMENT TERMINATES THIS AGREEMENT; AMENDMENTS OF THIS
CONTRACT.
This Agreement shall automatically terminate, without the payment of
any penalty, in the event of its assignment or in the event that the
Management Contract between the Manager and the Trust shall have
terminated for any reason; and this Agreement shall not be amended
unless such amendment be approved at a meeting by the affirmative vote
of a majority of the outstanding shares of the Fund, and by the vote,
cast in person at a meeting called for the purpose of voting on such
approval, of a majority of the Trustees of the Trust who are not
interested persons of the Trust or of the Manager or the Sub-Adviser.
5. EFFECTIVE PERIOD AND TERMINATION OF THIS AGREEMENT.
This Agreement shall become effective upon its execution, and shall
remain in full force and effect as to the Fund continuously thereafter
(unless terminated automatically as set forth in Section 4) until
terminated as follows:
(a) The Trust may at any time terminate this Agreement by written
notice delivered or mailed by registered mail, postage
prepaid, to the Manager and the Sub-Adviser, or
(b) If (i) the Trustees of the Trust or the shareholders by the
affirmative vote of a majority of the outstanding shares of
the Fund, and (ii) a majority of the Trustees of the Trust
who are not interested persons of the Trust or of the Manager
or of the Sub-Adviser, by vote cast in person at a meeting
called for the purpose of voting on such approval, do not
specifically approve at least annually the
-3-
<PAGE>
continuance of this Agreement, then this Agreement shall
automatically terminate at the close of business on the
second anniversary of its execution, or upon the expiration
of one year from the effective date of the last such
continuance, whichever is later; provided, however, that if
the continuance of this Agreement is submitted to the
shareholders of the Fund for their approval and such
shareholders fail to approve such continuance of this
Agreement as provided herein, the Sub-Adviser may continue
to serve hereunder in a manner consistent with the Investment
Company Act of 1940, as amended from time to time, and the
rules and regulations thereunder (the "1940 Act"), or
(c) The Manager may at any time terminate this Agreement by not
less than 60 days' written notice delivered or mailed by
registered mail, postage prepaid, to the Sub-Adviser, and
the Sub-Adviser may at any time terminate this Agreement by
not less than 180 days' written notice delivered or mailed by
registered mail, postage prepaid, to the Manager.
Action by the Trust under (a) above may be taken either (i)
by vote of a majority of the Trustees, or (ii) by the
affirmative vote of a majority of the outstanding shares of
the Fund.
Termination of this Agreement pursuant to this Section 5
shall be without the payment of any penalty.
6. CERTAIN INFORMATION.
The Sub-Adviser shall promptly notify the Manager in writing of the
occurrence of any of the following events: (a) the Sub-Adviser shall
fail to be registered as an investment adviser under the Investment
Advisers Act of 1940, as amended from time to time, and under the laws
of any jurisdiction in which the Sub-Adviser is required to be
registered as an investment adviser in order to perform its obligations
under this agreement or any other agreement concerning the provision of
investment advisory services to the Trust, (b) the Sub-Adviser shall
have been served or otherwise have notice of any action, suit,
proceeding, inquiry or investigation, at law or in equity, before or by
any court, public board or body, involving the affairs of the Trust,
(c) there is a change in control of the Sub-Adviser or any parent of
the Sub-Adviser within the meaning of the 1940 Act, (d) there is a
material adverse change in the business or financial position of the
Sub-Adviser or (e) the Chairman of the Sub-Adviser or the portfolio
manager of the Fund shall have been changed.
7. CERTAIN DEFINITIONS.
For the purposes of this Agreement, the "affirmative vote of a majority
of the outstanding shares" means the affirmative vote, at a duly called
and held meeting of shareholders, (a)
-4-
<PAGE>
of the holders of 67% or more of the shares of the Fund, as the case
may be, present (in person or by proxy) and entitled to vote at such
meeting, if the holders of more than 50% of the outstanding shares of
the Fund, as the case may be, entitled to vote at such meeting are
present in person or by proxy, or (b) of the holders of more than 50%
of the outstanding shares of the Fund, as the case may be, entitled to
vote at such meeting, whichever is less.
For the purposes of this Agreement, the terms "affiliated person,"
"control," "interested person" and "assignment" shall have their
respective meanings defined in the 1940 Act; the term "specifically
approve at least annually" shall be construed in a manner consistent
with the 1940 Act and the rules and regulations thereunder, subject,
however, to such exemptions as may be granted by the Securities and
Exchange Commission under the 1940 Act and the rules and regulations
thereunder; and the term "brokerage and research services" shall be the
meaning given in the 1934 Act and the rules and regulations thereunder.
8. NONLIABILITY OF SUB-ADVISER.
Notwithstanding any other provisions of this Agreement, in the absence
of willful misfeasance, bad faith or gross negligence on the part of
the Sub-Adviser, or reckless disregard of its obligations and duties
hereunder, the Sub-Adviser, including its officers, directors and
shareholders, shall not be subject to any liability to the Manager, to
the Trust, to the Fund, or to any shareholder, officer, director or
Trustee thereof, for any act or omission in the course of, or connected
with, rendering services hereunder.
9. EXERCISE OF VOTING RIGHTS.
Except with the agreement or on the specific instructions of the
Trustees of the Trust or the Manager, the Sub-Adviser shall not
exercise or procure the exercise of any voting right attaching to
investments of the Fund.
-5-
<PAGE>
IN WITNESS WHEREOF, PIMCO ADVISORS L.P. and PACIFIC INVESTMENT
MANAGEMENT COMPANY have each caused this instrument to be signed in duplicate on
its behalf by its duly authorized representative, all as of the day and year
first above written.
PIMCO ADVISORS L.P. PACIFIC INVESTMENT
MANAGEMENT COMPANY
By: William Cvengros By: William S. Thompson
Accepted and agreed to as of the day and year first above written:
PIMCO Advisors Funds
By: Newton B. Schott
Title: Vice President
A copy of the Agreement and Declaration of Trust of the Trust is on
file with the Secretary of The Commonwealth of Massachusetts, and notice is
hereby given that this instrument is executed on behalf of the Trustees of the
Trust as Trustees and not individually and that the obligations of this
instrument are not binding upon any of the Trustees or shareholders individually
but are binding upon the assets property of the Fund.
-6-
<PAGE>
3008022.01
SUB-ADVISER AGREEMENT
[Income Fund]
Sub-Adviser Agreement executed as of November 16, 1994 between PIMCO
ADVISORS L.P., a Delaware limited partnership (the "Manager"), and Pacific
Investment Management Company, a Delaware general partnership (the
"Sub-Adviser").
WITNESSETH:
That in consideration of the mutual covenants herein contained, it is
agreed as follows:
1. SERVICES TO BE RENDERED BY SUB-ADVISER TO THE TRUST.
(a) Subject always to the control of the Trustees of Thomson Fund
Group (the "Trust"), a Massachusetts business trust, the
Sub-Adviser, at its expense, will furnish continuously an
investment program for the Income Fund series of the Trust
(the "Fund") and will make investment decisions on behalf of
the Fund and place all orders for the purchase and sale of
portfolio securities and all other investments. In the
performance of its duties, the Sub-Adviser (1) will comply
with the provisions of the Trust's Agreement and Declaration
of Trust and By-laws, including any amendments thereto (upon
receipt of such amendments by the Sub-Adviser), and the
investment objectives, policies and restrictions of the Fund
as set forth in its current Prospectus and Statement of
Additional Information (copies of which will be supplied to
the Sub-Adviser upon filing with the SEC), (2) will use its
best efforts to safeguard and promote the welfare of the Fund,
(3) will comply with other policies which the Trustees or the
Manager, as the case may be, may from time to time determine
as promptly as practicable after such policies have been
communicated to the Sub-Adviser in writing, and (4) shall
exercise the same care and diligence expected of the Trustees.
The Sub-Adviser and the Manager shall each make its officers
and employees available to the other from time to time at
reasonable times to review investment policies of the Fund and
to consult with each other regarding investment affairs of the
Fund.
(b) The Sub-Adviser, at its expense, will furnish (i) all
necessary investment and management facilities, including
salaries of personnel, required for it to execute its duties
hereunder faithfully and (ii) administrative facilities,
including bookkeeping, clerical personnel and equipment
necessary for the efficient conduct of the investment affairs
of the Fund, including verification and oversight of the
pricing of the Fund's portfolio (but excluding determination
of net asset value and shareholder accounting services).
<PAGE>
3008022.01
-2-
(c) In the selection of brokers or dealers and the placing of
orders for the purchase and sale of portfolio investments for
the Fund, the Sub-Adviser shall use its best efforts to obtain
for the Fund the most favorable price and execution available,
except to the extent it may be permitted to pay higher
brokerage commissions for brokerage and research services as
described below. In using its best efforts to obtain for the
Fund the most favorable price and execution available, the
Sub-Adviser, bearing in mind the Fund's best interests at all
times, shall consider all factors it deems relevant,
including, by way of illustration, price, the size of the
transaction, the nature of the market for the security, the
amount of the commission, the timing of the transaction taking
into account market prices and trends, the reputation,
experience and financial stability of the broker or dealer
involved and the quality of service rendered by the broker or
dealer in other transactions. Subject to such policies as the
Trustees of the Trust may determine and communicate to the
Sub-Adviser in writing, the Sub-Adviser shall not be deemed to
have acted unlawfully or to have breached any duty created by
this Agreement or otherwise solely by reason of its having
caused the Trust to pay a broker or dealer that provides
brokerage and research services to the Sub-Adviser or its
affiliates an amount of commission for effecting a portfolio
investment transaction in excess of the amount of commission
another border or dealer would have charged for effecting that
transaction, if the Sub-Adviser determines in good faith that
such amount of commission was reasonable in relation to the
value of the brokerage and research services provided by such
broker or dealer, viewed in terms of either that particular
transaction or the Sub-Adviser's overall responsibilities with
respect to the Trust and to other clients of the Sub-Adviser
and its affiliates as to which the Sub-Adviser and its
affiliates exercise investment discretion. The Trust agrees
that any entity or person associated with the Sub-Adviser or
its affiliates which is a member of a national securities
exchange is authorized to effect any transaction on such
exchange for the account of the Trust and any Fund thereof
which is permitted by Section 11(a) of the Securities Exchange
Act of 1934, as amended (the "1934 Act") and Rule 11a2-2(T)
thereunder, and the Trust has consented to the retention of
compensation for such transactions in accordance with Rule
11a2-2(T)(2)(iv).
(d) The Sub-Adviser shall not be obligated to pay any expenses of
or for the Fund not expressly assumed by the Sub-Adviser
pursuant to this Section 1.
2. OTHER AGREEMENTS, ETC.
It is understood that any of the shareholders, Trustees, officers and
employees of the Trust may be a shareholder, director, officer or
employee of, or be otherwise interested in, the Sub-Adviser, and in any
person controlled by or under common control with the Sub-Adviser, and
that the Sub-Adviser and any person controlled by or under common
control with the Sub-Adviser may have an interest in the Trust. It is
also understood that the Sub-Adviser and persons controlled by or under
common control with the Sub-Adviser have and may have advisory,
management service or other contracts with other organizations and
persons, and may have other interests and businesses.
3. COMPENSATION TO BE PAID BY THE MANAGER TO THE SUB-ADVISER.
The Manager will pay the Sub-Adviser as compensation for the
Sub-Adviser's services rendered and for the expenses borne by the
Sub-Adviser pursuant to Section 1, a fee computed and paid monthly at
the annual rate of .25% of the average daily net asset value of the
Fund. Such fee shall be payable for each month within 10 business days
after the end of such month.
If the Sub-Adviser shall serve for less than the whole of a month, the
foregoing compensation shall be prorated.
4. ASSIGNMENT TERMINATES THIS AGREEMENT; AMENDMENTS OF THIS CONTRACT.
This Agreement shall automatically terminate, without the payment of
any penalty, in the event of its assignment or in the event that the
Management Contract between the Manager and the Trust shall have
terminated for any reason; and this Agreement shall not be amended
unless such amendment be approved at a meeting by the affirmative vote
of a majority of the outstanding shares of the Fund, and by the vote,
cast in person at a meeting called for the purpose of voting on such
approval, of a majority of the Trustees of the Trust who are not
interested persons of the Trust or of the Manager or the Sub-Adviser.
5. EFFECTIVE PERIOD AND TERMINATION OF THIS AGREEMENT.
This Agreement shall become effective upon its execution, and shall
remain in full force and effect as to the Fund continuously thereafter
(unless terminated automatically as set forth in Section 4) until
terminated as follows:
(a) The Trust may at any time terminate this Agreement by written
notice delivered or mailed by registered mail, postage
prepaid, to the Manager and the Sub-Adviser, or
(b) If (i) the Trustees of the Trust or the shareholders by the
affirmative vote of a majority of the outstanding shares of
the Fund, and (ii) a majority of the Trustees of the Trust who
are not interested persons of the Trust or of the Manager or
of the Sub-Adviser, by vote cast in person at a meeting called
for the purpose of voting on such approval, do not
specifically approve at least annually the continuance of this
Agreement, then this Agreement shall automatically terminate
at the close of business on the second anniversary of its
execution, or upon the expiration of one year from the
effective date of the last such continuance, whichever is
later; provided, however, that if the continuance of this
Agreement is submitted to the shareholders of the Fund for
their approval and such shareholders fail to approve such
continuance of this Agreement as provided herein, the
Sub-Adviser may continue to serve hereunder in a manner
consistent with the Investment Company Act of 1940 and the
rules and regulations thereunder, or
(c) The manager may at any time terminate this Agreement by not
less than 60 days' written notice delivered or mailed by
registered mail, postage prepaid, to the Sub-Adviser, and the
Sub-Adviser may at any time terminate this Agreement by not
less than 180 days' written notice delivered or mailed by
registered mail, postage prepaid, to the Manager.
Action by the Trust under (a) above may be taken either (i) by
vote of a majority of the Trustees, or (ii) by the affirmative
vote of a majority of the outstanding shares of the Fund.
Termination of this Agreement pursuant to this Section 5 shall
be without the payment of any penalty.
6. CERTAIN INFORMATION.
The Sub-Adviser shall promptly notify the Manager in writing of the
occurrence of any of the following events: (a) the Sub-Adviser shall
fail to be registered as an investment adviser under the Investment
Advisers Act of 1940, as amended from time to time, and under the laws
of any jurisdiction in which the Sub-Adviser is required to be
registered as an investment adviser in order to perform its obligations
under this agreement or any other agreement concerning the provision of
investment advisory services to the Trust, (b) the Sub-Adviser shall
have been served or otherwise have notice of any action, suit,
proceeding, inquiry or investigation, at law or in equity, before or by
any court, public board or body, involving the affairs of the Trust,
(c) there is a change in control of the Sub-Adviser or any parent of
the Sub-Adviser within the meaning of the Investment Company Act of
1940, as amended (the "1940 Act"), (d) there is a material adverse
change in the business or financial position of the Sub-Adviser or (e)
the Chairman of the Sub-Adviser or the portfolio manager of the Fund
shall have been changed.
7. CERTAIN DEFINITIONS.
For the purposes of this Agreement, the "affirmative vote of a majority
of the outstanding shares" means the affirmative vote, at a duly called
and held meeting of shareholders, (a) of the holders of 67% or more of
the shares of the Fund, as the case may be, present (in person or by
proxy) and entitled to vote at such meeting, if the holders of more
than 50% of the outstanding shares of the Fund, as the case may be,
entitled to vote at such meeting are present in person or by proxy, or
(b) of the holders of more than 50% of the outstanding shares of the
Fund, as the case may be, entitled to vote at such meeting, whichever
is less.
For the purposes of this Agreement, the terms "affiliated person,"
"control," "interested person" and "assignment" shall have their
respective meanings defined in the 1940 Act; the term "specifically
approve at least annually" shall be construed in a manner consistent
with the 1940 Act and the rules and regulations thereunder, subject,
however, to such exemptions as may be granted by the Securities and
Exchange Commission under the 1940 Act and the rules and regulations
thereunder; and the term "brokerage and research services" shall be the
meaning given in the 1934 Act and the rules and regulations thereunder.
8. NONLIABILITY OF SUB-ADVISER.
Notwithstanding any other provisions of this Agreement, in the absence
of willful misfeasance, bad faith or gross negligence on the part of
the Sub-Adviser, or reckless disregard of its obligations and duties
hereunder, the Sub-Adviser, including its officers, directors and
shareholders, shall not be subject to any liability to the Manager, to
the Trust, to the Fund, or to any shareholder, officer, director or
Trustee thereof, for any act or omission in the course of, or connected
with, rendering services hereunder.
9. EXERCISE OF VOTING RIGHTS.
Except with the agreement or on the specific instructions of the
Trustees of the Trust or the Manager, the Sub-Adviser shall not
exercise or procure the exercise of any voting right attaching to
investments of the Fund.
<PAGE>
IN WITNESS WHEREOF, PIMCO ADVISORS L.P. and PACIFIC INVESTMENT
MANAGEMENT COMPANY have each caused this instrument to be signed in duplicate on
its behalf by its duly authorized representative, all as of the day and year
first above written.
PIMCO ADVISORS L.P. PACIFIC INVESTMENT MANAGEMENT
(formerly Thomson Advisory Group L.P.) COMPANY
By: PIMCO Partners, G.P., a California By: William S. Thompson
general partnership, General Partner
By: PIMCO Partners, LLC, a California
limited liability company, General Partner
By: William S. Thompson
Accepted and agreed to as of the day and year first above written:
THOMSON FUND GROUP
By: Robert A. Prindiville
<PAGE>
A copy of the Agreement and Declaration of Trust of the Trust is on
file with the Secretary of The Commonwealth of Massachusetts, and notice is
hereby given that this instrument is executed on behalf of the Trustees of the
Trust as Trustees and not individually and that the obligations of this
instrument are not binding upon any of the Trustees or shareholders individually
but are binding upon the assets property of the Fund.
<PAGE>
3008035.01
SUB-ADVISER AGREEMENT
[Total Return Income Fund]
Sub-Adviser Agreement executed as of November 16, 1994 between PIMCO
ADVISORS L.P., a Delaware limited partnership (the "Manager"), and Pacific
Investment Management Company, a Delaware general partnership (the
"Sub-Adviser").
WITNESSETH:
That in consideration of the mutual covenants herein contained, it is
agreed as follows:
1. SERVICES TO BE RENDERED BY SUB-ADVISER TO THE TRUST.
(a) Subject always to the control of the Trustees of PIMCO
Advisors Funds (the "Trust"), a Massachusetts business trust,
the Sub-Adviser, at its expense, will furnish continuously an
investment program for the Total Return Income Fund series of
the Trust (the "Fund") and will make investment decisions on
behalf of the Fund and place all orders for the purchase and
sale of portfolio securities and all other investments. In the
performance of its duties, the Sub-Adviser (1) will comply
with the provisions of the Trust's Agreement and Declaration
of Trust and By-laws, including any amendments thereto (upon
receipt of such amendments by the Sub-Adviser), and the
investment objectives, policies and restrictions of the Fund
as set forth in its current Prospectus and Statement of
Additional Information (copies of which will be supplied to
the Sub-Adviser upon filing with the SEC), (2) will use its
best efforts to safeguard and promote the welfare of the Fund,
(3) will comply with other policies which the Trustees or the
Manager, as the case may be, may from time to time determine
as promptly as practicable after such policies have been
communicated to the Sub-Adviser in writing, and (4) shall
exercise the same care and diligence expected of the Trustees.
The Sub-Adviser and the Manager shall each make its officers
and employees available to the other from time to time at
reasonable times to review investment policies of the Fund and
to consult with each other regarding investment affairs of the
Fund.
(b) The Sub-Adviser, at its expense, will furnish (i) all
necessary investment and management facilities, including
salaries of personnel, required for it to execute its duties
hereunder faithfully and (ii) administrative facilities,
including bookkeeping, clerical personnel and equipment
necessary for the efficient conduct of the investment affairs
of the Fund, including verification and oversight of the
pricing of the Fund's portfolio (but excluding determination
of net asset value and shareholder accounting services).
<PAGE>
3008035.01
-3-
(c) In the selection of brokers or dealers and the placing of
orders for the purchase and sale of portfolio investments for
the Fund, the Sub-Adviser shall use its best efforts to obtain
for the Fund the most favorable price and execution available,
except to the extent it may be permitted to pay higher
brokerage commissions for brokerage and research services as
described below. In using its best efforts to obtain for the
Fund the most favorable price and execution available, the
Sub-Adviser, bearing in mind the Fund's best interests at all
times, shall consider all factors it deems relevant,
including, by way of illustration, price, the size of the
transaction, the nature of the market for the security, the
amount of the commission, the timing of the transaction taking
into account market prices and trends, the reputation,
experience and financial stability of the broker or dealer
involved and the quality of service rendered by the broker or
dealer in other transactions. Subject to such policies as the
Trustees of the Trust may determine and communicate to the
Sub-Adviser in writing, the Sub-Adviser shall not be deemed to
have acted unlawfully or to have breached any duty created by
this Agreement or otherwise solely by reason of its having
caused the Trust to pay a broker or dealer that provides
brokerage and research services to the Sub-Adviser or its
affiliates an amount of commission for effecting a portfolio
investment transaction in excess of the amount of commission
another border or dealer would have charged for effecting that
transaction, if the Sub-Adviser determines in good faith that
such amount of commission was reasonable in relation to the
value of the brokerage and research services provided by such
broker or dealer, viewed in terms of either that particular
transaction or the Sub-Adviser's overall responsibilities with
respect to the Trust and to other clients of the Sub-Adviser
and its affiliates as to which the Sub-Adviser and its
affiliates exercise investment discretion. The Trust agrees
that any entity or person associated with the Sub-Adviser or
its affiliates which is a member of a national securities
exchange is authorized to effect any transaction on such
exchange for the account of the Trust and any Fund thereof
which is permitted by Section 11(a) of the Securities Exchange
Act of 1934, as amended (the "1934 Act") and Rule 11a2-2(T)
thereunder, and the Trust has consented to the retention of
compensation for such transactions in accordance with Rule
11a2-2(T)(2)(iv).
(d) The Sub-Adviser shall not be obligated to pay any expenses of
or for the Fund not expressly assumed by the Sub-Adviser
pursuant to this Section 1.
2. OTHER AGREEMENTS, ETC.
It is understood that any of the shareholders, Trustees, officers and
employees of the Trust may be a shareholder, director, officer or
employee of, or be otherwise interested in, the Sub-Adviser, and in any
person controlled by or under common control with the Sub-Adviser, and
that the Sub-Adviser and any person controlled by or under common
control with the Sub-Adviser may have an interest in the Trust. It is
also understood that the Sub-Adviser and persons controlled by or under
common control with the Sub-Adviser have and may have advisory,
management service or other contracts with other organizations and
persons, and may have other interests and businesses.
3. COMPENSATION TO BE PAID BY THE MANAGER TO THE SUB-ADVISER.
The Manager will pay the Sub-Adviser as compensation for the
Sub-Adviser's services rendered and for the expenses borne by the
Sub-Adviser pursuant to Section 1, a fee computed and paid monthly at
the annual rate of .25% of the average daily net asset value of the
Fund. Such fee shall be payable for each month within 10 business days
after the end of such month.
If the Sub-Adviser shall serve for less than the whole of a month, the
foregoing compensation shall be prorated.
4. ASSIGNMENT TERMINATES THIS AGREEMENT; AMENDMENTS OF THIS CONTRACT.
This Agreement shall automatically terminate, without the payment of
any penalty, in the event of its assignment or in the event that the
Management Contract between the Manager and the Trust shall have
terminated for any reason; and this Agreement shall not be amended
unless such amendment be approved at a meeting by the affirmative vote
of a majority of the outstanding shares of the Fund, and by the vote,
cast in person at a meeting called for the purpose of voting on such
approval, of a majority of the Trustees of the Trust who are not
interested persons of the Trust or of the Manager or the Sub-Adviser.
5. EFFECTIVE PERIOD AND TERMINATION OF THIS AGREEMENT.
This Agreement shall become effective upon its execution, and shall
remain in full force and effect as to the Fund continuously thereafter
(unless terminated automatically as set forth in Section 4) until
terminated as follows:
(a) The Trust may at any time terminate this Agreement by written
notice delivered or mailed by registered mail, postage
prepaid, to the Manager and the Sub-Adviser, or
(b) If (i) the Trustees of the Trust or the shareholders by the
affirmative vote of a majority of the outstanding shares of
the Fund, and (ii) a majority of the Trustees of the Trust who
are not interested persons of the Trust or of the Manager or
of the Sub-Adviser, by vote cast in person at a meeting called
for the purpose of voting on such approval, do not
specifically approve at least annually the continuance of this
Agreement, then this Agreement shall automatically terminate
at the close of business on the second anniversary of its
execution, or upon the expiration of one year from the
effective date of the last such continuance, whichever is
later; provided, however, that if the continuance of this
Agreement is submitted to the shareholders of the Fund for
their approval and such shareholders fail to approve such
continuance of this Agreement as provided herein, the
Sub-Adviser may continue to serve hereunder in a manner
consistent with the Investment Company Act of 1940 and the
rules and regulations thereunder, or
(c) The manager may at any time terminate this Agreement by not
less than 60 days' written notice delivered or mailed by
registered mail, postage prepaid, to the Sub-Adviser, and the
Sub-Adviser may at any time terminate this Agreement by not
less than 180 days' written notice delivered or mailed by
registered mail, postage prepaid, to the Manager.
Action by the Trust under (a) above may be taken either (i) by
vote of a majority of the Trustees, or (ii) by the affirmative
vote of a majority of the outstanding shares of the Fund.
Termination of this Agreement pursuant to this Section 5 shall
be without the payment of any penalty.
6. CERTAIN INFORMATION.
The Sub-Adviser shall promptly notify the Manager in writing of the
occurrence of any of the following events: (a) the Sub-Adviser shall
fail to be registered as an investment adviser under the Investment
Advisers Act of 1940, as amended from time to time, and under the laws
of any jurisdiction in which the Sub-Adviser is required to be
registered as an investment adviser in order to perform its obligations
under this agreement or any other agreement concerning the provision of
investment advisory services to the Trust, (b) the Sub-Adviser shall
have been served or otherwise have notice of any action, suit,
proceeding, inquiry or investigation, at law or in equity, before or by
any court, public board or body, involving the affairs of the Trust,
(c) there is a change in control of the Sub-Adviser or any parent of
the Sub-Adviser within the meaning of the Investment Company Act of
1940, as amended (the "1940 Act"), (d) there is a material adverse
change in the business or financial position of the Sub-Adviser or (e)
the Chairman of the Sub-Adviser or the portfolio manager of the Fund
shall have been changed.
7. CERTAIN DEFINITIONS.
For the purposes of this Agreement, the "affirmative vote of a majority
of the outstanding shares" means the affirmative vote, at a duly called
and held meeting of shareholders, (a) of the holders of 67% or more of
the shares of the Fund, as the case may be, present (in person or by
proxy) and entitled to vote at such meeting, if the holders of more
than 50% of the outstanding shares of the Fund, as the case may be,
entitled to vote at such meeting are present in person or by proxy, or
(b) of the holders of more than 50% of the outstanding shares of the
Fund, as the case may be, entitled to vote at such meeting, whichever
is less.
For the purposes of this Agreement, the terms "affiliated person,"
"control," "interested person" and "assignment" shall have their
respective meanings defined in the 1940 Act; the term "specifically
approve at least annually" shall be construed in a manner consistent
with the 1940 Act and the rules and regulations thereunder, subject,
however, to such exemptions as may be granted by the Securities and
Exchange Commission under the 1940 Act and the rules and regulations
thereunder; and the term "brokerage and research services" shall be the
meaning given in the 1934 Act and the rules and regulations thereunder.
8. NONLIABILITY OF SUB-ADVISER.
Notwithstanding any other provisions of this Agreement, in the absence
of willful misfeasance, bad faith or gross negligence on the part of
the Sub-Adviser, or reckless disregard of its obligations and duties
hereunder, the Sub-Adviser, including its officers, directors and
shareholders, shall not be subject to any liability to the Manager, to
the Trust, to the Fund, or to any shareholder, officer, director or
Trustee thereof, for any act or omission in the course of, or connected
with, rendering services hereunder.
9. EXERCISE OF VOTING RIGHTS.
Except with the agreement or on the specific instructions of the
Trustees of the Trust or the Manager, the Sub-Adviser shall not
exercise or procure the exercise of any voting right attaching to
investments of the Fund.
<PAGE>
IN WITNESS WHEREOF, PIMCO ADVISORS L.P. and PACIFIC INVESTMENT
MANAGEMENT COMPANY have each caused this instrument to be signed in duplicate on
its behalf by its duly authorized representative, all as of the day and year
first above written.
PIMCO ADVISORS L.P. PACIFIC INVESTMENT MANAGEMENT
(formerly Thomson Advisory Group L.P.) COMPANY
By: PIMCO Partners, G.P., a California By: William S. Thompson
general partnership, General Partner
By: PIMCO Partners, LLC, a California
limited liability company, General Partner
By: William S. Thompson
Accepted and agreed to as of the day and year first above written:
THOMSON FUND GROUP
By: Robert A. Prindiville
<PAGE>
A copy of the Agreement and Declaration of Trust of the Trust is on
file with the Secretary of The Commonwealth of Massachusetts, and notice is
hereby given that this instrument is executed on behalf of the Trustees of the
Trust as Trustees and not individually and that the obligations of this
instrument are not binding upon any of the Trustees or shareholders individually
but are binding upon the assets property of the Fund.
<PAGE>
3008089.01
SUB-ADVISER AGREEMENT
[Tax Exempt Fund]
Sub-Adviser Agreement executed as of November 16, 1994 between PIMCO
ADVISORS L.P., a Delaware limited partnership (the "Manager"), and Columbus
Circle Investors, a Delaware general partnership (the "Sub-Adviser").
WITNESSETH:
That in consideration of the mutual covenants herein contained, it is
agreed as follows:
1. SERVICES TO BE RENDERED BY SUB-ADVISER TO THE TRUST.
(a) Subject always to the control of the Trustees of Thomson Fund
Group, a Massachusetts business trust, the Sub-Adviser, at its
expense, will furnish continuously an investment program for
the Tax Exempt Fund series of the Trust (the "Fund") and will
make investment decisions on behalf of the Fund and place all
orders for the purchase and sale of portfolio securities and
all other investments. In the performance of its duties, the
Sub-Adviser (1) will comply with the provisions of the Trust's
Agreement and Declaration of Trust and By-laws, including any
amendments thereto (upon receipt of such amendments by the
Sub-Adviser), and the investment objectives, policies and
restrictions of the Fund as set forth in its current
Prospectus and Statement of Additional Information (copies of
which will be supplied to the Sub-Adviser upon filing with the
SEC), (2) will use its best efforts to safeguard and promote
the welfare of the Fund, (3) will comply with other policies
which the Trustees or the Manager, as the case may be, may
from time to time determine as promptly as practicable after
such policies have been communicated to the Sub-Adviser in
writing, and (4) shall exercise the same care and diligence
expected of the Trustees. The Sub-Adviser and the Manager
shall each make its officers and employees available to the
other from time to time at reasonable times to review
investment policies of the Fund and to consult with each other
regarding investment affairs of the Fund.
(b) The Sub-Adviser, at its expense, will furnish (i) all
necessary investment and management facilities, including
salaries of personnel, required for it to execute its duties
hereunder faithfully and (ii) administrative facilities,
including bookkeeping, clerical personnel and equipment
necessary for the efficient conduct of the investment affairs
of the Fund, including verification and oversight of the
pricing of the Fund's portfolio (but excluding determination
of net asset value and shareholder accounting services).
<PAGE>
3008089.01
-3-
(c) In the selection of brokers or dealers and the placing of
orders for the purchase and sale of portfolio investments for
the Fund, the Sub-Adviser shall use its best efforts to obtain
for the Fund the most favorable price and execution available,
except to the extent it may be permitted to pay higher
brokerage commissions for brokerage and research services as
described below. In using its best efforts to obtain for the
Fund the most favorable price and execution available, the
Sub-Adviser, bearing in mind the Fund's best interests at all
times, shall consider all factors it deems relevant,
including, by way of illustration, price, the size of the
transaction, the nature of the market for the security, the
amount of the commission, the timing of the transaction taking
into account market prices and trends, the reputation,
experience and financial stability of the broker or dealer
involved and the quality of service rendered by the broker or
dealer in other transactions. Subject to such policies as the
Trustees of the Trust may determine and communicate to the
Sub-Adviser in writing, the Sub-Adviser shall not be deemed to
have acted unlawfully or to have breached any duty created by
this Agreement or otherwise solely by reason of its having
caused the Trust to pay a broker or dealer that provides
brokerage and research services to the Sub-Adviser or its
affiliates an amount of commission for effecting a portfolio
investment transaction in excess of the amount of commission
another border or dealer would have charged for effecting that
transaction, if the Sub-Adviser determines in good faith that
such amount of commission was reasonable in relation to the
value of the brokerage and research services provided by such
broker or dealer, viewed in terms of either that particular
transaction or the Sub-Adviser's overall responsibilities with
respect to the Trust and to other clients of the Sub-Adviser
and its affiliates as to which the Sub-Adviser and its
affiliates exercise investment discretion. The Trust agrees
that any entity or person associated with the Sub-Adviser or
its affiliates which is a member of a national securities
exchange is authorized to effect any transaction on such
exchange for the account of the Trust and any Fund thereof
which is permitted by Section 11(a) of the Securities Exchange
Act of 1934, as amended (the "1934 Act") and Rule 11a2-2(T)
thereunder, and the Trust has consented to the retention of
compensation for such transactions in accordance with Rule
11a2-2(T)(2)(iv).
(d) The Sub-Adviser shall not be obligated to pay any expenses of
or for the Fund not expressly assumed by the Sub-Adviser
pursuant to this Section 1.
2. OTHER AGREEMENTS, ETC.
It is understood that any of the shareholders, Trustees, officers and
employees of the Trust may be a shareholder, director, officer or
employee of, or be otherwise interested in, the Sub-Adviser, and in any
person controlled by or under common control with the Sub-Adviser, and
that the Sub-Adviser and any person controlled by or under common
control with the Sub-Adviser may have an interest in the Trust. It is
also understood that the Sub-Adviser and persons controlled by or under
common control with the Sub-Adviser have and may have advisory,
management service or other contracts with other organizations and
persons, and may have other interests and businesses.
3. COMPENSATION TO BE PAID BY THE MANAGER TO THE SUB-ADVISER.
The Manager will pay the Sub-Adviser as compensation for the
Sub-Adviser's services rendered and for the expenses borne by the
Sub-Adviser pursuant to Section 1, a fee computed and paid monthly at
the annual rate of 0.30% of the average daily net asset value of the
Fund. Such fee shall be payable for each month within 10 business days
after the end of such month.
If the Sub-Adviser shall serve for less than the whole of a month, the
foregoing compensation shall be prorated.
4. ASSIGNMENT TERMINATES THIS AGREEMENT; AMENDMENTS OF THIS CONTRACT.
This Agreement shall automatically terminate, without the payment of
any penalty, in the event of its assignment or in the event that the
Management Contract between the Manager and the Trust shall have
terminated for any reason; and this Agreement shall not be amended
unless such amendment be approved at a meeting by the affirmative vote
of a majority of the outstanding shares of the Fund, and by the vote,
cast in person at a meeting called for the purpose of voting on such
approval, of a majority of the Trustees of the Trust who are not
interested persons of the Trust or of the Manager or the Sub-Adviser.
5. EFFECTIVE PERIOD AND TERMINATION OF THIS AGREEMENT.
This Agreement shall become effective upon its execution, and shall
remain in full force and effect as to the Fund continuously thereafter
(unless terminated automatically as set forth in Section 4) until
terminated as follows:
(a) The Trust may at any time terminate this Agreement by written
notice delivered or mailed by registered mail, postage
prepaid, to the Manager and the Sub-Adviser, or
(b) If (i) the Trustees of the Trust or the shareholders by the
affirmative vote of a majority of the outstanding shares of
the Fund, and (ii) a majority of the Trustees of the Trust who
are not interested persons of the Trust or of the Manager or
of the Sub-Adviser, by vote cast in person at a meeting called
for the purpose of voting on such approval, do not
specifically approve at least annually the continuance of this
Agreement, then this Agreement shall automatically terminate
at the close of business on the second anniversary of its
execution, or upon the expiration of one year from the
effective date of the last such continuance, whichever is
later; provided, however, that if the continuance of this
Agreement is submitted to the shareholders of the Fund for
their approval and such shareholders fail to approve such
continuance of this Agreement as provided herein, the
Sub-Adviser may continue to serve hereunder in a manner
consistent with the Investment Company Act of 1940 and the
rules and regulations thereunder, or
(c) The manager may at any time terminate this Agreement by not
less than 60 days' written notice delivered or mailed by
registered mail, postage prepaid, to the Sub-Adviser, and the
Sub-Adviser may at any time terminate this Agreement by not
less than 180 days' written notice delivered or mailed by
registered mail, postage prepaid, to the Manager.
Action by the Trust under (a) above may be taken either (i) by
vote of a majority of the Trustees, or (ii) by the affirmative
vote of a majority of the outstanding shares of the Fund.
Termination of this Agreement pursuant to this Section 5 shall
be without the payment of any penalty.
6. CERTAIN INFORMATION.
The Sub-Adviser shall promptly notify the Manager in writing of the
occurrence of any of the following events: (a) the Sub-Adviser shall
fail to be registered as an investment adviser under the Investment
Advisers Act of 1940, as amended from time to time, and under the laws
of any jurisdiction in which the Sub-Adviser is required to be
registered as an investment adviser in order to perform its obligations
under this agreement or any other agreement concerning the provision of
investment advisory services to the Trust, (b) the Sub-Adviser shall
have been served or otherwise have notice of any action, suit,
proceeding, inquiry or investigation, at law or in equity, before or by
any court, public board or body, involving the affairs of the Trust,
(c) there is a change in control of the Sub-Adviser or any parent of
the Sub-Adviser within the meaning of the Investment Company Act of
1940, as amended (the "1940 Act"), (d) there is a material adverse
change in the business or financial position of the Sub-Adviser or (e)
the Chairman of the Sub-Adviser or the portfolio manager of the Fun
shall have been changed.
7. CERTAIN DEFINITIONS.
For the purposes of this Agreement, the "affirmative vote of a majority
of the outstanding shares" means the affirmative vote, at a duly called
and held meeting of shareholders, (a) of the holders of 67% or more of
the shares of the Fund, as the case may be, present (in person or by
proxy) and entitled to vote at such meeting, if the holders of more
than 50% of the outstanding shares of the Fund, as the case may be,
entitled to vote at such meeting are present in person or by proxy, or
(b) of the holders of more than 50% of the outstanding shares of the
Fund, as the case may be, entitled to vote at such meeting, whichever
is less.
For the purposes of this Agreement, the terms "affiliated person,"
"control," "interested person" and "assignment" shall have their
respective meanings defined in the 1940 Act; the term "specifically
approve at least annually" shall be construed in a manner consistent
with the 1940 Act and the rules and regulations thereunder, subject,
however, to such exemptions as may be granted by the Securities and
Exchange Commission under the 1940 Act and the rules and regulations
thereunder; and the term "brokerage and research services" shall be the
meaning given in the 1934 Act and the rules and regulations thereunder.
8. NONLIABILITY OF SUB-ADVISER.
Notwithstanding any other provisions of this Agreement, in the absence
of willful misfeasance, bad faith or gross negligence on the part of
the Sub-Adviser, or reckless disregard of its obligations and duties
hereunder, the Sub-Adviser, including its officers, directors and
shareholders, shall not be subject to any liability to the Manager, to
the Trust, to the Fund, or to any shareholder, officer, director or
Trustee thereof, for any act or omission in the course of, or connected
with, rendering services hereunder.
9. EXERCISE OF VOTING RIGHTS.
Except with the agreement or on the specific instructions of the
Trustees of the Trust or the Manager, the Sub-Adviser shall not
exercise or procure the exercise of any voting right attaching to
investments of the Fund.
<PAGE>
IN WITNESS WHEREOF, PIMCO ADVISORS L.P. and COLUMBUS CIRCLE INVESTORS
have each caused this instrument to be signed in duplicate on its behalf by its
duly authorized representative, all as of the day and year first above written.
PIMCO ADVISORS L.P. COLUMBUS CIRCLE INVESTORS
(formerly Thomson Advisory Group L.P.)
By: I. F. Smith
By: PIMCO Partners, G.P., a California
general partnership, General Partner
By: PIMCO Partners, LLC, a California
limited liability company, General Partner
By: William S. Thompson
Accepted and agreed to as of the day and year first above written:
THOMSON FUND GROUP
By: Robert A. Prindiville
<PAGE>
A copy of the Agreement and Declaration of Trust of the Trust is on
file with the Secretary of The Commonwealth of Massachusetts, and notice is
hereby given that this instrument is executed on behalf of the Trustees of the
Trust as Trustees and not individually and that the obligations of this
instrument are not binding upon any of the Trustees or shareholders individually
but are binding upon the assets property of the Fund.
<PAGE>
3007504.01
SUB-ADVISER AGREEMENT
[U.S. Government Fund]
Sub-Adviser Agreement executed as of November 16, 1994 between PIMCO
ADVISORS L.P., a Delaware limited partnership (the "Manager"), and Pacific
Investment Management Company, a Delaware general partnership (the
"Sub-Adviser").
WITNESSETH:
That in consideration of the mutual covenants herein contained, it is
agreed as follows:
1. SERVICES TO BE RENDERED BY SUB-ADVISER TO THE TRUST.
(a) Subject always to the control of the Trustees of Thomson Fund
Group (the "Trust"), a Massachusetts business trust, the
Sub-Adviser, at its expense, will furnish continuously an
investment program for the U.S. Government Fund series of the
Trust (the "Fund") and will make investment decisions on
behalf of the Fund and place all orders for the purchase and
sale of portfolio securities and all other investments. In the
performance of its duties, the Sub-Adviser (1) will comply
with the provisions of the Trust's Agreement and Declaration
of Trust and By-laws, including any amendments thereto (upon
receipt of such amendments by the Sub-Adviser), and the
investment objectives, policies and restrictions of the Fund
as set forth in its current Prospectus and Statement of
Additional Information (copies of which will be supplied to
the Sub-Adviser upon filing with the SEC), (2) will use its
best efforts to safeguard and promote the welfare of the Fund,
(3) will comply with other policies which the Trustees or the
Manager, as the case may be, may from time to time determine
as promptly as practicable after such policies have been
communicated to the Sub-Adviser in writing, and (4) shall
exercise the same care and diligence expected of the Trustees.
The Sub-Adviser and the Manager shall each make its officers
and employees available to the other from time to time at
reasonable times to review investment policies of the Fund and
to consult with each other regarding investment affairs of the
Fund.
(b) The Sub-Adviser, at its expense, will furnish (i) all
necessary investment and management facilities, including
salaries of personnel, required for it to execute its duties
hereunder faithfully and (ii) administrative facilities,
including bookkeeping, clerical personnel and equipment
necessary for the efficient conduct of the investment affairs
of the Fund, including verification and oversight of the
pricing of the Fund's portfolio (but excluding determination
of net asset value and shareholder accounting services).
<PAGE>
3007504.01
-3-
(c) In the selection of brokers or dealers and the placing of
orders for the purchase and sale of portfolio investments for
the Fund, the Sub-Adviser shall use its best efforts to obtain
for the Fund the most favorable price and execution available,
except to the extent it may be permitted to pay higher
brokerage commissions for brokerage and research services as
described below. In using its best efforts to obtain for the
Fund the most favorable price and execution available, the
Sub-Adviser, bearing in mind the Fund's best interests at all
times, shall consider all factors it deems relevant,
including, by way of illustration, price, the size of the
transaction, the nature of the market for the security, the
amount of the commission, the timing of the transaction taking
into account market prices and trends, the reputation,
experience and financial stability of the broker or dealer
involved and the quality of service rendered by the broker or
dealer in other transactions. Subject to such policies as the
Trustees of the Trust may determine and communicate to the
Sub-Adviser in writing, the Sub-Adviser shall not be deemed to
have acted unlawfully or to have breached any duty created by
this Agreement or otherwise solely by reason of its having
caused the Trust to pay a broker or dealer that provides
brokerage and research services to the Sub-Adviser or its
affiliates an amount of commission for effecting a portfolio
investment transaction in excess of the amount of commission
another border or dealer would have charged for effecting that
transaction, if the Sub-Adviser determines in good faith that
such amount of commission was reasonable in relation to the
value of the brokerage and research services provided by such
broker or dealer, viewed in terms of either that particular
transaction or the Sub-Adviser's overall responsibilities with
respect to the Trust and to other clients of the Sub-Adviser
and its affiliates as to which the Sub-Adviser and its
affiliates exercise investment discretion. The Trust agrees
that any entity or person associated with the Sub-Adviser or
its affiliates which is a member of a national securities
exchange is authorized to effect any transaction on such
exchange for the account of the Trust and any Fund thereof
which is permitted by Section 11(a) of the Securities Exchange
Act of 1934, as amended (the "1934 Act") and Rule 11a2-2(T)
thereunder, and the Trust has consented to the retention of
compensation for such transactions in accordance with Rule
11a2-2(T)(2)(iv).
(d) The Sub-Adviser shall not be obligated to pay any expenses of
or for the Fund not expressly assumed by the Sub-Adviser
pursuant to this Section 1.
2. OTHER AGREEMENTS, ETC.
It is understood that any of the shareholders, Trustees, officers and
employees of the Trust may be a shareholder, director, officer or
employee of, or be otherwise interested in, the Sub-Adviser, and in any
person controlled by or under common control with the Sub-Adviser, and
that the Sub-Adviser and any person controlled by or under common
control with the Sub-Adviser may have an interest in the Trust. It is
also understood that the Sub-Adviser and persons controlled by or under
common control with the Sub-Adviser have and may have advisory,
management service or other contracts with other organizations and
persons, and may have other interests and businesses.
3. COMPENSATION TO BE PAID BY THE MANAGER TO THE SUB-ADVISER.
The Manager will pay the Sub-Adviser as compensation for the
Sub-Adviser's services rendered and for the expenses borne by the
Sub-Adviser pursuant to Section 1, a fee computed and paid monthly at
the annual rate of .25% of the average daily net asset value of the
Fund. Such fee shall be payable for each month within 10 business days
after the end of such month.
If the Sub-Adviser shall serve for less than the whole of a month, the
foregoing compensation shall be prorated.
4. ASSIGNMENT TERMINATES THIS AGREEMENT; AMENDMENTS OF THIS CONTRACT.
This Agreement shall automatically terminate, without the payment of
any penalty, in the event of its assignment or in the event that the
Management Contract between the Manager and the Trust shall have
terminated for any reason; and this Agreement shall not be amended
unless such amendment be approved at a meeting by the affirmative vote
of a majority of the outstanding shares of the Fund, and by the vote,
cast in person at a meeting called for the purpose of voting on such
approval, of a majority of the Trustees of the Trust who are not
interested persons of the Trust or of the Manager or the Sub-Adviser.
5. EFFECTIVE PERIOD AND TERMINATION OF THIS AGREEMENT.
This Agreement shall become effective upon its execution, and shall
remain in full force and effect as to the Fund continuously thereafter
(unless terminated automatically as set forth in Section 4) until
terminated as follows:
(a) The Trust may at any time terminate this Agreement by written
notice delivered or mailed by registered mail, postage
prepaid, to the Manager and the Sub-Adviser, or
(b) If (i) the Trustees of the Trust or the shareholders by the
affirmative vote of a majority of the outstanding shares of
the Fund, and (ii) a majority of the Trustees of the Trust who
are not interested persons of the Trust or of the Manager or
of the Sub-Adviser, by vote cast in person at a meeting called
for the purpose of voting on such approval, do not
specifically approve at least annually the continuance of this
Agreement, then this Agreement shall automatically terminate
at the close of business on the second anniversary of its
execution, or upon the expiration of one year from the
effective date of the last such continuance, whichever is
later; provided, however, that if the continuance of this
Agreement is submitted to the shareholders of the Fund for
their approval and such shareholders fail to approve such
continuance of this Agreement as provided herein, the
Sub-Adviser may continue to serve hereunder in a manner
consistent with the Investment Company Act of 1940 and the
rules and regulations thereunder, or
(c) The manager may at any time terminate this Agreement by not
less than 60 days' written notice delivered or mailed by
registered mail, postage prepaid, to the Sub-Adviser, and the
Sub-Adviser may at any time terminate this Agreement by not
less than 180 days' written notice delivered or mailed by
registered mail, postage prepaid, to the Manager.
Action by the Trust under (a) above may be taken either (i) by
vote of a majority of the Trustees, or (ii) by the affirmative
vote of a majority of the outstanding shares of the Fund.
Termination of this Agreement pursuant to this Section 5 shall
be without the payment of any penalty.
6. CERTAIN INFORMATION.
The Sub-Adviser shall promptly notify the Manager in writing of the
occurrence of any of the following events: (a) the Sub-Adviser shall
fail to be registered as an investment adviser under the Investment
Advisers Act of 1940, as amended from time to time, and under the laws
of any jurisdiction in which the Sub-Adviser is required to be
registered as an investment adviser in order to perform its obligations
under this agreement or any other agreement concerning the provision of
investment advisory services to the Trust, (b) the Sub-Adviser shall
have been served or otherwise have notice of any action, suit,
proceeding, inquiry or investigation, at law or in equity, before or by
any court, public board or body, involving the affairs of the Trust,
(c) there is a change in control of the Sub-Adviser or any parent of
the Sub-Adviser within the meaning of the Investment Company Act of
1940, as amended (the "1940 Act"), (d) there is a material adverse
change in the business or financial position of the Sub-Adviser or (e)
the Chairman of the Sub-Adviser or the portfolio manager of the Fund
shall have been changed.
7. CERTAIN DEFINITIONS.
For the purposes of this Agreement, the "affirmative vote of a majority
of the outstanding shares" means the affirmative vote, at a duly called
and held meeting of shareholders, (a) of the holders of 67% or more of
the shares of the Fund, as the case may be, present (in person or by
proxy) and entitled to vote at such meeting, if the holders of more
than 50% of the outstanding shares of the Fund, as the case may be,
entitled to vote at such meeting are present in person or by proxy, or
(b) of the holders of more than 50% of the outstanding shares of the
Fund, as the case may be, entitled to vote at such meeting, whichever
is less.
For the purposes of this Agreement, the terms "affiliated person,"
"control," "interested person" and "assignment" shall have their
respective meanings defined in the 1940 Act; the term "specifically
approve at least annually" shall be construed in a manner consistent
with the 1940 Act and the rules and regulations thereunder, subject,
however, to such exemptions as may be granted by the Securities and
Exchange Commission under the 1940 Act and the rules and regulations
thereunder; and the term "brokerage and research services" shall be the
meaning given in the 1934 Act and the rules and regulations thereunder.
8. NONLIABILITY OF SUB-ADVISER.
Notwithstanding any other provisions of this Agreement, in the absence
of willful misfeasance, bad faith or gross negligence on the part of
the Sub-Adviser, or reckless disregard of its obligations and duties
hereunder, the Sub-Adviser, including its officers, directors and
shareholders, shall not be subject to any liability to the Manager, to
the Trust, to the Fund, or to any shareholder, officer, director or
Trustee thereof, for any act or omission in the course of, or connected
with, rendering services hereunder.
9. EXERCISE OF VOTING RIGHTS.
Except with the agreement or on the specific instructions of the
Trustees of the Trust or the Manager, the Sub-Adviser shall not
exercise or procure the exercise of any voting right attaching to
investments of the Fund.
<PAGE>
IN WITNESS WHEREOF, PIMCO ADVISORS L.P. and PACIFIC INVESTMENT
MANAGEMENT COMPANY have each caused this instrument to be signed in duplicate on
its behalf by its duly authorized representative, all as of the day and year
first above written.
PIMCO ADVISORS L.P. PACIFIC INVESTMENT MANAGEMENT
(formerly Thomson Advisory Group L.P.) COMPANY
By: PIMCO Partners, G.P., a California By: William S. Thompson
general partnership, General Partner
By: PIMCO Partners, LLC, a California
limited liability company, General Partner
By: William S. Thompson
Accepted and agreed to as of the day and year first above written:
THOMSON FUND GROUP
By: Robert A. Prindiville
<PAGE>
A copy of the Agreement and Declaration of Trust of the Trust is on
file with the Secretary of The Commonwealth of Massachusetts, and notice is
hereby given that this instrument is executed on behalf of the Trustees of the
Trust as Trustees and not individually and that the obligations of this
instrument are not binding upon any of the Trustees or shareholders individually
but are binding upon the assets property of the Fund.
<PAGE>
SUB-ADVISER AGREEMENT
[Short-Intermediate Government Fund]
Sub-Adviser Agreement executed as of November 16, 1994 between PIMCO
ADVISORS L.P., a Delaware limited partnership (the "Manager"), and Pacific
Investment Management Company, a Delaware general partnership (the
"Sub-Adviser").
WITNESSETH:
That in consideration of the mutual covenants herein contained, it is
agreed as follows:
1. SERVICES TO BE RENDERED BY SUB-ADVISER TO THE TRUST.
(a) Subject always to the control of the Trustees of Thomson Fund
Group (the "Trust"), a Massachusetts business trust, the
Sub-Adviser, at its expense, will furnish continuously an
investment program for the Short-Intermediate Government Fund
series of the Trust (the "Fund") and will make investment
decisions on behalf of the Fund and place all orders for the
purchase and sale of portfolio securities and all other
investments. In the performance of its duties, the Sub-Adviser
(1) will comply with the provisions of the Trust's Agreement
and Declaration of Trust and By-laws, including any amendments
thereto (upon receipt of such amendments by the Sub-Adviser),
and the investment objectives, policies and restrictions of
the Fund as set forth in its current Prospectus and Statement
of Additional Information (copies of which will be supplied to
the Sub-Adviser upon filing with the SEC), (2) will use its
best efforts to safeguard and promote the welfare of the Fund,
(3) will comply with other policies which the Trustees or the
Manager, as the case may be, may from time to time determine
as promptly as practicable after such policies have been
communicated to the Sub-Adviser in writing, and (4) shall
exercise the same care and diligence expected of the Trustees.
The Sub-Adviser and the Manager shall each make its officers
and employees available to the other from time to time at
reasonable times to review investment policies of the Fund and
to consult with each other regarding investment affairs of the
Fund.
(b) The Sub-Adviser, at its expense, will furnish (i) all
necessary investment and management facilities, including
salaries of personnel, required for it to execute its duties
hereunder faithfully and (ii) administrative facilities,
including bookkeeping, clerical personnel and equipment
necessary for the efficient conduct of the investment affairs
of the Fund, including verification and oversight of the
pricing of the Fund's portfolio (but excluding determination
of net asset value and shareholder accounting services).
<PAGE>
-4-
(c) In the selection of brokers or dealers and the placing of
orders for the purchase and sale of portfolio investments for
the Fund, the Sub-Adviser shall use its best efforts to obtain
for the Fund the most favorable price and execution available,
except to the extent it may be permitted to pay higher
brokerage commissions for brokerage and research services as
described below. In using its best efforts to obtain for the
Fund the most favorable price and execution available, the
Sub-Adviser, bearing in mind the Fund's best interests at all
times, shall consider all factors it deems relevant,
including, by way of illustration, price, the size of the
transaction, the nature of the market for the security, the
amount of the commission, the timing of the transaction taking
into account market prices and trends, the reputation,
experience and financial stability of the broker or dealer
involved and the quality of service rendered by the broker or
dealer in other transactions. Subject to such policies as the
Trustees of the Trust may determine and communicate to the
Sub-Adviser in writing, the Sub-Adviser shall not be deemed to
have acted unlawfully or to have breached any duty created by
this Agreement or otherwise solely by reason of its having
caused the Trust to pay a broker or dealer that provides
brokerage and research services to the Sub-Adviser or its
affiliates an amount of commission for effecting a portfolio
investment transaction in excess of the amount of commission
another border or dealer would have charged for effecting that
transaction, if the Sub-Adviser determines in good faith that
such amount of commission was reasonable in relation to the
value of the brokerage and research services provided by such
broker or dealer, viewed in terms of either that particular
transaction or the Sub-Adviser's overall responsibilities with
respect to the Trust and to other clients of the Sub-Adviser
and its affiliates as to which the Sub-Adviser and its
affiliates exercise investment discretion. The Trust agrees
that any entity or person associated with the Sub-Adviser or
its affiliates which is a member of a national securities
exchange is authorized to effect any transaction on such
exchange for the account of the Trust and any Fund thereof
which is permitted by Section 11(a) of the Securities Exchange
Act of 1934, as amended (the "1934 Act") and Rule 11a2-2(T)
thereunder, and the Trust has consented to the retention of
compensation for such transactions in accordance with Rule
11a2-2(T)(2)(iv).
(d) The Sub-Adviser shall not be obligated to pay any expenses of
or for the Fund not expressly assumed by the Sub-Adviser
pursuant to this Section 1.
2. OTHER AGREEMENTS, ETC.
It is understood that any of the shareholders, Trustees, officers and
employees of the Trust may be a shareholder, director, officer or
employee of, or be otherwise interested in, the Sub-Adviser, and in any
person controlled by or under common control with the Sub-Adviser, and
that the Sub-Adviser and any person controlled by or under common
control with the Sub-Adviser may have an interest in the Trust. It is
also understood that the Sub-Adviser and persons controlled by or under
common control with the Sub-Adviser have and may have advisory,
management service or other contracts with other organizations and
persons, and may have other interests and businesses.
3. COMPENSATION TO BE PAID BY THE MANAGER TO THE SUB-ADVISER.
The Manager will pay the Sub-Adviser as compensation for the
Sub-Adviser's services rendered and for the expenses borne by the
Sub-Adviser pursuant to Section 1, a fee computed and paid monthly at
the annual rate of .25% of the average daily net asset value of the
Fund. Such fee shall be payable for each month within 10 business days
after the end of such month.
If the Sub-Adviser shall serve for less than the whole of a month, the
foregoing compensation shall be prorated.
4. ASSIGNMENT TERMINATES THIS AGREEMENT; AMENDMENTS OF THIS CONTRACT.
This Agreement shall automatically terminate, without the payment of
any penalty, in the event of its assignment or in the event that the
Management Contract between the Manager and the Trust shall have
terminated for any reason; and this Agreement shall not be amended
unless such amendment be approved at a meeting by the affirmative vote
of a majority of the outstanding shares of the Fund, and by the vote,
cast in person at a meeting called for the purpose of voting on such
approval, of a majority of the Trustees of the Trust who are not
interested persons of the Trust or of the Manager or the Sub-Adviser.
5. EFFECTIVE PERIOD AND TERMINATION OF THIS AGREEMENT.
This Agreement shall become effective upon its execution, and shall
remain in full force and effect as to the Fund continuously thereafter
(unless terminated automatically as set forth in Section 4) until
terminated as follows:
(a) The Trust may at any time terminate this Agreement by written
notice delivered or mailed by registered mail, postage
prepaid, to the Manager and the Sub-Adviser, or
(b) If (i) the Trustees of the Trust or the shareholders by the
affirmative vote of a majority of the outstanding shares of
the Fund, and (ii) a majority of the Trustees of the Trust who
are not interested persons of the Trust or of the Manager or
of the Sub-Adviser, by vote cast in person at a meeting called
for the purpose of voting on such approval, do not
specifically approve at least annually the continuance of this
Agreement, then this Agreement shall automatically terminate
at the close of business on the second anniversary of its
execution, or upon the expiration of one year from the
effective date of the last such continuance, whichever is
later; provided, however, that if the continuance of this
Agreement is submitted to the shareholders of the Fund for
their approval and such shareholders fail to approve such
continuance of this Agreement as provided herein, the
Sub-Adviser may continue to serve hereunder in a manner
consistent with the Investment Company Act of 1940 and the
rules and regulations thereunder, or
(c) The manager may at any time terminate this Agreement by not
less than 60 days' written notice delivered or mailed by
registered mail, postage prepaid, to the Sub-Adviser, and the
Sub-Adviser may at any time terminate this Agreement by not
less than 180 days' written notice delivered or mailed by
registered mail, postage prepaid, to the Manager.
Action by the Trust under (a) above may be taken either (i) by
vote of a majority of the Trustees, or (ii) by the affirmative
vote of a majority of the outstanding shares of the Fund.
Termination of this Agreement pursuant to this Section 5 shall
be without the payment of any penalty.
6. CERTAIN INFORMATION.
The Sub-Adviser shall promptly notify the Manager in writing of the
occurrence of any of the following events: (a) the Sub-Adviser shall
fail to be registered as an investment adviser under the Investment
Advisers Act of 1940, as amended from time to time, and under the laws
of any jurisdiction in which the Sub-Adviser is required to be
registered as an investment adviser in order to perform its obligations
under this agreement or any other agreement concerning the provision of
investment advisory services to the Trust, (b) the Sub-Adviser shall
have been served or otherwise have notice of any action, suit,
proceeding, inquiry or investigation, at law or in equity, before or by
any court, public board or body, involving the affairs of the Trust,
(c) there is a change in control of the Sub-Adviser or any parent of
the Sub-Adviser within the meaning of the Investment Company Act of
1940, as amended (the "1940 Act"), (d) there is a material adverse
change in the business or financial position of the Sub-Adviser or (e)
the Chairman of the Sub-Adviser or the portfolio manager of the Fund
shall have been changed.
7. CERTAIN DEFINITIONS.
For the purposes of this Agreement, the "affirmative vote of a majority
of the outstanding shares" means the affirmative vote, at a duly called
and held meeting of shareholders, (a) of the holders of 67% or more of
the shares of the Fund, as the case may be, present (in person or by
proxy) and entitled to vote at such meeting, if the holders of more
than 50% of the outstanding shares of the Fund, as the case may be,
entitled to vote at such meeting are present in person or by proxy, or
(b) of the holders of more than 50% of the outstanding shares of the
Fund, as the case may be, entitled to vote at such meeting, whichever
is less.
For the purposes of this Agreement, the terms "affiliated person,"
"control," "interested person" and "assignment" shall have their
respective meanings defined in the 1940 Act; the term "specifically
approve at least annually" shall be construed in a manner consistent
with the 1940 Act and the rules and regulations thereunder, subject,
however, to such exemptions as may be granted by the Securities and
Exchange Commission under the 1940 Act and the rules and regulations
thereunder; and the term "brokerage and research services" shall be the
meaning given in the 1934 Act and the rules and regulations thereunder.
8. NONLIABILITY OF SUB-ADVISER.
Notwithstanding any other provisions of this Agreement, in the absence
of willful misfeasance, bad faith or gross negligence on the part of
the Sub-Adviser, or reckless disregard of its obligations and duties
hereunder, the Sub-Adviser, including its officers, directors and
shareholders, shall not be subject to any liability to the Manager, to
the Trust, to the Fund, or to any shareholder, officer, director or
Trustee thereof, for any act or omission in the course of, or connected
with, rendering services hereunder.
9. EXERCISE OF VOTING RIGHTS.
Except with the agreement or on the specific instructions of the
Trustees of the Trust or the Manager, the Sub-Adviser shall not
exercise or procure the exercise of any voting right attaching to
investments of the Fund.
<PAGE>
IN WITNESS WHEREOF, PIMCO ADVISORS L.P. and PACIFIC INVESTMENT
MANAGEMENT COMPANY have each caused this instrument to be signed in duplicate on
its behalf by its duly authorized representative, all as of the day and year
first above written.
PIMCO ADVISORS L.P. PACIFIC INVESTMENT MANAGEMENT
(formerly Thomson Advisory Group L.P.) COMPANY
By: PIMCO Partners, G.P., a California By: William S. Thompson
general partnership, General Partner
By: PIMCO Partners, LLC, a California
limited liability company, General Partner
By: William S. Thompson
Accepted and agreed to as of the day and year first above written:
THOMSON FUND GROUP
By: Robert A. Prindiville
<PAGE>
A copy of the Agreement and Declaration of Trust of the Trust is on
file with the Secretary of The Commonwealth of Massachusetts, and notice is
hereby given that this instrument is executed on behalf of the Trustees of the
Trust as Trustees and not individually and that the obligations of this
instrument are not binding upon any of the Trustees or shareholders individually
but are binding upon the assets property of the Fund.
<PAGE>
SUB-ADVISER AGREEMENT
[Money Market Fund]
Sub-Adviser Agreement executed as of November 16, 1994 between PIMCO
ADVISORS L.P., a Delaware limited partnership (the "Manager"), and Columbus
Circle Investors, a Delaware general partnership (the "Sub-Adviser").
WITNESSETH:
That in consideration of the mutual covenants herein contained, it is
agreed as follows:
1. SERVICES TO BE RENDERED BY SUB-ADVISER TO THE TRUST.
(a) Subject always to the control of the Trustees of Thomson Fund
Group, a Massachusetts business trust, the Sub-Adviser, at its
expense, will furnish continuously an investment program for
the Money Market Fund series of the Trust (the "Fund") and
will make investment decisions on behalf of the Fund and place
all orders for the purchase and sale of portfolio securities
and all other investments. In the performance of its duties,
the Sub-Adviser (1) will comply with the provisions of the
Trust's Agreement and Declaration of Trust and By-laws,
including any amendments thereto (upon receipt of such
amendments by the Sub-Adviser), and the investment objectives,
policies and restrictions of the Fund as set forth in its
current Prospectus and Statement of Additional Information
(copies of which will be supplied to the Sub-Adviser upon
filing with the SEC), (2) will use its best efforts to
safeguard and promote the welfare of the Fund, (3) will comply
with other policies which the Trustees or the Manager, as the
case may be, may from time to time determine as promptly as
practicable after such policies have been communicated to the
Sub-Adviser in writing, and (4) shall exercise the same care
and diligence expected of the Trustees. The Sub-Adviser and
the Manager shall each make its officers and employees
available to the other from time to time at reasonable times
to review investment policies of the Fund and to consult with
each other regarding investment affairs of the Fund.
(b) The Sub-Adviser, at its expense, will furnish (i) all
necessary investment and management facilities, including
salaries of personnel, required for it to execute its duties
hereunder faithfully and (ii) administrative facilities,
including bookkeeping, clerical personnel and equipment
necessary for the efficient conduct of the investment affairs
of the Fund, including verification and oversight of the
pricing of the Fund's portfolio (but excluding determination
of net asset value and shareholder accounting services).
<PAGE>
-2-
(c) In the selection of brokers or dealers and the placing of
orders for the purchase and sale of portfolio investments for
the Fund, the Sub-Adviser shall use its best efforts to obtain
for the Fund the most favorable price and execution available,
except to the extent it may be permitted to pay higher
brokerage commissions for brokerage and research services as
described below. In using its best efforts to obtain for the
Fund the most favorable price and execution available, the
Sub-Adviser, bearing in mind the Fund's best interests at all
times, shall consider all factors it deems relevant,
including, by way of illustration, price, the size of the
transaction, the nature of the market for the security, the
amount of the commission, the timing of the transaction taking
into account market prices and trends, the reputation,
experience and financial stability of the broker or dealer
involved and the quality of service rendered by the broker or
dealer in other transactions. Subject to such policies as the
Trustees of the Trust may determine and communicate to the
Sub-Adviser in writing, the Sub-Adviser shall not be deemed to
have acted unlawfully or to have breached any duty created by
this Agreement or otherwise solely by reason of its having
caused the Trust to pay a broker or dealer that provides
brokerage and research services to the Sub-Adviser or its
affiliates an amount of commission for effecting a portfolio
investment transaction in excess of the amount of commission
another border or dealer would have charged for effecting that
transaction, if the Sub-Adviser determines in good faith that
such amount of commission was reasonable in relation to the
value of the brokerage and research services provided by such
broker or dealer, viewed in terms of either that particular
transaction or the Sub-Adviser's overall responsibilities with
respect to the Trust and to other clients of the Sub-Adviser
and its affiliates as to which the Sub-Adviser and its
affiliates exercise investment discretion. The Trust agrees
that any entity or person associated with the Sub-Adviser or
its affiliates which is a member of a national securities
exchange is authorized to effect any transaction on such
exchange for the account of the Trust and any Fund thereof
which is permitted by Section 11(a) of the Securities Exchange
Act of 1934, as amended (the "1934 Act") and Rule 11a2-2(T)
thereunder, and the Trust has consented to the retention of
compensation for such transactions in accordance with Rule
11a2-2(T)(2)(iv).
(d) The Sub-Adviser shall not be obligated to pay any expenses of
or for the Fund not expressly assumed by the Sub-Adviser
pursuant to this Section 1.
2. OTHER AGREEMENTS, ETC.
It is understood that any of the shareholders, Trustees, officers and
employees of the Trust may be a shareholder, director, officer or
employee of, or be otherwise interested in, the Sub-Adviser, and in any
person controlled by or under common control with the Sub-Adviser, and
that the Sub-Adviser and any person controlled by or under common
control with the Sub-Adviser may have an interest in the Trust. It is
also understood that the Sub-Adviser and persons controlled by or under
common control with the Sub-Adviser have and may have advisory,
management service or other contracts with other organizations and
persons, and may have other interests and businesses.
3. COMPENSATION TO BE PAID BY THE MANAGER TO THE SUB-ADVISER.
The Manager will pay the Sub-Adviser as compensation for the
Sub-Adviser's services rendered and for the expenses borne by the
Sub-Adviser pursuant to Section 1, a fee computed and paid monthly at
the annual rate of 0.25% of the average daily net asset value of the
Fund up to $250 million, and 0.20% of such net asset value in excess of
$250 million. Such fee shall be payable for each month within 10
business days after the end of such month.
If the Sub-Adviser shall serve for less than the whole of a month, the
foregoing compensation shall be prorated.
4. ASSIGNMENT TERMINATES THIS AGREEMENT; AMENDMENTS OF THIS CONTRACT.
This Agreement shall automatically terminate, without the payment of
any penalty, in the event of its assignment or in the event that the
Management Contract between the Manager and the Trust shall have
terminated for any reason; and this Agreement shall not be amended
unless such amendment be approved at a meeting by the affirmative vote
of a majority of the outstanding shares of the Fund, and by the vote,
cast in person at a meeting called for the purpose of voting on such
approval, of a majority of the Trustees of the Trust who are not
interested persons of the Trust or of the Manager or the Sub-Adviser.
5. EFFECTIVE PERIOD AND TERMINATION OF THIS AGREEMENT.
This Agreement shall become effective upon its execution, and shall
remain in full force and effect as to the Fund continuously thereafter
(unless terminated automatically as set forth in Section 4) until
terminated as follows:
(a) The Trust may at any time terminate this Agreement by written
notice delivered or mailed by registered mail, postage
prepaid, to the Manager and the Sub-Adviser, or
(b) If (i) the Trustees of the Trust or the shareholders by the
affirmative vote of a majority of the outstanding shares of
the Fund, and (ii) a majority of the Trustees of the Trust who
are not interested persons of the Trust or of the Manager or
of the Sub-Adviser, by vote cast in person at a meeting called
for the purpose of voting on such approval, do not
specifically approve at least annually the continuance of this
Agreement, then this Agreement shall automatically terminate
at the close of business on the second anniversary of its
execution, or upon the expiration of one year from the
effective date of the last such continuance, whichever is
later; provided, however, that if the continuance of this
Agreement is submitted to the shareholders of the Fund for
their approval and such shareholders fail to approve such
continuance of this Agreement as provided herein, the
Sub-Adviser may continue to serve hereunder in a manner
consistent with the Investment Company Act of 1940 and the
rules and regulations thereunder, or
(c) The manager may at any time terminate this Agreement by not
less than 60 days' written notice delivered or mailed by
registered mail, postage prepaid, to the Sub-Adviser, and the
Sub-Adviser may at any time terminate this Agreement by not
less than 180 days' written notice delivered or mailed by
registered mail, postage prepaid, to the Manager.
Action by the Trust under (a) above may be taken either (i) by
vote of a majority of the Trustees, or (ii) by the affirmative
vote of a majority of the outstanding shares of the Fund.
Termination of this Agreement pursuant to this Section 5 shall
be without the payment of any penalty.
6. CERTAIN INFORMATION.
The Sub-Adviser shall promptly notify the Manager in writing of the
occurrence of any of the following events: (a) the Sub-Adviser shall
fail to be registered as an investment adviser under the Investment
Advisers Act of 1940, as amended from time to time, and under the laws
of any jurisdiction in which the Sub-Adviser is required to be
registered as an investment adviser in order to perform its obligations
under this agreement or any other agreement concerning the provision of
investment advisory services to the Trust, (b) the Sub-Adviser shall
have been served or otherwise have notice of any action, suit,
proceeding, inquiry or investigation, at law or in equity, before or by
any court, public board or body, involving the affairs of the Trust,
(c) there is a change in control of the Sub-Adviser or any parent of
the Sub-Adviser within the meaning of the Investment Company Act of
1940, as amended (the "1940 Act"), (d) there is a material adverse
change in the business or financial position of the Sub-Adviser or (e)
the Chairman of the Sub-Adviser or the portfolio manager of the Fun
shall have been changed.
7. CERTAIN DEFINITIONS.
For the purposes of this Agreement, the "affirmative vote of a majority
of the outstanding shares" means the affirmative vote, at a duly called
and held meeting of shareholders, (a) of the holders of 67% or more of
the shares of the Fund, as the case may be, present (in person or by
proxy) and entitled to vote at such meeting, if the holders of more
than 50% of the outstanding shares of the Fund, as the case may be,
entitled to vote at such meeting are present in person or by proxy, or
(b) of the holders of more than 50% of the outstanding shares of the
Fund, as the case may be, entitled to vote at such meeting, whichever
is less.
For the purposes of this Agreement, the terms "affiliated person,"
"control," "interested person" and "assignment" shall have their
respective meanings defined in the 1940 Act; the term "specifically
approve at least annually" shall be construed in a manner consistent
with the 1940 Act and the rules and regulations thereunder, subject,
however, to such exemptions as may be granted by the Securities and
Exchange Commission under the 1940 Act and the rules and regulations
thereunder; and the term "brokerage and research services" shall be the
meaning given in the 1934 Act and the rules and regulations thereunder.
8. NONLIABILITY OF SUB-ADVISER.
Notwithstanding any other provisions of this Agreement, in the absence
of willful misfeasance, bad faith or gross negligence on the part of
the Sub-Adviser, or reckless disregard of its obligations and duties
hereunder, the Sub-Adviser, including its officers, directors and
shareholders, shall not be subject to any liability to the Manager, to
the Trust, to the Fund, or to any shareholder, officer, director or
Trustee thereof, for any act or omission in the course of, or connected
with, rendering services hereunder.
9. EXERCISE OF VOTING RIGHTS.
Except with the agreement or on the specific instructions of the
Trustees of the Trust or the Manager, the Sub-Adviser shall not
exercise or procure the exercise of any voting right attaching to
investments of the Fund.
<PAGE>
IN WITNESS WHEREOF, PIMCO ADVISORS L.P. and COLUMBUS CIRCLE INVESTORS
have each caused this instrument to be signed in duplicate on its behalf by its
duly authorized representative, all as of the day and year first above written.
PIMCO ADVISORS L.P. COLUMBUS CIRCLE INVESTORS
(formerly Thomson Advisory Group L.P.)
By: I. F. Smith
By: PIMCO Partners, G.P., a California
general partnership, General Partner
By: PIMCO Partners, LLC, a California
limited liability company, General Partner
By: William S. Thompson
Accepted and agreed to as of the day and year first above written:
THOMSON FUND GROUP
By: Robert A. Prindiville
<PAGE>
A copy of the Agreement and Declaration of Trust of the Trust is on
file with the Secretary of The Commonwealth of Massachusetts, and notice is
hereby given that this instrument is executed on behalf of the Trustees of the
Trust as Trustees and not individually and that the obligations of this
instrument are not binding upon any of the Trustees or shareholders individually
but are binding upon the assets property of the Fund.
Exhibit 99.B6
Distributor's Contract
<PAGE>
PIMCO ADVISORS FUNDS
DISTRIBUTOR'S CONTRACT
(As amended through September 28, 1995)
Distributor's Contract dated as of May 11, 1995, by and between PIMCO
ADVISORS FUNDS, a Massachusetts business trust (the "Trust"), and PIMCO ADVISORS
DISTRIBUTION COMPANY ("PADCO").
WHEREAS, the Trust and PADCO are desirous of entering into a new
agreement providing for the distribution of shares of the Trust and the
provision of shareholder services by PADCO;
NOW THEREFORE, in consideration of the mutual agreements contained in
the Terms and Conditions of Distributor's Contract attached to and forming a
part of this Contract (the "Terms and Conditions"), the Trust hereby appoints
PADCO as a distributor of shares of the Trust and as servicing agent of
shareholders and shareholder accounts of the Trust, and PADCO hereby accepts
such appointment, all as set forth in the Terms and Conditions.
A copy of the Amended and Restated Agreement and Declaration of Trust
of the Trust is on file with the Secretary of The Commonwealth of Massachusetts
and notice is hereby given that this instrument is executed on behalf of the
Trustees of the Trust as Trustees and not individually, and that the obligations
of or arising out of this instrument are not binding upon any of the Trustees or
shareholders individually but are binding only upon the assets and property of
the Trust.
IN WITNESS WHEREOF, PIMCO ADVISORS FUNDS and PIMCO ADVISORS
DISTRIBUTION COMPANY have each caused this Amended Distributor's Contract to be
signed in duplicate on its behalf, all as of the day and year first above
written.
PIMCO ADVISORS FUNDS
By: Robert A. Prindiville
PIMCO ADVISORS DISTRIBUTION COMPANY
By: John O. Leasure
Dated: September 28, 1995
-1-
<PAGE>
TERMS AND CONDITIONS
OF
DISTRIBUTOR'S CONTRACT
As amended through September 28, 1995
1. Sale of Shares to Padco and Sales by Padco. PADCO will have the
right, as principal, to sell shares of beneficial interest ("shares") of the
three classes (referred to herein as "Class A shares," "Class B shares" and
"Class C shares") of each portfolio of the Trust represented by a separate
series of shares (a "Fund") directly to the public against orders therefor at
the applicable public offering price as described below in the case of Class A
shares, and at net asset value in the case of Class B shares and Class C shares.
For such purposes, PADCO will have the right to purchase shares at net asset
value. PADCO will also have the right, as agent, to sell shares of a Fund
indirectly to the public through broker dealers who are members of the National
Association of Securities Dealers, Inc. and who are acting as introducing
brokers pursuant to clearing agreements with PADCO ("introducing brokers"), or
to broker dealers which are members of the National Association of Securities
Dealers, Inc. and who have entered into selling agreements with PADCO
("participating brokers"), in each case against orders therefor. The price for
introducing brokers and participating brokers shall be, in the case of Class A
shares, the applicable public offering price less a concession to be determined
by PADCO, which concession will not exceed the amount of the sales charge or
underwriting discount, if any, described below and, in the case of Class B
shares and Class C shares, net asset value.
Prior to the time of transfer of any shares by the Trust to, or on the
order of, PADCO or any introducing broker or participating broker, PADCO shall
pay or cause to be paid to the Trust or to its order an amount in New York
clearing house funds equal to the applicable net assets value of the shares.
Upon receipt of registration instructions in proper form, PADCO will transmit or
cause to be transmitted such instructions to the Trust or its agent for
registration of the shares purchased.
The public offering price of Class A shares shall be the net asset
value of such shares, plus any applicable sales charge as set forth in the then
current prospectus and statement of additional information (collectively, the
"prospectus") of the Trust. In no event will any applicable sales charge or
underwriting discount exceed the limitations on permissible sales loads imposed
by Section 22(b) of the Investment Company Act of 1940 and Section 26(d)(1) of
Article III of the Rules of Fair Practice to the National Association of
Securities Dealers, Inc., as either or both may be amended from time to time.
On every sale, the Trust shall receive the net asset value of the
shares. The net asset value of shares shall be determined in the manner provided
in the Amended an Restated Agreement and Declaration of Trust and By-laws of the
Trust as then amended. In the case of Class A shares, PADCO may retain so much
of any sales charge or underwriting discount as is not allowed by PADCO as a
concession to
-1-
<PAGE>
dealers and such sales charge or underwriting discount shall be in
addition to the fee paid to PADCO in respect of Class A shares as described in
Section 2 hereof.
2. Fees. For its services as servicing agent of a Fund's Class A
shareholders and Class A shareholder accounts, the Trust shall pay PADCO on
behalf of the Fund a servicing fee at the rate and upon the terms and conditions
set forth in the Distribution and Servicing Plan attached as Exhibit A hereto,
and as amended from time to time, and may retain so much of any sales charge or
underwriting discount as is not allowed by PADCO as a concession to dealers, and
shall receive any contingent deferred sales charge as provided in Section 5
hereof.
For its services as distributor of a Fund's Class B shares and Class C
shares and as servicing agent of a Fund's Class B and Class C shareholders and
Class B and Class C shareholder accounts, the Trust shall pay PADCO on behalf of
the Fund a distribution fee and a servicing fee at the rates and on the terms
and conditions set forth in the relevant Distribution and Servicing Plan
attached as Exhibits B and C hereto, respectively, and as amended from time to
time, and shall receive any contingent deferred sales charge as provided in
Section 5 hereof. The respective distribution and servicing fees shall be
accrued daily and paid monthly to PADCO as soon as practicable after the end of
the calendar month in which they accrue, but in any event within 5 business days
following the last calendar day of each month.
3. Reservation of Right Not to Sell. The Trust reserves the right to
refuse at any time or times to sell any of its shares for any reason deemed
adequate by it.
4. Use of Sub-agents; Non-exclusivity; Sales of Shares by the Trust.
PADCO may employ such sub-agents, including one or more participating brokers or
introducing brokers, for the purposes of selling shares of the Trust as PADCO,
in its sole discretion, shall deem advisable or desirable. PADCO may enter into
similar arrangements with other issuers. The Trust reserves the right to issue
shares at any time directly to its shareholders as a stock dividend or stock
split and to sell shares to its shareholders or other persons at not less than
net asset value.
5. Repurchase of Shares. PADCO will act as agent for the Trust in
connection with the repurchase and redemption of shares by the Trust upon the
terms and conditions set forth in the then current prospectus of the Trust or as
the Trust acting through its Trustees may otherwise direct. PADCO may employ
such sub-agents, including one or more participating brokers or introducing
brokers, for the purpose as PADCO, in its sole discretion, shall deem to be
advisable or desirable. Any contingent deferred sales charge imposed on
repurchases and redemptions of Class A, Class B and Class C shares upon the
terms and conditions set forth in the then current prospectus of the Trust shall
be paid to PADCO in addition to the fees with respect to the Class A, Class B
and Class C shares set forth in Section 2 hereof. The Trust will take such steps
as are commercially reasonable to track on a share-by-share basis the aging of
its shares for purposes of calculating any contingent deferred sales charges
and/or Distribution Fees.
-2-
<PAGE>
6. Basis of Purchases and Sales of Shares. PADCO's obligation to sell
shares hereunder shall be on a best efforts basis only and PADCO shall not be
obligated to sell any specific number of shares. Shares will be sold by PADCO
only against orders therefor. PADCO will not purchase shares from anyone other
than the Trust except in accordance with Section 5, and will not take "long" or
"short" positions in shares contrary to the Amended and Restated Agreement and
Declaration of Trust of the Trust.
7. Rules of NASD, etc. PADCO will conform to the Rules of Fair Practice
of the National Association of Securities Dealers, Inc. and the Securities laws
of any jurisdiction in which it sells, directly or indirectly, any shares. PADCO
also agrees to furnish to the trust sufficient copies of any agreement or plans
it intends to use in connection with any sales of shares in adequate time for
the Trust to file and clear them with the proper authorities before they are put
in use, and not to use them until so filed and cleared.
8. Independent Contractor. PADCO shall be an independent contractor and
neither PADCO nor any of its officers or employees as such, is or shall be an
employee of the Trust. PADCO is responsible for its own conduct and the
employment, control and conduct of its agents and employees and for injury to
such agents or employees or to others through its agents or employees. PADCO
assumes full responsibility for its agents and employees under applicable
statutes and agrees to pay all employer taxes thereunder.
9. Registration and Qualification of Shares. The Trust agrees to
execute such papers and to do such acts and things as shall from time to time be
reasonably requested by PADCO for the purpose of qualifying and maintaining
qualification of the shares for sale under the so-called Blue Sky Laws of any
state or for maintaining the registration of each Fund of the Trust and the
Trust under the Securities Act of 1933 (the "1933 Act") and the Investment
Company Act of 1940 (together with the rules and regulations thereunder, the
"1940 Act"), to the end that there will be available for sale from time to time
such number of shares as PADCO may reasonably be expected to sell. The Trust
shall advise PADCO promptly of (a) any action of the Securities and Exchange
Commission or any authorities of any state or territory, of which it may be
advised, affecting registration or qualification of the Trust, a Fund or the
shares thereof, or rights to offer such shares for sale and (b) the happening of
any event which makes untrue any statement or which requires the making of any
change in the registration statement or prospectus in order to make the
statements therein not misleading.
10. Expenses. The Trust will pay or reimburse PADCO for all expenses of
qualifying shares of the Trust for sale under the securities or so-called "Blue
Sky" laws of any State. PADCO will pay all expenses of preparing, printing and
distributing advertising and sales literature (apart from expenses of
registering shares under the 1933 Act and the 1940 Act and the preparation and
printing of prospectuses and reports as required by said Acts and the direct
expenses of the issue of shares, except that PADCO
-3-
<PAGE>
will pay the cost of the preparation and printing of prospectuses and
shareholders' reports used by it in the sale of Trust shares).
11. Securities Transactions. The Trust agrees that PADCO may effect a
transaction on any national securities exchange of which it is a member for the
account of the Trust and any Fund of the Trust which is permitted by Section
11(a) of the Securities Exchange Act of 1934.
12. Indemnification of Trust. PADCO agrees to indemnify and hold
harmless the Trust and each person who has been, is, or may hereafter be, a
Trustee of the Trust against expenses reasonably incurred by any of them in
connection with any claim or in connection with any action, suit or proceeding
to which any of them may be a party, which arises out of or is alleged to arise
out of any misrepresentation or omission to state a material fact, or out of any
alleged misrepresentation or omission to state a material fact, on the part of
PADCO or any agent or employee of PADCO or any other person for whose acts PADCO
is responsible or is alleged to be responsible, unless such misrepresentation or
omission was made in reliance upon written information furnished by the Trust,
provided, that in no event shall anything contained in this Agreement be
construed to protect the Trust or any such person against any liability to which
the Trust or such person would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of its duties
under this Agreement. PADCO also agrees likewise to indemnify and hold harmless
the Trust and each such person in connection with any claim or in connection
with any action, suit or proceeding which arises out of or is alleged to arise
out of PADCO's failure to exercise reasonable care and diligence with respect to
its services rendered in connection with investment, reinvestment, employee
benefit and other plans for shares. The term "expenses" includes amount paid in
satisfaction of judgments or in settlements which are made with PADCO's consent.
The foregoing rights of indemnification shall be in addition to any other rights
to which the Trust or a Trustee may be entitled as a matter of law.
13. Indemnification of PADCO. The Trust agrees to indemnify and hold
harmless PADCO, its several officers, employees and directors, and any person
who controls PADCO within the meaning of Section 15 of the 1933 Act, against
expenses reasonably incurred by any of them in connection with any claim or in
connection with any action, suit or proceeding to which any of them may be a
party, which arises out of or is alleged to arise out of any misrepresentation
or omission to state a material fact, or out of any alleged misrepresentation or
omission to state a material fact in the Trust's Registration Statement or
prospectus, provided that in no event shall anything contained in this Agreement
be construed so as to protect PADCO against any liability to the Trust or its
shareholders to which PADCO would otherwise be subject by reason of willful
misfeasance, bad faith, or gross negligence, in the performance of its duties
under this Agreement.
14. Assignment Terminates this Agreement; Amendments of this Agreement.
This Agreement shall automatically terminate, without the payment of any
penalty, in the event of its assignment. This agreement may be amended only if
such amendment be
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<PAGE>
approved either by action of the Trustees of the Trust or at a meeting
of the shareholders of the Trust by the affirmative vote of a majority of the
outstanding shares of the Trust, and by a majority of the Trustees of the Trust
who are not interested persons of the Trust and who have no direct or indirect
financial interest in the operation of the Distribution Plans or this Agreement
by vote cast in person at a meeting called for the purpose of voting on such
approval.
15. Effective Period and Termination of this Agreement. This Agreement
shall take effect upon the date first above written and shall remain in full
force and effect continuously as to a Fund and a class of shares thereof (unless
terminated automatically as set forth in Section 14 hereof) until terminated:
(a) Either by such Fund or such class or PADCO by not more than sixty
(60) days' nor less than thirty (30) days' written notice delivered or mailed by
registered mail, postage prepaid, to the other party; or
(b) Automatically as to any Fund or class thereof at the close of
business one year from the date hereof, or upon the expiration of one year from
the effective date of the last continuance of this Agreement, whichever is
later, if the continuance of this Agreement is not specifically approved at
least annually by the Trustees of the Trust or the shareholders of such Fund or
such class by the affirmative vote of a majority of the outstanding shares of
such Fund or such class, and by a majority of the Trustees of the Trust who are
not interested persons of the Trust and who have no direct or indirect financial
interest in the operation of the Distribution Plan or this Agreement by vote
cast in person at a meeting called for the purpose of voting on such approval.
Action by a Fund or a class thereof under (a) above may be taken either
(i) by vote of the Trustees of the Trust, or (ii) by the affirmative Vote of a
majority of the outstanding shares of such Fund or such class. The requirement
under (b) above the continuance of this Agreement be "specifically approved at
least annually" shall be construed in a manner consistent with the Investment
Company Act of 1940 and the Rules and Regulations thereunder.
Termination of this Agreement pursuant to this Section 15 shall be
without the payment of any penalty.
If this Agreement is terminated or not renewed with respect to one or
more Funds or classes thereof, it may continue in effect with respect to any
Fund or any class thereof as to which it has not been terminated (or has been
renewed).
16. Limited Recourse. PADCO hereby acknowledges that the Trust's
obligations hereunder with respect to the distribution fee or servicing fee or
contingent deferred sales charges payable with respect to the shares of any Fund
of the Trust or a particular class of shares of a Fund are binding only on the
assets and properly belonging to such Fund or such class.
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<PAGE>
17. Certain Definitions. For the purposes of this Agreement, the
"affirmative vote of a majority of the outstanding shares" means the affirmative
vote, at a duly called and held meeting of shareholders, (a) of the holders of
67% or more of the shares of the Trust or the Fund, as the case may be, present
(in person or by proxy) and entitled to vote at such meeting, if the holders of
more than 50% of the outstanding shares of the Trust or the Fund, as the case
may be, entitled to vote at such meeting are present in person or by proxy, or
(b) of the holders of more than 50% of the outstanding shares of the Trust or
the Fund, as the case may be, entitled to vote at such meeting, whichever is
less.
For the purposes of this Agreement, the terms "interested persons" and
"assignment" shall have the meanings defined in the 1940 Act, subject, however,
to such exemptions as may be granted by the Securities and Exchange Commission
under said Act. Certain other items used herein that are not otherwise defined
have the meaning given in the current prospectus of the Trust or constituent
agreements or documents of the Trust.
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Exhibit 99.B8
Amended and Restated Custodian Agreement and Amendments Thereto
<PAGE>
AMENDED AND RESTATED
CUSTODY AGREEMENT
Agreement made as of this 13th day of September, 1985, between THOMSON
MCKINNON INVESTMENT TRUST, a Massachusetts business trust organized and
existing under the laws of The Commonwealth of Massachusetts, having a
principal office and place of business at One New York Plaza, New York,
New York 10004 (hereinafter called the "Fund"), and THE BANK OF NEW YORK,
a New York corporation authorized to do a banking business, having its
principal office and place of business at 48 Wall Street, New York, New
York 10015 (hereinafter called the "Custodian").
WHEREAS, the Fund and the Custodian entered into a Custody Agreement dated
as of February 23, 1984; and
WHEREAS, since February 23, 1984, the Fund has created two additional
series of shares of beneficial interest, which requires that certain
amendments be made to said Custody Agreement.
NOW, THEREFORE, in consideration of the mutual promises thereinafter set
forth the Fund and the Custodian agree that, effective as of the date
hereof, the Custody Agreement is hereby amended and restated as set forth
below.
ARTICLE I
Definitions:
Whenever used in this Agreement, the following words and phrases, unless
the context otherwise requires, shall have the following meanings:
"Authorized Person" shall be deemed to include any person, whether or not
such person is an Officer or employee of the Fund, duly authorized by the
Board of Trustees of the Fund to give Oral Instructions and Written
Instructions on behalf of the Fund and listed in the Certificate annexed
hereto as Appendix A or such other Certificate as may be delivered by the
fund to the Custodian from time to time.
"Book-Entry System" shall mean the Federal Reserve / Treasury book-entry
system for United States and federal agency securities, its successor or
successors and its nominee or nominees.
"Certificate" shall mean any notice, instruction, or other instrument in
writing and signed on behalf of the Fund by any two Officers, and which is
authorized or required by this Agreement to be delivered to the Custodian
by the Fund and is actually received by the Custodian.
"Call Option" shall mean an exchange-traded option with respect to
Securities, other than Futures Contracts and Futures Contract Options,
entitling the holder, upon timely exercise and payment of the exercise
price, as specified therein, to purchase from the writer thereof the
specified underlying Securities.
"Covered Call Option" shall mean an option with respect to Securities,
other than Futures Contracts and Futures Contract Options, entitling the
holder, upon timely exercise and payment of the exercise price, as
specified therein, to purchase from the writer thereof the specified
underlying Securities which are owned by the writer thereof and held
subject to appropriate restrictions.
"Clearing Member" shall mean a registered broker-dealer which is a
clearing member under the rules of O.C.C. and a member of a national
securities exchange qualified to act as a custodian for an investment
company, or any broker-dealer reasonably believed by the Custodian to be
such a clearing member.
"Collateral Account" shall mean a segregated account so denominated which
is specifically allocated to a Series and pledged to the Custodian as
security for, and in consideration of, the Custodian's issuance of (a) any
Put Option guarantee letter or similar document described in paragraph 8
of Article V herein, or (b) any receipt described in Article V or VIII
herein.
"Depository" shall mean The Depository Trust Company ("DTC"), a clearing
agency registered with the Securities and Exchange Commission, its
successor or successors and its nominee or nominees. The term "Depository"
shall further mean to include any other person authorized to act as a
depository under the Investment Company Act of 1940, its successor or
successors and its nominee or nominees, specifically identified in a
certified copy of a resolution of the Fund's Board of Directors
specifically approving deposits therein by the Custodian.
"Forward Commitment" shall mean a contract (other than a Futures Contract)
to purchase Securities for a fixed price at a future date beyond customary
settlement time.
"Futures Contract" shall mean the firm commitment to buy or sell fixed
income securities including, without limitation, U.S. Treasury Bills, U.S.
Treasury Notes, U.S. Treasury Bonds, domestic bank certificates of
deposit, and Eurodollar certificates of deposit, during a specified month
at an agreed upon price.
"Futures Contract Option" shall mean an option with respect to a Futures
Contract.
"Margin Account" shall mean a segregated account in the name of a broker,
dealer, futures commission merchant, or a Clearing Member, or in the name
of the Series for the benefit of a broker, dealer, futures commission
merchant, or Clearing Member, as the case may be, in accordance with an
agreement between the Fund on behalf of the Series, the Custodian and a
broker, dealer, futures commission merchant or Clearing Member (a "Margin
Account Agreement"), separate and distinct from the custody account for
each Series, in which certain Securities and/or money of a Series shall be
deposited and withdrawn from time to time in connection with transactions
in Futures Contracts and Futures Contract Options in which the Series from
time to time may engage. Securities held in the Book-Entry System or the
Depository shall be deemed to have been deposited in, or withdrawn from, a
Margin Account upon the Custodian's effecting an appropriate entry in its
books and records.
"Money Market Security" shall be deemed to include, without limitation,
certain debt obligations issued or guaranteed as to interest and principal
by the government of the United States or agencies or instrumentalities
thereof, any tax, bond or revenue anticipation note issued by any state or
municipal government or public authority, commercial paper, certificates
of deposit and bankers' acceptances, repurchase agreements with respect to
the same and bank time deposits, where the purchase and sale of such
securities normally requires settlement in Federal Funds on the same day
as such purchase or sale.
"O.C.C." shall mean the Options Clearing Corporation, a clearing agency
registered under Section 17A of the Securities and Exchange Act of 1934,
its successor or successors, and its nominee or nominees.
"Officers" shall be deemed to include the President, any Vice President,
the Clerk or the Treasurer of the Fund duly authorized by the Board of
Trustees of the Fund to execute any Certificate, instruction, notice or
other instrument on behalf of the Fund and listed in the Certificate
annexed hereto as Appendix B or such other Certificate as may be delivered
by the Fund to the Custodian from time to time.
"Option" shall mean a Call Option, Covered Call Option, and/or a Put
Option.
"Oral Instructions" shall mean verbal instructions actually received by
the Custodian from an Authorized Person or from a person reasonably
believed by the Custodian to be an Authorized Person.
"Put Option" shall mean an exchange-traded option with respect to
Securities, other than Futures Contracts and Futures Contract Options,
entitling the holder, upon timely exercise and tender of the specified
underlying Securities, to sell such Securities to the writer thereof for
the exercise price.
"Security" shall be deemed to include, without limitation, Money Market
Securities, Call Options, Put Options, Futures Contracts, Futures Contract
Options, common stock, securities convertible into common stock and other
securities having characteristics similar to common stock preferred
stocks, debt obligations issued by state or municipal governments and by
public authorities (including, without limitation, general obligation
bonds, revenue bonds and industrial bonds and industrial development
bonds), bonds, debentures, notes, mortgages or other obligations, and any
certificates, receipts, warrants or other instruments representing rights
to receive, purchase, sell or subscribe for the same, or evidencing or
representing any other rights or interest therein, or any property or
assets.
"Senior Security Account" shall mean an account maintained and
specifically allocated to a Series under the terms of this Agreement as a
segregated account, by recordation or otherwise, within the custody
account in which certain Securities and/or other assets of the Fund
specifically allocated to such Series shall be deposited and withdrawn
from time to time in accordance with Certificates received by the
Custodian in connection with certain Options, Futures Contracts and
Futures Contract Options transactions in which the Fund from time to time
may engage.
"Series" shall mean the Thomson McKinnon U.S. Government Fund, the Thomson
McKinnon Tax Exempt Fund, the Thomson McKinnon Income Fund, the Thomson
McKinnon Growth Fund, the Thomson McKinnon Opportunity Fund, and the
Thomson McKinnon Short-Term Fund, each being a separate series of the
Trust's shares of beneficial interest representing interests in separate
portfolios of securities and other assets, and any such other series that
the Trustees of the Trust in their discretion may create and that are
described from time to time in the currently effective prospectus of the
Trust and for which the Custodian agrees to act as custodian pursuant to
Article XV hereof.
"Shares" shall mean the shares of beneficial interest of the Fund, each of
which is allocated to a particular Series.
"Written Instructions" shall mean written communications actually received
by the Custodian from an Authorized Person or from a person reasonably
believed by the Custodian to be an Authorized Person by telex or any other
such system whereby the receiver of such communications is able to verify
by codes or otherwise with a reasonable degree of certainty the identity
of the sender of such communication.
ARTICLE II
Appointment of Custodian
1. The Fund hereby constitutes and appoints the Custodian as custodian of the
Securities and moneys at any time owned by any Series of the Fund during
the period of this Agreement.
2. The Custodian hereby accepts appointment as such custodian and agrees to
perform the duties thereof as hereinafter set forth.
ARTICLE III
Custody of Cash and Securities
1. Except as otherwise provided in paragraph 7 of this Article and in Article
VIII, the Fund will deliver or cause to be delivered to the Custodian all
Securities and all moneys owned by each Series of the Fund, at any time
during the period of this Agreement, and shall specify the Series which
owns any such Securities or money. The Custodian shall segregate, keep and
maintain the assets of the Series separate and apart. The Custodian will
not be responsible for any Securities and moneys not actually received by
it. The Custodian will be entitled to reverse any credits made on a
Series' behalf where such credits previously have been made and moneys not
finally collected.
The Fund shall deliver to the Custodian a certified resolution of the
Board of Trustees of the Fund, substantially in the form of Exhibit A
hereto, approving, authorizing and instructing the Custodian on a
continuous and on-going basis, until instructed to the contrary by a
Certificate, to deposit in the Book-Entry System all Securities eligible
for deposit therein, regardless of which Series owns such Securities, and
to utilize the Book-Entry System to the extent possible in connection with
its performance hereunder, including, without limitation, in connection
with settlements of purchases and sales of Securities, loans of
Securities, and deliveries and returns of Securities collateral. The Fund
also shall deliver to the Custodian a certified resolution of the Board of
Trustees of the Fund, substantially in the form of Exhibit B hereto,
approving, authorizing and instructing the Custodian on a continuous and
on-going basis, until instructed to the contrary by a Certificate, to
deposit in the Depository all Securities eligible for deposit therein,
regardless of which Series owns such Securities, and to utilize the
Depository to the extent possible with respect to such Securities in
connection with its performance hereunder, including, without limitation,
in connection with settlements of purchases and sales of Securities, loans
of Securities, and deliveries and returns of Securities collateral.
Securities and moneys deposited in either the Book-Entry System or the
Depository will be represented in non-priorietary accounts which include
only assets held by the Custodian for customers, including, but not
limited to, accounts in which the Custodian acts in a fiduciary or
representative capacity.
The Fund shall deliver to the Custodian, prior to the Custodian's
accepting, utilizing and acting as provided in this Agreement with respect
to Clearing Member confirmations for transactions in Options by a Series,
a certified resolution of the Fund's Board of Trustees, substantially in
the form of Exhibit C hereto, approving, authorizing and instructing the
Custodian on a continuous and on-going basis, until instructed to the
contrary by a Certificate, to accept, utilize and act in accordance with
such confirmations as provided in this Agreement.
2. The Custodian shall establish and maintain separate accounts in the name
of each Series, and shall credit to the separate account of each Series
all moneys received by it for the account of such Series. Money credited
to a separate account of a Series shall be disbursed by the Custodian
only:
(a) As hereinafter provided;
(b) Pursuant to Certificates setting forth the name and address of the
person to whom the payment is to be made, the Series account from
which payment is to be made, and the purpose for which payment is to
be made; or
(c) in payment of the fees and in reimbursement of the expenses and
liabilities of the Custodian attributable to such Series.
3. Promptly after the close of business on each day, the Custodian shall
furnish the Fund with confirmations and a summary of all transfers to or
from the account of each Series of the Fund, either hereunder or with any
co-custodian or sub-custodian appointed in accordance with this Agreement,
during such day. Where Securities are transferred to the account of a
Series, the Custodian shall by book-entry or otherwise identify as
belonging to such Series a quantity of Securities in a fungible bulk of
Securities registered in the name of the Custodian (or its nominee) or
shown on the Custodian's non-proprietary account on the books of the
Book-Entry System or the Depository. At least monthly and from time to
time when requested by the Fund, the Custodian shall furnish the Fund with
a detailed statement, of the Securities and moneys held by the Custodian
for each Series of the Fund.
4. Except as otherwise provided in paragraph 7 of this Article and in Article
VIII, all Securities held by the Custodian hereunder which are issued or
issuable only in bearer form, except such Securities as are held in the
Book-Entry System, shall be held by the Custodian in that form; all other
Securities held hereunder may be registered in the name of the Series for
which such Securities are held, in the name of any duly appointed
registered nominee of the Custodian as the Custodian may from time to time
determine, or in the name of the Depository or its successor or
successors, or its nominee or nominees. The Fund agrees to furnish to the
Custodian appropriate instruments to enable the Custodian to hold or
deliver in proper form for transfer, or to register in the name of its
registered nominee or the Depository any Securities which the Custodian
may hold hereunder and which may from time to time be registered in the
name of a Series of the Fund. The Custodian shall hold all such Securities
which are not held in the Book-Entry System or in the Depository in a
separate account in the name of such Series physically segregated at all
times from those of any other person or persons.
5. Except as otherwise provided in this Agreement and unless otherwise
instructed to the contrary by a Certificate, the Custodian by itself, or
through the use of the Book-Entry System or the Depository with respect to
Securities held hereunder and therein deposited, shall with respect to all
Securities held for each Series of the Fund hereunder:
(a) Collect all income due or payable;
(b) Present for payment and collect the amount payable upon such
Securities which may be called, but only if either (i) the Custodian
receives a written notice of such call, or (ii) notice of such call
appears in one or more of the publications listed in Appendix C
annexed hereto;
(c) Present for payment and collect the amount payable upon all Securities
which may mature or be redeemed, or retired, or otherwise became
payable;
(d) Surrender Securities in temporary form for definitive Securities;
(e) Execute, as custodian, any necessary declarations or certificates of
ownership under the Federal Income Tax Laws or the laws or regulations
of any other taxing authority now or hereafter in effect; and
(f) Hold directly, or through the Book-Entry System or the Depository with
respect to Securities therein deposited, for the account of a Series,
all rights and similar securities issued with respect to any
Securities held by the Custodian for such Series hereunder.
6. Upon receipt of a Certificate and not otherwise, the Custodian, directly
or through the use of the Book-Entry System or the Depository, shall:
(a) Execute and deliver to such persons as may be designated in such
Certificate proxies, consents, authorizations, and any other
instruments whereby the authority of a Series as owner of any
Securities held by the Custodian hereunder may be exercised;
(b) Deliver any Securities held by the Custodian hereunder for the Series
specified in such Certificate in exchange for other Securities or cash
issued or paid in connection with the liquidation, reorganization,
refinancing, merger, consolidation or recapitalization of any
corporation, or the exercise of any conversion privilege and receive
and hold hereunder for the account of such Series any cash or other
Securities received in exchange;
(c) Deliver any Securities held by the Custodian hereunder for the Series
specified in such Certificate to any protective committee,
reorganization committee or other person in connection with the
reorganization, refinancing, merger, consolidation, recapitalization
or sale of assets of any corporation, and receive and hold hereunder
for the account of such Series such certificates of deposit, interim
receipts or other instruments or documents as may be issued to it to
evidence such delivery;
(d) Make such transfers or exchanges of the assets of the Series specified
in such Certificate, and take such other steps as shall be stated in
such Certificate for the purpose of effectuating any duly authorized
plan of liquidation, reorganization, merger, consolidation or
recapitalization of the Series or the Fund; and
(e) Present for payment and collect the amount payable upon Securities not
described in preceding paragraph 5(b) of this Article which may be
called as specified in the Certificate.
7. Notwithstanding any provision elsewhere contained herein, the Custodian
shall not be required to obtain possession of any instrument or
certificate representing any Option, any Futures Contract or any Futures
Contract Option until after it shall have determined, or shall have
received a Certificate from the Fund stating, that any such instruments or
certificates are available. The Fund shall deliver to the Custodian such a
Certificate no later than the business day preceding the availability of
any such instrument or certificate. Prior to such availability, the
Custodian shall comply with Section 17(f) of the Investment Company Act of
1940, as amended, in connection with the purchase, sale, settlement,
closing out or writing of Options, Futures Contracts, or Futures Contract
Options by making payments or deliveries specified in Certificates
received by the Custodian in connection with any such purchase, sale,
writing, settlement or closing out upon its receipt from a broker, dealer,
or futures commission merchant of a statement or confirmation reasonably
believed by the Custodian to be in the form customarily used by brokers,
dealers, or futures commission merchants with respect to such Options,
Futures Contracts, or Futures Contract Options, as the case may be,
confirming that such Security is held by such broker, dealer or futures
commission merchant, in book-entry form or otherwise, in the name of the
Custodian (or any nominee of the Custodian) as custodian for the Fund.
Whenever any such instruments or certificates are available, the Custodian
shall, notwithstanding any provision in this Agreement to the contrary,
make payment for any Option, Futures Contract, or Futures Contract Option
for which such instrument or such certificates are available only against
the delivery to the Custodian of such instrument or such certificate, and
deliver any Option, Future Contract, or Futures Contract Option for which
such instruments or such instruments or such certificates are available
only against receipt by the Custodian of payment therefor. Any such
instrument or certificate delivered to the Custodian shall be held by the
Custodian hereunder in accordance with, and subject to, the provisions of
this Agreement. Notwithstanding anything in this paragraph 7 to the
contrary, however, payments to or from a Margin Account and payments with
respect to Securities to which a Margin Account relates shall be made in
accordance with the terms and conditions of the corresponding Margin
Account Agreement.
ARTICLE IV
Purchase and Sale of Investments of the Fund other than
Options, Futures Contracts and Futures Contract Options.
1. Promptly after each purchase of Securities by a Series of the Fund, other
than a purchase of an Option, a Futures Contract, a Futures Contract
Option or a Forward Commitment entered into by a Series, the Fund shall
deliver to the Custodian (i) with respect to each purchase of Securities
which are not Money Market Securities, a Certificate, and (ii) with
respect to each purchase of Money Market Securities, a Certificate, Oral
Instructions or Written Instructions, specifying with respect to each such
purchase: (a) the Series which purchased such Securities; (b) the name of
the issuer and the title of the Securities; (c) the number of shares or
the principal amount purchased and accrued interest, if any; (d) the date
of purchase and settlement; (e) the purchase price per unit; (f) the total
amount payable upon such purchase; (g) the name of the person from whom or
the broker through whom the purchase was made, and the name of the
clearing broker, if any; and (h) the name of the broker or other person to
whom payment is to be made. Upon receipt of Securities purchased by or for
a Series of the Fund, the Custodian shall pay out of the moneys held for
the account of such Series the total amount payable upon such purchase to
the person from whom or the broker through whom the purchase was made,
provided that the same conforms to the total amount payable as set forth
in such Certificate, Oral Instructions or Written Instructions.
2. Promptly after each sale of Securities by a Series of the Fund, other than
a sale of any Option, Futures Contract, Futures Contract Option or any
short sale, the Fund shall deliver to the Custodian (i) with respect to
each sale of Securities which are not Money Market Securities, a
Certificate, and (ii) with respect to each sale of Money Market
Securities, a Certificate, Oral Instructions or Written Instructions,
specifying with respect to each such sale: (a) the Series which sold such
Securities; (b) the name of the issuer and the title of the Security; (c)
the number of shares or principal amount sold, and accrued interest, if
any; (d) the date of sale; (e) the sale price per unit; (f) the total
amount payable to the Fund upon such sale; (g) the name of the broker
through whom or the person to whom the sale was made, and the name of the
clearing broker, if any; and (h) the name of the broker or other person to
whom the Securities are to be delivered. The Custodian shall deliver the
Securities to the broker or other person specified in the Certificate upon
receipt of the total amount payable to the Series upon such sale, provided
that such amount conforms to the total amount payable as set forth in such
Certificate, Oral Instructions or Written Instructions.
3. Promptly after any Forward Commitment is entered into by a Series of the
Fund, the Fund shall deliver to the Custodian a Certificate specifying
with respect to each Forward Commitment: (a) the Series which entered into
the Forward Commitment; (b) the name of the issuer and the title of the
underlying Securities; (c) the number of shares or the principal amount of
the underlying Securities and accrued interest, if any; (d) the date of
settlement; (e) the purchase price per unit of the underlying Securities;
(f) the total purchase price to be paid for the underlying Securities on
the settlement date; (g) the name of the broker or dealer through whom the
Forward Commitment was entered into; and (h) the amount and kind of
Securities and/or the amount of cash, if any, to be deposited in the
Senior Security Account for such Series in connection with such Forward
Commitment. In addition, the Fund shall deliver to the Custodian (or
arrange for delivery to the Custodian) a broker's or dealer's statement
confirming that such Forward Commitment was entered into in the name of a
duly appointed and registered nominee of the Custodian as custodian for
the Fund. On the settlement date for the purchase of the Securities
underlying the Forward Commitment, the Fund will deliver to the Custodian
a Certificate specifying the information required in paragraph 1 of this
Article. Upon receipt of the Securities underlying the Forward Commitment
entered into by a Series of the Fund, the Custodian shall pay out of the
moneys held for the account of such Series the amount set forth in the
Certificate and effect the withdrawals from the related Senior Security
Account specified in the Certificate.
ARTICLE V
Options
1. Promptly after the purchase of any Option by a Series of the Fund, the
Fund shall deliver to the Custodian a Certificate specifying with respect
to each Option purchased: (a) the Series which purchased such Option; (b)
the type of Option (put or call); (c) the name of the issuer and the title
and number of shares or principal amount subject to such Option; (d) the
expiration date; (e) the exercise price; (f) the dates of purchase and
settlement; (g) the total amount payable by the Series in connection with
such purchase; (h) the name of the Clearing Member through whom such
Option was purchased; and (i) the name of the broker to whom payment is to
be made. Upon receipt of a Clearing Member's statement confirming the
purchase of such Option held by such Clearing Member for the account of
the Custodian (or any duly appointed and registered nominee of the
Custodian) as custodian for the Fund, the Custodian shall pay out of
moneys held for the account of the Series specified in such Certificate
the total amount payable upon such purchase to the Clearing Member through
whom the purchase was made, provided that the such amount conforms to the
total amount payable as set forth in such Certificate.
2. Promptly after the sale of any Option purchased by a Series of the Fund
pursuant to paragraph 1 hereof, the Fund shall deliver to the Custodian a
Certificate specifying with respect to each such sale: (a) the Series
which sold such Option; (b) the type of Option (put or call); (c) the name
of the issuer and the title and number of shares or principal amount
subject to such Option; (d) the date of sale of such Option; (e) the sale
price of such Option; (f) the date of settlement; (g) the total amount
payable to the Series upon such sale; and (h) the name of the Clearing
Member through whom the sale was made. The Custodian shall consent to the
delivery of the Option sold by the Clearing Member which previously
supplied the confirmation described in paragraph 1 of this Article with
respect to such Option against payment to the Custodian of the total
amount payable to the series, provided that the such amount conforms to
the total amount payable as set forth in such Certificate.
3. Promptly after the exercise by a Series of the Fund of any Call Option
purchased by such Series pursuant to paragraph 1 of this Article, the Fund
shall deliver to the Custodian a Certificate specifying with respect to
such Call Option: (a) the Series which exercised such Call Option; (b) the
name of the issuer and the title and number of shares or principal amount
subject to the Call Option; (c) the expiration date; (d) the date of
exercise and settlement; (e) the exercise price per share; (f) the total
amount to be paid by the Fund upon such exercise; and (g) the name of the
Clearing Member through whom such Call Option was exercised. Upon receipt
of the Securities underlying the Call Option which was exercised the
Custodian shall pay out of the moneys held for the account of the Series
specified in such Certificate the total amount payable to the Clearing
Member through whom the Call Option was exercised, provided that such
amount conforms to the total amount payable as set forth in such
Certificate.
4. Promptly after the exercise by a Series of the Fund of any Put Option
purchased by such Series pursuant to paragraph 1 hereof, the Fund shall
deliver to the Custodian a Certificate specifying with respect to such Put
Option: (a) the Series which exercised such Put Option; (b) the name of
the issuer and the title and number of shares or principal amount subject
to the Put Option; (c) the expiration date; (d) the date of exercise and
settlement; (e) the exercise price per share; (f) the total amount to be
paid to the Fund upon such exercise; and (g) the name of the Clearing
Member through whom such Put Option was exercised. Upon receipt of the
amount payable upon the exercise of the Put Option, the Custodian shall
deliver or direct the Depository to deliver the Securities subject to the
Put Option, provided such amount conforms to the amount payable to the
Series as set forth in such Certificate.
5. Whenever a Series of the Fund writes a Covered Call Option, the Fund shall
promptly deliver to the Custodian a Certificate specifying with respect to
such Covered Call Option: (a) the Series which wrote such Covered Call
Option; (b) the name of the issuer and the title and number of shares or
principal amount for which the Covered Call Option was written and which
underlie the same; (c) the expiration date; (d) the exercise price; (e)
the premium to be received by the Fund; (f) the date such Covered Call
Option was written and (g) the name of the Clearing Member through whom
the premium is to be received. Upon receipt of the premium specified in
the Certificate with respect to such Covered Call Option, the Custodian
shall deliver or cause to be delivered such receipts as are required in
accordance with the customs prevailing among Clearing Members dealing in
Covered Call Options and shall impose, or direct the Depository to impose,
upon the underlying Securities specified in the Certificate such
restrictions as may be required by such receipts. Notwithstanding the
foregoing, the Custodian has the right, upon prior written notification to
the Fund, at any time to refuse to issue any receipts for Securities in
the possession of the Custodian and not deposited with the Depository
underlying a Covered Call Option.
6. Whenever a Covered Call Option written by a Series of the Fund and
described in the preceding paragraph of this Article is exercised, the
Fund shall promptly deliver to the Custodian a Certificate instructing the
Custodian to deliver, or to direct the Depository to deliver, the
Securities subject to such Covered Call Option and specifying: (a) the
Series which wrote such Covered Call Option; (b) the name of the issuer
and the title and number of shares or principal amount subject to the
Covered Call Option; (c) the Clearing Member to whom the underlying
Securities are to be delivered; and (d) the total amount payable to the
Fund upon such delivery. Upon the return and/or cancellation of any
receipts delivered pursuant to paragraph 5 of this Article and receipt of
the total amount payable to the Series as specified in the Certificate,
the Custodian shall deliver, or direct the Depository to deliver, the
underlying Securities as specified in the Certificate.
7. Whenever a Series of the Fund writes a Put Option, the Fund shall promptly
deliver to the Custodian a Certificate specifying with respect to such Put
Option: (a) the Series which wrote such Put Option; (b) the name of the
issuer and title and number of shares or principal amount for which the
Put Option is written and which underlie the same; (c) the expiration
date; (d) the exercise price; (e) the premium to be received by the Fund
(f) the date such Put Option is written; (g) the name of the Clearing
Member through whom the premium is to be received and to whom a Put Option
guarantee letter is to be delivered; (h) the amount of cash, and/or the
amount and kind of Securities, if any, to be deposited in the Senior
Security Account for such Series; and (i) the amount of cash and/or the
amount and kind of Securities to be deposited into the Collateral Account
for such Series. After making the deposits into the Collateral Account
specified in the Certificate, the Custodian shall issue a Put Option
guarantee letter substantially in the form attached hereto as Appendix
___, and deliver the same to the Clearing Member specified in the
Certificate against receipt of the premium specified in said Certificate.
Notwithstanding the foregoing, the Custodian shall be under no obligation
to issue any Put Option guarantee letter or similar document if it is
unable to make any of the representations contained therein.
8. Whenever a Put Option written by a Series of the Fund and described in the
preceding paragraph is exercised, the Fund shall promptly deliver to the
Custodian a Certificate specifying: (a) the Series which wrote such Put
Option; (b) the name of the issuer and title and number of shares or
principal amount which are to be delivered to the Series upon exercise of
the Put Option; (c) the Clearing Member from whom the underlying
Securities are to be received; (d) the total amount payable by the Series
upon such delivery; (e) the amount of cash and/or the amount and kind of
Securities to be withdrawn from the Senior Security Account; and (f) the
amount of cash and/or the amount and kind of Securities to be withdrawn
from the Collateral Account for such Series. Upon the return and/or
cancellation of any Put Option guarantee letter or similar document issued
by the Custodian in connection with such Put Option and receipt of the
Securities specified in the Certificate, the Custodian shall pay out of
the moneys held for the account of the Series specified in the Certificate
the total amount payable to the Clearing Member specified in the
Certificate as set forth in such Certificate, and shall effect the
withdrawals from the related Series Security Account or Collateral Account
specified in such Certificate.
9. Whenever a Series of the Fund purchases any Option identical to a
previously written Option described in paragraph 5 or 7 of this Article in
a transaction expressly designated as a "Closing Purchase Transaction" in
order to terminate its obligation as writer of an Option, the Fund shall
promptly deliver to the Custodian a Certificate specifying with respect to
the Option being purchased: (a) that the transaction is a Closing Purchase
Transaction; (b) the Series which purchased the Option; (c) the name of
the issuer and the title and number of shares or principal amount subject
to the Option; (d) the exercise price; (e) the premium to be paid by the
Series; (f) the expiration date (g) the type of Option (put or call); (h)
the date of such purchase; (i) the name of the Clearing Member to whom the
premium is to be paid; and (j) the amount of cash and/or the amount and
kind of Securities, if any, to be withdrawn from the Collateral Account
and/or the Senior Security Account for such Series. In the case of any
Covered Call Option liquidated through a Closing Purchase Transaction, the
Custodian, upon the return and/or cancellation of any receipt issued
pursuant to paragraph 5 of this Article, shall make the payment and effect
the withdrawals from the Senior Security Account and from the Segregated
Account specified in the Certificate, and remove, or direct to the
Depository to remove, the previously imposed restrictions on the
Securities underlying the Covered Call Option. In the case of any Put
Option liquidated through a Closing Purchase Transaction, upon receipt of
a broker's or dealer's statement confirming the liquidation of the Fund's
position as writer of such Put Option, the Custodian shall, upon the
return and/or cancellation of any Put Option guarantee letter issued
pursuant to paragraph 7 hereof, make the payment and effect the
withdrawals from the related Senior Security Account and/or the Collateral
Account specified in the Certificate.
10. Upon the expiration or exercise of, or consummation of a Closing
Transaction with respect to, any Option purchased or written by a Series
of the Fund and described in this Article, the Custodian shall delete such
Option from the statements delivered to the Fund pursuant to paragraph 3
Article III herein, and upon the return and/or cancellation of any
receipts issued by the Custodian, shall make such withdrawals from the
Collateral Account and/or the Senior Security Account as may be specified
in a Certificate received in connection with such expiration, exercise, or
consummation.
ARTICLE VI
Futures Contracts
1. Whenever a Series of the Fund shall enter into a Futures Contract, the
Fund shall deliver to the Custodian a Certificate specifying with respect
to such Futures Contract (or with respect to any number of identical
Futures Contract(s)): (a) the Series which entered into the Futures
Contact; (b) the category of Futures Contract (the name of the underlying
financial instrument); (c) the number of identical Futures Contracts
entered into; (d) the delivery or settlement date of the Futures
Contract(s); (e) the date the Futures Contract(s) was (were) entered into
and the maturity date; (f) whether the Series is buying or selling such
Futures Contract(s); (g) the amount of cash and/or the amount and kind of
Securities, if any, to be deposited by the Custodian in a Margin Account
with respect to such Futures Contract and the name in which such Margin
Account has been, or is to be, established; (h) the amount of cash and/or
the amount and kind of Securities, if any, to be deposited in the Senior
Security Account for such Series; (i) the name of the broker, dealer, or
futures commission merchant through whom the Futures Contract was entered
into; and (j) the amount of fee or commission, if any, to be paid and the
name of the broker, dealer, or futures commission merchant to whom such
amount is to be paid. Upon receipt of confirmation of purchase or sale of
Futures Contracts as provided in the Margin Account Agreement, the
Custodian shall make deposits, if any, to the Margin Account in accordance
with the terms and conditions of the Margin Account Agreement. The
Custodian shall make payment out of the assets of such Series of the fee
or commission, if any, specified in the Certificate and deposit in the
Senior Security Account for such Series the amount of cash and/or the
amount and kind of Securities specified in said Certificate.
2(a) Any variation margin payment or similar payment required to be made by the
Series to a broker, dealer, or futures commission merchant with respect to
an outstanding Futures Contract, shall be made by the Custodian in
accordance with the terms and conditions of the Margin Account Agreement.
2(b) Any variation margin payment or similar payment from a broker, dealer, or
futures commission merchant to the Series with respect to an outstanding
Futures Contract, shall be received by the Custodian in accordance with
the terms and conditions of the Margin Account Agreement.
3. Whenever a Futures Contract held by the Custodian hereunder is retained by
a Series of the Fund until delivery or settlement is made on such Futures
Contract, the Fund shall deliver to the Custodian a Certificate
specifying: (a) the Series which has assumed the position in the Futures
Contract; (b) the Securities and/or amount of cash to be delivered or
received; (c) the broker, dealer or futures commission merchant to or from
whom payment or delivery is to be made or received; and (d) the amount of
cash and/or Securities to be withdrawn from the related Margin Account
and/or the Senior Security Account for such Series. Upon receipt of
confirmation as provided in the Margin Account Agreement to the effect
that the Futures Contract is being settled and that the Series' position
in such Futures Contract is thereby terminated, the Custodian shall make
the payment or delivery specified in the Certificate, and delete such
Futures Contract from the statements delivered to the Fund pursuant to
paragraph 3 of Article III herein.
4. Whenever a Series of the Fund shall enter into a Futures Contract to
offset a Futures Contract held by the Custodian hereunder for the account
of such Series, the Fund shall deliver to the Custodian a Certificate
specifying: (a) the items of information required in a Certificate
described in paragraph 1 of this Article, and (b) the Futures Contract
being offset. Upon receipt of confirmation of the offsetting transaction
as provided in the Margin Account Agreement, the Custodian shall make
payment out of the money held hereunder for the account of such Series of
the fee or commission, if any, specified in the Certificate and delete the
Futures Contract being offset from the statements delivered to the Fund
pursuant to paragraph 3 of Article III herein, and make such withdrawals
from the Senior Security Account for such Series and/or the Margin Account
as may be specified in such Certificate.
ARTICLE VII
Futures Contract Options
1. Promptly after the purchase of any Futures Contract Option by a Series of
the Fund, the Fund shall deliver to the Custodian a Certificate specifying
with respect to such Futures Contract Option: (a) the Series which
purchased such Option; (b) the type of Futures Contract Option (put or
call); (c) the type of Futures Contract and such other information as may
be necessary to identify the Futures Contract underlying the Futures
Contract Option purchased; (d) the expiration date; (e) the exercise
price; (f) the dates of purchase and settlement; (g) the amount of premium
to be paid by the Fund upon such purchase; (h) the name of the broker or
futures commission merchant through whom such option was purchased; and
(i) the name of the broker, or futures commission merchant, to whom
payment is to be made. Upon receipt of confirmation of the purchase of a
Futures Contract Option as provided in the Margin Account Agreement, the
Custodian shall pay out of the assets of such Series the total amount to
be paid upon such purchase to the broker or futures commissions merchant
through whom the purchase was made, provided that the same conforms to the
amount set forth in such Certificate.
2. Promptly after the sale of any Futures Contract Option purchased by a
Series of the Fund pursuant to paragraph 1 hereof, the Fund shall promptly
deliver to the Custodian a Certificate specifying with respect to each
such sale: (a) the Series which sold such Futures Contract Option; (b) the
type of Futures Contract Option (put or call); (c) the type of Futures
Contract and such other information as may be necessary to identify the
Futures Contract underlying the Futures Contract Option; (d) the date of
sale; (e) the sale price; (f) the date of settlement; (g) the total amount
payable to the Fund upon such sale; and (h) the name of the broker of
futures commission merchant through whom the sale was made. The Custodian
shall consent to the cancellation of the Futures Contract Option being
closed against payment to the Custodian of the total amount payable to the
Fund, provided such amount conforms to the total amount payable as set
forth in such Certificate.
3. Whenever a Futures Contract Option purchased by a Series of the Fund
pursuant to paragraph 1 is exercised by such Series, the Fund shall
promptly deliver to the Custodian a Certificate specifying: (a) the Series
which exercised such Futures Contract Option; (b) the particular Futures
Contract Option (put or call) being exercised; (c) the type of Futures
Contract underlying the Futures Contract Option; (d) the date of exercise;
(e) the name of the broker or futures commission merchant through whom the
Futures Contract Option is exercised; (f) the net total amount, if any,
payable by the Fund; (g) the amount, if any, to be received by the Fund;
(h) the amount of cash and/or the amount and kind of Securities to be
deposited in a Margin Account, and the name in which such Margin Account
is to be or has been established; (i) the amount of cash and/or the amount
and kind of Securities to be deposited in the Senior Security Account for
such Series. The Custodian shall make out of the assets of such Series the
payments, if any, and the deposits, if any, into the Senior Security
Account as specified in the Certificate. The deposits, if any, to be made
to the Margin Account shall be made by the Custodian in accordance with
the terms and conditions of the Margin Account Agreement.
4. Whenever a Series of the Fund writes a Futures Contract Option, the Fund
shall promptly deliver to the Custodian a Certificate specifying with
respect to such Futures Contract Option: (a) the Series which wrote such
Futures Option; (b) the type of Futures Contract Option (put or call); (c)
the type of Futures Contract and such other information as may be
necessary to identify the Futures Contract underlying the Futures Contract
Option; (d) the expiration date; (e) the exercise price; (f) the premium
to be received by the Fund; (g) the name of the broker or futures
commission merchant through whom the premium is to be received; (h) if the
Futures Contract Option is a put, the amount of cash and/or the amount and
kind of Securities, if any, to be deposited by the Custodian in a Margin
Account relating to such Futures Contract Option, and the name in which
such Margin Account is to be or has been established; and (i) the amount
of cash and/or the amount and kind of Securities, if any, to be deposited
in the Senior Security Account for such Series. Upon receipt of the
premium specified in the Certificate, the Custodian shall make the
deposits into the Margin Account (in accordance with the Margin Account
Agreement) and/or into the Senior Security Account, as specified in the
Certificate, out of the moneys and Securities held hereunder for the
account of such Series.
5. Whenever a Futures Contract Option written by a Series of the Fund which
is a call is exercised, the Fund shall promptly deliver to the Custodian a
Certificate specifying: (a) the Series which wrote such Futures Contract
Option; (b) the particular Futures Contract Option exercised; (c) the type
of Futures Contract underlying the Futures Contract Option; (d) the name
of the broker or futures commission merchant through whom such Futures
Contract Option was exercised; (e) the net total amount, if any, payable
to the Series upon such exercise; (f) the net total amount, if any,
payable by the Series upon such exercise; (g) the amount of cash and/or
amount and kind of Securities to be deposited in a Margin Account, and the
name in which such account is to be or has been established; and (h) the
amount of cash and/or the amount and kind of Securities to be deposited in
the Senior Security Account for such Series. Upon receipt of any
confirmation required by the Margin Account Agreement and of the net total
amount payable to the Series, if any, specified in such Certificate, the
Custodian shall make the payments, if any, and the deposits, if any, into
the Margin Account (in accordance with the Margin Account Agreement)
and/or the Senior Security Account, as specified in the Certificate.
6. Whenever a Futures Contract Option which is written by a Series of the
Fund and which is a put is exercised, the Fund shall promptly deliver to
the Custodian a Certificate specifying: (a) the Series which wrote such
Option; (b) the particular Futures Contract Option exercised; (c) the type
of Futures Contract underlying such Futures Contract Option; (d) the name
of the broker or futures commission merchant through whom such Futures
Contract Option is exercised; (e) the net total amount, if any, payable to
the Series upon such exercise; (f) the net total amount, if any, payable
by the Series upon such exercise; and (g) the amount and kind of
Securities and/or cash to be withdrawn from or deposited in, the Senior
Security Account for such Series, if any, and/or the related Margin
Account, if any. Upon receipt of the net total amount payable to the
Series, if any, specified in the Certificate, the Custodian shall make the
payments, if any, and the deposits, if any, into the Margin Account (in
accordance with the Margin Account Agreement) and/or the Senior Security
Account, as specified in the Certificate, out of the moneys and Securities
held hereunder for the account of such Series.
7. Whenever a Series of the Fund purchases any Futures Contract Option
identical to Futures Contract Option it has written in order to liquidate
its position as a writer of such Futures Contract Option, the Fund shall
promptly deliver to the Custodian a Certificate specifying with respect to
the Futures Contract Option being purchased: (a) the Series which
purchases such Option; (b) that the transaction is a closing transaction;
(c) the type of Futures Contract and such other information as may be
necessary to identify the Futures Contract underlying the Futures Option
Contract; (d) the exercise price; (e) the premium to be paid by the
Series; (f) the expiration date; (g) the name of the broker or futures
commission merchant to whom the premium is to be paid; and (h) the amount
of cash and/or the amount and kind of Securities, if any, to be withdrawn
from the related Margin Account and/or the Senior Security Account for
such Series. Upon receipt of any confirmation required by the Margin
Account Agreement and of the Custodian shall make the payments and effect
the withdrawals from the related Margin Account (in accordance with the
Margin Account Agreement) and/or the Senior Security Account specified in
the Certificate.
8. Upon the expiration, exercise, or consumption of a closing transaction
with respect to, any Futures Contract Option written or purchased by a
Series of the Fund and described in this Article, the Custodian shall (a)
delete such Futures Contract Option from the statements delivered to the
Fund pursuant to paragraph 3 of Article III herein and, (b) make such
withdrawals from and/or in the case of an exercise such deposits into the
Margin Account (in accordance with the Margin Account Agreement) and/or
the Senior Security Account as may be specified in a Certificate.
9. Futures Contracts acquired by a Series of the Fund through the exercise of
a Futures Contract Option described in this Article shall be subject to
Article VI hereof.
ARTICLE VIII
Short Sales
1. Promptly after any short sale by any Series of the Fund, the Fund shall
promptly deliver to the Custodian a Certificate specifying: (a) the Series
which made such short sale; (b) the name of the issuer and title of the
Security; (c) the number of shares or principal amount sold, and accrued
interest or dividends, if any; (d) the dates of the sale and settlement;
(e) the sale price per unit; (f) the total amount credited to the Fund
upon such sale, if any; (g) the amount of cash and/or the amount and kind
of Securities, if any to be deposited in a Senior Security Account; and
(h) the name of the broker through whom such short sale was made. Upon
receipt of a statement from such broker confirming such sale and that the
total amount credited to the Series upon such sale, as specified in the
Certificate, is held by such broker for the account of the Custodian (or
any nominee of the Custodian) as custodian of the Fund, the Custodian
shall issue a receipt or make the deposits into the Senior Security
Account specified in the Certificate.
2. In connection with the closing-out of any short sale, the Fund shall
promptly deliver to the Custodian a Certificate specifying with respect to
each such closing-out: (a) the Series for which such transaction is being
made; (b) the name of the issuer and the title of the Security; (c) the
number of shares of the principal amount, and accrued interest or
dividends, if any, required to effect such closing-out to be delivered to
the broker; (d) the dates of closing-out and settlement; (e) the purchase
price per unit; (f) the net total amount payable to the Fund upon such
closing-out; (g) the net total amount payable to the broker upon such
closing-out; (h) the amount of cash and/or the amount and kind of
Securities, if any, to be withdrawn from the Senior Security Account; and
(i) the name of the broker through whom the Fund is effecting such
closing-out. Upon receipt of the net total amount payable to the Series
upon such closing-out, and the return and/or cancellation of the receipts,
if any, issued by the Custodian with respect to the short sale being
closed-out, the Custodian shall pay to the broker the net total amount
payable to the broker, and make the withdrawals from the Senior Security
Account, as the same as specified in the Certificate, out of moneys held
hereunder for the account of such Series.
ARTICLE IX
Loan of Portfolio Securities of the Fund
1. Promptly after each loan of portfolio Securities held by the Custodian
hereunder for the account of a Series, the Fund shall deliver or cause to
be delivered to the Custodian a Certificate specifying with respect to
each such loan: (a) the Series which owns the loaned Securities; (b) the
name of the issuer and the title of the Securities; (c) the number of
shares or the principal amount loaned; (d) the date of loan and delivery;
(e) the total amount to be delivered to the Custodian against the loan of
the Securities, including the amount of cash collateral and the premium,
if any, separately identified; and (f) the name of the broker, dealer, or
financial institution to which the loan was made. The Custodian shall
deliver the Securities thus designated to the broker, dealer or financial
institution to which the loan was made upon receipt of the total amount
designated in the Certificate to be delivered against the loan of
Securities. The Custodian may accept payment in connection with a delivery
otherwise than through the Book-Entry System or Depository only in the
form of a certified or bank cashier's check payable to the order of the
Fund or the Custodian drawn on New York Clearing House funds and may
deliver Securities in accordance with the customs prevailing among dealers
in securities.
2. Promptly after each termination of a loan of Securities by a Series of the
Fund, the Fund shall deliver or cause to be delivered to the Custodian a
Certificate specifying with respect to such loan termination and return of
Securities: (a) the Series which owns the loaned Securities; (b) the name
of the issuer and the title of the Securities to be returned; (c) the
number of shares or the principal amount to be returned; (d) the date of
termination; (e) the total amount to be delivered by the Custodian
(including the cash collateral for such Securities minus any offsetting
credits as described in said Certificate); and (f) the name of the broker,
dealer, or financial institution from which the Securities will be
returned. The Custodian shall receive all Securities returned from the
broker, dealer, or financial institution to which such Securities were
loaned and upon receipt thereof shall pay, out of the moneys held for the
account of the Series, the total amount payable upon such return of
Securities as set forth in the Certificate.
ARTICLE X
Concerning Margin Accounts, Senior Security Accounts, and Collateral
Accounts
1. The Custodian shall, from time to time, make such additional deposits to,
or withdrawals from, a Senior Security Account as specified in a
Certificate received by the Custodian. Such Certificate shall specify the
Series for which such deposit or withdrawal is to be made, and the amount
of cash and/or the amount and kind of Securities specifically allocated to
such Series to be deposited in, or withdrawn from, such Senior Security
Account for such Series. In the event that the Fund fails to specify in a
Certificate the Series, the name of the issuer, the title and the number
of shares or the principal amount of any particular Securities to be
deposited by the Custodian into or withdrawn from, a Senior Securities
Account, the Custodian shall be under no obligation to make any such
deposit or withdrawal and shall so notify the Fund.
2. The Custodian shall make deliveries or payments from a Margin Account to
the broker, dealer, futures commission merchant or Clearing Member in
whose name, or for whose benefit, the account was established only in
accordance with the Margin Account Agreement.
Except as otherwise expressly provided herein, the Custodian shall be
under no duty or obligation to act in accordance with or with respect to
any Certificate, or with any other order, direction or request of the
Fund, in whatever form, with respect to any cash or Securities deposited
in any Margin Account, including, without limitation, any Certificate,
order, direction, or request to pay, deliver, transfer or withdraw any
such cash or Securities unless such order, direction, or request is
contained in a Certificate believed by the Custodian to bear the signed
consent thereto of an officer, director, or employee of the broker,
dealer, futures commission merchant or Clearing Member in whose name, or
for whose benefit, the Margin Account was established.
3. Amounts received by the Custodian as payments or distributions with
respect to Securities deposited in any Margin Account shall be dealt with
in accordance with the terms and conditions of the Margin Account
Agreement.
4. The Custodian shall have a continuing lien and security interest in and to
any property at any time held by the Custodian in any Collateral Account
described herein. In accordance with applicable law the Custodian may
enforce its lien and realize on any such property whenever the Custodian
has made payment or delivery pursuant to any Put Option guarantee letter
or similar document or any receipt issued hereunder by the Custodian. In
the event the Custodian should realize on any such property net proceeds
which are less than the Custodian's obligations under any Put Option
guarantee letter or similar document or any receipt, such deficiency shall
be a debt owed the Custodian by the Fund within the scope of Article XIII
herein.
5. In the event the Fund furnishes the Custodian with evidence of an order of
exemption or other regulatory relief under the Investment Company Act of
1940, as amended, permitting the Fund to establish with brokers and/or
futures commission merchants accounts (hereinafter "Exempt Accounts")
intended to replace any Margin Account, then, notwithstanding any other
provisions contained herein, the Fund may substitute an instruction to
deliver Securities and/or money to a broker or futures commission merchant
for deposit into an Exempt Account for an instruction to deposit
Securities and/or money into a Margin Account. The Custodian shall be
under no duty or obligation with respect to any Securities and/or money so
delivered for deposit into an Exempt Account, including any obligation to
provide the Fund with any statements with respect to any Exempt Account,
nor shall the Custodian have any duty or obligation with respect to
operation or terms of the Exempt Account, the timely return of any such
Securities or money delivered for deposit therein, or the payment by such
broker or futures commission merchant of amounts to be paid to the Fund
with respect to such account. The Custodian shall accept from any such
broker and/or futures commission merchant any Securities and/or moneys
purportedly paid out of, or distributed with respect to, any Exempt
Account, when so instructed in a Certificate specifying the Series to
which the same is specifically allocated.
6. On each business day, the Custodian shall furnish the Fund with a
statement with respect to each Margin Account in which money or Securities
are held as of the close of business on the previous business day,
specifying: (a) the name of the Margin Account; (b) the amount and kind of
Securities held therein; and (c) the amount of money held therein. The
Custodian shall make available upon request to any broker, dealer, or
futures commission merchant specified in the name of a Margin Account a
copy of the statement furnished the Fund with respect to such Margin
Account.
7. Promptly after the close of business on each business day in which cash
and/or Securities are maintained in a Collateral Account for any Series,
the Custodian shall furnish the Fund with a Statement with respect to such
Collateral Account specifying the amount of cash and/or the amount and
kind of Securities held therein. No later than the close of business next
succeeding the delivery to the Fund of such statement, the Fund shall
furnish to the Custodian a Certificate or Written Instructions specifying
the then-current market value of the Securities described in such
statement. In the event such market value is less than the Custodian's
obligation with respect to any outstanding Put Option guarantee letter or
similar document, the Fund shall promptly specify in a Certificate the
additional cash and/or Securities to be deposited in such Collateral
Account to eliminate such deficiency.
ARTICLE XI
Payment of Dividends or Distributions
1. The Fund shall furnish to the Custodian a copy of the resolution or
resolutions of the Board of Trustees of the Fund, certified by the
Trustees or any Assistant Clerk, either (i) setting forth with respect to
the Series specified therein the date of the declaration of a dividend or
distribution, the date of payment thereof, the record date as of which
shareholders entitled to payment shall be determined, the amount payable
per Share of such Series to the shareholders of record as of that date and
the total amount payable to the Dividend Agent and any sub-dividend agent
or co-dividend agent of the Fund on the payment date, or (ii) authorizing
with respect to the Series specified therein the declaration of dividends
and distributions on a daily basis and authorizing the Custodian to rely
on Oral Instructions, Written Instructions or a Certificate setting forth
the date of the declaration of such dividend or distribution, the date of
payment thereof, the record date as of which shareholders entitled to
payment shall be determined, the amount payable per Share of such Series
to the shareholders or record as of that date and the total amount payable
to the Dividend Agent on the payment date.
2. Upon the payment date specified in such resolution, Oral Instructions,
Written Instructions or Certificate, as the case may be, the Custodian
shall pay out of the moneys held for the account of each Series the total
amount payable to the Dividend Agent, and any sub-divided agent or
co-dividend agent of the Fund with respect to such Series.
ARTICLE XII
Sale and Redemption of Shares
1. Whenever the Fund shall sell any Shares of any Series, it shall deliver to
the Custodian a Certificate duly specifying:
(a) the Series, the number of Shares sold, trade date, and price; and
(b) the amount of money to be received by the Custodian for the sale of
such Shares and specifically allocated to the separate account in the
name of such Series.
2. Upon receipt of such money from the Transfer Agent, the Custodian shall
credit such money to the separate account in the name of the Series for
which such money was received.
3. Upon issuance of any Shares of any Series described in the foregoing
provisions of this Article, the Custodian shall pay, out of the money held
for the account of such Series, all original issue or other taxes required
to be paid by the Fund in connection with such issuance upon the receipt
of a Certificate specifying the amount to be paid.
4. Except as provided hereinafter, whenever the Fund desires the Custodian to
make payment out of the money held by the Custodian hereunder in
connection with a redemption of any Shares, it shall furnish to the
Custodian a Certificate specifying:
(a) The number and Series of Shares redeemed; and (b) The amount to be paid
for such Shares.
5. Upon receipt from the Transfer Agent of an advice setting forth the Series
and number of Shares received by the Transfer Agent for redemption and
that such Shares are in good form for redemption, the Custodian shall make
payment to the Transfer Agent out of the moneys held for the separate
account of the Series of Shares being redeemed the total amount specified
in the Certificate issued pursuant to the foregoing paragraph 4 of this
Article.
6. Notwithstanding the above provisions regarding the redemption of any
Shares, whenever any Shares are redeemed pursuant to any check redemption
privilege which from time to time may be offered by the Fund, the
Custodian, unless otherwise instructed by a Certificate, shall, upon
receipt of an advice from the Fund or its agent setting forth that the
redemption is in good form for redemption in accordance with the check
redemption procedure, honor the check presented as part of such check
redemption privilege out of the moneys held in the separate account of the
Series of Shares being redeemed.
ARTICLE XIII
Overdrafts or Indebtedness
1. If the Custodian should in its sole discretion advance funds on behalf of
any Series which results in an overdraft because the moneys held by the
Custodian in the separate account for such Series shall be insufficient to
pay the total amount payable upon a purchase of Securities by such Series,
as set forth in a Certificate, Oral Instructions, or Written Instructions
or which results in an overdraft in the separate account of such Series
for some other reason, of if the Series is for any other reason indebted
to the Custodian (except in respect of the fees of the Custodian
attributable to such Series and borrowings by such Series for investment
or for temporary or emergency purposes using Securities as collateral
pursuant to a separate agreement and subject to the provisions of
paragraph 2 of this Article), such overdraft or indebtedness shall be
deemed to be a loan made by the Custodian to the Series payable on demand
and shall bear interest from the date incurred at a rate per annum (based
on a 360-day year for the actual number of days involved) equal to 1/2%
over Custodian's prime commercial lending rate in effect from time to
time, such rate to be adjusted on the effective date of any change in such
prime commercial lending rate but in no event to be less than 6% per
annum. In addition, the Fund hereby agrees that the Custodian shall have a
continuing lien and security interest in and to assets of a Series which
is indebted to the Custodian (except with respect to fees of the Custodian
attributable to such Series and borrowings by such Series for investment
or for temporary or emergency purposes using securities as collateral) to
the extent of 10% of such Series' assets held by the Custodian.
2. The Fund will cause to be delivered to the Custodian by any bank
(including, if the borrowing is pursuant to a separate agreement, the
Custodian) from which it borrows money for investment or for temporary or
emergency purposes using Securities held by the Custodian hereunder as
collateral for such borrowings, a notice or undertaking in the form then
employed by any such bank setting forth the amount which such bank will
loan to the Fund against delivery of a stated amount of collateral. The
Fund shall promptly deliver to the Custodian a Certificate specifying with
respect to each such borrowing: (a) the Series to which such borrowing
relates; (b) the name of the bank; (c) the amount and terms of the
borrowing, which may be set forth by incorporating by reference an
attached promissory note, duly endorsed by the Fund, or other loan
agreement; (d) the time and date, if known, on which the loan is to be
entered into; (e) the date on which the loan becomes due and payable; (f)
the total amount payable to the Fund on the borrowing date; (g) the market
value of Securities to be delivered as collateral for such loan, including
the name of the issuer, the title and the number of shares or the
principal amount of any particular Securities, and (h) a statement
specifying whether such loan is for investment purposes or for temporary
or emergency purposes and that such loan is in conformance with the
Investment Company Act of 1940 and the Fund's prospectus. The Custodian
shall deliver on the borrowing date specified in a Certificate the
specified collateral and the executed promissory note, if any, against
delivery by the lending bank of the total amount of the loan payable,
provided that such account conforms to the total amount payable as set
forth in the Certificate. The Custodian may, at the option of the lending
bank, keep such collateral in its possession, but such collateral shall be
subject to all rights therein given the lending bank by virtue of any
promissory note or loan agreement. The Custodian shall deliver such
Securities as additional collateral as may be specified in a Certificate
to collateralize further any transaction described in this paragraph. The
Fund shall cause all Securities released from collateral status to be
returned directly to the Custodian, and the Custodian shall receive from
time to time such return of collateral as may be tendered to it. In the
event that the Fund fails to specify in a Certificate the Series, the name
of the issuer, the title and number of shares of the principal amount of
any particular Securities to be delivered as collateral by the Custodian,
the Custodian shall not be under any obligation to deliver any Securities.
ARTICLE XIV
Concerning the Custodian
1. Except as hereinafter provided, neither the Custodian nor its nominee
shall be liable for any loss or damage, including counsel fees, resulting
from its action or omission to act or otherwise either hereunder or under
any Margin Account Agreement, except for any such loss or damage arising
out of its own negligence or willful misconduct. The Custodian may, with
respect to questions of law, apply for and obtain the advice and opinion
of counsel to the Fund or of its own counsel reasonably satisfactory to
the Fund and shall be fully protected with respect to anything done or
omitted by it in good faith in conformity with such advice or opinion,
provided that such action is not in violation of applicable federal or
state laws or regulations. Upon the prior agreement of the Fund, the cost
of any such advice or opinion will be borne by the Fund. The Custodian
shall be liable to the Fund for any loss or damage resulting from the use
of the Book-Entry System or any Depository arising by reason of any
negligence, misfeasance or willful misconduct on the part of the Custodian
or any of its employees or agents. In the event that the Custodian
determines that there has been any loss or damage involving Securities of
any Series of the Fund deposited with any Depository, the Custodian shall
assert whatever rights, and seek whatever remedies, it shall have against
the Depository with respect to such loss or damage. The Custodian shall
credit to any Series' account hereunder the amount, if any, as determined
by the Custodian, of the payments, if any, recovered by the Custodian from
any Depository as reimbursement for any such loss or damage involving any
Securities deposited by the Custodian hereunder with said Depository. In
the event the Custodian in connection with such a loss or damage neither
asserts such rights and seeks such remedies, nor credits to the Series'
account hereunder the amount which the Fund and the Custodian agree would
be recovered by any such Series from the Depository by the Custodian's
assertion of such rights and remedies, then, and only then, the Fund shall
be subrogated to the rights of the Custodian against the Depository.
2. Without limiting the generality of the foregoing, the Custodian shall be
under no obligation to inquire into, and shall not be liable for:
(a) The validity of the issue of any Securities purchased, sold, or
written by or for any Series of the Fund, the legality of the
purchase, sale or writing thereof, or the propriety of the amount paid
or received therefor;
(b) The legality of the sale or redemption of any Shares, or the propriety
of the amount to be received or paid therefor;
(c) The legality of the declaration or payment of any dividend by the
Fund;
(d) The legality of any borrowing by the Fund using Securities as
collateral;
(e) The legality of any loan of portfolio Securities, nor shall the
Custodian be under any duty or obligation to see to it that any cash
collateral delivered to it by a broker, dealer, or financial
institution or held by it at any time as a result of such loan of
portfolio Securities of any Series of the Fund is adequate collateral
for the Fund against any loss it might sustain as a result of such
loan. The Custodian specifically, but not by way of limitation, shall
not be under any duty or obligation periodically to check or notify
the Fund that the amount of such cash collateral held by it for the
account of any Series of the Fund is sufficient collateral, but such
duty or obligation shall be the sole responsibility of the Fund. In
addition, the Custodian shall be under no duty or obligation to see
that any broker, dealer or financial institution to which portfolio
Securities of any Series of the Fund are lent pursuant to Article IX
of this Agreement makes payment to it of any dividends or interest
which are payable to or for the account of such Series during the
period of such loan or at the termination of such loan, provided,
however, that the Custodian shall promptly notify the Fund in the
event that such dividends or interest are not paid and received when
due; or
(f) The sufficiency or value of any amounts of money and/or Securities
held in any Margin Account, Senior Security Account, Exempt Account or
Collateral Account in connection with transactions by any Series of
the Fund. In addition, the Custodian shall be under no duty or
obligation to see that any broker, dealer, futures commission merchant
or Clearing Member makes payment to any Series of the Fund of any
variation margin payment or similar payment which such Series may be
entitled to receive from such broker, dealer, futures commission
merchant or Clearing Member, or to see that any variation margin
payment received by the Custodian from any broker, dealer, futures
commission merchant or Clearing Member is the amount such Series is
entitled to receive, provided, however, that if any variation margin
payment which a Series is entitled to receive or any portion of such
payment is not received by the Custodian, the Custodian promptly shall
notify the Trust to that effect.
3. The Custodian shall not be liable for, or considered to be the Custodian
of, any money, whether or not represented by any check, draft, or other
instrument for the payment of money, received by it on behalf of a Series
of the Fund until the Custodian actually receives and collects such money
directly or by the final crediting of the account representing such
Series' interest in the Book-Entry System or the Depository.
4. The Custodian shall not be under any duty or obligation to take action to
effect collection of any amount due to the Fund from the Transfer Agent of
the Fund not to take any action to effect payment or distribution by the
Transfer Agent of the Fund of any amount paid by the Custodian to the
Transfer Agent of the Fund in accordance with this Agreement.
5. The Custodian shall not be under any duty or obligation to take action to
effect collection of any amount, if the Securities upon which such amount
is payable are in default, or if payment is refused after due demand or
presentation, unless and until (i) it shall be directed to take such
action by a Certificate and (ii) it shall be assured to its satisfaction
of reimbursement of its costs and expenses in connection with any such
action.
6. The Custodian may appoint one or more banking institutions as Depository
or Depositories, as sub-custodian or sub-custodians, or as Sub-Custodian
or Co-Custodians including, but not limited to, banking institutions
located in foreign countries, of Securities and moneys at any time owned
by a Series of the Fund, upon such terms and conditions as may be approved
in a Certificate or contained in an agreement executed by the Custodian,
the Fund and the appointed institution.
7. The Custodian shall not be under any duty or obligation (a) to ascertain
whether any Securities at any time delivered to, or held by it, for the
account of a Series of the Fund are such as properly may be held by the
Fund or such Series under the provisions of its then-current prospectus,
or (b) to ascertain whether any transactions by the Fund, whether or not
involving the Custodian, are such transactions as may properly be engaged
in by the Fund.
8. The Custodian shall be entitled to receive and the Fund agrees to pay to
the Custodian all out-of-pocket expenses and such compensation as may be
agreed upon from time to time between the Custodian and the Fund. The
Custodian may charge such compensation and any expenses incurred by the
Custodian in the performance of its duties with respect to a Series
against any money held by it for the account of such Series only in
accordance with paragraph 2(c) of Article III hereof. Unless and until the
Fund instructs the Custodian by a Certificate to apportion among the
Series in a specified manner any loss, damage, liability or expense for
which the Custodian is entitled to reimbursement under the provisions of
this Agreement, the Custodian shall allocate any such loss, damage,
liability or expense to each Series according to such Series' pro rata
share (based on the ratio of such Series' net asset value at the time of
the charge to the aggregate net asset value of all Series at that time) of
the amount of any such loss, damage, liability or expense. The expenses
for which the Custodian shall be entitled to reimbursement hereunder shall
include, but are not limited to, the expenses of sub-custodians and
foreign branches of the Custodian incurred in settling outside of New York
City transactions involving the purchase and sale of Securities of the
Fund.
9. The Custodian shall be entitled to rely upon any Certificate, notice or
other instrument in writing received by the Custodian and reasonably
believed by the Custodian to be a Certificate. The Custodian shall be
entitled to rely upon any Oral Instructions and any Written Instructions
actually received by the Custodian hereinabove provided for. The Fund
agrees to forward to the Custodian a Certificate or facsimile thereof
confirming such Oral Instructions or Written Instructions in such manner
so that such Certificate or facsimile thereof is received by the
Custodian, whether by hand delivery, telecopier or other similar device,
or otherwise, by the close of business on the business day on which such
Oral Instructions or Written Instructions are given to the Custodian. The
Fund agrees that the fact that such confirming instructions are not
received by the Custodian shall in no way affect the validity of the
transactions or enforceability of the transactions hereby authorized by
the Fund. The Fund agrees that the Custodian shall incur no liability to
the Fund in acting upon Oral Instructions or Written Instructions given to
the Custodian hereunder concerning such transactions provided such
instructions reasonably appear to have been received from an Authorized
Person.
10. The Custodian shall be entitled to rely upon any instrument or notice in
writing received by the Custodian and reasonably believed by the Custodian
to be a certification furnished in accordance with a Margin Account
Agreement. Without limiting the generality of the foregoing, the Custodian
shall be under no duty to inquire into, and shall not be liable for, the
accuracy of any statements or representations contained in any such
instrument or other notice including, without limitation, any
specification of any amount to be paid to a broker, dealer, futures
commission merchant or Clearing Member.
11. The books and records pertaining to the Fund which are in the possession
of the Custodian shall be the property of the Fund. Such books and records
shall be prepared and maintained as required by the Investment Company Act
of 1940, as amended, and other applicable securities laws and rules and
regulations. The Fund, or the Fund's authorized representatives, shall
have access to such books and records during the Custodian's normal
business hours. Upon the reasonable request of the Fund, copies of any
such books and records shall be provided by the Custodian to the Fund or
the Fund's authorized representative, and the Fund shall reimburse the
Custodian its expenses of providing such copies.
12. The Custodian shall provide the Fund with any report obtained by the
Custodian on the system of internal accounting control of the Book-Entry
System, the Depository, or O.C.C., and with such reports on its own
systems of internal accounting control as the Fund may reasonably request
from time to time.
13. The Fund agrees to indemnify the Custodian against and save the Custodian
harmless form all liability, claims, losses and demands whatsoever,
including attorney's fees, howsoever arising or incurred because of or in
connection with the Custodian's payment or non-payment of checks pursuant
to paragraph 6 of Article XII as part of any check redemption privilege
program of the Fund, except for any such liability, claim, loss and demand
arising out of the Custodian's own negligence or willful misconduct.
14. Subject to the foregoing provisions of this Agreement, the Custodian may
deliver and receive Securities, and receipts with respect to such
Securities, and arrange for payments to be made and received by the
Custodian in accordance with the customs prevailing from time to time
among brokers or dealers in such Securities.
15. The Custodian shall have no duties or responsibilities whatsoever except
such duties and responsibilities as are specifically set forth in this
Agreement, and no covenant or obligation shall be implied in this
Agreement against the Custodian.
ARTICLE XV
Additional Series
In the event that the Trust establishes one or more series in addition to
the Thomson McKinnon U.S. Government Fund, the Thomson McKinnon Tax Exempt Fund,
the Thomson McKinnon Income Fund, Thomson McKinnon U.S. Government Fund, the
Thomson McKinnon Growth Fund, the Thomson McKinnon Opportunity Fund and the
Thomson McKinnon Short-Term Fund, with respect to which it desires to have the
Custodian render services as custodian under the terms hereof, it shall so
notify the Custodian in writing at least thirty (30) days in advance of the sale
of shares of such series, and unless the Custodian declines in writing to
provide such services within fifteen (15) days of receipt of such notice, the
assets allocated to such series of shares shall be subject to this Agreement.
ARTICLE XVI
Termination
1. Either of the parties hereto may terminate this Agreement by giving to the
other party a notice in writing specifying the date of such termination,
which shall be not less than ninety (90) days after the date of giving of
such notice. In the event such notice is given by the Fund, it shall be
accompanied by a copy of a resolution of the Board of Trustees of the
Fund, certified by the Clerk or any Assistant Clerk, electing to terminate
this Agreement and designating a successor custodian or custodians, each
of which shall be a bank or trust company having not less than $2,000,000
aggregate capital, surplus and undivided profits. In the event such notice
is given by the Custodian, the Fund shall, on or before the termination
date, deliver to the Custodian a copy of a resolution of the Board of
Trustees of the Fund , certified by the Clerk or any Assistant Clerk,
designating a successor custodian or custodians. In the absence of such
designation by the Fund, the Custodian may designate a successor custodian
which shall be a bank or trust company having not less than $2,000,000
aggregate capital, surplus and undivided profits. Upon the date set forth
in such notice this Agreement shall terminate, and the Custodian shall
upon receipt of a notice of acceptance by the successor custodian on that
date deliver directly to the successor custodian all Securities and moneys
then owned by the Fund and held by it as Custodian, after deducting all
fees, expenses and other amounts for the payment or reimbursement to which
it shall then be entitled.
2. If a successor custodian is not designated by the Fund or the Custodian in
accordance with the preceding paragraph, the Fund shall upon the date
specified in the notice of termination of this Agreement and upon the
delivery to the Fund by the Custodian of all Securities (other than
Securities held in the Book-Entry System which cannot be delivered to the
Fund) and moneys then owned by any Series of the Fund be deemed to be its
own custodian and the Custodian shall thereby be relieved of all duties
and responsibilities pursuant to this Agreement, other than the duty with
respect to Securities held in the Book-Entry System which cannot be
delivered to the Fund to hold such Securities hereunder in accordance with
this Agreement.
ARTICLE XVII
Miscellaneous
1. Annexed hereto as Appendix A is a Certificate signed by two of the present
Officers of the Fund under its seal, setting forth the names and the
signatures of the present Authorized Persons. The Fund agrees to furnish
to the Custodian a new Certificate in similar form in the event that any
such present Authorized Person ceases to be an Authorized Person or in the
event that other or additional Authorized Persons are elected or
appointed. Until such new Certificate shall be received, the Custodian
shall be fully protected in acting under the provisions of this Agreement
upon Oral Instruction or signatures of the present Authorized Persons as
set forth in the last delivered Certificate.
2. Annexed hereto as Appendix B is a Certificate signed by two of the present
Officers of the Fund under its seal, setting forth the names and the
signatures of the present Officers of the Fund. The Fund agrees to furnish
to the Custodian a new Certificate in similar form in the event any such
present Officer ceases to be an Officer of the Fund, or on the event that
other or additional Officers are elected or appointed. Until such new
Certificate shall be received, the new Custodian shall be fully protected
in acting under the provisions of this Agreement upon the signatures of
the Officers as set forth in the last delivered Certificate.
3. Any notice or other instrument in writing, authorized or required by this
Agreement to be given to the Custodian, shall be sufficiently given if
addressed to the Custodian and mailed and delivered to it at its offices
at 90 Washington St., New York, NY 10015, or at such other place as the
Custodian may from time to time designate in writing.
4. Any notice or other instrument in writing, authorized or required by this
Agreement to be given to the Fund shall be sufficiently given if addressed
to the Fund and mailed or delivered to it at its office at the address for
the Fund first above written, or at such other place as the Fund may from
time to time designate in writing.
5. This Agreement may not be amended or modified in any manner except by a
written agreement executed by both parties with the same formality as this
Agreement and approved by a resolution of the Board of Trustees of the
Fund.
6. This Agreement shall extend to and shall be binding upon the parties
hereto, and their respective successors and assigns; provided, however,
that this Agreement shall not be assignable by the Fund without the
written consent of the Custodian, or by the Custodian without the written
consent of the Fund, authorized or approved by a resolution of the Fund's
Board of Trustees.
7. This Agreement shall be construed in accordance with the laws of the State
of New York.
8. This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original, but such counterparts shall,
together, constitute only one instrument.
9. A copy of the Agreement and Declaration of Trust of the Fund is on file
with the Secretary of The Commonwealth of Massachusetts, and notice is
hereby given that this instrument is executed on behalf of the Trustees of
the Fund as Trustees and not individually and that the obligations of this
instrument are not binding upon any of the Trustees or shareholders
individually but are binding only upon the assets and property of the
Fund.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
THOMSON McKINNON INVESTMENT TRUST
By: /s/ Robert A. Prindiville, President
Attest: /s/ intials SKB
THE BANK OF NEW YORK
By: /s/ L. Farello
Attest: /s/ S. Sina
<PAGE>
AMENDMENT NO. 1
Dated as of February 14, 1992
to the
AMENDED AND RESTATED CUSTODY AGREEMENT
Dated as of September 13, 1985
between
THOMSON FUND GROUP
and
THE BANK OF NEW YORK
THIS AMENDMENT NO. 1, dated as of February 14, 1992, is made between
THOMSON FUND GROUP (formerly, Thomson McKinnon Investment Trust), a
Massachusetts business trust (the "Fund"), and THE BANK OF NEW YORK, a New York
corporation (the "Custodian").
W I T N E S S E T H:
WHEREAS, the parties hereto entered into a Custody Agreement dated as of
February 23, 1984 which was amended and restated by an Amended and Restated
Custody Agreement dated September 13, 1985 (the "Custody Agreement"), pursuant
to which the Custodian agreed to act as custodian of all the Securities and
moneys at any time owned by any Series of the Fund during the period of the
Custody Agreement,
WHEREAS, pursuant to Article XV of the Custody Agreement, the parties
hereto desire to have the Custodian render services as custodian under the terms
of the Custody Agreement, as amended hereby, of all the Securities and money
owned by the Thomson Global Fund commencing on February 14, 1992 (the "Effective
Date") and
WHEREAS, the parties hereto desire to amend the Custody Agreement to (i)
accommodate the custody of assets of any Series of the Fund outside the United
States in accordance with Rule 17f-5 promulgated under the Investment Company
Act of 1940, as amended (the "1940") and (ii) add Participants Trust Company to
the definition of "Depository" as used in the Custody Agreement,
NOW THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt of which is hereby acknowledged, the parties
hereto agree with one another as follows:
Reference to Definitions. Terms defined in the Custody Agreement, as
amended hereby, and not otherwise defined herein are used with the meaning
so defined.
Amendments. Effective upon the Effective Date, the Custody Agreement is
hereby amended as follows:
2.1 Addition of Article XV. A new Article is hereby added immediately
after Article XIV of the Custody Agreement as follows:
ARTICLE XV
DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY OF ANY SERIES HELD
OUTSIDE OF THE UNITED STATES
1. The Custodian is authorized and instructed to employ, as sub-custodian for
each Series' "foreign securities" (as defined in paragraph (c)(1) of Rule
17f-5 under the Investment Company Act of 1940, as amended ("foreign
securities")) and other assets, the foreign banking institutions and
foreign securities depositories and clearing agencies designated on
Exhibit D ("foreign sub-custodians") hereto to carry out their respective
responsibilities in accordance with the terms of the subcustodian
agreement between each such foreign sub-custodian and the Custodian,
copies of which have been previously delivered to the Fund and receipt of
which is hereby acknowledged (each such agreement, a "foreign
sub-custodian agreement"). The Custodian shall be liable for the acts and
omissions of each foreign sub-custodian constituting negligence or willful
misconduct in the conduct of its responsibilities under the terms of the
foreign sub-custodian agreement. Upon receipt of a Certificate, together
with a certified resolution of the Fund's Board of Trustees, the Custodian
and the Fund may agree to amend Exhibit D hereto from time to time to
designate additional foreign banking institutions and foreign securities
depositories and clearing agencies to act as foreign sub-custodians.
2. The Custodian hereby represents and warrants to the Fund that each foreign
subcustodian agreement previously delivered to the Fund governs the direct
relationship between the Custodian and the foreign sub-custodian with
respect to subcustody of each Series' foreign securities and other assets.
The Custodian agrees not to amend any such foreign subcustodian agreement
in a manner adverse to any Series' interest without the prior written
consent of the Fund.
3. The Custodian shall identify on its books as belonging to each Series of
the Fund the foreign securities of such Series held by each foreign
sub-custodian. At the election of the Fund, it shall be entitled to be
subrogated to the rights of the Custodian with respect to any claims by
the Fund or any Series against a foreign banking institution as a
consequence of any loss, damage, cost, expense, liability or claim if and
to the extent that the Fund or any Series has not been made whole for any
such loss, damage, cost, expense, liability or claim.
4. Upon request of the Fund, the Custodian will, pursuant to the terms of the
applicable foreign sub-custodian agreement, use reasonable efforts to
arrange for the independent accountants of the Fund to be afforded access
to the books and records of any foreign banking institution employed as
foreign sub-custodian insofar as such books and records relate to the
performance of such foreign banking institution under its agreement with
the Custodian on behalf of the Fund.
5. The Custodian will supply to the Fund from time to time, as mutually
agreed upon, statements in respect of the Securities and other assets of
each Series held by foreign sub-custodians, including but not limited to
an identification of foreign banking institutions having possession of
each Series' foreign securities and other assets and advices or
notifications of any transfers of foreign securities to or from each
custodial account maintained by a foreign sub-custodian for the Custodian
on behalf of the Series indicating, as to foreign securities acquired for
the Series, the identity of the foreign banking institution having
physical possession of such foreign securities.
6. The Custodian shall furnish annually to the Fund, as mutually agreed upon,
information concerning the foreign sub-custodians employed by the
Custodian. Such information shall be similar in kind and scope to that
furnished to the Fund in connection with the initial approval of the use
of foreign sub-custodians by the Custodian and, in any event, shall
include information pertaining to (i) the foreign sub-custodians'
financial strength, general reputation and standing in the countries in
which they are located and their ability to provide the custodial services
required, and (ii) whether the foreign sub-custodians would provide a
level of safeguards for safekeeping and custody of securities not
materially different from those prevailing in the United States. The
Custodian shall (a) monitor the day-to-day services and reports provided
to it by each foreign sub-custodian, (b) at least annually, obtain and
review the annual financial report published by such foreign sub-custodian
to determine that it meets the financial criteria of an "Eligible Foreign
Custodian" under Rule 17f-5(c)(2)(i) or (ii), and (c) on a periodic basis
inspect physically the operations of such foreign sub-custodian. In
addition, the Custodian will promptly inform the Fund in the event that
the Custodian learns that a foreign sub-custodian no longer satisfies the
financial criteria of an "Eligible Foreign Custodian" under Rule 17f-5 of
the Investment Company Act of 1940, as amended, or otherwise learns of a
material adverse change in the financial condition of a foreign
sub-custodian. Upon receipt of a Certificate from the Fund, the Custodian
shall cease the employment of any one or more of such foreign
sub-custodians for maintaining custody of the assets of one or more Series
as specified in such Certificate. The Custodian agrees that it will use
reasonable care in monitoring compliance by each foreign sub-custodian
with the terms of the relevant foreign sub-custodian agreement and that if
it has knowledge of any breach by such sub-custodian of such foreign
sub-custodian agreement having a material adverse effect on any Series it
will promptly notify the Fund of such breach. The Custodian also agrees to
use reasonable and diligent efforts to enforce its rights under the
relevant foreign sub-custodian agreement.
7. The provisions of this Article XV shall not apply where the custody of the
Fund's assets is maintained in a foreign branch of a banking institution
which is a "bank" as defined by Section 2(a)(5) of the Investment Company
Act of 1940, as amended, which meets the qualification set forth in
Section 26(a) of said Act.
8. The Custodian shall transmit promptly to the Fund all proxies, proxy
solicitation materials, notices, reports or other communications or
written information (including, without limitation, information concerning
pendency of calls and maturity, expiration or rights and notices of
exercises of calls) received by the Custodian from any foreign
sub-custodian with respect to any of the Fund's foreign securities.
9. Notwithstanding any provision of this Agreement to the contrary,
settlement and payment for securities received for the account of any
Series and delivery of Securities maintained for the account of such
Series may be effected in accordance with the customary or established
securities trading or securities processing practices and procedures in
the jurisdiction or market in which the transaction occurs, including,
without limitation, delivery of Securities to the purchaser thereof or to
a dealer therefor (or an agent for such purchaser or dealer) against a
receipt with the expectation of receiving later payment for such
securities from such purchaser or dealer.
2.2 Amendment to Article XIV, Section 6. Article XIV, Section 6, of the
Custody Agreement is hereby amended to add the following prefatory phrase:
"Subject to Article XV hereof,".
2.3 Renumbering of Certain Articles. Articles XV, XVI and XVII of the Custody
Agreement are hereby renumbered as Articles XVI, XVII, and XVIII,
respectively, and all references to such Articles contained in the Custody
Agreement are hereby modified accordingly.
2.4 Amendment to Article I, Section 8. The first sentence of Article 1,
Section 8, of the Custody Agreement is hereby amended by substituting
therefor the following sentence: " ' Depository' shall mean each of The
Depository Trust Company ("DTC") and Participants Trust Company ("PTC"),
each a clearing agency registered with the Securities and Exchange
Commission, its successor or successors and its nominee or nominees."
Addition of Thomson Global Fund. As contemplated by Article XV of the
Custody Agreement, upon the Effective Date, the parties hereto agree that
the Custodian shall render custodial services to the Thomson Global Fund
under the terms of the Custody Agreement as amended hereby.
Addition of Exhibit D. Exhibit D attached hereto is hereby incorporated
into and made a part of the Custody Agreement.
Representatives and Warranties. Each party hereto represent and warrants
to the other that: (a) it has full power and authority to enter into and
perform this Amendment in accordance with its terms; and (b) this
Amendment has been duly executed and delivered by it and constitutes the
legal, valid and binding obligation of it, enforceable in accordance with
the terms of this Amendment, subject to laws of general application
relating to bankruptcy, insolvency and the relief of debtors and other
laws of general application, the enforcement of creditors' rights
generally, rules of law governing specific performance injunctive relief
and other equitable remedies.
Board Resolutions. Within a reasonable time after execution hereof the
Fund shall furnish to the Custodian a certified copy of the resolution(s)
of the Fund's Board of Trustees approving this Amendment.
Miscellaneous. Except to the extent specifically amended hereby, the
provisions of the Custody Agreement shall remain unmodified, and the
Custody Agreement as amended hereby is newly confirmed as being in full
force and effect. Changes in or additions to the Custody Agreement, as
amended hereby, may be made if agreed to in writing by the parties hereto.
The Custody Agreement, as amended hereby, constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof and
supersedes and prior understandings or agreements concerning the subject
matter hereof. The invalidity or unenforceability of any provision hereof
shall in no way affect the validity or enforceability of any other
provision. This Amendment shall be governed by, and construed in
accordance with, the laws of New York. This Amendment may be executed in
any number of counterparts, all of which taken together shall constitute
one and the same instrument.
IN WITNESS WHEREOF, the parties have caused this Amendment to be executed
as of the date first above written.
THOMSON FUND GROUP
Attest: \s\ Samuel C. Newman By: \s\ Robert A. Prindiville
- ---------------------------- ---------------------
Title: President
THE BANK OF NEW YORK
Attest: \s\ Joseph F. Keenan By: \s\ Fred Riccardi
- ---------------------------- -------------
Title: Senior Vice President
<PAGE>
AMENDMENT
AMENDMENT made as of this 11th day of May, 1995 to that certain custody
agreement dated September 13, 1985 (the "Custody Agreement") between The Bank of
New York as Custodian (the "Custodian") and PIMCO Advisors Funds (the "Fund") a
Massachusetts business trust.
WHEREAS, the Custodian and Fund have previously entered into a Custody
Agreement;
WHEREAS, the Fund and the Custodian desire to amend the Custody Agreement
to provide for the electronic transmission of instructions from the Fund to the
Custodian; and
WHEREAS, the Trustees of the Fund have approved the amendment of the
Custody Agreement as hereinafter set forth;
NOW, THEREFORE, in consideration for the mutual promises set forth, the
Fund and the Custodian agree to amend the Custody Agreement as follows:
1. The definition of the term "Certificate" in Article I is hereby amended to
read in its entirety as follows:
"Certificate" shall mean any notice, instruction, or any other instrument
in writing, authorized or required by this Agreement to be given to the
Custodian which is actually received by the Custodian and signed on behalf
of the Fund by any two Officers, and the term Certificate shall also
include instructions by the Fund to the Custodian communicated by a
Terminal Link."
2. The definition of the term "Officer" in Article I is hereby amended to
read in its entirety as follows:
"Officer" shall be deemed to include the President, any Vice President,
the Secretary, the Treasurer, the Controller, any Assistant Secretary, any
Assistant Treasurer, and any other person or persons, whether or not any
such other person is an officer or employee of the Fund, duly authorized
by the Trustees of the Fund to execute any certificate, instruction,
notice or other instrument on behalf of the Fund and listed in the
Certificate annexed hereto as Appendix B or such other Certificate as may
be received by the Custodian from time to time.
3. Article I is hereby further amended by the addition of the following
defined term:
"Terminal Link" shall mean an electronic data transmission link between
the Fund, an Intermediary, if any, (as hereinafter defined), and the
Custodian requiring in connection with each use of the Terminal Link or on
behalf of the Fund use of an authorization code provided by the Custodian
and at least two access codes established by the Fund. As used herein the
term "Intermediary" shall mean a third party that maintains a transmission
line to the Custodian and has been selected by the Fund to receive
electronic data transmissions from the Custodian or the Fund and forward
the same to the Fund or the Custodian, respectively.
4. A new Article shall be added to read in its entirety as follows:
1. The Terminal Link shall be utilized by the Fund only for the purpose
of the Fund providing Certificates to the Custodian with respect to
transactions involving Securities or for the transfer of money to be
applied to the payment of dividends, distributions or redemptions of
Fund Shares, and shall be utilized by the Custodian only for the
purpose of providing notices to the Fund. Such use shall commence
only after the Fund shall have delivered to the Custodian a
Certificate substantially in the form of Appendix I and shall have
established access codes and safekeeping procedures to safeguard and
protect the confidentiality and availability of such access codes
and shall have reviewed the safekeeping procedures established by
the Intermediary, if any, to assure that transmissions input by the
Fund, and only such transmissions, are forwarded by the
Intermediary, if any, to the Custodian without any alteration or
omission. Each use of the Terminal Link by the Fund shall constitute
a representation and warranty that the Terminal Link is being used
only for the purposes permitted hereby, that at least two Officers
have each utilized an access code, that such safekeeping procedures
have been established by the Fund, that the Intermediary, if any,
has safekeeping procedures reviewed by the Fund to assure that all
transmissions inputted by the Fund, and only such transmissions, are
forwarded by the Intermediary to the Custodian without any
alteration or omission by the Intermediary, and that such use does
not contravene the Investment Company Act of 1940, as amended, or
the rules or regulations thereunder.
2. The Fund shall obtain and maintain at its own cost and expense all
equipment and services, including, but not limited to communications
services, necessary for it to utilize the Terminal Link, and the
Custodian shall not be responsible for the reliability or
availability of any such equipment or services.
3. The Fund acknowledges that any data bases made available as part of,
or through the Terminal Link and any proprietary data, software,
processes, information and documentation (other than any such which
are or become part of the public domain or are legally required to
be made available to the public and excluding information
transmitted by means of, but not otherwise related to, the Terminal
Link) (collectively, the "Information"), are the exclusive and
confidential property of the Custodian. The Fund shall, and shall
cause others to which it discloses the Information, including,
without limitation the Intermediary, to keep the Information
confidential by using the same care and discretion it uses with
respect to its own confidential property and trade secrets, and
shall neither make nor permit any disclosure without the express
prior written consent of the Custodian.
4. Upon termination of this Agreement for any reason, the Fund shall
return to the Custodian any and all copies of the Information which
are in the Fund's possession or under its control, or which the Fund
distributed to third parties, including, without limitation, the
Intermediary. The provisions of this Article shall not affect the
copyright status of any of the Information which may be copyrighted
and shall apply to all Information whether or not copyrighted.
5. The Custodian reserves the right to modify the Terminal Link from
time to time without notice to the Fund or the Intermediary, if any,
except that the Custodian shall give the Fund notice not less than
90 days in advance of any modification which would materially
adversely affect the Fund's operation, and the Fund agrees that
neither the Fund not the Intermediary, if any, shall modify or
attempt to modify the Terminal Link without the Custodian's prior
written consent. The Fund acknowledges that any software or
procedures provided the Fund or the Intermediary as part of the
Terminal Link are the property of the Custodian and, accordingly,
the Fund agrees that any modifications to the Terminal Link, whether
by the Fund, the Intermediary or the Custodian's consent, shall
become the property of the Custodian.
6. Neither the Custodian nor any manufacturers, if any, and suppliers
it, the Fund, or the Intermediary, if any, utilized in connection
with the Terminal Link makes any warranties or representations,
express or implied, in fact or in law, including but not limited to
warranties of merchantability and fitness for a particular purpose.
7. The Fund will cause its Officers and employees, and the Custodian
will cause its officers and employees to treat the authorization
codes and access codes applicable to Terminal Link with extreme
care, and the Fund and the Custodian each irrevocably authorizes the
other to act in accordance with and rely on Certificates and notices
received by it through the Terminal Link. The Fund and the Custodian
each acknowledge that it is its responsibility to assure that only
its Officers and authorized persons of the Intermediary, if any, in
the case of the Fund, and authorized persons in the case of the
Custodian use the Terminal Link on its behalf, and that a party
shall not be responsible nor liable for use of the Terminal Link on
behalf of the other party by persons other than such person or
Officers, or by only a single Officer, not for any alteration,
omission, or failure to promptly forward by the Intermediary, if
any.
8(a) Except as otherwise specifically provided in Section 8(b) of this
Article, the Custodian shall have no liability for any losses,
damages, injuries, claims, costs or expenses arising out of or in
connection with any failure, malfunction or other problem relating
to Terminal Link for money damages suffered as the direct result of
the negligence of the Custodian in an amount not exceeding for any
incident $100,000 provided, however, that the Custodian's liability
under this Section 8 shall be reduced to the extent any failure by
the Fund to comply with the provisions of Section 10 contributed to
such loss, damage, injury, claim, cost or expense.
8(b) The Custodian's liability for its negligence in executing or failing
to execute in accordance with a Certificate received through
Terminal Link shall be only with respect to a transfer of funds
which is not made in accordance with such Certificate after such
Certificate shall have been duly acknowledged by the Custodian, but
such liability shall be reduced or eliminated to the extent any
failure by the Fund to comply with the provisions of Section 11 of
this Article contributed to all or any part of the failure to
transfer, and the Custodian's liability shall be limited to (i)
restoration of the principal amount mistransferred, if and to the
extent that the Custodian would be required to make such restoration
under applicable law, and (ii) the lesser of (A) the Fund's actual
pecuniary loss incurred by reason of its loss of use of the
mistransferred funds or the funds which were not transferred, as the
case may be, or (B) compensation for the loss of the use of the
mistransferred funds or the funds which were not transferred, as the
case may be, at a rate per annum equal to the average federal funds
rate as computed from the Federal Reserve Bank of New York's daily
determination of the effective rate for federal funds, for the
period during which the Fund has lost use of such funds. In no event
shall the Custodian have any liability for failure to execute in
accordance with a Certificate a transfer of funds where the
Certificate is received by the Custodian through Terminal Link other
than through the applicable transfer module for the particular
instructions contained in such Certificate.
9. Without limiting the generality of the foregoing, in no event shall
the Custodian or any manufacturer or supplier of its computer
equipment, software or services relating to the Terminal Link be
responsible for any special, indirect, incidental or consequential
damages which the Fund or the Intermediary may incur or experience
by reason of its use of the Terminal Link even if the Custodian or
any manufacturer or supplier has been advised of the possibility of
such damages, nor with respect to the use of the Terminal Link shall
the Custodian or any such manufacturer or supplier be liable for
acts of God, or with respect to the following to the extent beyond
such person's reasonable control: machine or computer breakdown or
malfunction, interruption or malfunction of communication
facilities, labor difficulties or any other similar or dissimilar
labor difficulties or any other similar or dissimilar cause.
10. The Fund shall notify the Custodian of any errors, omissions or
interruptions in, or delay or unavailability of, the Terminal Link
as promptly as practicable, and in any event within 24 hours after
the earliest of (i) discovery thereof, or (ii) in the case of any
error, the date of actual receipt of the earliest notice which
reflects such error, it being agreed that discovery and receipt of
notice may only occur on a business day. The Custodian shall
promptly advise the Fund or the Intermediary whenever the Custodian
learns of any errors, omissions or interruption in, or delay or
unavailability of, the Terminal Link.
11. The Custodian shall acknowledge to the Fund or to the Intermediary,
if any, by use of the Terminal Link, receipt of each Certificate the
Custodian receives through the Terminal Link, and in the absence of
such acknowledgment, the Custodian shall not be liable for any
failure to act in accordance with such Certificate and the Fund may
not claim that such Certificate was received by the Custodian. Such
verification, which may occur after the Custodian has acted upon
such Certificate, shall be accomplished on the same day on which
such Certificate is received.
5. References in this Amendment to the Custody Agreement are to the Custody
Agreement as amended hereby.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
by their respective officers, thereunto duly authorized and their respective
seals to be hereto affixed as of the day and year first above written.
NOTICE
The Agreement and Declaration of Trust of the Fund is on file with the
Secretary of State of The Commonwealth of Massachusetts and notice is hereby
given that this Agreement is executed on behalf of the Trustees of the Fund as
Trustees and not individually and that the obligations of this Agreement are not
binding upon the Trustees or the holders of shares of any series of the Fund
individually but are binding only upon the assets and property of the relevant
series of the Fund.
THE BANK OF NEW YORK
[SEAL]
Attest:
By: \s\ Fred Recardi
-----------------------------
Senior Vice President
By: \s\ Joseph F. Keenan
-----------------------------
PIMCO ADVISORS FUNDS
By: \s\ Robert A. Prindiville
-----------------------------
President
Exhibit 99.B9(a)
Transfer Agency Agreement and Addendums Thereto
<PAGE>
-10-
THOMSON FUND GROUP
TRANSFER AGENCY AGREEMENT
This agreement is made as of the 1st day of October, 1990, among
THOMSON FUND GROUP, a Massachusetts business trust organized and existing under
the laws of The Commonwealth of Massachusetts having its principal office and
place of business at One State Street Plaza, New York, New York 10004
(hereinafter referred to as the "Trust"), SHAREHOLDER SERVICES, INC., a Colorado
corporation having its place of business at 3410 South Galena Street, Denver,
Colorado 80231 (hereinafter referred to as the "Transfer Agent") and Oppenheimer
Management Corporation, a Colorado corporation having its place of business at
3410 South Galena Street, Denver, Colorado 80231 ("OMC").
In consideration of the mutual promises hereinafter set forth, the
parties hereto covenant and agree as follows:
ARTICLE 1
DEFINITIONS
Whenever used in this Agreement, the following words and phrases shall
have the following meanings:
1.1. "Approved Institution" shall mean a broker-dealer, broker, bank or
other entity named in a Certificate, as hereinafter defined, and having
account(s) in the Trust, or the Distributor or an agent it appoints, in each
case acting on behalf of the Trust for the benefit of its clients. From time to
time the Trust may amend a previously delivered Certificate by delivering to the
Transfer Agent a Certificate naming an additional entity as an Approved
Institution or deleting any entity named as an Approved Institution in a
previously delivered Certificate.
1.2. "Business Day" shall mean each day on which the New York Stock
Exchange is open for trading.
1.3. "Certificate" shall mean any notice, instruction, or other
instrument in writing, authorized or required by this Agreement to be given to
the Transfer Agent by the Trust and which is signed by any Officer, as
hereinafter defined, and actually received by the Transfer Agent. "Certificate"
shall also include any notice submitted to the Transfer Agent by electronic or
telephone transmission, reasonably believed by the Transfer Agent to be genuine
and to have been properly made, signed or authorized by an Officer.
1.4. "Computer Tape" shall mean any computer/electromagnetic tape or
transmission transmitted by an Approved Institution, via a remote terminal or
other similar link, into a data processing, storage, or collection system or
similar system (the "System"), located on the Transfer Agent's premises. For
purposes of Section 5.1, such Computer Tape shall be deemed to have been
furnished at such times as are agreed upon from time to time by the Transfer
Agent and Trust only if the information reflected thereon was input into the
System at such times as are agreed upon from time to time by the Transfer Agent
and the Trust.
1.5. "Custodian" shall mean, with respect to Thomson International Fund
(formerly Thomson Global Fund), State Street Bank and Trust Company until
February 14, 1992 and thereafter, and with respect to any other Fund,
"Custodian" shall mean The Bank of New York, as custodian under the terms and
conditions of the Custody Agreement between the respective Custodian and the
respective Fund, or in any case any successor(s) to such Custodian performing
similar functions for or on behalf of a particular Fund.
1.6. "Direct Accounts" means accounts registered in the name(s) of
shareholders other than Approved Institutions.
1.7. "Distributor" shall mean Thomson Investor Services Inc.
(hereinafter referred to as "TISI"), as distributor under the terms and
conditions of the Distributor's Contract between the Trust and TISI, wherein
TISI acquires the exclusive right to sell shares of beneficial interest of the
Trust to investors against orders therefor at net asset value, or any
successor(s) to TISI performing a similar function for or on behalf of the
Trust.
1.8. "Effective Date" shall mean October 1, 1990.
1.9. "Fund" shall mean each of the Thomson Growth Fund, Thomson Target
Fund, Thomson Opportunity Fund, Thomson International Fund, Thomson Precious
Metals and Natural Resources Fund, Thomson Equity Income Fund (formerly Thomson
Convertible Securities Fund), Thomson Income Fund, Thomson Tax Exempt Fund,
Thomson U.S. Government Fund, Thomson Short-Intermediate Government Fund, and
Thomson Money Market Fund (formerly Thomson Short-Term Fund), each being a
separate portfolio of securities and other assets, interests in which are
represented by a separate series of the Trust's shares of beneficial interest,
and such term shall include any other such portfolio that the Trustees of the
Trust may in their discretion create for which the Transfer Agent agrees to act
as transfer agent pursuant to Article 10 of this Agreement.
1.10. "Officer" shall mean the Trust's Chairman of the Board,
President, any Vice President, Clerk, any Assistant Clerk, Treasurer, any
Assistant Treasurer and any other person duly authorized by the Trustees of the
Trust to execute or give any Certificate on behalf of the Trust and named in the
Certificate annexed hereto as Appendix A, as such Certificate may be amended
from time to time.
1.11. "Prospectus" shall mean the most current Trust prospectus an
statement of additional information relating to the Shares, actually received
by the Transfer Agent from the Trust.
1.12. "Shares" shall mean full or fractional shares comprising all or
any part of each series representing the beneficial interest in each Fund.
Shares of each series are further divided between two classes known as "Class A"
and "Class B," Class A Shares being generally sold with a front-end load and
Class B Shares being generally sold subject to a contingent deferred sales load.
ARTICLE 2
APPOINTMENT OF TRANSFER AGENT
2.1. The Trust hereby constitutes and appoints the Transfer Agent as
transfer agent of all the Shares of each Fund and as dividend disbursing agent
for each Fund during the term of this Agreement.
2.2. The Transfer Agent hereby accepts appointment as transfer agent
and dividend disbursing agent and agrees to perform the duties hereinafter set
forth.
2.3. In connection with such appointment, upon or prior to executing
this Agreement the Trust shall deliver to the Transfer Agent such of the
following as have not already been furnished to the Transfer Agent:
(a) A copy of the Agreement and Declaration of Trust of the Trust and
all amendments thereto certified by the Clerk of the Trust;
(b) A copy of the By-Laws of the Trust certified by the Clerk of the
Trust;
(c) A copy of resolutions of the Trustees of the Trust, certified by
the Clerk of the Trust, authorizing the execution of this Transfer Agency
Agreement;
(d) A Certificate signed by the Clerk of the Trust specifying the
names and specimen signatures of the Officers of the Trust;
(e) Specimen Share certificates for Shares of each series of each Fund
in the forms approved by the Trustees of the Trust, together with a Certificate
signed by the Clerk of the Trust as to such approval;
(f) Copies of the most recently filed Post-Effective Amendment to the
Trust's Registration Statement, filed with the Securities and Exchange
Commission under the Securities Act of 1933, as amended, and under the
Investment Company Act of 1940, as amended, together with any applications for
exemptive relief from any of the provisions of such laws filed by the Trust and
the record of any formal action of the Securities and Exchange Commission with
respect to all such applications; and
(g) An opinion of counsel for the Trust to the effect that (1)
beneficial interest in each Fund is divided into an unlimited number of shares
of beneficial interest, (2) the issue and sale of the Trust's authorized but
unissued Shares have been duly authorized under Massachusetts law, (3) the
outstanding Shares are fully paid and non-assessable and (4) upon the issue and
sale of any authorized and unissued Shares and upon receipt of the consideration
therefor in an amount not less than either the Shares' net asset value or par
value, if any, established and in force at the time of their sale, the Shares so
issued will be validly issued, fully paid and non-assessable.
2.4. The Trust shall furnish the Transfer Agent with sufficient
supplies of blank Share certificates in the forms approved from time to time by
the Trustees of the Trust, and from time to time will renew such supplies upon
request of the Transfer Agent. Such blank Share certificates shall be properly
signed, by facsimile or otherwise, by authorized Officers and, if required,
shall bear the seal of the Trust or a facsimile thereof. Notwithstanding the
death, resignation or removal of any Officer authorized to sign such Share
certificates, the Transfer Agent may continue to countersign and issue Share
certificates bearing such Officer's signature until otherwise directed by the
Trust. The Trust agrees to indemnify and exonerate, save and hold the Transfer
Agent harmless, from and against any and all claims or demands that may be
asserted against the Transfer Agent with respect to the genuineness of any Share
certificate supplied to the Transfer Agent by the Trust pursuant to this
Agreement.
ARTICLE 3
AUTHORIZATION AND ISSUANCE OF SHARES
3.1. The Transfer Agent shall maintain records of accounts evidencing
ownership of Shares as provided in this Agreement and in the Trust's Prospectus
and, subject to the terms and conditions of this Agreement, and when requested
shall countersign, record, issue, and deliver certificates for Shares both upon
original issue and transfer. Evidence of the ownership of Shares shall be
maintained on the Transfer Agent's records in book (uncertificated) form, or, if
requested by an Approved Institution (or the Distributor or its agent acting on
behalf of such Approved Institution) or shareholder, Share certificates shall be
issued, subject to the provisions of Article 5 hereof, to evidence the ownership
of Shares.
3.2. Prior to the issuance of any Shares pursuant to Share splits and
prior to any reduction in the number of Shares outstanding, the Trust shall
deliver the following documents to the Transfer Agent:
(a) A copy of the resolution(s) adopted by the Trustees of the Trust
and/or the shareholders of the relevant Fund, certified by the Clerk of the
Trust, authorizing such issuance of additional Shares of such Fund or such
reduction, as the case may be, and
(b) In the case of the issuance of Shares, an opinion of counsel for
the Trust with respect to the matters set forth in Section 2.3(g) hereof as to
such Shares.
ARTICLE 4
RECAPITALIZATION OR CAPITAL ADJUSTMENT
4.1. In the case of any Share split, recapitalization or other capital
adjustment, the Transfer Agent will, in the case of accounts represented by
uncertificated Shares, cause the account records to be adjusted, as necessary,
to reflect the number of Shares held for the account of each such shareholder as
a result of such adjustment, or, in the case of Shares represented by
certificates, will, if so instructed by the Trust, issue revised Share
certificates in exchange for, or upon transfer of, outstanding Share
certificates in the old form, in either case upon receiving:
(a) A Certificate authorizing the issuance of revised Share
certificates and any other action required to be taken by the Transfer Agent in
connection with any such split, recapitalization or other capital adjustment;
(b) A copy of any amendment to the Agreement and Declaration of Trust
of the Trust, certified by the Clerk of the Trust, with respect to the
adjustment;
(c) Specimen Share certificates in the revised form approved by the
Trustees of the Trust; and
(d) An opinion of counsel for the Trust with respect to the matters set
forth in Article 2, Section 2.3.(g) hereof as to such Shares.
4.2. The Trust shall furnish the Transfer Agent with a sufficient
supply of blank Share certificates in any new form authorized in connection with
any such Share split, recapitalization or other capital adjustment, and from
time to time will replenish such supply upon the request of the Transfer Agent.
Such blank Share certificates shall be properly signed by authorized Officers
and, if required, shall bear the Trust's seal or facsimile thereof.
ARTICLE 5
ISSUANCE, REDEMPTION, AND TRANSFER OF SHARES
5.1. (a) On each Business Day, the Transfer Agent shall accept, at such
times as are agreed upon from time to time by the Transfer Agent and the Trust,
(i) purchase orders received by the Transfer Agent directly from an Approved
Institution (or the Distributor or its agent acting on behalf of such Approved
Institution) or an individual investor, (ii) redemption requests either received
from a shareholder, whether or not an Approved Institution (or the Distributor
or its agent acting on behalf of such Approved Institution), or contained in a
Certificate, and (iii) requests for exchanges of one Fund's Shares of a given
class for Shares of another Fund (but the same class) received from a
shareholder, whether or not an Approved Institution (or the Distributor or its
agent acting on behalf of such Approved Institution), or contained in a
Certificate, provided that (1) such purchase order, exchange request or
redemption request, as the case may be, is in conformity with the Fund's
purchase, exchange, and redemption procedures, as applicable, described in the
Prospectus, and (2) if such type of purchase order, exchange request, or
redemption request is not described in the Prospectus in effect upon the
commencement date of the Agreement, the Transfer Agent has agreed to accept and
act as to such order or request. Upon receipt on any Business Day of any check
drawn or endorsed to the Transfer Agent, a Fund or the Distributor for the
purchase of Shares, or any payment made by Automated Clearing House or Federal
Funds wire, the Transfer Agent shall deposit such check or payment in the bank
account established by the Trust or the Distributor for the collection of such
amounts and shall wire such amounts to the relevant Fund's Custodian on the next
Business Day. The Transfer Agent shall have no responsibility hereunder for the
Trust's compliance with state securities registration laws ("Blue Sky laws")
relating to such purchase orders, except to the extent that the Transfer Agent
will maintain records in a manner that will enable the Trust to monitor the
total number of Shares of each Fund and of each class sold in each state and
shall provide the Trust reports as to such sales as specified in Appendix B to
this Agreement.
(b) On each Business Day, the Transfer Agent shall also accept, at such
times as are agreed upon from time to time by the Transfer Agent and the Trust,
a Computer Tape consistent in all respects with the Transfer Agent's tape layout
package, as amended from time to time, which is believed by the Transfer Agent
to be furnished by or on behalf of any Approved Institution, setting forth data
as to purchases, redemptions and exchanges of Shares. The Transfer Agent may
rely on the data on such Computer Tapes as accurate, and shall not be
responsible hereunder for errors in such Computer Tapes furnished to it
hereunder, unless caused by the Transfer Agent's own negligence, bad faith or
willful misconduct.
(c) On each Business Day, the Trust shall provide or cause to be
provided to the Transfer Agent, at such time as the parties hereto shall agree,
the net asset value per share for each class of each Fund.
5.2. On the Business Day following each Business Day, at such time as
the Transfer Agent and the Trust shall agree, an authorized employee of the
Transfer Agent shall confirm the following information by summary sheet
transmitted by electronic or other electromagnetic means to an authorized
employee or agent of the Trust (or by such other form as shall be agreed upon
from time to time by the Trust and the Transfer Agent):
(a) The total dollar amount to be applied toward the purchase of Shares
of each class of each Fund and the number of Shares of each class of each Fund
purchased on such prior Business Day, computed by aggregating the amounts so
specified in (i) the purchase orders received by the Transfer Agent on such
prior Business Day from individual investors and (ii) all Computer Tapes
described in Section 5.1(b) timely received by the Transfer Agent with respect
to such prior Business Day;
(b) The total dollar value and number of Shares of each class of each
Fund redeemed on such prior Business Day, computed by aggregating the amounts so
specified in (i) the redemption requests received by the Transfer Agent directly
from shareholders on the preceding Business Day, and (ii) all Computer Tapes
described in Section 5.1(b) relating to such prior Business Day; and
(c) The total dollar value and number of Shares of each class of each
Fund to be exchanged for Shares of the same class of another Fund and the number
of Shares of such other Fund to be issued in such exchanges on such prior
Business Day, computed by aggregating the amounts represented by any exchange
requests received directly by the Transfer Agent from shareholders and the
amounts specified in all Computer Tapes described in Section 5.1(b) relating to
such prior Business Day.
5.3. Following each Business Day, the Transfer Agent will (on a day on
which banks in Denver, Colorado and New York, New York are open for business but
in any event on or prior to the Fifth Business Day following such Business Day)
advise the Distributor of the amount of cash necessary to be wired to the
appropriate Custodian, representing purchase orders for each class of each
Fund's Shares received by the Transfer Agent as to such Business Day, as set
forth in Section 5.1 above. On each Business Day, the Transfer Agent will advise
the Trust of the amount of cash representing exchange orders received by the
Transfer Agent as to such Business Day, such advice to be given on the next
Business Day.
5.4. As to each Business Day, the Transfer Agent shall issue to, and
redeem from, the accounts specified in a purchase order, redemption request, or
exchange request received by the Transfer Agent in proper form in accordance
with the Prospectus and, when required by the Prospectus, properly endorsed by
the record owner thereof with the record owner's or owners' signature(s)
guaranteed by an institution of the type described in the Transfer Agent's
then-current policies and procedures concerning acceptance of signature
guarantees or shall issue to, and/or redeem from, the accounts specified in a
Computer Tape received by the Transfer Agent from an Approved Institution, the
appropriate number of full and fractional Shares based on the net asset value
per Share of the relevant classes of the relevant Funds specified in an advice
received as to such Business Day from the Trust. Notwithstanding the foregoing,
if a redemption specified in a redemption request received directly by the
Transfer Agent or in a Computer Tape is for a dollar value of Shares in excess
of the dollar value of uncertificated Shares in the specified account plus the
dollar value of certificated Shares in the specified account for which the
Transfer Agent has received the tender of a Share certificate or certificates in
proper form as described above, the Transfer Agent shall not effect such
redemption in whole or part. In such case involving a Computer Tape, the
Transfer Agent shall orally or by electronic or other electromagnetic means
advise both the Trust and the Approved Institution (or the Distributor or its
agent if acting on behalf of such Approved Institution) which supplied such
Computer Tape of such discrepancy. In such case involving a direct shareholder,
the Transfer Agent shall notify such shareholder directly, orally or in writing.
5.5. The Transfer Agent shall, as of each Business Day specified in a
Certificate described in Section 6.1, issue Shares of the appropriate class of a
Fund, based on the net asset value per Share of such class of such Fund
specified in an advice received from the Trust as to such Business Day, in
connection with a reinvestment of a dividend or distribution on Shares of such
class of such Fund.
5.6. On each Business Day, the Transfer Agent shall advise the Trust by
computer/electromagnetic tape specifying, with respect to the immediately
preceding Business Day: the total number of Shares of each class of each Fund
(including fractional Shares) issued and outstanding at the opening of business
on such day; the total number of Shares of each class of each Fund sold on such
day, pursuant to Section 5.2; the total number of Shares of each class of each
Fund redeemed or exchanged on such day; the total number of Shares of each class
of each Fund, if any, sold on such day pursuant to preceding Section 5.4, and
the total number of Shares of each class of each Fund issued and outstanding at
the close of business on such day. Unless the Trust or its agent shall advise
the Transfer Agent of any error in the information contained in such
computer/electromagnetic tape (the "Initial Tape") prior to the transmission of
the next computer/electromagnetic tape by the Transfer Agent, the Transfer Agent
shall be deemed to have fulfilled its responsibilities hereunder with respect to
the accuracy of the data on subsequent computer/electromagnetic tapes submitted
to the Trust that are based upon any inaccurate data from the Initial Tape.
5.7. In connection with each exchange and redemption of Shares other
than pursuant to a Computer Tape submitted by an Approved Institution (or by the
Distributor or its agent acting on behalf of such Approved Institution), the
Transfer Agent shall send to the shareholder such statements as are described in
the Prospectus. If the Prospectus indicates that certificates for Shares are
available, and if specifically requested in writing by any shareholder, or if
otherwise required hereunder, the Transfer Agent will countersign, issue and
mail to such shareholder, at the address set forth in the records of the
Transfer Agent, a Share certificate for any full Shares requested.
5.8. In computing the redemption proceeds to be paid to any shareholder
or to an account for an Approved Institution, the Transfer Agent shall first
compute the amount of any contingent deferred sales charge to be paid with
respect to such Class B Shares, as set forth in the Trust's Prospectus and any
relevant exemptive relief obtained by the Trust under the Investment Company Act
of 1940, a copy of which exemptive relief shall have been furnished to the
Transfer Agent, and any withholding for federal income taxes for which the
Transfer Agent has the responsibility under this Agreement to calculate such
withholding, in such manner as the Trust and the Transfer Agent shall agree from
time to time in conformity with instructions provided by the Trust to the
Transfer Agent. The Transfer Agent shall also compute any withholding for
federal income taxes for which the Transfer Agent has such responsibility at the
time of any exchange of a Fund's shares for another Fund's shares. In the case
of a redemption of Shares directly by a shareholder of record and not by means
of a Computer Tape submitted by an Approved Institution (or by the Distributor
or its agent acting on behalf of such Approved Institution), upon deposit of
moneys in a redemption account by the relevant Custodian against which the
Transfer Agent is authorized by the Trust to draw checks in connection with a
redemption of Shares of a Fund, the Transfer Agent shall cancel the redeemed
Shares and after making appropriate deduction for any contingent deferred sales
charge in the case of Class B Shares or any withholding of taxes required of it
by this Agreement or applicable law, make payment of (i) the redemption proceeds
to the order of the shareholder, (ii) the amount of any contingent deferred
sales charge to the Distributor, and (iii) any tax withheld to the Internal
Revenue Service, in accordance with the Fund's redemption and payment procedures
described in the Prospectus. In the case of an exchange of Shares directly by a
shareholder of record and not by means of a Computer Tape submitted by an
Approved Institution, upon deposit of moneys in an account by the relevant
Custodian against which the Transfer Agent is authorized by the Trust to draw
checks in connection with an exchange of Shares of a Fund, the Transfer Agent
shall cancel the exchanged Shares, and withhold and pay taxes required under
this Agreement and applicable law. In the case of a redemption of Shares
pursuant to a Computer Tape, the Transfer Agent shall, on the next Business Day,
send the Trust a Computer Tape setting forth the amount of redemption proceeds
due each Approved Institution, and the amount of contingent deferred sales
charge, if any, to be assessed in connection with such redemption. If such
Approved Institution (or the Distributor or its agent acting on behalf of such
Approved Institution) has previously furnished the Transfer Agent withholding
instructions with respect to such redemption or any exchange of Shares pursuant
to a Computer Tape, the Transfer Agent shall include in the Computer Tape
furnished to the Trust information as to the amount of such withholding.
5.9. The Transfer Agent shall not be required to issue Shares of any
class or any Fund (other than with respect to the reinvestment of dividends or
distributions on shares owned by an existing shareholder if so stated in the
Certificate) after it has received a Certificate stating that the sale of Shares
of that class or Fund has been suspended or discontinued.
5.10. The Transfer Agent shall not be responsible for the payment of
any original issue or other taxes required to be paid by the Trust in connection
with the issuance of any Shares.
5.11. The Transfer Agent shall not be responsible for issuing or
effecting any "stop transfer" or other similar order or restriction on any
Shares held in the name of an Approved Institution. In the case of Shares
registered in the name of a shareholder other than an Approved Institution as to
which a "stop transfer" or other similar order or restriction applies, the
Transfer Agent may rely on a Certificate to effect a redemption, exchange or
transfer of such Shares, notwithstanding such stop order or restriction.
5.12. The Transfer Agent shall accept (a) a Computer Tape which is
furnished by or on behalf of any Approved Institution (or the Distributor or its
agent acting on behalf of such Approved Institution) and represented to be
instructions with respect to the transfer of Shares from one account of such
Approved Institution to another such account, and (b) as to Shares standing
directly in the name of a shareholder other than an Approved Institution,
transfer instructions in proper form in accordance with the Trust's Prospectus
and the Transfer Agent's rules described herein, and shall effect the transfer
specified in said Computer Tape or transfer instructions, provided that any
necessary documents or Share certificates have been tendered to the Transfer
Agent.
5.13. (a) Except as otherwise provided in sub-paragraph (b) of this
Section 5.13 and in Section 5.14, Shares will be transferred, exchanged or
redeemed other than pursuant to Computer Tapes from an Approved Institution (or
the Distributor or its agent acting on behalf of such Approved Institution) upon
presentation to the Transfer Agent of endorsed Share certificates or, in the
case of uncertificated Shares, instructions endorsed in proper form in
accordance with the Prospectus as stated in Section 5.4, accompanied by such
documents as the Transfer Agent reasonably deems necessary to evidence the
authority of the person making such transfer, exchange or redemption, and
bearing satisfactory evidence of the payment of transfer taxes. In the case of
small estates, where no administration is contemplated, the Transfer Agent may,
when furnished with an appropriate small estates affidavit under applicable law
or with a surety bond, and without further approval of the Trust, transfer or
redeem Shares registered in the name of a decedent if the current market value
of the Shares being redeemed or transferred does not exceed such amount as may
from time to time be prescribed by the applicable state statutes and
regulations. The Transfer Agent reserves the right to refuse to transfer,
exchange or redeem Shares until it is satisfied that the endorsement on the
Share certificate or instructions is valid and genuine, and for that purpose it
will require, unless otherwise instructed by an Officer, a signature guarantee
as stated in Section 5.4 of this Agreement. The Transfer Agent also reserves the
right to refuse to transfer, exchange or redeem Shares until it is reasonably
satisfied that the requested transfer, exchange or redemption is legally
authorized, or until it is reasonably satisfied that there is no basis to any
claims adverse to such transfer, exchange or redemption. The Transfer Agent may,
in effecting transfers, exchanges and redemptions of Shares, rely upon those
provisions of the Uniform Act for the Simplification of Fiduciary Security
Transfers or the Uniform Commercial Code, as the same may be amended from time
to time, applicable to the transfer of securities.
(b) Notwithstanding the foregoing or any other provision contained in
this Agreement to the contrary, the Transfer Agent shall be fully protected by
the Trust in requiring any instructions, documents, assurances, endorsements or
guarantees, including, without limitation, any signature guarantees, in
connection with a redemption, exchange or transfer of Shares whenever the
Prospectus of the relevant Fund explicitly permits the Transfer Agent to require
such instructions, documents, assurances, endorsements or guarantees.
5.14. Notwithstanding any provision contained in this Agreement to the
contrary, the Transfer Agent shall not be expected to require, as a condition to
any transfer, redemption or exchange of any Shares pursuant to a Computer Tape,
any documents, including, without limitation, any documents of the kind
described in Section 5.13(a) to evidence the authority of the person requesting
the transfer, exchange or redemption and/or the payment of any transfer taxes,
and shall be fully protected in acting in accordance with the applicable
provisions of this Agreement.
5.15. Nothing contained in this Agreement shall constitute any
agreement or representation by the Transfer Agent to permit, or to agree to
permit, any Approved Institution to input information into the System, although
the Transfer Agent may permit access to the System by an Approved Institution to
retrieve data or information as to such Approved Institution's accounts.
5.16. The Transfer Agent will make available to the Trust such records
and information as are reasonably necessary with respect to Voice-Initiated
Transactions to demonstrate that the Designated Procedures in the Trust's
insurance policy are being maintained and followed, providing such procedures
have been provided to and accepted by the Transfer Agent. The current Designated
Procedures for Voice-Initiated Transactions are attached hereto as Appendix D
and shall remain in full force and effect until the Trust notifies the Transfer
Agent of any changes thereto.
ARTICLE 6
DIVIDENDS AND DISTRIBUTIONS
6.1. The Trust shall furnish to the Transfer Agent a Certificate either
(i) setting forth with respect to each Class of a Fund the date of the
declaration of a dividend or distribution, the date of accrual or payment
thereof, as the case may be, the record date as of which shareholders entitled
to payment or accrual, as the case may be, shall be determined, the amount per
Share of such dividend or distribution for each class of the Fund, the payment
date on which all previously accrued and unpaid dividends are to be paid, and
the total amount, if any, of dividends to be paid to shareholders on such
payment date, or (ii) stating that the declaration of dividends and
distributions shall be on a daily or other periodic basis and containing
information of the type set forth in subsection (i) hereof.
6.2. Upon the payment date specified in the relevant Certificate, the
Transfer Agent shall, in the case of a cash dividend or distribution, advise the
Trust (by telephone or other electronic transmission) of the amount of cash
necessary to make the payment of the dividend or distribution to the
shareholders of record as of such payment date, including the amounts to be paid
to Approved Institutions. The Trust shall be responsible for having the
appropriate Custodian transfer from time to time a sufficient amount of cash to
a dividend disbursement account (the "Account") maintained by the Trust for the
relevant Fund to honor drafts which the Transfer Agent shall have caused checks
to be drawn to the order of such shareholders or Approved Institutions in
payment of the dividend. The Transfer Agent shall not be liable for any improper
payments made in accordance with a Certificate described in Section 6.1. In the
case of dividends or distributions reinvested in additional Shares of a class of
a Fund, the Transfer Agent shall follow the procedures set forth in Section 5.5.
In the event that the Account is established and maintained in the name
of the Transfer Agent as agent for the Trust, the parties acknowledge that the
Transfer Agent is doing so as the Trust's agent, that the Transfer Agent shall
in no way be responsible for any actions or omissions to act by the financial
institution at which the account is established and maintained, and that the
disclaimer and indemnity provisions of Section 8.5(a) and 8.6 of this Agreement,
respectively, apply to the actions of the Transfer Agent with respect to the
Account.
6.3. The Transfer Agent shall in no way be responsible for the
determination of the rate or form of dividends or capital gain distributions due
shareholders.
6.4. The Transfer Agent shall file such appropriate information returns
concerning the payment of dividends and capital gain distributions and
redemptions with the proper federal, state and local authorities as are required
by law to be filed by the Trust but shall in no way be responsible for the
collection or withholding of taxes due on such dividends or distributions or on
redemption proceeds due shareholders, except and only to the extent required of
it by applicable law for accounts of shareholders other than Approved
Institutions. If any amount is to be withheld from any dividend or distribution
paid to, or exchange or redemption proceeds or other cash distribution from, the
account of an Approved Institution, such Approved Institution (or the
Distributor or its agent acting on behalf of such Approved Institution) may
advise the Transfer Agent of the amount to be withheld therefrom, and if such
advice is provided in a timely manner to the Transfer Agent, the Transfer Agent
will provide a separate check for such amount to the Approved Institution, which
shall be responsible for the proper application of such withheld amounts.
ARTICLE 7
CONCERNING THE TRUST
7.1. The Trust shall promptly deliver to the Transfer Agent written
notice of any change in the Officers authorized to sign or give Share
certificates or Certificates, together with a specimen signature of each new
Officer.
7.2. It shall be the sole responsibility of the Trust to deliver to the
Transfer Agent in a timely manner the Trust's currently effective Prospectus,
copies of any exemptive relief obtained by the Trust under applicable securities
laws and copies of any amendments to the Trust's Agreement and Declaration of
Trust, By-Laws and any other documents to be furnished by the Trust under this
Agreement to enable the Transfer Agent to carry out its duties hereunder, and,
for purposes of this Agreement, the Transfer Agent shall not be deemed to have
notice of any information contained in such Prospectus, exemptive relief or
other document until it is actually received by the Transfer Agent.
ARTICLE 8
CONCERNING THE TRANSFER AGENT
8.1. Subject to the standard of care set forth in Section 8.5, the
Transfer Agent shall not be liable and shall be fully protected in acting upon
any Computer Tape, Certificate, oral instructions, writing or document
reasonably believed by it to be genuine and to have been signed (in the case of
written instructions or documents) or made by the proper person or persons and
shall not be held to have any notice of any change of authority of any person
until receipt of written notice thereof from the Trust or such person. Subject
to the standard of care set forth in Section 8.5, the Transfer Agent shall be
similarly protected in processing Share certificates which it reasonably
believes to bear the proper manual or facsimile signatures of the Officers of
the Trust and the proper countersignature of the Transfer Agent or any prior
transfer agent.
8.2. The Transfer Agent covenants that it shall carry out its
responsibilities under this Agreement in accordance and compliance with the
provisions of applicable laws and regulations governing its operation as a
transfer agent.
8.3. The Transfer Agent shall keep and maintain on behalf of the Trust
all records which the Trust or the Transfer Agent is, or may be, required to
keep and maintain pursuant to any applicable statutes, rules and regulations,
including without limitation Rule 31a-1 under the Investment Company Act of
1940, relating to the maintenance of records in connection with the services to
be provided hereunder. The Transfer Agent agrees to make such records available
for inspection by the Trust at reasonable times and otherwise to keep
confidential all records and other information relative to the Trust and its
shareholders, except when requested to divulge such information by
duly-constituted authorities or court process, or requested by a shareholder
with respect to information concerning an account as to which such shareholder
has either a legal or beneficial interest or when requested by the Trust, the
shareholder, or the dealer of record as to such account.
8.4. The Transfer Agent may, with the prior written consent of the
Trust evidenced by a Certificate, employ agents or attorneys-in-fact at the
expense of the Trust, and shall not be liable for any loss or expense arising
out of, or in connection with, the actions or omissions to act of such agents or
attorneys-in-fact as long as the Transfer Agent acts in good faith and without
negligence or willful misconduct in connection with the selection of such agents
or attorneys-in-fact.
8.5. (a) The Transfer Agent shall not be liable for any loss or damage,
including, without limitation, attorneys' fees, expenses and court costs,
resulting from its actions or omissions to act under or in connection with this
Agreement and its duties and responsibilities hereunder, except for any loss or
damage arising out of its own failure to act in good faith, or its negligence or
willful misfeasance; provided, however, that any liability of the Transfer Agent
for losses or damages under this Agreement resulting from the Transfer Agent's
actions or omissions to act under or in connection with this Agreement and its
duties and responsibilities hereunder with respect to Shares, whether
represented by certificates or uncertificated, held in Direct Accounts (such
liability being hereinafter referred to as "Direct Account Liability") shall be
further limited as follows: to the extent that the amount of any Direct Account
Liability is not reimbursed from the proceeds of any insurance policy or
policies maintained by the Transfer Agent, then the liability of the Transfer
Agent to the Trust for Direct Account Liability during each of (i) the first
twelve months following the Effective Date and (ii) each twelve month period
commencing after the expiration of such initial twelve month period shall, in
both instances, be limited to the greater of (x) $250,000 and (y) the sum of the
12 most recent monthly fee payments received by the Transfer Agent as to Direct
Accounts as of the date that the Trust makes its claims for indemnity hereunder;
provided, however, that if such claim shall be made prior to the end of the
first month of this Agreement the amount in clause (y) shall be deemed to be
$250,000; and provided, further, that if such claim shall be made after the
first month of this Agreement but prior to the first anniversary of the
Effective Date, the amount in clause (y) for the purposes of the first twelve
months following the date of this Agreement shall initially be equal to the
annualization of the Transfer Agent's fees received through the date of such
claim, but shall be subject to adjustment, as necessary, on the first
anniversary of the Effective Date on the basis of fees actually received during
the first year of this Agreement, with any positive adjustment to be paid
promptly by the Transfer Agent to the Trust and any negative adjustment to be
refunded promptly by the Trust to the Transfer Agent.
Payment by the Transfer Agent pursuant to this Section 8.5(a) shall be
made promptly without need for demand by the Trust and in any event shall be
made promptly after the receipt of the Trust's demand therefore together with
appropriate documentation demonstrating the relevant loss or damage.
OMC shall be jointly and severally liable for all of the Transfer
Agent's obligations under this Section 8.5(a).
(b) OMC or the Transfer Agent shall maintain an insurance policy or
surety bond, in the face amount of $10 million per covered transaction against
losses suffered by the Transfer Agent in excess of the policy deductibles
arising from errors or omissions on the part of the Transfer Agent in carrying
out its responsibilities under this Agreement. OMC or the Transfer Agent shall
furnish promptly to the Trust copies of all insurance policies maintained
pursuant to this Section 8.5(b) that have not previously been furnished to the
Trust. OMC and the Transfer Agent shall direct their respective insurers to
provide the Trust with at least 30 days' written notice of any cancellation of
any policy maintained to satisfy Section 8.5(b). In addition, OMC and the
Transfer Agent shall promptly provide the Trust with a copy of any amendment of
any such policy.
8.6. The Trust shall indemnify and exonerate, save and hold harmless
the Transfer Agent (including its officers, directors, employees and agents)
(hereinafter the Transfer Agent and such persons are referred to as
"Indemnitees") from and against any and all claims (whether with or without
basis in fact or law), demands, expenses (including without limitation
attorney's fees, expenses and court costs) and liabilities of any and every
nature which any Indemnitee may sustain or incur or which may be asserted
against any Indemnitee by any person by reason of or as a result of any action
taken or omitted to be taken by the Transfer Agent in good faith and without
negligence or willful misconduct in reasonable reliance upon (i) any provision
of this Agreement; (ii) the Prospectus; (iii) any instruction or order
including, without limitation, any Computer Tape reasonably believed by the
Transfer Agent to have been received from an Approved Institution (or the
Distributor or its agent acting on behalf of such Approved Institution); (iv)
any instrument or order reasonably believed by the Transfer Agent to be genuine
and to be signed, countersigned or executed by any duly authorized Officer; (v)
any Certificate or other instructions of an Officer; (vi) any opinion of legal
counsel for the Trust; (vii) any records or data supplied by the Trust's prior
transfer agent; or (viii) any order of any court, arbitration panel or other
judicial entity.
8.7. At any time the Transfer Agent may apply to an Officer of the
Trust for written instructions with respect to any matters arising in connection
with the Transfer Agent's duties and obligations under this Agreement, and the
Transfer Agent shall not be liable for any action taken or omitted by it in good
faith and without negligence or willful misconduct in accordance with such
written instruments. The Transfer Agent may consult with counsel to the Trust,
at the expense of the Trust and shall be fully protected with respect to
anything done or omitted by it in good faith and without negligence or willful
misfeasance in accordance with the advice or opinion of counsel to the Trust.
Such application by the Transfer Agent for written instructions from an Officer
of the Trust may, at the option of the Transfer Agent, set forth in writing any
action proposed to be taken or omitted by the Transfer Agent with respect to its
duties or obligations under this Agreement and the date on and/or after which
such action shall be taken, and the Transfer Agent shall not be liable (other
than for its bad faith, negligence or willful misfeasance) for any action taken
or omitted in accordance with a proposal included in any such application on or
after the date specified therein unless, prior to taking or omitting any such
action, the Transfer Agent has received written instructions in response to such
application specifying the action to be taken or omitted.
8.8. (a) Any report, confirmation or other document furnished to the
Trust or to an Approved Institution as part of the Transfer Agent's
responsibilities under this Agreement the contents of which report, confirmation
or other document are capable of verification by the Trust or Approved
Institution, as applicable, in the ordinary course of business, within 7
Business Days of receipt shall be deemed final and conclusive on the 8th
Business Day after such report, confirmation or document has been furnished to
the Trust or Approved Institution, as the case may be, and the Transfer Agent
shall not be liable to the Trust or such Approved Institution under this
Agreement as to any error or omission in such report, confirmation or document
that is not reported to the Transfer Agent within such 7-day period unless such
error or omission was caused by the willful malfeasance of the Transfer Agent.
(b) Any report, confirmation or other document furnished to the Trust
or an Approved Institution, the contents of which report, confirmation or other
document is not capable of verification by the Trust or such Approved
Institution, as applicable, within a 7-day period in the ordinary course of
business but is capable of verification by the Trust or an Approved Institution
within a 90-day period in the ordinary course of business, shall be deemed to be
final and conclusive 90 days after it has been furnished to the Trust or such
Approved Institution hereunder, and the Transfer Agent shall not be liable to
the Trust or such Approved Institution for any error or omission in such report,
confirmation or other document that is not reported to the Transfer Agent within
such 90-day period unless such error or omission was caused by the willful
malfeasance of the Transfer Agent.
(c) Any report, confirmation or other document furnished to the Trust
or an Approved Institution, the contents of which report is not capable of
verification by the Trust or such Approved Institution, as applicable, within a
90-day period in the ordinary course of business, including, without limitation,
posting of debits to individual accounts in connection with check drafts and
calculations of contingent deferred sales charges, shall be deemed to be final
and conclusive 1 year after it has been furnished to the Trust or such Approved
Institution and the Transfer Agent shall not be liable to the Trust or such
Approved Institution for any error or omission in such report, confirmation or
other document that is not reported to the Transfer Agent within such 1-year
period, provided, however, that, following such 1-year period, the Transfer
Agent shall nonetheless remain liable for (i) all damages suffered by the Trust
as a result of any such error or omission caused by the Transfer Agent's willful
malfeasance and (ii) 50% of the damages suffered by the Trust as a result of any
such error or omission that was caused by the Transfer Agent's negligence and
was not reported to the Transfer Agent within the 1-year period.
8.9. The Transfer Agent shall deliver Share certificates by courier or
by certified or registered mail to the shareholder's address in the records of
the Transfer Agent. The Transfer Agent shall advise the Trust of any Share
certificates returned as undeliverable after being transmitted by courier or
mailed as herein provided for.
8.10. The Transfer Agent may issue new Share certificates in place of
Share certificates represented to have been lost, stolen, or destroyed upon
receiving instructions satisfactory to the Transfer Agent. If the Transfer Agent
receives written notification from the owner of the lost, destroyed, or stolen
Share certificate within a reasonable time after the owner has notice of such
loss, destruction or theft, the Transfer Agent shall issue a replacement Share
certificate upon receipt of an affidavit or affidavits of loss or nonreceipt and
an indemnity agreement executed by the registered owner or his legal
representative, and supported (a) in the case of a certificate having a value at
the time of replacement of less than $100, by a fixed penalty surety bond for
twice the then-current market value of Shares represented by said certificate
and (b) in the case of a certificate having a value at time of replacement of
$100 or more, by an open penalty bond, in form satisfactory to the Transfer
Agent or (c) by such other documentation or reasonable assurances in a
particular case as may be set forth in a Certificate. If the Trust receives such
written notification from the owner of the lost, destroyed or stolen Share
certificate within a reasonable time after the owner has notice of it, the Trust
shall promptly notify the Transfer Agent. The Transfer Agent may issue new Share
certificates in exchange for, and upon surrender of, mutilated Share
certificates.
8.11. The Transfer Agent will supply shareholder lists to the Trus
from time to time upon receiving a request therefor from an Officer of the
Trust.
8.12. At the request of an Officer, the Transfer Agent will address and
mail such appropriate notices to shareholders as the Trust may direct, at the
Trust's expense.
8.13. Notwithstanding any of the foregoing provisions of this
Agreement, the Transfer Agent shall be under no duty or obligation to inquire
into, and shall not be liable for:
(a) The legality of the issue or sale of any Shares, the sufficiency of
the amount to be received therefor, or the authority of an Approved Institution
or of the Trust, as the case may be, to request such sale or issuance;
(b) The legality of a transfer, exchange or of a redemption of any
Shares by an Approved Institution, the propriety of the amount to be paid
therefor, or the authority of an Approved Institution to request such transfer,
exchange or redemption;
(c) The legality of the declaration of any dividend or capital gains
distribution by the Trust, or the legality of the issue of any Shares in payment
of any Share dividend or distribution; or
(d) The legality of any recapitalization or readjustment of the
Shares.
8.14. The Transfer Agent shall be entitled to receive, and the Trust
hereby agrees to pay to the Transfer Agent for its performance hereunder,
including its performance of the duties and functions set forth in Appendix B
hereto, (i) its reasonable out-of-pocket expenses (including without limitation
legal expenses, court costs, and attorney's fees) incurred in connection with
this Agreement and its performance hereunder and (ii) such compensation as is
specified in Appendix C hereto as such fees may be amended from time to time by
agreement in writing by the Transfer Agent and the Trust.
8.15. The Transfer Agent shall have no duties or responsibilities
whatsoever except such duties and responsibilities as are specifically set forth
in this Agreement, and no covenant or obligation shall be implied in this
Agreement against the Transfer Agent.
ARTICLE 9
TERMINATION
9.1. The initial term of this Agreement shall commence on the Effective
Date and shall continue for a period of four years from such date (the "Initial
Term") unless earlier terminated pursuant to Section 9.2. Thereafter, unless
terminated by either the Trust or the Transfer Agent at the end of the Initial
Term upon at least 90 days' prior written notice, this Agreement shall continue
from day to day thereafter (such period shall be referred to as the "Renewal
Term"), until the Trust or the Transfer Agent terminates this Agreement by
giving at least 12 months' prior written notice to the other (and to OMC if
notice is given by the Trust), whereupon this Agreement shall terminate
automatically upon the expiration of the 12-month period specified in the
written notice. In the event such notice of termination is given by the Trust,
it shall be accompanied by a copy of a resolution of the Trustees of the Trust,
certified by the Clerk or any Assistant Clerk, electing to terminate this
Agreement and designating a successor transfer agent or transfer agents. In the
event such notice is given by the Transfer Agent, the Trust shall, on or before
the termination date, deliver to the Transfer Agent a copy of a resolution of
its Trustees certified by the Clerk or any Assistant Clerk designating a
successor transfer agent or transfer agents. In the absence of such designation
by the Trust, the Transfer Agent may designate a successor transfer agent. If
the Trust fails to designate a successor transfer agent and if the Transfer
Agent is unable to find a successor transfer agent, the Trust shall, upon the
date specified for termination of this Agreement and delivery of the records
maintained hereunder, be deemed to be its own transfer agent and the Transfer
Agent and OMC shall thereby be relieved of all duties and responsibilities
pursuant to this Agreement.
9.2. Notwithstanding Section 9.1 hereof, this Agreement may be
terminated at any time by the Trust (a) without cause upon not less than 180
days' written notice from the Trust to the Transfer Agent and OMC or (b) upon
not less than 60 days' written notice from the Trust to the Transfer Agent and
OMC notifying the Transfer Agent and OMC: (i) if a majority of the Trustees who
are not "interested persons" (as that term is defined in the Investment Company
Act of 1940) upon completion of the procedures set forth below have reasonably
made a specific finding that the Transfer Agent has failed on a continuing basis
to perform its duties pursuant to this Agreement in a satisfactory manner
consistent with then current industry standards and practices or (ii) if there
is instituted and pending any action or proceeding by or before any court or
governmental, administrative or regulatory agency against or involving the
parties hereto, their affiliates, the Trustees of the Trust or any of them and
challenging the making of this Agreement or alleging that any material term of
the Agreement is contrary to law or any governmental agency has threatened in
writing to commence such an action or proceeding. Prior to any termination
pursuant to clause (b)(i), the Trustees shall provide the Transfer Agent and OMC
with a written statement of the specific aspects of the Transfer Agent's
performance of its duties that are unsatisfactory, the specific incident or
incidents giving rise to the Trustees' conclusion and any written material that
the Trustees relied upon in making such a determination. The Transfer Agent
shall have 30 days to respond to such written statement. If no response is made,
or if, after reasonable consideration of the response of the Transfer Agent,
such response is unsatisfactory to the Trustees, then the Trustees may terminate
the Agreement pursuant to clause (b)(i) hereof. For purposes of making a finding
as contemplated by clause (b)(i) above, the Transfer Agent shall be conclusively
presumed to have failed on a continuing basis to perform its duties pursuant to
this Agreement in a satisfactory manner consistent with the industry standards
and practices prevailing on the date of this Agreement if any of the following
should occur:
(1) The Transfer Agent is unable (more than once in a
twelve-month period) to process daily activity for any two successive
Business Days and to confirm information generated by such activity by
the fourth Business Day following the later of such two Business Days.
(For example, assuming no holidays, daily activity on a Monday and
Tuesday is not confirmed by the following Monday.)
(2) The Transfer Agent is unable (more than two times in any
twelve-month period) to provide system access to personnel of an
Approved Institution for six hours between 9:00 a.m. and 5:00 p.m. New
York time on three successive Business Days.
(3) The Transfer Agent is unable (more than twice in any one
year) to create and mail dividend checks within four Business Days
after the Fund's payable date (assuming that the required information
has been furnished to the Transfer Agent on the record date).
(4) The Transfer Agent is unable to instruct various financial
institutions on daily money movements from and to the Funds' Custodians
for two successive Business Days by the fourth Business Day following
the later of such two Business Days. (For this purpose, instructions
based on reasonable estimates are treated as fulfilling the Transfer
Agent's obligations hereunder.)
(5) The Transfer Agent is unable (more than twice in any
twelve-month period) to transmit dividend activity within five Business
Days from the relevant Fund's payable date.
For purposes of the foregoing, an event described in any of the
foregoing clauses 1 through 5 shall be deemed not to have occurred if the
Transfer Agent's inability to perform is a direct result of faulty or inadequate
performance by service providers including, but not limited to, telephone
companies, pricing services, TISI and banks, other than the Transfer Agent and
its agents and employees or a direct result of other events out of the Transfer
Agent's reasonable control. Also for the purposes of the foregoing, if the
Transfer Agent processes transactions or instructions (as the case may be) as
required hereunder within the time periods indicated but more than 10% of the
transactions, checks or instructions, as the case may be, are inaccurate in any
material respect and are not corrected within the requisite time then the
Transfer Agent shall be deemed to have been unable to perform the relevant
service within the requisite time.
9.3. In the event of termination of this Agreement, the Transfer Agent
will facilitate transfer of the records maintained by it hereunder and cooperate
with such successor transfer agent as may be designated pursuant to the
provisions of Section 9.1 hereof with respect to delivery of such records and
assumption by such successor transfer agent of its duties. If this Agreement is
terminated by the Trust during the Initial Term, for its services in
facilitating such transfer, the Trust shall pay to the Transfer Agent a fee as
specified in Appendix C hereto; provided, however, that the Trust shall not be
obligated to pay such fee if this Agreement is terminated by the Trustees during
the Initial Term in accordance with the procedures set forth in Section 9.2
hereof on the grounds:
(i) that the Transfer Agent's failure to perform
satisfactorily has been evidenced by the occurrence of one or more of
the events set forth in subparagraphs (1) through (5) of Section 9.2
hereof;
(ii) that the Transfer Agent has failed to respond to a
written statement from the Trustees setting forth the specific aspects
of the Transfer Agent's performance that are unsatisfactory or has
responded by admitting that its performance is unsatisfactory; or
(iii) set forth in clause (b)(ii) of Section 9.2 hereof and
such action or proceeding is threatened or commenced by a governmental
agency.
ARTICLE 10
ADDITIONAL FUNDS
10.1. In the event that the Trust establishes one or more Funds in
addition to the Funds named herein with respect to which it desires to have the
Transfer Agent render services as transfer agent under the terms hereof, it
shall so notify the Transfer Agent in writing at least 60 days in advance of the
sale of Shares of such Fund and shall deliver to the Transfer Agent the
documents listed in Section 2.3 with respect to such Funds. Unless the Transfer
Agent declines in writing within a reasonable time to provide such services, the
Shares of such Funds shall be subject to this Agreement.
ARTICLE 11
MISCELLANEOUS
11.1. The Trust agrees that prior to effecting any change in the
Prospectus which would increase or alter the duties and obligations of the
Transfer Agent hereunder, it shall advise the Transfer Agent of such proposed
change at least 30 days prior to the intended date of the same, and shall
proceed with such change only if it shall have received the written consent of
the Transfer Agent thereto, and shall have received and agreed to the schedule
of charges, if any, specified by the Transfer Agent necessary to effect such
change.
11.2. Any notice or other instrument in writing, authorized or required
by this Agreement to be given to the Trust shall be sufficiently given if
addressed to the Trust and mailed or delivered to it at its office at One New
York Plaza, New York, New York 10004 until October 1, 1991 and thereafter to its
office at One Station Place, Stamford, Connecticut, 06902, Attention: Newton B.
Schott, Jr., or at such other place as the Trust may from time to time designate
in writing.
11.3. Any notice or other instrument in writing, authorized or required
by this Agreement to be given to the Transfer Agent shall be sufficiently given
if addressed to the Transfer Agent, Attention: President, and mailed or
delivered to it at its office at 3410 South Galena Street, Denver, Colorado
80231, or at such other place as the Transfer Agent may from time to time
designate in writing.
11.4. Any notice or other instrument in writing, authorized or required
by this Agreement to be given to OMC shall be sufficiently given if addressed to
OMC, Attention: President, and mailed or delivered to it at its office at Two
World Trade Center, 34th Floor, New York, NY 10048-0203, or at such other place
as OMC may from time to time designate in writing.
11.5. This Agreement may not be amended or modified in any manner
except by a written agreement executed by all parties.
11.6. This Agreement shall extend to and shall be binding upon the
parties hereto, and their respective successors and assigns; provided, however,
that this Agreement shall not be assignable by the Trust without the written
consent of the Transfer Agent and OMC or by the Transfer Agent or OMC without
the written consent of the Trust. A change of ownership of the Transfer Agent or
OMC as a result of an internal reorganization of the Transfer Agent or OMC,
their parent corporation or affiliates shall not be deemed to be an "assignment"
hereunder. A change in "control" (as defined under the Investment Company Act of
1940) of the Transfer Agent's or OMC's parent corporation shall not be deemed an
"assignment" hereunder. A sale of a controlling interest in the capital stock or
of all or substantially all of the assets of the Transfer Agent or OMC to a
third party unaffiliated with the Transfer Agent or its parent corporation shall
be deemed to be an "assignment" hereunder.
11.7. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York as to agreements to be performed in that
state except for Section 11.10 hereof which shall be governed by and construed
in accordance with the laws of The Commonwealth of Massachusetts.
11.8. This Agreement may be executed in any number of counterparts each
of which shall be deemed to be an original; but such counterparts shall,
together, constitute only one instrument.
11.9. The provisions of this Agreement are intended to benefit only the
Transfer Agent, OMC and the Trust, and no rights shall be granted to any other
person by virtue of this Agreement.
11.10. A copy of the Agreement and Declaration of Trust of the Trust is
on file with the Secretary of The Commonwealth of Massachusetts, and notice is
hereby given that this instrument is executed on behalf of the Trustees of the
Trust as Trustees and not individually and that the obligations of this
instrument are not binding upon any of the Trustees or shareholders individually
but are binding only upon the assets and property of each Fund.
11.11. Neither the Trust nor the Transfer Agent will be liable or
responsible hereunder for delays or errors by reason of circumstances reasonably
beyond its control, including, without limitation, acts of civil or military
authority, national emergencies, labor difficulties, fire, mechanical breakdown,
flood, catastrophe, acts of God, insurrection, war, riots, or failure of
transportation, communication or power supply.
11.12. The Trust shall establish and maintain such bank accounts, with
such bank or banks as are selected by the Trust, as are necessary so that the
Transfer Agent may perform the services to be provided hereunder. To the extent
that performance of such services shall require the Transfer Agent directly to
disburse amounts for payments of dividends, redemption proceeds or other
purposes, the Trust shall provide such bank or banks with all instructions and
authorizations necessary to evidence the Transfer Agent's authority to effect
such transactions.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers, thereunto duly authorized, as of the day
and year first above written.
THOMSON FUND GROUP
Attest:
Newton B. Schott. Jr. By: Robert A. Prindiville
SHAREHOLDER SERVICES, INC.
Attest:
William A. Young By: Barbara Hennigar
President
OPPENHEIMER MANAGEMENT CORPORATION
Attest:
Dennis R. Molleur By: Andrew J. Donohue
Vice President Senior Vice President
<PAGE>
APPENDIX A
TO TRANSFER AGENCY AGREEMENT
President Robert A. Prindiville
Vice President Newton B. Schott, Jr.
Treasurer Brian J. Girvan
Assistant Treasurer Brian Molloy
Clerk Newton B. Schott, Jr.
Assistant Clerk Samuel C. Newman
<PAGE>
A-1
APPENDIX B
TO TRANSFER AGENCY AGREEMENT
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT SERVICES
The Transfer Agent shall provide the following services:
A. DAILY ACTIVITY (each Business Day)
1. Maintain on a daily basis the following shareholder
information for both transmission and direct accounts:
Balance of shares held by Shareholder Services, Inc.
Dividend code (cash, reinvestment, or income in cash with
capital gains reinvested).
State of residence code.
2. Maintain on a daily basis the following additional
shareholder information for "direct accounts" (i.e., accounts
not held in the name of an Approved Institution):
Name and address (Zip Coded).
Tax identification number and certification coding.
Balance of shares issued in certificate form.
Certificate number, number of shares and issuance date of each
certificate outstanding.
Certificate number, number of shares, issuance date and
cancellation date for each certificate no longer outstanding.
Registration code (i.e., joint tenant, corporation, pension,
plan , etc.).
Dealer number, dealer name, branch code (as provided), and the
branch address.
Dealer Representative's number and name, as provided.
<PAGE>
B-2
B. OTHER DAILY ACTIVITY (each Business Day)
1. Process payments for direct accounts and Thomson Auto Invest
Plan into established accounts upon availability of funds.
2. Issue share certificates upon receipt of instructions from the
Trust.
3. Deposit share certificates into accounts upon receipt of
instructions.
4. Prepare and process redemptions of shares issued in
certificate form.
5. Prepare and process book share redemptions.
6. Process exchanges of Shares on exchange forms supplied by the
Trust to Shareholders or by other written instructions, or on
Computer Tapes from Approved Institutions.
7. Examine and process all transfer of Shares for direct accounts
to determine that all transfer requirements and legal
documents have been supplied. Transfer of shares for accounts
of Approved Institutions will be processed via Computer Tape.
8. Issue and mail replacement checks.
9. Handle bad check collection, with notification to the Trust.
Immediately liquidate the shares purchased and return to the
Shareholder or the Trust, for accounts on the Thomson Auto
Invest Plan, the check and a confirmation of the transaction.
10. Handle foreign collection items for direct accounts, if any.
11. Solicit missing taxpayer identification numbers for direct accounts.
12. Process address changes reflecting the new address for direct accounts.
13. Process changes of dealer and/or representative on direct accounts.
C. REPORTS PROVIDED TO THE TRUST
1. Daily Activity Report (purchase, redemption and exchange
activity processed on a Business Day).
2. Daily Proof Sheet Summary and Transaction Register (including
contingent deferred sales charge and 12b-1 plan fee base
calculation as applicable).
3. Daily Share Summary (by Fund) showing:
a. Beginning balance
b. Redemptions
c. Payments
d. Exchanges
e. Adjustments
f. Ending balance and amount of money transfer
necessary.
4. Daily Share Reconciliation Report (for exception processing).
5. Weekly Position Reports for accounts of Approved Institutions
(showing all account balances).
6. Weekly Operations Analysis Activity Report.
7. Monthly Operations Analysis Activity Report.
8. Monthly Statistical Report (forecasts versus actual).
9. Daily Blue Sky Reports (sales by Fund by state).
10. Monthly Dividend Report by Fund (quarterly report for those
Funds paying quarterly, etc.).
11. Quarterly Transfer Agent Performance Review Reports (three
per year).
12. Annual Transfer Agent Performance Review Report.
D. DIVIDEND ACTIVITY
1. Calculate and process daily accrual or reinvestment of dividends, mail
dividend statements for direct accounts and statements for capital
gains distributions, in accordance with investor's standing
instructions (the capital gains distribution to be paid simultaneously
with the dividend).
2. Compute, prepare and mail all necessary reports to
shareholder, federal and/or state authorities (Forms 1042,
5498 and 1099) for direct accounts.
E. PERIODIC ACTIVITIES
1. Address and mail up to five mailings per year (material must be
adaptable to mechanical equipment of Shareholder Services, Inc.).
2. Produce transcripts of account history as requested by the Trust or the
dealer of record for an account.
<PAGE>
APPENDIX C
TO TRANSFER AGENCY AGREEMENT
Thomson Fee Schedule
<TABLE>
<CAPTION>
1988 1989 1990 1991 1992 1993
Direct Trans Direct Trans Direct Trans Direct Trans Direct Trans Direct Trans
Qtly & Ann Funds:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Opportunity $ 4.60 $ 7.60 $ 4.60 $11.00 $ 4.60 $11.00 $5.25 $11.00 $5.25 $11.00 $6.00 $11.00
Growth $ 4.60 $ 7.60 $ 4.60 $14.75 $ 4.60 $14.75 $5.25 $14.75 $5.25 $14.75 $6.00 $14.75
Global $ 4.60 $ 7.60 $ 4.60 $11.00 $ 4.60 $11.00 $5.25 $11.00 $5.25 $11.00 $6.00 $11.00
Prec Met & Nat $ 4.60 $ 7.60 $ 4.60 $11.00 $ 4.60 $11.00 $5.25 $11.00 $5.25 $11.00 $6.00 $11.00
Convertible Sec $ 4.60 $ 7.60 $ 4.60 $14.75 $ 4.60 $14.75 $5.25 $14.75 $5.25 $14.75 $6.00 $14.75
Daily Acc &
Monthly Funds:
Money Market $13.00 $16.00 $14.50 $21.75 $14.50 $21.75 $9.45 $21.75 $9.50 $21.75 $9.50 $21.75
Tax Exempt $13.00 $16.00 $14.50 $16.25 $14.50 $21.75 $9.45 $16.25 $9.50 $16.25 $9.50 $16.25
Income $ 6.00 $ 9.00 $ 7.00 $16.25 $ 7.50 $16.25 $9.45 $16.25 $9.50 $16.25 $9.50 $16.25
U.S. Government $ 8.00 $11.00 $ 7.00 $16.25 $ 7.50 $16.25 $9.45 $16.25 $9.50 $16.25 $9.50 $16.25
Short Inter Gov N/A N/A N/A N/A N/A N/A $9.45 $16.25 $9.50 $16.25 $9.50 $16.25
</TABLE>
*Fees effective 10/1 of year indicated.
<PAGE>
D-2
APPENDIX D TO TRANSFER AGENCY AGREEMENT
1. Definitions. The following terms used in this Agreement shall have the
following meanings:
a. "Voice-initiated Transaction" means any Voice-initiated
Redemption, Voice-initiated Election, or Voice-initiated
Exchange.
b. "Voice-initiated Redemption" means any redemption of shares
issued by an Investment Company which is requested by voice
over the telephone.
c. "Voice-initiated Election" means any election concerning
dividend options available to Fund shareholders which is made
by voice over the telephone.
d. "Voice-initiated Exchange" means any exchange of shares in a
registered account of one Fund into shares in an identically
registered account of another Fund in the same complex
pursuant to exchange privileges of the two Funds, which
exchange is requested by voice over the telephone.
e. "Designated Procedures" means the following procedures:
(1) Election in Application: No Voice initiated
Redemption shall be executed unless the
shareholder(s) to whose account such a
Voice-initiated Redemption relates has previously
elected by Official Designation to permit such
Voice-initiated Redemption.
(2) Recordings: All Voice-initiated Transaction
requests shall be recorded, and the recordings shall
be retained for at least six (6) months.
(a) Information contained on the recordings
shall be capable of being retrieved through
the following methods:
A trade ticket is prepared for each call
which states an Index No., the time and the
phone line on which the call is received.
For retrieval, the trade ticket is recalled,
then the specific tape and call.
(b) Information contained on the recordings
shall be capable of being retrieved and
produced within a reasonable time after
retrieval of specific information is
requested, at a success rate of no less than
85 percent.
(3) Identity Test: The identity of the caller in any
request for a Voice-initiated Redemption shall be
tested before executing that Voice-initiated
Redemption, using the following test:
Tax ID name and address
(4) Written Confirmation: A written confirmation of any
Voice-initiated Transaction and of any change of the
record address of a Fund shareholder made over the
telephone shall be mailed to the shareholder(s) to
whose account such Voice-initiated Transaction or
change of address relates, at the original record
address (and, in the case of such change of address,
at the changed record address) by the end of the
Insured's next regular processing cycle, but no later
than five (5) business days following such
Voice-initiated Transaction or change of address. For
the purposes hereof, 'regular processing cycle' means
the 24-hour period commencing upon receipt of such
Voice-initiated Transaction or change of the record
address.
<PAGE>
ADDENDUM TO TRANSFER AGENCY AGREEMENT
BETWEEN
THOMSON FUND GROUP
AND
SHAREHOLDER SERVICES, INC. AND
OPPENHEIMER MANAGEMENT CORPORATION
This Addendum is incorporated in and made a part of the above-captions
Transfer Agency Agreement (the "Agreement"). The following language amends the
annexed Agreement and, in case of any conflict between said language and the
language contained in this Addendum, the language in this Addendum shall control
and govern.
1. The first sentence in Section 9.1 on page 19 of the Agreement is
hereby deleted in its entirety and replaced with the following:
This Agreement shall commence on the Effective Date and shall continue
until October 1, 1996 (the "Initial Term"), unless earlier terminated
pursuant to Section 9.2.
2. Appendix C of the Agreement is hereby deleted in its entirety and
replaced with the attached Appendix C.
3. Section 8.14 of the Agreement is hereby amended by adding the
following to the end thereof: "In addition, if the total number of Trust
accounts with Transfer Agent decrease to less than 150,000 accounts, the Trust
shall pay to the Transfer Agent such compensation as is specified in Appendix
C-1 hereto, as such fees may be amended from time to time by agreement in
writing by the Transfer Agent and the Trust."
IN WITNESS WHEREOF, the parties hereto have caused this Addendum to the
Agreement to be executed by their respective officers, thereunto duly
authorized, as of the 31st day of March, 1994.
THOMSON FUND GROUP
Attest: Samuel C. Newman By: Robert A. Prindiville
Title: President
<PAGE>
SHAREHOLDER SERVICES, INC.
Attest: XXXXXXXXXXXXXXXXXXX By: Barbara Hennigar
Title: President/CEO
OPPENHEIMER MANAGEMENT
CORPORATION
Attest: Dennis R. Molleur By: Andrew J. Donohue
Title: Executive Vice President
& General Counsel
<PAGE>
Schedule C
<TABLE>
<CAPTION>
Transfer Agency Agreement Fee Schedule
Non-Networked Direct Accounts Network Levels 1 and 3 Accounts
Fund 150,000- 300,000- 350,000- over 150,00- 300,000- 350,000- over
299,999(1) 349,999 399,999 400,000 299,999(1) 349,999 399,999 400,000
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Annual Dividend Funds
(bullet) Target 12.00 11.75 11.50 11.25 10.00 9.75 9.50 9.25
(bullet) Opportunity 12.00 11.75 11.50 11.25 10.00 9.75 9.50 9.25
(bullet) International 12.00 11.75 11.50 11.25 10.00 9.75 9.50 9.25
(bullet) Precious Metals & Natural Resources 12.00 11.75 11.50 11.25 10.00 9.75 9.50 9.25
Quarterly Dividend Funds
(bullet) Equity Income 13.75 13.50 13.25 13.00 10.00 9.75 9.50 9.25
(bullet) Growth 13.75 13.50 13.25 13.00 10.00 9.75 9.50 9.25
Daily Accrual Funds
(bullet) U.S. Government 15.25 15.00 14.75 14.50 10.75 10.50 10.25 10.00
(bullet) Tax-Exempt 15.25 15.00 14.75 14.50 10.75 10.50 10.25 10.00
(bullet) Income 15.25 15.00 14.75 14.50 10.75 10.50 10.25 10.00
(bullet) Short-Intermediate Government 15.25 15.00 14.75 14.50 10.75 10.50 10.25 10.00
(bullet) Money Market 15.25 15.00 14.75 14.50 10.75 10.50 10.25 10.00
Transmission Accounts
Fund 150,000- 300,000- 350,000- over
299,999(1) 349,999 399,999 400,000
Annual Dividend Funds
(bullet) Target 4.50 4.25 4.00 3.75
(bullet) Opportunity 4.50 4.25 4.00 3.75
(bullet) International 4.50 4.25 4.00 3.75
(bullet) Precious Metals & Natural Resources 4.50 4.25 4.00 3.75
Quarterly Dividend Funds
(bullet) Equity Income 4.50 4.25 4.00 3.75
(bullet) Growth 4.50 4.25 4.00 3.75
Daily Accrual Funds
(bullet) U.S. Government 5.00 4.75 4.50 4.25
(bullet) Tax-Exempt 5.00 4.75 4.50 4.25
(bullet) Income 5.00 4.75 4.50 4.25
(bullet) Short-Intermediate Government 5.00 4.75 4.50 4.25
(bullet) Money Market 5.00 4.75 4.50 4.25
</TABLE>
(1) Accounts up to 299,999 will be charged fees from the first breakpoint level;
the next 50,000 accounts (300,000 to 349,000) will be charged at the next
breakpoint level; the next 50,000 at the third level, etc. For a total account
base of less than 150,000 accounts, please refer to Schedule C-1 for
applicable rates.
<PAGE>
SECOND ADDENDUM TO TRANSFER AGENCY AGREEMENT BETWEEN
PIMCO ADVISORS FUNDS
(FORMERLY, THOMSON FUND GROUP) AND
SHAREHOLDER SERVICES, INC. AND
OPPENHEIMER MANAGEMENT CORPORATION
DATED OCTOBER 1, 1990
This Addendum is incorporated into and made a part of the
above-captioned Transfer Agency Agreement (the "Agreement"). The following
language amends the Agreement, and in the event of any conflict between the
language of the Agreement and the language contained in this Addendum, the
language contained in this Addendum shall control and govern.
The following subsection is added at the end of Section 8 of the
Agreement:
8.16 The Transfer Agent shall act as the Funds' agent in
transmitting instructions (with respect to the transfer of money
to be applied to the payment of dividends, distributions or
redemptions of shares of the Fund) to the Bank of New York
("BoNY") through an electronic data transmission link between the
Transfer Agent and BoNY (the "Terminal Link"), using an
authorization code provided by BoNY and at least two access codes
provided by the Funds. The Transfer Agent shall use its best
efforts to protect the confidentiality and availability of such
codes and to ensure that any such instructions are transmitted
promptly and accurately. The Transfer Agent shall keep
confidential any databases made available as part of or through
the Terminal Link and any propriety data, software, processes,
information or documentation relating to the Terminal Link (other
than such as are or become part of the public domain or are
legally required to be made available to the public)
(collectively, the "Information"), using the same care and
discretion it uses with respect to its own confidential property
and trade secrets. Upon the written request of the Funds, the
Transfer Agent shall promptly return all copies of any Information
to BoNY. The Transfer Agent shall notify the Funds as promptly as
possible of any errors, omissions or interruptions in, or delays
or unavailability of, the Terminal Link.
IN WITNESS WHEREOF, the parties hereto have caused this Addendum to the
Agreement to be executed by their respective officers, thereunto duly
authorized, as of the day and year set forth below.
PIMCO ADVISORS FUNDS OPPENHEIMER MANAGEMENT CORPORATION
By: Robert A. Prindiville By: Andrew J. Donohue
President Executive Vice President
Date: August 1, 1995 Date: August 1, 1995
SHAREHOLDER SERVICES INC.
By: Barbara Hennigar
President / CEO
Date: August 1, 1995
Exhibit 99.B9(b)
Fund Accounting Agreement
<PAGE>
FUND ACCOUNTING AGREEMENT
AGREEMENT made as of this 23rd day of February, 1984 by and between
THOMSON McKINNON INVESTMENT TRUST, a Massachusetts business trust having its
principal place of business at One New York Plaza, New York, New York 10004
(hereinafter called the "Fund") and The Bank of New York, a New York corporation
authorized to do a banking business, having its principal place of business at
48 Wall Street, New York, New York 10015 (hereinafter called the "Bank").
W I T N E S S E T H:
In consideration of the mutual agreements herein contained, the Fund and
the Bank hereby agree as follows:
1. The Fund hereby appoints the Bank its agent to perform the duties
hereinafter set forth.
2. The Bank hereby accepts appointment as such agent and agrees to perform
the duties hereinafter set forth.
3. The Bank shall compute the net asset value per share of each Series of
shares (the "Series") of the Fund at such times and dates and in the
manner specified in the currently effective Prospectus of the Fund.
Securities of the Fund shall be valued as set forth in the currently
effective Prospectus of the Fund. The Fund acknowledges and agrees that it
shall have sole responsibility for determining the method of valuation of
Fund securities. To the extent valuation of Fund securities on such basis
is at any time inconsistent with any applicable laws and/or regulations,
the Fund shall immediately so notify the Bank in writing and thereafter
shall either furnish the Bank at all appropriate times with the values of
the Fund's securities or, subject to the prior approval of the Bank,
instruct the Bank in writing to value Fund securities in a manner which
the Fund then represents in writing to be consistent with all applicable
laws and regulations.
4. The Bank shall also compute the net income of each Series for dividend
purposes and the net income per share at such times and dates and in the
manner specified in the currently effective Prospectus of the Fund.
5. The Fund may from time to time instruct the Bank in writing to compute the
value of the securities of a Series, a Series' net asset value per share,
the net income of a Series, or the net income per share of a Series in a
manner other than as specified in paragraphs 3 and 4 of this Agreement;
provided, however, that any such other methods of computation shall not be
inconsistent with any applicable laws and regulations.
6. The Fund agrees to furnish the Bank with any and all instructions,
explanations, information and documentation deemed necessary by the Bank
in the performance of its duties hereunder, including, without limitation,
the amounts, and/or written formula for calculating the amounts, and times
of accrual of Fund liabilities and expenses. The Fund further agrees (a)
at any time and from time to time to furnish the Bank with bid, offer,
and/or market values of Fund securities if the same are not available to
the Bank from a security pricing or similar service utilized, or
subscribed to, by the Bank at the time such information is required for
calculations hereunder, and (b) that the Bank shall at no time or from
time to time be required or obligated to commence or maintain any
utilization of, or subscriptions to, any securities pricing or similar
service.
7. The Bank shall advise the Fund, the Fund's custodian and the Fund's
transfer agent of the net asset value per share, the net income and the
net income per share of each Series upon completion of the computations
required to be made by the Bank pursuant to this Agreement.
8. The Bank shall, as agent for the Fund, maintain and keep current the
books, accounts and other documents, if any, listed in Appendix A hereto
and made a part hereof, as such Appendix A may be amended from time to
time. Such books, accounts and other documents shall be preserved by the
Bank in accordance with the applicable provisions of Rule 31a-2 under the
Investment Company Act of 1940, as amended ("the Act"), shall be the
property of the Fund and shall be surrendered to the Fund promptly on
request. Notwithstanding the foregoing, the Bank shall preserve for the
period of time specified in Rule 31a-2(a) (2) under the Act schedules
compiled hereunder evidencing and supporting each computation of the net
asset value of each Series' shares, and such schedules shall be the
property of the Fund and shall be surrendered to the Fund promptly on
request.
9. All records maintained and preserved by the Bank pursuant to this
Agreement which the Fund is required to maintain and preserve in
accordance with the above-mentioned Rules shall be and remain the property
of the Fund and shall be surrendered to the Fund promptly upon request in
the form in which such records have been maintained and preserved.
10. The Fund acknowledges and agrees: (a) that the Bank, in performing the
services required of it under the terms of this Agreement, shall be
entitled to rely fully on the accuracy and validity of any and all
instructions, explanations, information and documentation furnished to it
by the Fund and shall have no duty or obligation to review the accuracy,
validity or propriety of such instructions, explanations and information
or documentation, including, without limitation, evaluations of securities
held as part of the portfolios of the Series; the amounts and/or formula
for calculating the amounts and times of accrual of Series liabilities and
expenses; the amounts receivable and the amounts payable on the sale or
purchase of the portfolio securities of the Fund; and amounts receivable
or amounts payable for the sale or redemption of Fund shares effected by
or on behalf of the Fund; and (b) that in the event the Bank's
computations hereunder require, in whole or in part, information,
including, without limitation, bid, offer and/or market values of
securities, or accruals of interest, yield or earnings thereon, which is
not furnished by the Fund because the same is available to the Bank from a
pricing or similar service utilized, or subscribed to, by the Bank which
the Bank in its judgment deems reliable, the Bank shall not be
responsible for, under any duty to inquire into, nor deemed to make any
assurances with respect to; the accuracy or completeness of such
information.
11. The Bank shall not be required to inquire into any valuation of securities
by the Fund or any third party described in preceding paragraph 10 hereof,
even though the Bank in performing services similar to the services
provided pursuant to this Agreement for others may receive different
valuations of securities of the same issuers.
12. The Bank, in performing the services required of it under the terms of
this Agreement, shall not be responsible for determining whether any
interest accruable to the Fund is or will be actually paid, but will
accrue such interest until otherwise instructed by the Fund.
13. It is understood and agreed that the Bank shall not be responsible for
delays or errors which occur by reason of circumstances beyond its control
in the performance of its duties under this Agreement, including, without
limitation, labor difficulties within and without the Bank, mechanical
breakdowns, flood or catastrophe, acts of God, or failures of
transportation, communication or power supply, or other circumstances. It
is further understood and agreed that the Bank shall not be responsible
for delays or failures to supply the information or services specified in
this Agreement where such delays or failures are caused by the failure of
any person(s) other than the Bank to supply any instructions,
explanations, information or documentation deemed necessary by the Bank in
the performance of its duties under this Agreement.
14. No provision of this Agreement shall prevent the Bank from offering
services similar or identical to those covered by this Agreement to any
other corporations, associations or entities of any kind. Any and all
operational procedures, techniques and devices developed by the Bank in
connection with the performance of its duties and obligations under this
Agreement, including those developed in conjunction with the Fund, shall
be and remain the property of the Bank, and the Bank shall be free to
employ such procedures, techniques and devices in connection with the
performance of any other contract with any other person whether or not
such contract is similar or identical to this Agreement.
15. The Bank may, with respect to questions of law, apply to and obtain the
advice and opinion of counsel to the Fund or its own counsel and shall be
entitled to rely on the advice or opinion of such counsel. Upon the prior
consent of the Fund, any such advice or opinion shall be at the expense of
the Fund.
16. The Bank shall not be liable for any loss, damage or expense, including
counsel fees and other costs and expenses of a defense against any claim
or liability, resulting from, arising out of, or in connection with its
performance hereunder, including its actions or omissions, the
incompleteness or inaccuracy of any information furnished by the Fund, or
for delays caused by circumstances beyond the Bank's control, unless such
loss, damage or expense arises out of the bad faith, negligence, or
willful misconduct of the Bank.
17. Without limiting the generality of the foregoing, the Fund agrees to
indemnify the Bank against and save the Bank harmless from any loss,
damage or expense, including counsel fees and other costs and expenses of
a defense against any claim or liability, arising from the following:
(a) Errors in records or instructions, explanations, information or
documentation of any kind, as the case may be, supplied to the Bank by
any third party described in preceding paragraph 10 hereof or by or on
behalf of the Fund;
(b) Action or inaction taken or omitted to be taken by the Bank without
bad faith, negligence or willful misconduct, or in good faith pursuant
to written instructions of an officer or employee of the Fund; and
(c) Any action taken or omitted to be taken by the Bank in good faith in
accordance with the advice or opinion of counsel for the Fund or own
counsel.
18. The Bank will promptly notify the Fund upon its actually learning of a
situation which it believes presents or appears likely to present the
probability of a claim by the Bank for indemnification against the Fund
hereunder, and shall promptly advise the Fund of all facts actually known
by the Bank which it believes are pertinent to such situation. The Bank
shall in no case confess any claim or make any compromise in any case in
which the Fund will be asked to indemnify the Bank, except with the Fund's
prior written consent.
19. In consideration for all of the services to be performed by the Bank as
set forth herein the Bank shall be entitled to receive reimbursement for
all out-of-pocket expenses and such compensation as may be agreed upon in
writing from time to time between the Bank and the Fund.
20. This Agreement shall not be assignable by the Fund without the prior
written consent of the Bank, or by the Bank without the prior written
consent of the Fund.
21. Either of the parties hereto may terminate this Agreement by giving the
other party a notice in writing specifying the date of such termination,
which shall not be less than sixty (60) days after the date of giving of
such notice. Upon the date set forth in such notice, it is understood and
agreed that the Bank shall deliver to the Fund all records then the
property of the Fund and, upon such delivery, the Bank shall be relieved
of all duties and responsibilities under this Agreement.
22. This Agreement may not be amended or modified in any manner except by
written agreement executed on behalf of both parties hereto.
23. This Agreement is executed in the State of New York and all laws or rules
of construction of the State of New York shall govern the rights, duties
and obligations of the parties hereto.
24. The performance and provisions of this Agreement are intended to benefit
only the Bank and the Fund, and no rights shall be granted to any other
person by virtue of this Agreement.
25. A copy of the Agreement and Declaration of Trust of the Fund is on file
with the Secretary of The Commonwealth of Massachusetts, and notice is
hereby given that this instrument is executed on behalf of the Trustees of
the Fund as Trustees and not individually and that the obligations of this
instrument are not binding upon any of the Trustees or shareholders
individually but are binding only upon the assets and property of the
Fund.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first written above.
THOMSON McKINNON INVESTMENT TRUST
By: /s/ J. Ronald Morgan______________
Attest:
/s/ Newton B. Schott, Jr.
THE BANK OF NEW YORK
By: /s/ Steve Grunston__________________
Attest:
/s/ Victor Vendem
<PAGE>
APPENDIX A
TO FUND ACCOUNTING AGREEMENT
between
THE BANK OF NEW YORK
and
THOMSON McKINNON INVESTMENT TRUST
I. The Bank of New York, as agent (the "Bank") for Thomson McKinnon
Investment Trust (the "Fund"), shall maintain the following records on a
daily basis for each Series.
1. Report of priced portfolio securities
2. Statement of net asset value per share
3. Net income of the Fund for dividend purposes
4. Net income per share
5. Yield of the Fund
II. The Bank shall maintain the following records on a monthly basis for each
Series:
1. General Ledger
2. General Journal
3. Cash Receipts Journal
4. Cash Disbursements Journal
5. Subscriptions Journal
6. Redemptions Journal
7. Accounts Receivable Reports
8. Accounts Payable Reports
9. Open Subscriptions / Redemption Reports
10. Transaction (Securities) Journal
11. Broker Net Trades Reports
III. The Bank shall prepare a Holdings Ledger and N-1Q Report on a quarterly
basis, and a Buy-Sell Ledger (Broker's Ledger) on a semiannual basis for
each Series. Schedule D shall be produced on an annual basis for each
Series.
The above reports may be printed according to any other required frequency
to meet the requirements of the Internal Revenue Service, The Securities
and Exchange Commission and the Fund's Auditors.
IV. For internal control purposes, the Bank uses the Account Journals produced
by The Bank of New York Custody System to record daily settlements of the
following for each Series:
1. Securities bought
2. Securities sold
3. Interest received
4. Dividends received
5. Capital stock sold
6. Capital stock redeemed
7. Other income and expenses
All portfolio purchases for the Fund are recorded to reflect expected
maturity value and total cost including any prepaid interest.
Exhibit 99.B9(c)
Amended and Restated Blue Sky Service Agreement
<PAGE>
Amended and Restated
BLUE SKY SERVICE AGREEMENT
Blue Sky Service Agreement dated as of March 30, 1995, by and between PIMCO
Advisors Funds, a Massachusetts business trust (the "Trust"), and PIMCO Advisors
L.P., a Delaware limited partnership.
WHEREAS, the Trust and PIMCO Advisors L.P. desire to amend and restate the
existing agreement pursuant to which PIMCO Advisors L.P.
provides without additional fees Blue Sky compliance services to the Trust; and
WHEREAS, the maintenance of the qualification of Class A, Class B and Class C
shares of the Trust in the several states would assist in the effort to maintain
or increase the level of the Trust's assets and consequently the level of
advisory fees payable to PIMCO Advisors L.P. pursuant to the various Management
Contracts between the Trust and PIMCO Advisors L.P. with consequent benefit to
PIMCO Advisors L.P.;
NOW THEREFORE, the parties hereto agree as follows:
1. Registration and Qualification of Shares
PIMCO Advisors L.P. agrees to do all acts and things as shall from time to
time be reasonably necessary for the purpose of qualifying and maintaining
qualification of each class and series of shares of the Trust as set forth
in the Trust's Prospectus as from time to time in effect (each a "Fund")
for sale under the so-called "Blue Sky" laws of any state or U.S.
jurisdiction or for maintaining the registration of the Trust and of the
shares under the Securities Act of 1933 and the Investment Company Act of
1940, to the end that there will be available for sale from time to time
such number of shares of each Fund and the Trust as the principal
underwriter of the Trust may reasonably be expected to sell. The Trust
agrees to do all such acts and things and execute such certificates and
other documents as my be reasonably requested by PIMCO Advisors L.P. in
furtherance of the foregoing. Each party shall advise the other party
promptly of (a) any action of the Securities and Exchange Commission or any
authorities of any state or territory, of which it may advise, affecting
registration or qualification of the Trust, any Fund or the shares thereof,
or rights to offer such shares for sale, and (b) the happening of any event
which makes untrue any statement in the registration statement or the
prospectus, or which requires the making of any change in the registration
statement or prospectus in order to make the statements therein not
misleading.
2. Compensation; Expenses
The Trust will pay or reimburse PIMCO Advisors L.P. for all expenses of
qualifying shares of each Fund and the Trust for sale under the Blue Sky
laws of any state. PIMCO Advisors L.P. will receive no compensation from
the Trust or any Fund for performing services under this Agreement.
<PAGE>
Blue Sky Agreement
Page 2
3. Indemnification of Trust
PIMCO Advisors L.P. agrees to indemnify and hold harmless the Trust, the
Funds and each person who has been, is or may hereafter be a Trustee of the
Trust against all expenses reasonably incurred by any of them in connection
with any claim or in connection with any action, suit or proceeding to
which any of them may be a party, which arises out of or is alleged to
arise out of any failure by PIMCO Advisors L.P. to discharge its
responsibilities under this Agreement or any failure to maintain the
registration or qualification of shares of each Fund and the Trust under
the Blue Sky laws of any jurisdiction, except for actions, suits or
proceedings arising out of the gross negligence or willful misconduct of
the Trust. The term "expenses" includes amounts paid in satisfaction of
judgments or in settlements which are made with PIMCO Advisors L.P.'s
consent. The foregoing rights of indemnification shall be in addition to
any other rights to which any Fund, the Trust or a Trustee may be entitled
as a matter of law.
4. Effective Period and Termination of this Agreement
This Agreement shall take effect as of the date first above written. This
Agreement shall remain in full force and effect continuously as to a Fund
until terminated by such Fund by not more than sixty (60) days' nor less
than thirty (30) days' written notice delivered or mailed by registered
mail, postage prepaid, to PIMCO Advisors L.P. This Agreement shall
terminate with respect to a Fund automatically upon the termination of the
Management Contract between the Trust and PIMCO Advisors L.P. with respect
to such Fund unless the Trust consents to the continuation of this
Agreement with respect to such Fund.
5. Limitation of Liability
A copy of the Amended and Restated Agreement and Declaration of Trust of
the Trust is on file with the Secretary of The Commonwealth of
Massachusetts and notice is hereby given that this instrument is executed
on behalf of the Trustees of the Trust as Trustees and not individually,
and the obligations of or arising out of this instrument are not binding
upon any of the Trustees or shareholders individually but are binding only
upon the assets and property of the Trust.
IN WITNESS WHEREOF, the Trust and PIMCO Advisors L.P. have each caused this
Agreement to be signed on its behalf, all as of the day and year first
above written.
PIMCO Advisors Funds
Robert A. Prindiville
PIMCO Advisors L.P.
William D. Cvengros
Exhibit 99.B9(d)
Organizational Expense Reimbursement Agreement
for the Short-Intermediate Fund
<PAGE>
ORGANIZATIONAL EXPENSE
REIMBURSEMENT AGREEMENT
This Agreement is made as of this 31st day of July, 1991, by and
between Thomson Fund Group (the "Trust") on behalf of its Thomson
Short-Intermediate Government Fund (the "Fund") and Thomson Advisory Group L.P.
(the "Manager").
WHEREAS, the Trust is registered as an open-end diversified management
series investment company under the Investment Company Act of 1940 and is in the
process of organizing the Fund;
WHEREAS, there have been and will be certain organizational expenses
incurred as a part of such registration and organization, which are properly
expenses of the Trust, that have been and will in the future be paid by the
Manager by reason of the fact that the Fund is not and will not be capitalized
when such expenses otherwise become due and payable;
WHEREAS, such organizational expenses include expenses necessary to
organize and establish the Fund and to create the necessary relationships and
legal qualifications to enable it to commence business and operations,
including, but not by way of limitation, such expenses as outside legal
counsel's fees, and independent public accountant fees (such expenses are
hereinafter referred to as "Organizational Expenses");
NOW THEREFORE, in consideration of the premises and mutual covenants herein
contained, it is agreed as follows:
1. Upon the issuance and sale of shares of the Fund to the public, the
Trust shall reimburse and pay to the Manager up to $50,000 of the
amount expended by the Manager for Organization Expenses for the Fund.
2. Such reimbursement shall be paid by the Trust, out of the assets of the
Fund, to the Manager upon demand, without interest, and in no event
later than five years from the commencement of operations of the Fund.
Upon demand for payment, the Manager shall present copies of invoices
or receipts, and copies of canceled checks or other evidence of payment
by the Manager of the Organizational Expenses for which it is demanding
reimbursement.
3. In connection with the sale to the Manager by the Trust of shares of
beneficial interest of the Fund on or prior to the date on which a
Prospectus describing the Fund is filed under Rule 497 of the 1933 Act,
as amended, with the Securities and Exchange Commission (the "SEC"),
the Manager agrees, pursuant to the requirements of the staff of the
SEC, that if such shares are redeemed during the first five years of
the Fund's operation by any holder thereof, the proceeds will be
reduced by the Fund's then-unamortized Organization Expenses.
THOMSON FUND GROUP
By: Robert A. Prindiville
President
THOMSON ADVISORY GROUP L.P.
General Partner
By: Robert A. Prindiville
President
Exhibit 99.B9(e)
Organizational Expense Reimbursement Agreement
for the Target Fund
<PAGE>
ORGANIZATIONAL EXPENSE
REIMBURSEMENT AGREEMENT
This Agreement is made as of this 10th day of August, 1992, by and
between Thomson Fund Group (the "Trust") on behalf of its Thomson Target Fund
(the "Fund") and Thomson Advisory Group L.P. (the "Manager").
WHEREAS, the Trust is registered as an open-end diversified management
series investment company under the Investment Company Act of 1940 and is in the
process of organizing the Fund;
WHEREAS, there have been and will be certain organizational expenses
incurred as a part of such registration and organization, which are properly
expenses of the Trust, that have been and will in the future be paid by the
Manager by reason of the fact that the Fund is not and will not be capitalized
when such expenses otherwise become due and payable;
WHEREAS, such organizational expenses include expenses necessary to
organize and establish the Fund and to create the necessary relationships and
legal qualifications to enable it to commence business and operations,
including, but not by way of limitation, such expenses as outside legal
counsel's fees, and independent public accountant fees (such expenses are
hereinafter referred to as "Organizational Expenses");
NOW THEREFORE, in consideration of the premises and mutual covenants herein
contained, it is agreed as follows:
1. Upon the issuance and sale of shares of the Fund to the public, the
Trust shall reimburse and pay to the Manager up to $50,000 of the
amount expended by the Manager for Organization Expenses for the Fund.
2. Such reimbursement shall be paid by the Trust, out of the assets of the
Fund, to the Manager upon demand, without interest, and in no event
later than five years from the commencement of operations of the Fund.
Upon demand for payment, the Manager shall present copies of invoices
or receipts, and copies of canceled checks or other evidence of payment
by the Manager of the Organizational Expenses for which it is demanding
reimbursement.
3. In connection with the sale to the Manager by the Trust of shares of
beneficial interest of the Fund on or prior to the date on which a
Prospectus describing the Fund is filed under Rule 497 of the 1933 Act,
as amended, with the Securities and Exchange Commission (the "SEC"),
the Manager agrees, pursuant to the requirements of the staff of the
SEC, that if such shares are redeemed during the first five years of
the Fund's operation by any holder thereof, the proceeds will be
reduced by the Fund's then-unamortized Organization Expenses.
THOMSON FUND GROUP
By: Robert A. Prindiville
President
THOMSON ADVISORY GROUP L.P.
General Partner
By: Robert A. Prindiville
President
Exhibit 99.B9(f)
Organizational Expense Reimbursement Agreements
for the Total Return Income Fund
and the Innovation Fund
<PAGE>
Organizational Expense Reimbursement Agreement
PIMCO Advisors Innovation Fund
PIMCO Advisors Total Return Income Fund
Thomson Advisory Group L.P.
This Agreement is made as of this 29th day of September, 1994, by and between
Thomson Fund Group (the "Trust") on behalf of PIMCO Advisors Innovation Fund and
PIMCO Advisors Total Return Income Fund (the "Funds") and Thomson Advisory Group
L.P. ("TAGLP").
WHEREAS, the Trust is registered as an open-end diversified management series
investment company under the Investment Company Act of 1940 and is in the
process of organizing the Funds;
WHEREAS, there have been and will be certain organizational expenses incurred as
a part of such registration and organization, which are properly expenses of the
Trust, that have been and will in the future be paid by TAGLP by reason of the
fact that the Funds were not or will not be capitalized when such expenses
otherwise became or become due and payable;
WHEREAS, such organizational expenses include expenses necessary to organize and
establish the Funds and to create the necessary relationships and legal
qualifications to enable it to commence business and operations, including, but
not by way of limitation, such expenses as outside legal counsel's fees and
independent public accountant fees (such expenses are hereinafter referred to as
"Organizational Expenses");
NOW THEREFORE, in consideration of the premises and mutual covenants herein
contained, it is agreed as follows:
1. Upon the issuance and sale of shares of each of the Funds to the
public, the Trust shall reimburse and pay to TAGLP up to $50,000
of the amount expended by TAGLP for Organizational Expenses for
each Fund.
<PAGE>
Organizational Expense
Reimbursement Agreement Page 2
2. Such reimbursement shall be paid by the Trust, out of the assets
of the respective Fund, to TAGLP upon demand, without interest,
and in no event later than five years from the commencement of
operations of the respective Fund. Upon demand for payment, TAGLP
shall present copies of invoices or receipts, and copies of
canceled checks or other evidence of payment by TAGLP of the
Organization Expenses for which it is demanding reimbursement.
3. A copy of the Amended and Restated Agreement and Declaration of
Trust of the Trust is on file with the Secretary of The
Commonwealth of Massachusetts and nitice is hereby given that this
instrument is executed on behalf of the Trustees of the Trust as
Trustees and not individually, and the obligations of or arising
out of this instrument are not binding upon any of the Trustees or
shareholders individually but are binding only upon the assets and
property of the Trust.
THOMSON FUND GROUP
By: Robert A. Prindiville
President
THOMSON ADVISORY GROUP L.P.
By: THOMSON ADVISORY GROUP INC.,
General Partner
By: Robert A. Prindiville
President
Exhibit 99.B9(g)
Organizational Expense Reimbursement Agreements
for the Discovery Fund and the Value Fund
<PAGE>
Organizational Expense Reimbursement Agreement
PIMCO Advisors Discovery Fund
PIMCO Advisors Value Fund
PIMCO Advisors L.P.
This Agreement is made as of this 30th day of March, 1995, by and between PIMCO
Advisors Funds (the "Trust") on behalf of PIMCO Advisors Discovery Fund and
PIMCO Advisors Value Fund (the "Funds") and PIMCO Advisors L.P. ("PALP").
WHEREAS, the Trust is registered as an open-end diversified management series
investment company under the Investment Company Act of 1940 and is in the
process of organizing the Funds;
WHEREAS, there have been and will be certain organizational expenses incurred as
a part of such registration and organization, which are properly expenses of the
Trust, that have been and will in the future be paid by PALP by reason of the
fact that the Funds were not or will not be capitalized when such expenses
otherwise became or become due and payable;
WHEREAS, such organizational expenses include expenses necessary to organize and
establish the Funds and to create the necessary relationships and legal
qualifications to enable it to commence business and operations, including, but
not by way of limitation, such expenses as outside legal counsel's fees and
independent public accountant fees (such expenses are hereinafter referred to as
"Organizational Expenses");
NOW THEREFORE, in consideration of the premises and mutual covenants herein
contained, it is agreed as follows:
1. Upon the issuance and sale of shares of each of the Funds to the
public, the Trust shall reimburse and pay to PALP up to $50,000 of
the amount expended by PALP for Organizational Expenses for each
Fund.
<PAGE>
Organizational Expense
Reimbursement Agreement Page 2
2. Such reimbursement shall be paid by the Trust, out of the assets
of the respective Fund, to PALP upon demand, without interest, and
in no event later than five years from the commencement of
operations of the respective Fund. Upon demand for payment, PALP
shall present copies of invoices or receipts, and copies of
canceled checks or other evidence of payment by PALP of the
Organization Expenses for which it is demanding reimbursement.
3. A copy of the Amended and Restated Agreement and Declaration of
Trust of the Trust is on file with the Secretary of The
Commonwealth of Massachusetts and notice is hereby given that this
instrument is executed on behalf of the Trustees of the Trust as
Trustees and not individually, and the obligations of or arising
out of this instrument are not binding upon any of the Trustees or
shareholders individually but are binding only upon the assets and
property of the Trust.
PIMCO Advisors Funds
By: Robert A. Prindiville
President
PIMCO Advisors L.P.
By: William D. Cvengros
President and
Chief Executive Officer
Exhibit 99.B9(h)
Organizational Expense Reimbursement Agreement
for the Advisors Global Income Fund
<PAGE>
Organizational Expense Reimbursement Agreement
PIMCO Advisors Global Income Fund
PIMCO Advisors L.P.
This Agreement is made as of this 28th day of September, 1995, by and between
PIMCO Advisors Funds (the "Trust") on behalf of PIMCO Advisors Global Income
Fund and PIMCO Advisors L.P. ("PALP").
WHEREAS, the Trust is registered as an open-end diversified management series
investment company under the Investment Company Act of 1940 and is in the
process of organizing the Funds;
WHEREAS, there have been and will be certain organizational expenses incurred as
a part of such registration and organization, which are properly expenses of the
Trust, that have been and will in the future be paid by PALP by reason of the
fact that the Funds were not or will not be capitalized when such expenses
otherwise became or become due and payable;
WHEREAS, such organizational expenses include expenses necessary to organize and
establish the Funds and to create the necessary relationships and legal
qualifications to enable it to commence business and operations, including, but
not by way of limitation, such expenses as outside legal counsel's fees and
independent public accountant fees (such expenses are hereinafter referred to as
"Organizational Expenses");
NOW THEREFORE, in consideration of the premises and mutual covenants herein
contained, it is agreed as follows:
1. Upon the issuance and sale of shares of the Fund to the public,
the Trust shall reimburse and pay to PALP up to $50,000 of the
amount expended by PALP for Organizational Expenses for the Fund.
<PAGE>
Organizational Expense
Reimbursement Agreement Page 2
2. Such reimbursement shall be paid by the Trust, out of the assets
of the Fund, to PALP upon demand, without interest, and in no
event later than five years from the commencement of operations of
the Fund. Upon demand for payment, PALP shall present copies of
invoices or receipts, and copies of canceled checks or other
evidence of payment by PALP of the Organization Expenses for which
it is demanding reimbursement.
3. A copy of the Amended and Restated Agreement and Declaration of
Trust of the Trust is on file with the Secretary of The
Commonwealth of Massachusetts and notice is hereby given that this
instrument is executed on behalf of the Trustees of the Trust as
Trustees and not individually, and the obligations of or arising
out of this instrument are not binding upon any of the Trustees or
shareholders individually but are binding only upon the assets and
property of the Trust.
PIMCO Advisors Funds
By: Robert A. Prindiville
President
PIMCO Advisors L.P.
By: William D. Cvengros
President and
Chief Executive Officer
Exhibit 99.B10
Opinion and Consent of Counsel filed with
Trust's Rule 24f-2 Notice
<PAGE>
Ropes & Gray
One International Place
Boston, Massachusetts 02110-2624
(617) 951-7000
Telecopier (617) 951-7050
November 20, 1995
PIMCO Advisors Funds
2187 Atlantic Street
Stamford, CT 06902
Gentlemen:
You have informed us that you intend to file a Rule 24f-2 Notice (the
"Notice") with the Securities and Exchange Commission (the "Commission")
pursuant to Rule 24f-2 (the "Rule") under the Investment Company Act of 1940, as
amended, making definite the registration of 936,523,292 shares of beneficial
interest(the "Shares"), par value $0.00001, of your PIMCO Advisors Equity Income
Fund, PIMCO Advisors Value Fund, PIMCO Advisors Growth Fund, PIMCO Advisors
Target Fund, PIMCO Advisors Discovery Fund, PIMCO Advisors Opportunity Fund,
PIMCO Advisors Innovation Fund, PIMCO Advisors International Fund, PIMCO
Advisors Precious Metals Fund, PIMCO Advisors High Income Fund, PIMCO Advisors
Total Return Income Fund, PIMCO Advisors Tax Exempt Fund, PIMCO Advisors U.S.
Government Fund, PIMCO Advisors Short-Intermediate Fund and PIMCO Advisors Money
Market Fund, sold in reliance upon the Rule during your fiscal year ended
September 30, 1995.
We have examined the Amended and Restated Agreement and Declaration of
Trust dated September 11, 1990 of Thomson Fund Group (the "Trust"), on file in
the office of the Secretary of State of The Commonwealth of Massachusetts (the
"Declaration of Trust") and the amendment to the Declaration of Trust filed on
November 15, 1994 to change the name of the Trust to PIMCO Advisors Funds. We
are familiar with the actions taken by the Trust's Trustees to authorize the
issue and sale from time to time of shares of beneficial interest of the Trust
at not less
than net asset value and not less than par value, and have assumed that the
Shares have been issued and sold in accordance with such actions. We have also
examined a copy of the Trust's By-laws, as amended through May 24, 1991, and
such other documents as we have deemed necessary for the purposes of this
opinion.
-1-
<PAGE>
Based on the foregoing, we are of the opinion that the Shares have been
duly authorized and validly issued and are fully paid and non-assessable by the
Trust.
The Trust is an entity of the type commonly known as a "Massachusetts
business trust." Under Massachusetts law, shareholders could, under certain
circumstances, be held personally liable for the obligations of the Trust.
However, the Agreement and Declaration of Trust disclaims shareholder liability
for acts or obligations of the Trust and requires that notice of such disclaimer
be given in each agreement, obligation or instrument entered into or executed by
the Trust or its Trustees. The Agreement and Declaration of Trust provides for
indemnification out of the property of the particular series of shares for all
loss and expense of any shareholder of that series held personally liable solely
by reason of his being or having been a shareholder. Thus, the risk of
shareholder liability is limited to circumstances in which that series of shares
itself would be unable to meet its obligations.
We consent to this opinion accompanying the Notice when filed with the
Commission.
Very truly yours,
Ropes & Gray
-2-
3012188.02
Exhibit 99.B11
Consent of Independent Accountants
<PAGE>
Coopers | Coopers & Lybrand L.L.P.
& Lybrand | a professional services firm
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the inclusion in this Post-Effective Amendement No. 33 to
the Registration Statement (Form N-1A) of our report dated November 16, 1995 on
our audits of the financial statements and financial highlights of PIMCO
Advisors Funds to be filed with the Securities and Exchange Commission under the
provisions of the Securities Act of 1933 and the Investment Company Act of 1940,
as amended. We also consent to the reference to our Firm under the heading
Independent Accountants in the Statement of Additional Information which is part
of this Registration Statement.
Coopers & Lybrand L.L.P.
New York, New York
November 27, 1995
Coopers & Lybrand L.L.P. is a member of Coopers & Lybrand International, a
limited liability association incorporated in Switzerland.
Exhibit 99.B15(a)
Class A Distribution and Servicing Plan
<PAGE>
EXHIBIT A
<PAGE>
-4-
PIMCO ADVISORS FUNDS
Amended and Restated
Distribution and Servicing Plan (Class A)
Revised through November 15, 1994
This Plan (the "Plan") dated as of September 11, 1990, and amended
thereafter, constitutes the Distribution and Servicing Plan with respect to the
Class A shares of PIMCO ADVISORS FUNDS, a Massachusetts business trust (the
"Trust").
Section 1. The Trust will pay to the principal distributor of the
Trust's shares (the "Distributor") a fee (the "Servicing Fee") for services
rendered and expenses borne by the Distributor in connection with personal
service rendered to Class A shareholders of the Trust and/or maintenance of
Class A shareholder accounts, at an annual rate with respect to each Fund
(series) of the Trust (a "Fund") not to exceed 0.25% of the Fund's average daily
net assets attributable to its Class A shares. Subject to such limit and subject
to the provisions of Section 9 hereof, the Servicing Fee shall be as approved
from time to time by (a) the Trustees of the Trust and (b) the Independent
Trustees of the Trust and may be paid in respect of services rendered and
expenses borne in the past as to which no Servicing Fee was paid on account of
such limitation. If at any time this Plan shall not be in effect with respect to
all Funds of the Trust, the Servicing Fee shall be computed on the basis of net
assets attributable to Class A shares of those Funds for which the Plan is in
effect. The Servicing Fee shall be accrued daily and paid monthly or at such
other intervals as the Trustees shall determine.
Section 2. The Servicing Fee may be spent by the Distributor on
personal services rendered to Class A shareholders of the Trust and/or
maintenance of Class A shareholder accounts (but may not be spent on record
keeping charges, accounting expenses, transfer costs, or custodian fees). The
Distributor's expenditures may include, but shall not be limited to,
compensation to, and expenses (including telephone and overhead expenses) of,
financial consultants or other employees of the Distributor or of participating
or introducing brokers who aid in the processing of purchase or redemption
requests for Class A shares or the processing of dividend payments with respect
to Class A shares, who provide information periodically to shareholders showing
their positions in a Fund's Class A shares, who forward communication from the
Trust to Class A shareholders, who render ongoing advice concerning the
suitability of particular investment opportunities offered by the Trust in light
of the shareholder's needs, who respond to inquiries from Class A shareholders
relating to such services, or who train personnel in the provision of such
services.
Section 3. This Plan shall not take effect with respect to any Fund of
the Trust until it has been approved by a vote of at least a majority of the
outstanding Class A voting securities of that Fund. This Plan shall be deemed to
have been effectively approved with respect to any Fund if a majority of the
outstanding Class A voting securities of that Fund votes for the approval of
this Plan, notwithstanding that this Plan has not been approved by a majority of
the outstanding Class A voting securities of any other Fund or that this Plan
has not been approved by a majority of the outstanding Class A voting securities
of the Trust.
Section 4. This Plan shall not take effect until it has been approved,
together with any related agreements, by votes of the majority (or whatever
greater percentage may, from time to time, be required by Section 12(b) of the
Investment Company Act of 1940 (the "Act") or the rules and regulations
thereunder) of both (a) the Trustees of the Trust, and (b) the Independent
Trustees of the Trust cast in person at a meeting called for the purpose of
voting on this Plan or such agreement.
Section 5. This Plan shall continue in effect for a period of more than
one year after it takes effect only so long as such continuance is specifically
approved at least annually in the manner provided for approval of this Plan in
Section 4. It is acknowledged that the Distributor may expend or impute interest
expense in respect of its activities or expenses under this Plan and the
Trustees and the Independent Trustees may give such weight to such interest
expense as they determine in their discretion.
Section 6. Any person authorized to direct the disposition of monies
paid or payable by the Trust pursuant to this Plan or any related agreement
shall provide to the Trustees of the Trust, and the Trustees shall review, at
least quarterly, a written report of the amounts so expended and the purposes
for which such expenditures were made.
Section 7. This Plan may be terminated at any time with respect to the
Class A shares of any Fund by vote of a majority of the Independent Trustees, or
by vote of a majority of the outstanding Class A voting securities of that Fund.
Section 8. All agreements with any person relating to implementation of
this Plan with respect to any Fund shall be in writing, and any agreement
related to this Plan with respect to any Fund shall provide:
A. That such agreement may be terminated at any time, without
payment of any penalty, by vote of a majority of the
Independent Trustees or by vote of majority of the outstanding
Class A voting securities of such Fund, on not more than 60
days' written notice to any other party to the agreement; and
B. That such agreement shall terminate automatically in the event
of its assignment.
Section 9. This Plan may not be amended to increase materially the
amount of Servicing Fees permitted pursuant to Section 1 hereof without approval
in the manner provided in Section 3 hereof, and all material amendments to this
Plan shall be approved in the manner provided for approval of this Plan in
Section 4 hereof.
Section 10. As used in this Plan, (a) the term "Independent Trustees"
shall mean those Trustees of the Trust who are not interested persons of the
Trust, and have no direct or indirect financial interest in the operation of
this Plan or any agreements related to it, (b) the terms "assignment",
"interested person" and "majority of the outstanding voting securities" shall
have the respective meanings specified in the Act and the rules and regulations
thereunder, subject to such exemptions as may be granted by the Securities and
Exchange Commission, (c) the term "introducing broker" shall mean any broker or
dealer who is a member of the National Association of Securities Dealers, Inc.
and who is acting as an introducing broker pursuant to clearing agreements with
the Distributor; and (d) the term "participating broker" shall mean any broker
or dealer which is a member of the National Association of Securities Dealers,
Inc. and who has entered into a selling or dealer agreement with the
Distributor.
Section 11. This Plan has been adopted pursuant to Rule 12b-1 under the
Act and is designed to comply with all applicable requirements imposed under
such Rule. To the extent that any or all of the Servicing Fees may be deemed to
have been primarily intended to result in the sale of the Trust's shares (within
the meaning of Rule 12b-1), all those Servicing Fees paid by the Trust shall be
deemed to be made under this Plan and pursuant to clause (b) of such Rule.
Dated: November 15, 1994.
Exhibit 99.B15(b)
Class C Distribution and Servicing Plan
<PAGE>
PIMCO ADVISORS FUNDS
Fourth Amended and Restated
Distribution and Servicing Plan (Class C)
Revised through November 15, 1994
This Plan (the "Plan") dated as of April 23, 1987, and amended
thereafter, constitutes the Distribution and Servicing Plan with respect to the
Class C shares of PIMCO ADVISORS FUNDS, a Massachusetts business trust (the
"Trust").
Section 1. The Trust will pay to the principal distributor of the
Trust's shares (the "Distributor") a fee (the "Distribution Fee") for services
rendered and expenses borne by the Distributor in connection with the
distribution of Class C shares of the Trust and another fee (the "Servicing
Fee") in connection with personal services rendered to Class C shareholders of
the Trust and/or maintenance of Class C shareholder accounts. The Distribution
Fee shall be paid at an annual rate with respect to each Fund (series) of the
Trust (a "Fund") not to exceed 0.75 of 1% of the Fund's average daily net assets
attributable to its Class C shares, and the Servicing Fee shall be paid at an
annual rate not to exceed 0.25 of 1% of the Fund's average daily net assets
attributable to Class C shares. Subject to such limits and subject to the
provisions of Section 9 hereof, the Distribution and Servicing Fees shall be as
approved from time to time by (a) the Trustees of the Trust and (b) the
Independent Trustees of the Trust and may be paid in respect of services
rendered and expenses borne in the past as to which no Distribution and
Servicing Fees were paid on account of such limitation. If at any time this Plan
shall not be in effect with respect to all Funds of the Trust, the Distribution
and Servicing Fees shall be computed on the basis of sales of Class C shares or
net assets attributable to Class C shares (as applicable) of those Funds for
which the Plan is in effect. The Distribution and Servicing Fees shall be
accrued daily and paid monthly or at such other intervals as the Trustees shall
determine.
<PAGE>
-3-
Section 2. The Distribution Fee may be spent by the Distributor on any
activities or expenses primarily intended to result in the sale of Class C
shares of the Trust, including, but not limited to compensation to, and expenses
(including overhead and telephone expenses) of, financial consultants or other
employees of the Distributor or of participating or introducing brokers who
engage in distribution of Class C shares, printing of prospectuses and reports
for other than existing Class C shareholders, advertising and preparation,
printing and distribution of sales literature. The Servicing Fee may be spent by
the Distributor on personal services rendered to Class C shareholders of the
Trust and/or maintenance of Class C shareholder accounts (but may not be spent
on record keeping charges, accounting expenses, transfer costs, or custodian
fees). The Distributor's expenditures may include, but shall not be limited to,
compensation to, and expenses (including telephone and overhead expenses) of,
financial consultants or other employees of the Distributor or of participating
or introducing brokers who aid in the processing of purchase or redemption
requests for Class C shares or the processing of dividend payments with respect
to Class C shares, who provide information periodically to shareholders showing
their positions in a Fund's Class C shares, who forward communications from the
Trust to Class C shareholders, who render ongoing advice concerning the
suitability of particular investment opportunities offered by the Trust in light
of the shareholder's needs, who respond to inquiries from Class C shareholders
relating to such services, or who train personnel in the provision of such
services.
Section 3. This Plan shall not take effect with respect to any Fund of
the Trust until it has been approved by a vote of at least a majority of the
outstanding Class C voting securities of that Fund. This Plan shall be deemed to
have been effectively approved with respect to any Fund if a majority of the
outstanding Class C voting securities of that Fund votes for the approval of
this Plan, notwithstanding that this Plan has not been approved by a majority of
the outstanding Class C voting securities of any other Fund or that this Plan
has not been approved by a majority of the outstanding Class C voting securities
of the Trust.
Section 4. This Plan shall not take effect until it has been approved,
together with any related agreements, by votes of the majority (or whatever
greater percentage may, from time to time, be required by Section 12(b) of the
Investment Company Act of 1940 (the "Act") or the rules and regulations
thereunder) of both (a) the Trustees of the Trust, and (b) the Independent
Trustees of the Trust cast in person at a meeting called for the purpose of
voting on this Plan or such agreement.
Section 5. This Plan shall continue in effect for a period of more than
one year after it takes effect only so long as such continuance is specifically
approved at least annually in the manner provided for approval of this Plan in
Section 4. It is acknowledged that the Distributor may expend or impute interest
expense in respect of its activities or expenses under this Plan and the
Trustees and the Independent Trustees may give such weight to such interest
expense as they determine in their discretion.
Section 6. Any person authorized to direct the disposition of monies
paid or payable by the Trust pursuant to this Plan or any related agreement
shall provide to the Trustees of the Trust, and the Trustees shall review, at
least quarterly, a written report of the amounts so expended and the purposes
for which such expenditures were made.
Section 7. This Plan may be terminated at any time with respect to the
Class C shares of any Fund by vote of a majority of the Independent Trustees, or
by vote of a majority of the outstanding Class C voting securities of that Fund.
Section 8. All agreements with any person relating to implementation of
this Plan with respect to any Fund shall be in writing, and any agreement
related to this Plan with respect to any Fund shall provide:
A. That such agreement may be terminated at any time, without
payment of any penalty, by vote of a majority of the
Independent Trustees or by vote of majority of the outstanding
Class C voting securities of such Fund, on not more than 60
days' written notice to any other party to the agreement; and
B. That such agreement shall terminate automatically in the event
of its assignment.
Section 9. This Plan may not be amended to increase materially the
aggregate amount of Distribution and Servicing Fees permitted pursuant to
Section 1 hereof without approval in the manner provided in Section 3 hereof,
and all material amendments to this Plan shall be approved in the manner
provided for approval of this Plan in Section 4 hereof.
Section 10. As used in this Plan, (a) the term "Independent Trustees"
shall mean those Trustees of the Trust who are not interested persons of the
Trust, and have no direct or indirect financial interest in the operation of
this Plan or any agreements related to it, (b) the terms "assignment",
"interested person" and "majority of the outstanding voting securities" shall
have the respective meanings specified in the Act and the rules and regulations
thereunder, subject to such exemptions as may be granted by the Securities and
Exchange Commission, (c) the term "introducing broker" shall mean any broker or
dealer who is a member of the National Association of Securities Dealers, Inc.
and who is acting as an introducing broker pursuant to clearing agreements with
the Distributor; and (d) the term "participating broker" shall mean any broker
or dealer which is a member of the National Association of Securities Dealers,
Inc. and who has entered into a selling or dealer agreement with the
Distributor.
Section 11. This Plan has been adopted pursuant to Rule 12b-1 under the
Act and is designed to comply with all applicable requirements imposed under
such Rule. All Distribution Fees and, to the extent that any or all of the
Servicing Fees may be deemed to have been primarily intended to result in the
sale of the Trust's shares (within the meaning of Rule 12b-1), those Servicing
Fees shall be deemed to have been paid under this Plan and pursuant to clause
(b) of such Rule.
Dated: November 15, 1994
Exhibit 99.B15(c)
Class B Distribution and Servicing Plan
<PAGE>
EXHIBIT B
-1-
<PAGE>
PIMCO ADVISORS FUNDS
Distribution and Servicing Plan (Class B)
Revised through September 28, 1995
This Plan (the "Plan"), as amended from time to time, constitutes the
Distribution and Servicing Plan with respect to the Class B shares of PIMCO
ADVISORS FUNDS, a Massachusetts business trust (the "Trust").
Section 1. The Trust will pay to the principal distributor of the
Trust's shares (the "Distributor") a fee (the "Distribution Fee") for services
rendered and expenses borne by the Distributor in connection with the
distribution of Class B shares of the Trust and another fee (the "Servicing
Fee") in connection with personal services rendered to Class B shareholders of
the Trust and/or maintenance of Class B shareholder accounts. The Distribution
Fee shall be paid at an annual rate with respect to each Fund (series) of the
Trust (a "Fund") not to exceed 0.75 of 1% of the Fund's average daily net assets
attributable to its Class B shares, and the Servicing Fee shall be paid at an
annual rate not to exceed 0.25 of 1% of the Fund's average daily net assets
attributable to Class B shares. Subject to such limits and subject to the
provisions of Section 9 hereof, the Distribution and Servicing Fees shall be as
approved from time to time by (a) the Trustees of the Trust and (b) the
Independent Trustees of the Trust and may be paid in respect of services
rendered and expenses borne in the past as to which no Distribution and
Servicing Fees were paid on account of such limitation. If at any time this Plan
shall not be in effect with respect to all Funds of the Trust, the Distribution
and Servicing Fees shall be computed on the basis of sales of Class B shares or
net assets attributable to Class B shares (as applicable) of those Funds for
which the Plan is in effect. The Distribution and Servicing Fees shall be
accrued daily and paid monthly or at such other intervals as the Trustees shall
determine.
Section 2. The Distribution Fee may be spent by the Distributor on any
activities or expenses primarily intended to result in the sale of Class B
shares of the Trust, including, but not limited to compensation to, and expenses
(including overhead and telephone expenses) of, financial consultants or other
employees of the Distributor or of participating or introducing brokers who
engage in distribution of Class B shares, printing of prospectuses and reports
for other than existing Class B shareholders, advertising and preparation,
printing and distribution of sales literature. The Servicing Fee may be spent by
the Distributor on personal services rendered to Class B shareholders of the
Trust and/or maintenance of Class B shareholder accounts (but may not be spent
on recordkeeping charges, accounting expenses, transfer costs, or custodian
fees). The Distributor's expenditures may include, but shall not be limited to,
compensation to, and expenses (including telephone and overhead expenses) of,
financial consultants or other employees of the Distributor or of participating
or introducing brokers
-2-
<PAGE>
who aid in the processing of purchase or redemption requests for Class B shares
or the processing of dividend payments with respect to Class B shares, who
provide information periodically to shareholders showing their positions in a
Fund's Class B shares, who forward communications from the Trust to Class B
shareholders, who render ongoing advice concerning the suitability of particular
investment opportunities offered by the Trust in light of the shareholder's
needs, who respond to inquiries from Class B shareholders relating to such
services, or who train personnel in the provision of such services.
Section 3. This Plan shall not take effect with respect to any Fund of
the Trust until it has been approved by a vote of at least a majority of the
outstanding Class B voting securities of that Fund. This Plan shall be deemed to
have been effectively approved with respect to any Fund if a majority of the
outstanding Class B voting securities of that Fund votes for the approval of
this Plan, notwithstanding that this Plan has not been approved by a majority of
the outstanding Class B voting securities of any other Fund or that this Plan
has not been approved by a majority of the outstanding Class B voting securities
of the Trust.
Section 4. This Plan shall not take effect until it has been approved,
together with any related agreements, by votes of the majority (or whatever
greater percentage may, from time to time, be required by Section 12(b) of the
Investment Company Act of 1940 (the "Act") or the rules and regulations
thereunder) of both (a) the Trustees of the Trust, and (b) the Independent
Trustees of the Trust cast in person at a meeting called for the purpose of
voting on this Plan or such agreement.
Section 5. This Plan shall continue in effect for a period of more than
one year after it takes effect only so long as such continuance is specifically
approved at least annually in the manner provided for approval of this Plan in
Section 4. It is acknowledged that the Distributor may expend or impute interest
expense in respect of its activities or expenses under this Plan and the
Trustees and the Independent Trustees may give such weight to such interest
expense as they determine in their discretion.
Section 6. Any person authorized to direct the disposition of monies
paid or payable by the Trust pursuant to this Plan or any related agreement
shall provide to the Trustees of the Trust, and the Trustees shall review, at
least quarterly, a written report of the amounts so expended and the purposes
for which such expenditures were made.
Section 7. This Plan may be terminated at any time with respect to the
Class B shares of any Fund by vote of a majority of the Independent Trustees, or
by vote of a majority of the outstanding Class B voting securities of that Fund.
Section 8. All agreements with any person relating to implementation of
this Plan with respect to any Fund shall be in writing, and any agreement
related to this Plan with respect to any Fund shall provide:
-3-
<PAGE>
A. That such agreement may be terminated at any time, without payment
of any penalty, by vote of a majority of the Independent Trustees
or by vote of a majority of the outstanding Class B voting
securities of such Fund, on not more than 60 days' written notice
to any other party to the agreement; and
B. That such agreement shall terminate automatically in the event of
its assignment.
Section 9. This Plan may not be amended to increase materially the
aggregate amount of Distribution and Servicing Fees permitted pursuant to
Section 1 hereof without approval in the manner provided in Section 3 hereof,
and all material amendments to this Plan shall be approved in the manner
provided for approval of this Plan in Section 4 hereof.
Section 10. As used in this Plan, (a) the term "Independent Trustees"
shall mean those Trustees of the Trust who are not interested persons of the
Trust, and have no direct or indirect financial interest in the operation of
this Plan or any agreements related to it, (b) the terms "assignment",
"interested person" and "majority of the outstanding voting securities" shall
have the respective meanings specified in the Act and the rules and regulations
thereunder, subject to such exemptions as may be granted by the Securities and
Exchange Commission, (c) the term "introducing broker" shall mean any broker or
dealer who is a member of the National Association of Securities Dealers, Inc.
and who is acting as an introducing broker pursuant to clearing agreements with
the Distributor; and (d) the term "participating broker" shall mean any broker
or dealer which is a member of the National Association of Securities Dealers,
Inc. and who has entered into a selling or dealer agreement with the
Distributor.
Section 11. This Plan has been adopted pursuant to Rule 12b-1 under the
Act and is designed to comply with all applicable requirements imposed under
such Rule. All Distribution Fees and, to the extent that any or all of the
Servicing Fees may be deemed to have been primarily intended to result in the
sale of the Trust's shares (within the meaning of Rule 12b-1), those Servicing
Fees shall be deemed to have been paid under this Plan and pursuant to clause
(b) of such Rule.
Dated: September 28, 1995
Exhibit 99.B
Schedule for Computation of Performance Information
<PAGE>
THOMSON FUND GROUP
RECENT PERFORMANCE OF CLASS B SHARES OF TFG FUNDS
As of September 30, 1990
<TABLE>
<CAPTION>
Average Annual
Total Return
TFG Fund Inception Current SEC Inception to Year ended Five Years Lipper Rank
Date Yield at 9/30/90 9/30/90 9/30/90 Ended Year Ended
9/30/90 9/30/90
------- -------
<S> <C> <C> <C> <C> <C> <C>
Income-Oriented
U.S. Government 9/16/85 7.64% 7.40% 1.50% 7.46% 75/127
Income 2/24/84 11.23 8.45 (1.48) 7.41 36/41
Tax Exempt 11/1/85 5.37 8.58 (0.57) N/A 82/104
Short-Term 2/24/84 6.57 N/A N/A N/A 248/256
Convertible
Securities 4/18/88 6.14 (1.30) (20.93) N/A 25/28
Equity-Oriented
Global 8/25/86 N/A 4.33 (20.44) N/A 27/37
Growth 2/24/84 N/A 16.57 (11.45) 16.85 67/247
Opportunity 2/24/84 N/A 12.03 (17.85) 11.71 73/137
Metals and 10/10/88 N/A (4.52) (8.48) N/A 23/34
Resources
Indexes
S&P 500 (9.31)%
NASDAQ-OTC (27.20)
SL Gov't Corp. 6.75
</TABLE>
More recently updated performance figures, either concerning Yield for the Class
B shares of the Income Oriented funds and the Convertible Securities Fund or
Total Return results for Class B shares of the Funds, can be obtained from the
Manager.
<PAGE>
Total Rate of Return
Calculation Formula
P(1+T)n = ERV
P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value
Calculation
(including deferred sales charge)
<TABLE>
<CAPTION>
Fund One Year Period Life of Fund
<S> <C> <C>
U.S. Government $1000 (1+.0150) 1 = $1015.00 $1000 (1+.0740) 5.039 = $1432.75
Income $1000 (1-.0148) 1 = $ 985.20 $1000 (1+.0845) 6.6 = $1708.51
Tax-Exempt $1000 (1-.0057) 1 = $1005.69 $1000 (1+.0858) 4.914 = $1498.23
Convertible $1000 (1-.2093) 1 = $ 790.67 $1000 (1-.0130) 2.45 = $ 968.37
Global $1000 (1-.2044) 1 = $ 795.60 $1000 (1+.0433) 4.097 = $1189.76
Growth $1000 (1-.1145) 1 = $ 885.55 $1000 (1+.1657) 6.6 = $2750.79
Opportunity $1000 (1-.1785) 1 = $ 821.52 $1000 (1+.1203) 6.6 = $2116.24
Precious Metals and
Natural Resources $1000 (1-.0848) 1 = $ 915.22 $1000 (1-.0452)1.97 = $ 912.89
</TABLE>
<PAGE>
FUND YIELD CALCULATION
(Calendar Month-End Method)
30-Day Base Period Ended 9/30/90
FUND YIELD = 2 [ (a-b+ 1) 6 - 1]
-----------------
cd
Thomson U.S. Government Fund
a = dividends and interest earned during the month $3,482,157
b = expenses accrued during the month 658,610
c = average dividend shares outstanding during the month 50,158,980
d = maximum offering price per share on the last day of the month $ 8.98
Fund Yield 7.64%
Thomson Income Fund
a = dividends and interest earned during the month $3,842,229
b = expenses accrued during the month 555,949
c = average dividend shares outstanding during the month 42,274,515
d = maximum offering price per share on the last day of the month $ 8.50
Fund Yield 11.23%
Thomson Convertible Securities Fund
a = dividends and interest earned during the month $182,366
b = expenses accrued during the month 50,702
c = average dividend shares outstanding during the month 3,193,990
d = maximum offering price per share on the last day of the month $ 8.16
Fund Yield 6.14%
Thomson Tax Exempt Fund
a = dividends and interest earned during the month $295,063
b = expenses accrued during the month 74,494
c = average dividend shares outstanding during the month 4,544,781
d = maximum offering price per share on the last day of the month $ 10.97
Fund Yield 5.37%
<PAGE>
THOMSON SHORT-TERM FUND
September 30, 1990
Day Yield
Base period return x 365 / 7 = 7 day yield
.001260 x 365 / 7 = 6.57%
Effective Yield
[(Base period return + 1) 365 / 7] - 1 = Effective Yield
[(.001260 + 1) 365 / 7] = 6.79%
Exhibit 99.B18
Multi-Class Plan
<PAGE>
PIMCO ADVISORS FUNDS
Plan pursuant to Rule 18f-3(d) under the Investment Company Act of 1940
Effective July 27, 1995
WHEREAS, the Board of Trustees of the PIMCO Advisors Funds (the
"Trust") have considered the following multi-class plan (the "Plan") under which
the Trust may offer multiple classes of shares of its now existing and hereafter
created series1 pursuant to Rule 18f-3 under the Investment Company Act of 1940
(the "1940 Act"); and
WHEREAS, a majority of the Trustees of the Trust and a majority of the
Trustees who are not interested persons of the Trust have found the Plan, as
proposed, to be in the best interests of each class of the Trust individually
and the Trust as a whole;
NOW, THEREFORE, the Trust hereby approves and adopts the following Plan
pursuant to Rule 18f-3(d) of the 1940 Act.
The Plan
Each now existing and hereafter created series ("Fund") of the Trust
may from time to time issue one or more of the following classes of shares:
Class A shares, Class B shares and Class C shares.2 Each class is subject to
such investment minimums and other conditions of
- --------------------
1 The Trust has been offering multiple classes of shares, prior to
the effectiveness of this Plan, pursuant to an exemptive order of the Securities
and Exchange Commission. This Plan is intended to allow the Trust to offer
multiple classes of shares to the full extent and in the manner permitted by
Rule 18f-3 under the 1940 Act (the "Rule"), subject to the requirements and
conditions imposed by the Rule.
2 Currently, Class A and Class C shares of the Trust's Opportunity
Fund are not available for purchase by new investors in that Fund. The
Opportunity Fund has never offered Class B shares. Shareholders who owned shares
of the Opportunity Fund on December 31, 1992 will still be permitted to purchase
additional shares for as long as they continue to own any shares of the Fund.
Similarly, participants in any self-directed qualified benefit plan that owned
Opportunity Fund shares on March 1, 1993 will be eligible to direct the purchase
of Opportunity Fund shares by their plan account for so long as the plan
continues to own shares of the Fund.
-1-
<PAGE>
eligibility as are set forth in the Trust's prospectus as from time to time in
effect (the "Prospectus"). The differences in expenses among these classes of
shares, and the conversion and exchange features of each class of shares, are
set forth below in this Plan, which is subject to change, to the extent
permitted by law and by the Declaration of Trust and By-laws of the Trust, by
action of the Board of Trustees of the Trust.
Initial Sales Charge
Class A shares of the Funds are offered at a public offering price that
is equal to their net asset value ("NAV") plus a sales charge of up to 5.50% of
the public offering price (which maximum may be less for certain Funds, as
described in the Prospectus). The sales charges on Class A shares are subject to
reduction or waiver as permitted by Rule 22d-1 under the 1940 Act, as described
in the Prospectus. For example, as of the date of this Plan, each Fund may waive
the Class A sales charge for certain categories of investors including current
or retired officers, trustees, directors or employees of the Trust and for
current registered representatives and other full-time employees of
participating brokers.
Class B and Class C shares of the Funds are offered at their NAV,
without an initial sales charge.(3)
Contingent Deferred Sales Charge
A contingent deferred sales charge (a "CDSC") may be imposed on Class
A, Class B or Class C shares under certain circumstances. The Trust imposes
CDSCs on redemptions of a particular class of shares of a Fund if the investor
redeems an amount which causes the current value of the investor's account for
the Fund to fall below the total dollar amount of purchase payments subject to
the CDSC, except that no CDSC is imposed if the shares
- --------------------
3 As of the date of this Plan, Class B shares of the Trust's Money
Market Fund are not offered for initial purchases but may be obtained through
exchanges of Class B shares of other Funds. Class B shares are also currently
not available for purchases by employer sponsored retirement plans.
-2-
<PAGE>
redeemed have been acquired through the reinvestment of dividends or capital
gains distributions or if the amount redeemed is derived from increases in the
value of the account above the amount of purchase payments subject to a CDSC. In
determining whether a CDSC is payable, it is assumed that the purchase payment
from which the redemption is made is the earliest purchase payment (from which a
redemption or exchange has not already been effected). In determining whether an
amount is available for redemption of a certain class without incurring a CDSC,
the purchase payments made for all shares of that class in the investor's
account with the particular Fund are aggregated, and the current value of all
such shares is aggregated.
Purchases of Class A shares of each Fund (with the exception of the
Trust's Money Market Fund) of $1 million or more that are redeemed within
eighteen months of their purchase may be subject to a CDSC (a "Class A CDSC") of
1%. A Class A CDSC does not apply to investors purchasing $1,000,000 or more of
any Fund's Class A shares if such investors are otherwise eligible to purchase
Class A shares without any sales charge. The waiver categories (which may be
changed from time to time) will be set forth in the Prospectus in a manner
consistent with the requirements for disclosure of front-end load variations
found in Rule 22d-1 under the 1940 Act. See above. A Class A CDSC does not apply
to Class A shares of the Trust's Money Market Fund but, if Money Market Fund
Class A shares are purchased in a transaction that, for any other Fund, would be
subject to a Class A CDSC and the Money Market Fund Class A shares are
subsequently exchanged for Class A shares of any other Fund, a Class A CDSC will
apply to the shares of the Fund acquired by exchange for a period of 18 months
from the date of exchange. Class A shares are not otherwise subject to a CDSC.
Class B shares that are redeemed within 6 years from purchase are
subject to a CDSC of up to 5% of the redemption amount to which a CDSC applies;
such percentage declines, eventually to 0%, the longer the shares are held as
described in the Prospectus. As of the date of this Plan, purchases of Class B
shares are subject to a CDSC according to the following schedule:
Years Since Purchase Percentage
Payment was Made CDSC
- -------------------- ----------
First.............................5
Second............................4
Third.............................3
Fourth............................3
Fifth.............................2
-3-
<PAGE>
Sixth.............................1
Seventh...........................0
Eighth ...........................*
* Class B shares convert into Cass A shares as
described below.
Class C shares that were purchased before July 1, 1991 are subject to a
CDSC of 2% if redeemed within the 4th or 5th year from purchase, and 0%
thereafter. Class C shares purchased on or after July 1, 1991 are subject to a
CDSC of 1% if redeemed within 1 year from purchase, and 0% thereafter.
As permitted by Rule 6c-10 under the 1940 Act and as described in the
Prospectus, the CDSC otherwise applicable to Class A, Class B and Class C shares
may be varied or waived in connection with particular classes of transactions
provided the conditions in Rule 22d-1 under the 1940 Act are satisfied. As of
the date of this Plan, examples of redemptions for which the CDSC is not
applicable include any partial or complete redemption following death or
disability of a shareholder from an account in which the deceased or disabled is
named, provided the redemption is requested within one year of the death or
initial determination of disability (which applies to all classes), and any
redemption resulting from a return of an excess contribution to a qualified
employer retirement plan or an IRA (which applies only to Class A and Class C
shares).
Separate Arrangements and Expense Allocations of Each Class
Class A, Class B and Class C shares pay the expenses associated with
their different distribution and shareholder servicing arrangements. Each class
may, at the Trustees' discretion, also pay a different share of other expenses,
not including advisory or custodial fees or other expenses related to the
management of the Trust's assets, if these expenses are actually incurred in a
different amount by that class, or if the class receives services of a different
kind or to a different degree than other classes. All other expenses will be
allocated to each class on the basis of the net asset value of that class in
relation to the net asset value of the particular Fund. However, the Trust's
Money Market Fund, which operates in reliance on Rule 2a-7 under the 1940 Act
and makes daily distributions of its net investment income, may allocate such
other expenses to each share regardless of class, or based on relative net
assets (i.e., settled shares), as permitted by Rule 18f-3(c)(2) under the 1940
Act.
Class A, Class B and Class C shares pay fees for services rendered and
expenses borne in connection with personal services rendered to shareholders of
that class and the maintenance of
-4-
<PAGE>
shareholder accounts ("Service Fees"). In addition, Class B and Class C shares
pay fees in connection with the distribution of shares of that class
("Distribution Fees"). Class A Service Fees and Class B and C Distribution and
Service Fees are paid pursuant to separate plans adopted for each class pursuant
to Rule 12b-1 under the 1940 Act (the "12b-1 Plans").
Class A, Class B and Class C shares of each Fund pay, pursuant to the
relevant 12b-1 Plan, a Service Fee of up to 0.25% per annum of the average daily
net assets of such Fund attributable to such class, as described in the
Prospectus.
Class B and Class C shares of each Fund pay, pursuant to the relevant
12b-1 Plan, a distribution fee of up to 0.75% per annum of the average daily net
assets of such Fund attributable to such class, as described in the Prospectus.
Conversion and Exchange Features
Conversion Features
Class B shares of each Fund automatically convert to Class A shares of
the same Fund after they have been held for 7 years and thereafter are subject
to the lower fees charged to Class A shares. In this regard, if there is any
material increase in payments authorized under the 12b-1 Plan applicable to
Class A shares without the approval of the Class B shareholders, the Trust will
establish a new class of shares, into which Class B shares would convert, on the
same terms as those that applied to Class A shares before such increase.
Exchange Features
Except with respect to exchanges for shares of the Opportunity Fund, a
shareholder may exchange Class A, Class B and Class C shares of any Fund for the
same class of shares of any other Fund in an account with identical registration
on the basis of their respective net asset values (except that a sales charge
will apply on exchanges of Class A shares of the Trust's Money Market Fund on
which currently no sales charge is paid at the time of purchase). Shareholders
of Funds other than the Opportunity Fund are not permitted to exchange any of
their shares for Opportunity Fund shares unless the shareholders are
independently eligible to purchase Opportunity Fund shares as described in
footnote 2 above.
Class A shares of the Trust's Money Market Fund may be exchanged for
shares of any other Fund, but the usual sales charges applicable to investments
in such other Fund apply on
-5-
<PAGE>
exchanged Money Market Fund shares for which no sales charge was paid at the
time of purchase.
With respect to Class B and Class C shares, or Class A shares subject
to a CDSC, if less than all of an investment is exchanged out of a Fund, any
portion of the investment attributable to capital appreciation and/or reinvested
dividends or capital gains distributions will be exchanged first, and thereafter
any portions exchanged will be from the earliest investment made in the Fund
from which the exchange was made.
Although a Class A CDSC does not apply to Class A shares of the Trust's
Money Market Fund, as indicated above, if Money Market Fund Class A shares
purchased in a transaction that would otherwise be subject to a Class A CDSC are
subsequently exchanged for Class A shares of any other Fund, a Class A CDSC will
apply to the shares of the Fund acquired by exchange for a period of 18 months
from the date of the exchange.
Dividends/Distributions
Each Fund pays out as dividends substantially all of its net investment
income (which comes from dividends and interest it receives from its
investments) and net realized short-term capital gains.
All dividends and/or distributions will be paid in the form of
additional shares of the class of shares of the Fund to which the dividends
and/or distributions relate or, at the election of the shareholder, of another
Fund at net asset value of such Fund, unless the shareholder elects to receive
cash. Dividends paid by each Fund with respect to each class are calculated in
the same manner and at the same time.
Voting Rights
Each share of a Fund entitles the shareholder of record to one vote.
Each Fund will vote separately on matters relating solely to that Fund. In
addition, each class of shares of a Fund shall have exclusive voting rights on
any matter submitted to shareholders that relates solely to that class, and
shall have separate voting rights on any matter submitted to shareholders in
which the interests of one class differ from the interests of any other class.
However, all Fund shareholders will have equal voting rights on matters that
affect all Fund shareholders equally. Currently, the Funds' classes vote
separately only with respect to their 12b-1 Plans. Class B shareholders may be
asked to vote separately to approve any material increase in payments
-6-
<PAGE>
authorized under the 12b-1 Plan applicable to Class A shares based on the
automatic conversion of Class B shares to Class A shares as described above.
PIMCO ADVISORS FUNDS
By: Robert A. Prindiville
Title: President
Date: 7/27/95
-7-
Exhibit 99.B19
Powers of Attorney
<PAGE>
POWER OF ATTORNEY
We, the undersigned hereby severally constitute and appoint Newton B. Schott,
Jr., Robert A. Prindiville, John O. Leasure, Douglass N. Ellis, Jr., Esq., and
Joseph B. Kittredge, Jr., Esq. and each of them singly, his true and lawful
attorneys, with full power to them and each of them, to sign for US, and in our
name and in the capacities indicated below, any and all amendments (including
post-effective amendments) to the Registration Statements of Thomson McKinnon
Investment Trust on Form N-1A and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys, and each of them, acting alone, full
power and authority to do and perform each and every act and thing requisite or
necessary to be done in the premises, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys or any of them lawfully do or cause to be done by virtue hereof.
Name: Capacity Date
Robert A. Prindiville Trustee and President December 10, 1987
Newton B. Schott, Jr. Trustee, Vice President and Clerk December 10, 1987
Michael S. Shapiro Treasurer December 10, 1987
J. Ronald Morgan Chairman of the Trustees December 10, 1987
Philip M. Fahey Trustee December 10, 1987
E. Phillip Cannon Trustee December 10, 1987
Gary L. Light Trustee December 10, 1987
William G. Christensen Trustee December 10, 1987
Joel Segall Trustee December 10, 1987
Timothy S. Healy, S.J. Trustee December 10, 1987
Emmet Cashin, Jr. Trustee December 10, 1987
Donald P. Carter Trustee December 10, 1987
<PAGE>
POWER OF ATTORNEY
I, the undersigned Trustee of Thomson Fund Group (the "Trust"), hereby severally
constitute and appoint Irwin F. Smith, Robert A. Prindiville, Newton B. Schott,
Jr. and Douglass N. Ellis, Jr., and each of them singly, my true and lawful
attorneys, with full power to them and each of them, to sign for me, and in my
name and in the capacities indicated below, the Registration Statement on Form
N-1A of the Trust and any and all amendments (including post-effective
amendments) to said Registration Statement and to file the same with all
exhibits thereto, and other documents in connection thereunder, with the
Securities and Exchange Commission, granting unto said attorneys, and each of
them, acting alone, full power and authority to do and perform each and every
act and thing necessary to be done in the premises, as fully to all intents and
purposes as he or she might or could do in person, and hereby ratify and confirm
all that said attorneys or any of them lawfully do or cause to be done by virtue
thereof.
WITNESS my hand and common seal on the date set forth below.
Signature: Capacity Date
Signed: W. Bryant Stooks Trustee November 8, 1993
<PAGE>
POWER OF ATTORNEY
I, the undersigned Trustee of Thomson Fund Group (the "Trust"), hereby severally
constitute and appoint Irwin F. Smith, Robert A. Prindiville, Newton B. Schott,
Jr. and Douglass N. Ellis, Jr., and each of them singly, my true and lawful
attorneys, with full power to them and each of them, to sign for me, and in my
name and in the capacities indicated below, the Registration Statement on Form
N-1A of the Trust and any and all amendments (including post-effective
amendments) to said Registration Statement and to file the same with all
exhibits thereto, and other documents in connection thereunder, with the
Securities and Exchange Commission, granting unto said attorneys, and each of
them, acting alone, full power and authority to do and perform each and every
act and thing necessary to be done in the premises, as fully to all intents and
purposes as he or she might or could do in person, and hereby ratify and confirm
all that said attorneys or any of them lawfully do or cause to be done by virtue
thereof.
WITNESS my hand and common seal on the date set forth below.
Signature: Capacity Date
Signed: Gary A. Childress Trustee November 8, 1993
<PAGE>
POWER OF ATTORNEY
I, the undersigned Trustee of Thomson Fund Group (the "Trust"), hereby severally
constitute and appoint Irwin F. Smith, Robert A. Prindiville, Newton B. Schott,
Jr. and Douglass N. Ellis, Jr., and each of them singly, my true and lawful
attorneys, with full power to them and each of them, to sign for me, and in my
name and in the capacities indicated below, the Registration Statement on Form
N-1A of the Trust and any and all amendments (including post-effective
amendments) to said Registration Statement and to file the same with all
exhibits thereto, and other documents in connection thereunder, with the
Securities and Exchange Commission, granting unto said attorneys, and each of
them, acting alone, full power and authority to do and perform each and every
act and thing necessary to be done in the premises, as fully to all intents and
purposes as he or she might or could do in person, and hereby ratify and confirm
all that said attorneys or any of them lawfully do or cause to be done by virtue
thereof.
WITNESS my hand and common seal on the date set forth below.
Signature: Capacity Date
Signed: Gerald M. Thorne Trustee November 8, 1993
<PAGE>
POWER OF ATTORNEY
I, the undersigned Trustee of Thomson Fund Group (the "Trust") hereby severally
constitute and appoint Robert A. Prindiville, Newton B. Schott, Jr. and Douglass
N. Ellis, Jr., and each of them singly, my true and lawful attorneys, with full
power to them and each of them, to sign for me, and in my name and in the
capacities indicated below, the Registration Statement on Form N-1A of the Trust
and any and all amendments (including post-effective amendments) to said
Registration Statement and to file the same with all exhibits thereto, and other
documents in connection thereunder, with the Securities and Exchange Commission,
granting unto said attorneys, and each of them, acting alone, full power and
authority to do and perform each and every act and thing necessary to be done in
the premises, as fully to all intents and purposes as he or she might or could
do in person, and hereby ratify and confirm all that said attorneys or any of
them lawfully do or cause to be done by virtue thereof.
WITNESS my hand and common seal on the date set forth below.
Signature: Capacity Date
Signed: William D. Cvengros Trustee October 27, 1994
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000730674
<NAME> PIMCO ADVISORS EQUITY INCOME FUND
<SERIES>
<NUMBER> 081
<NAME> CLASS A
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-START> OCT-01-1994
<PERIOD-END> SEP-30-1995
<INVESTMENTS-AT-COST> 168020
<INVESTMENTS-AT-VALUE> 192428
<RECEIVABLES> 4876
<ASSETS-OTHER> 22
<OTHER-ITEMS-ASSETS> 173
<TOTAL-ASSETS> 197499
<PAYABLE-FOR-SECURITIES> 7189
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1301
<TOTAL-LIABILITIES> 8490
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 156814
<SHARES-COMMON-STOCK> 915
<SHARES-COMMON-PRIOR> 1195
<ACCUMULATED-NII-CURRENT> 570
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 7217
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 24408
<NET-ASSETS> 189009
<DIVIDEND-INCOME> 4894
<INTEREST-INCOME> 2751
<OTHER-INCOME> 0
<EXPENSES-NET> (3685)
<NET-INVESTMENT-INCOME> 3959
<REALIZED-GAINS-CURRENT> 7701
<APPREC-INCREASE-CURRENT> 13912
<NET-CHANGE-FROM-OPS> 25572
<EQUALIZATION> (108)
<DISTRIBUTIONS-OF-INCOME> (344)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 261
<NUMBER-OF-SHARES-REDEEMED> 565
<SHARES-REINVESTED> 23
<NET-CHANGE-IN-ASSETS> (4825)
<ACCUMULATED-NII-PRIOR> 214
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1372
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 3685
<AVERAGE-NET-ASSETS> 183285
<PER-SHARE-NAV-BEGIN> 12.50
<PER-SHARE-NII> .36
<PER-SHARE-GAIN-APPREC> 1.61
<PER-SHARE-DIVIDEND> (.33)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 14.14
<EXPENSE-RATIO> 1.30
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000730674
<NAME> PIMCO ADVISORS EQUITY INCOME FUND
<SERIES>
<NUMBER> 082
<NAME> CLASS B
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-START> OCT-01-1994
<PERIOD-END> SEP-30-1995
<INVESTMENTS-AT-COST> 168020
<INVESTMENTS-AT-VALUE> 192428
<RECEIVABLES> 4876
<ASSETS-OTHER> 22
<OTHER-ITEMS-ASSETS> 173
<TOTAL-ASSETS> 197499
<PAYABLE-FOR-SECURITIES> 7189
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1301
<TOTAL-LIABILITIES> 8490
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 156814
<SHARES-COMMON-STOCK> 125
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 570
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 7217
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 24408
<NET-ASSETS> 189009
<DIVIDEND-INCOME> 4894
<INTEREST-INCOME> 2751
<OTHER-INCOME> 0
<EXPENSES-NET> (3685)
<NET-INVESTMENT-INCOME> 3959
<REALIZED-GAINS-CURRENT> 7701
<APPREC-INCREASE-CURRENT> 13912
<NET-CHANGE-FROM-OPS> 25572
<EQUALIZATION> (108)
<DISTRIBUTIONS-OF-INCOME> (6)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 127
<NUMBER-OF-SHARES-REDEEMED> 3
<SHARES-REINVESTED> 1
<NET-CHANGE-IN-ASSETS> (4825)
<ACCUMULATED-NII-PRIOR> 214
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1372
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 3685
<AVERAGE-NET-ASSETS> 183285
<PER-SHARE-NAV-BEGIN> 12.55
<PER-SHARE-NII> .11
<PER-SHARE-GAIN-APPREC> 1.55
<PER-SHARE-DIVIDEND> (.08)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 14.13
<EXPENSE-RATIO> 2.10
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000730674
<NAME> PIMCO ADVISORS EQUITY INCOME FUND
<SERIES>
<NUMBER> 083
<NAME> CLASS C
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-START> OCT-01-1994
<PERIOD-END> SEP-30-1995
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<TOTAL-LIABILITIES> 8490
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<SHARES-COMMON-PRIOR> 14349
<ACCUMULATED-NII-CURRENT> 570
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<ACCUM-APPREC-OR-DEPREC> 24408
<NET-ASSETS> 189009
<DIVIDEND-INCOME> 4894
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<NET-INVESTMENT-INCOME> 3959
<REALIZED-GAINS-CURRENT> 7701
<APPREC-INCREASE-CURRENT> 13912
<NET-CHANGE-FROM-OPS> 25572
<EQUALIZATION> (108)
<DISTRIBUTIONS-OF-INCOME> (3191)
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<NUMBER-OF-SHARES-SOLD> 2571
<NUMBER-OF-SHARES-REDEEMED> 4777
<SHARES-REINVESTED> 225
<NET-CHANGE-IN-ASSETS> (4825)
<ACCUMULATED-NII-PRIOR> 214
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
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<GROSS-ADVISORY-FEES> 1372
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 3685
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<PER-SHARE-NAV-BEGIN> 12.47
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<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000730674
<NAME> PIMCO ADVISORS VALUE FUND
<SERIES>
<NUMBER> 151
<NAME> CLASS A
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-START> OCT-01-1994
<PERIOD-END> SEP-30-1995
<INVESTMENTS-AT-COST> 11110
<INVESTMENTS-AT-VALUE> 11594
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<OTHER-ITEMS-ASSETS> 1250
<TOTAL-ASSETS> 13327
<PAYABLE-FOR-SECURITIES> 150
<SENIOR-LONG-TERM-DEBT> 0
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<TOTAL-LIABILITIES> 218
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 12603
<SHARES-COMMON-STOCK> 233
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 22
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 1
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 485
<NET-ASSETS> 13110
<DIVIDEND-INCOME> 70
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<EXPENSES-NET> (41)
<NET-INVESTMENT-INCOME> 45
<REALIZED-GAINS-CURRENT> 1
<APPREC-INCREASE-CURRENT> 485
<NET-CHANGE-FROM-OPS> 531
<EQUALIZATION> 22
<DISTRIBUTIONS-OF-INCOME> (12)
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<NET-CHANGE-IN-ASSETS> 13110
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<PER-SHARE-NAV-BEGIN> 10.00
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000730674
<NAME> PIMCO ADVISORS VALUE FUND
<SERIES>
<NUMBER> 152
<NAME> CLASS B
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-START> OCT-01-1994
<PERIOD-END> SEP-30-1995
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<INVESTMENTS-AT-VALUE> 11594
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<OTHER-ITEMS-ASSETS> 1250
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<PAYABLE-FOR-SECURITIES> 150
<SENIOR-LONG-TERM-DEBT> 0
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<TOTAL-LIABILITIES> 218
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 12603
<SHARES-COMMON-STOCK> 372
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 22
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 1
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 485
<NET-ASSETS> 13110
<DIVIDEND-INCOME> 70
<INTEREST-INCOME> 16
<OTHER-INCOME> 0
<EXPENSES-NET> (41)
<NET-INVESTMENT-INCOME> 45
<REALIZED-GAINS-CURRENT> 1
<APPREC-INCREASE-CURRENT> 485
<NET-CHANGE-FROM-OPS> 531
<EQUALIZATION> 22
<DISTRIBUTIONS-OF-INCOME> (12)
<DISTRIBUTIONS-OF-GAINS> 0
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<SHARES-REINVESTED> 1
<NET-CHANGE-IN-ASSETS> 13110
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<AVERAGE-NET-ASSETS> 8327
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> .05
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<PER-SHARE-DIVIDEND> (.04)
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<EXPENSE-RATIO> 2.10
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000730674
<NAME> PIMCO ADVISORS VALUE FUND
<SERIES>
<NUMBER> 153
<NAME> CLASS C
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-START> OCT-01-1994
<PERIOD-END> SEP-30-1995
<INVESTMENTS-AT-COST> 11110
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<TOTAL-LIABILITIES> 218
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 12603
<SHARES-COMMON-STOCK> 622
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 22
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 1
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 485
<NET-ASSETS> 13110
<DIVIDEND-INCOME> 70
<INTEREST-INCOME> 16
<OTHER-INCOME> 0
<EXPENSES-NET> (41)
<NET-INVESTMENT-INCOME> 45
<REALIZED-GAINS-CURRENT> 1
<APPREC-INCREASE-CURRENT> 485
<NET-CHANGE-FROM-OPS> 531
<EQUALIZATION> 22
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<NET-CHANGE-IN-ASSETS> 13110
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<GROSS-EXPENSE> 41
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<PER-SHARE-NAV-BEGIN> 10.00
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<PER-SHARE-DIVIDEND> (.04)
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<EXPENSE-RATIO> 2.00
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000730674
<NAME> PIMCO ADVISORS GROWTH FUND
<SERIES>
<NUMBER> 021
<NAME> CLASS A
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-START> OCT-01-1994
<PERIOD-END> SEP-30-1995
<INVESTMENTS-AT-COST> 1211567
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<NET-CHANGE-IN-ASSETS> 239946
<ACCUMULATED-NII-PRIOR> 0
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<PER-SHARE-NAV-BEGIN> 22.01
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000730674
<NAME> PIMCO ADVISORS GROWTH FUND
<SERIES>
<NUMBER> 022
<NAME> CLASS B
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-START> OCT-01-1994
<PERIOD-END> SEP-30-1995
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000730674
<NAME> PIMCO ADVISORS GROWTH FUND
<SERIES>
<NUMBER> 023
<NAME> CLASS C
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-START> OCT-01-1994
<PERIOD-END> SEP-30-1995
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000730674
<NAME> PIMCO ADVISORS TARGET FUND
<SERIES>
<NUMBER> 111
<NAME> CLASS A
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1995
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000730674
<NAME> PIMCO ADVISORS TARGET FUND
<SERIES>
<NUMBER> 112
<NAME> CLASS B
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<S> <C>
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