<PAGE>
PIMCO Advisors Funds
1996 Annual Report
[ART APPEARS HERE]
The long-running, high-climbing bull market in stocks has left some investors
wondering what's around the corner. Story on page 4.
STOCK FUNDS
Equity Income
Value
Growth
Target
Discovery
Opportunity
Innovation
International
Precious Metals
BOND FUNDS
Global Income
High Income
Total Return Income
Tax Exempt
U.S. Government
Short-Intermediate
Money Market
Inside this report:
Page 2 Letter From PIMCO Advisors Funds' President
Where We've Been and What's Ahead
Page 4 Today's Investor
The Stock Market's Historic Climb
Page 6 Fund Spotlight
PIMCO Advisors Innovation Fund
Page 7 In The News
Proposed Consolidation of Fund Families
Page 8 Investor Services Corner
Page 9 Overview: Comprehensive Fund Family
Page 10 PIMCO Advisors Funds Financial Information
P I M C O
<PAGE>
President's Letter
Dear Fellow Shareholder
During the past year the financial markets have certainly had their share of ups
and downs. For those long-term investors who remained focused on the bigger
picture, however, this year brought its rewards. The year-to-date ended
September 30, 1996, saw the stock market, as measured by the Standard & Poor's
500 Index, up a healthy 13.5%. And after early-year losses, the bond market, as
measured by the Lehman Aggregate Bond Index, rebounded and was up 0.6%. For a
detailed review of the stock and bond markets, please refer to the discussion on
the following page.
A Volatile Year Uncertainty over the strength of the economy has been one of
the driving forces behind market performance over the last twelve months. Each
new piece of economic data was closely scrutinized in the hope of determining
where the economy was moving. But the data has often been conflicting, confusing
investors and leading to market fluctuations.
The most visible example of the focus on the economy and short-term events
occurred this past March, when the government announced that over 700,000 new
jobs were created the previous month. This announcement led to concerns of
rising inflation and interest rates, which in turn led to a 171 point (3%) drop
in the Dow Jones Industrial Average and a 3.5% drop in the average price of
bonds.
Looking Ahead Unfortunately, no clear economic picture has yet evolved and the
market still appears fixated on very short-term events, meaning market
volatility is likely to continue. We at PIMCO Advisors believe investors should
avoid making rash decisions during this type of volatile period and should
instead remain focused on longer-term investment goals.
We also urge our shareholders to have realistic expectations for investment
performance, especially in the stock market. After a record-setting six-year
bull market, it will be increasingly difficult for stocks to post annual double-
digit gains. The article on page four provides a number of strategies to
consider with your financial advisor given this situation and current market
conditions.
As an investor in the PIMCO Advisors Funds, you have received a proxy
statement and ballot concerning a proposal to consolidate and restructure the
PIMCO Advisors Funds with the institutional PIMCO Funds family. We're very
excited about the $24 billion fund family which can result from this transaction
and the potential benefits to our shareholders. We urge you to cast your vote as
soon as possible, if you have not already done so.
If approved, the PIMCO Advisors Funds would combine with two existing
trusts: PIMCO Funds: Multi-Manager Series and the PIMCO Funds: Pacific
Investment Management Series. These trusts will be led by two experienced
investment management professionals, Stephen Treadway and Brent Harris,
respectively. As the PIMCO Advisors Funds will cease to exist, I will no longer
serve as President, but I am standing for election as a Trustee of the PIMCO
Funds: Multi-Manager Series. This will allow me to continue working for the
interests of our shareholders. I would like to thank you for the support you
have placed in PIMCO Advisors by entrusting us with your investment dollars.
Sincerely,
/s/ Robert A. Prindiville
Robert A. Prindiville
President
November 15, 1996
2/PIMCO Advisors Funds
<PAGE>
Stocks Continue Higher
Stock Market Review
The stock market continues to show amazing resiliency in the face of adversity.
In March, the market experienced one of its largest one-day point drops in its
history. And during the summer, fears of rising inflation and interest rates
resulted in a notable slump--particularly in the technology sector. But in both
cases investors took the declines in stride and used the price drops as
opportunities to buy stocks "on sale." As a result, stocks rebounded quickly,
allowing the bull market to forge ahead into record territory.
Year-to-date ended September 30, 1996, the market has risen over 13%. Large
capitalization, or large-cap stocks have led the way, followed by mid-cap and
small-cap issues. This is not entirely surprising, as investors often favor
stocks of larger companies during periods of market volatility. Most recently,
stocks in the technology, health care and financial sectors have been the best
performers.
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
DATE PRICE DATE PRICE DATE PRICE DATE PRICE
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
10/06/95 582.49 1/05/96 616.71 4/05/96 655.86 7/05/96 657.44
10/13/95 584.50 1/12/96 601.81 4/12/96 636.71 7/12/96 646.19
10/20/95 587.46 1/19/96 611.83 4/19/96 645.07 7/19/96 638.73
10/27/95 579.70 1/26/96 621.62 4/26/96 653.46 7/26/96 635.90
11/03/95 590.57 2/02/96 635.85 5/03/96 641.63 8/02/96 662.49
11/10/95 592.72 2/09/96 656.37 5/10/96 652.09 8/09/96 662.10
11/17/95 600.07 2/16/96 647.98 5/17/96 668.91 8/16/96 665.21
11/24/95 599.97 2/23/96 659.08 5/24/96 678.51 8/23/96 667.03
5/31/96 669.12 8/30/96 651.99
12/01/95 606.98 3/01/96 644.37
12/08/95 617.48 3/08/96 633.50 6/07/96 673.31 9/06/96 655.68
12/15/95 616.34 3/15/96 641.43 6/14/96 665.85 9/13/96 680.54
12/22/95 611.96 3/22/96 650.62 6/21/96 666.84 9/20/96 687.02
12/29/95 615.93 3/29/96 645.50 6/28/96 670.63 9/27/96 686.19
</TABLE>
Despite volatility, stocks have continued their ascent over the last year.
Source: Standard & Poor's 500 Index.
Turning to the international stock markets, overall performance was less
notable. This was especially the case with many Asian and European markets. In
Japan, the market slump has continued, due to increasing doubts about the pace
and magnitude of the country's economic recovery. In Europe, political and
economic concerns have been a drag on performance. However, several emerging
markets showed more promising results, particularly in Latin America.
Going forward, we currently anticipate slow economic growth, coupled with
moderate inflation and relatively low interest rates. With this scenario,
it's hard to imagine a more positive environment for the stock market. This
is already evident by the relatively strong corporate profits being reported by
many firms during the third quarter of 1996. However, given the historic length
of the current bull run, market surprises (such as a change in the economic,
corporate or political landscape) could lead to further volatility for
investors.
Bonds Bouncing Back?
Bond Market Review
It appears that bond market performance may be turning the corner. The year
certainly started out on the right note as inflation was low and the economy
appeared weak. This is often positive for the bond market since it typically
leads to falling interest rates. When rates fall, the price of bonds rise.
Then, during the first quarter of 1996, there were signs that the economy was
picking up steam. This led to fears of higher inflation and higher interest
rates--the proverbial one-two punch for bonds. The market's worst fears were
realized in March, when surprisingly strong job market data was released. In a
single day bond prices fell sharply and interest rates began a five month
ascent--with long-term rates finally peaking at almost 7.2% by early July.
Over the last three months, economic data has sent very mixed signs regarding
the direction of the economy. And signals from the Federal Reserve Board
alternatively depressed and elevated prospects regarding interest rate
movements. By the end of September, tame inflation and moderating growth led to
a Federal Reserve decision not to increase interest rates. This was greeted
enthusiastically by the bond market, and interest rates have started to fall.
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
DATE YIELD DATE YIELD DATE YIELD DATE YIELD
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
10/06/95 6.422 1/05/96 6.047 4/05/96 6.827 7/05/96 7.195
10/13/95 6.306 1/12/96 6.150 4/12/96 6.805 7/12/96 7.033
10/20/95 6.364 1/19/96 5.976 4/19/96 6.789 7/19/96 6.977
10/27/95 6.358 1/26/96 6.047 4/26/96 6.792 7/26/96 7.011
11/03/95 6.286 2/02/96 6.166 5/03/96 7.120 8/02/96 6.746
11/10/95 6.340 2/09/96 6.100 5/10/96 6.931 8/09/96 6.693
11/17/95 6.234 2/16/96 6.246 5/17/96 6.836 8/16/96 6.771
11/24/95 6.252 2/23/96 6.408 5/24/96 6.837 8/23/96 6.958
5/31/96 6.992 8/30/96 7.121
12/01/95 6.089 3/01/96 6.370
12/08/95 6.056 3/08/96 6.714 6/07/96 7.034 9/06/96 7.113
12/15/95 6.100 3/15/96 6.741 6/14/96 7.092 9/13/96 6.951
12/22/95 6.066 3/22/96 6.658 6/21/96 7.099 9/20/96 7.046
12/29/95 5.951 3/29/96 6.670 6/28/96 6.874 9/27/96 6.911
</TABLE>
Rising interest rates have hurt bond performance in 1996, but relief may be in
sight.
Source: 30-year bond yield.
Despite bond market fluctuations, in May PIMCO Advisors' Pacific Investment
Management Company reaffirmed its long-term forecast of 5-7% rates on 30-year
Treasury bonds. Given that rates are still close to 7%, they are very optimistic
about the prospect for rate declines. This is especially true, as Pacific
Investment Management remains confident that the U.S. economy will grow less
quickly than market expectations. This view, together with a benign inflation
outlook, creates a back-drop for potentially attractive returns for the coming
year.
Of course, there could be some setbacks along the way. In the short-term, we
could see an uptick in the inflation rate due largely to the increase in oil
prices. However, we would view this as a temporary blip and would believe that
higher oil prices could eventually lead to slower economic growth and restrained
inflation beginning early next year. .
1996 Annual Report/3
<PAGE>
------------------
Today's Investor
------------------
The Stock Market's Historic Climb
And What You Should Do About It
History was made on October 14, 1996, when the Dow Jones Industrial Average
topped 6000 for the first time. This achievement was just the latest milestone
in a spectacular six-year bull market for stocks. But as the year draws to a
close, the question looms--what should you do now?
Any way you look at it, the current bull market has been a record-setter*:
. Being six years old, it is nearly twice as long as any previous bull market.
. It has resulted in the largest percentage gain of any bull market.
. During its run, the Dow has posted an 18.3% annualized return versus a 10.5%
annualized return from 1926-1995.
. When the bull market began, the Dow stood at 2365. In mid-October 1996, it
had risen to over 6000.
A Record-Breaking Bull Market
The Dow's biggest bull markets, ranked by the rise through..
<TABLE>
<CAPTION>
Percentage No. of Percentage No. of
Increase Days Increase Days
- -------------------------------------- --------------------------------------
<S> <C> <C> <C> <C> <C>
Oct. 14, 1996 153.7% 2,195 Sept. 23, 1955 90.8% 739
- -------------------------------------- --------------------------------------
Aug. 25, 1987 150.6% 1,127 Feb. 11, 1926 83.8% 632
- -------------------------------------- --------------------------------------
Nov. 28, 1928 103.0% 771 May 14, 1965 75.4% 1,053
- -------------------------------------- --------------------------------------
</TABLE>
Source: Birinyi Associates. Based on bull markets without a decline of at
least 10%.
Past performance is not indicative of future results.
Breaking 6000
To many people, breaking the 6000 barrier this year was a surprise. Especially
given the stock market's mini-correction this summer. By mid-July, the Dow had
fallen below 5400 and it appeared that it was more likely to drop back to 5000
before it hit 6000. But once again, investors who didn't panic reaped the
benefits, as the Dow roared ahead 600 points during the next 12 weeks.
From a statistical standpoint, the market's increase from 5000 to 6000
represents a 20% gain. While this is a strong increase, it pales in comparison
to previous 1000 point milestones. For example, the Dow rising from 2000 to 3000
represented a 50% gain. But if nothing else, the latest milestone is
psychologically important--especially given the speed of the market's ascent.
[ART APPEARS HERE]
Hitting Milestones in Record Time
The last 2000 point increase in the Dow occurred in less than two years.
<TABLE>
<CAPTION>
Date Months to Date Months to
Level Crossed Achieve Level Crossed Achieve
- ---------------------------------- ----------------------------------
<S> <C> <C> <C> <C> <C>
1000 11/14/72 1037 4000 2/23/95 46
- ---------------------------------- ----------------------------------
2000 1/8/87 170 5000 11/21/95 9
- ---------------------------------- ----------------------------------
3000 4/17/91 51 6000 10/14/96 11
- ---------------------------------- ----------------------------------
</TABLE>
Source: USA Today. Past performance is not indicative of future results.
Will the Rally Continue?
Opinions abound on whether the stock market will continue to rise. This isn't
surprising because the length and breadth of this bull market is unsurpassed.
Stock market bulls believe the outlook is promising given these factors:
. From an historical standpoint, economic conditions are nearly perfect.
Inflation is low, interest rates have fallen and growth is modest.
. According to the October 11th issue of USA Today, the market is now trading
at 17.4 times expected 1996 earnings. This is fairly normal, given current
economic conditions.
. U.S.-led technological innovations have boosted productivity both here and
abroad.
. Many U.S. corporations have made strong inroads in the global marketplace.
Meanwhile, the bears feel these reasons could trigger a pullback:
. With the bull market at six years old, it is overdue for a fall.
. If economic conditions falter, so will stock prices. An increase in inflation
or interest rates could cause a downturn.
. Uncertainty regarding the post-election political environment.
. While it hasn't happened in the past, many of today's new investors may panic
if the market corrects in any meaningful way.
What You Should Do Now
Of course, no one can know with certainty where the market is headed. During the
summer few thought the bull market could continue. On the other hand, it's
inevitable that a market correction will eventually occur. So whether the
market's next move is up or down 500 points, you should discuss these time-
tested strategies with your financial advisor.
4 / PIMCO Advisors Funds
<PAGE>
1. Rebalance Your Portfolio
Given the recent performance of the stock and bond markets, your portfolio
may no longer be properly diversified. Consider a hypothetical investor with a
portfolio of 65% in stock funds and 35% in bond funds as of January 1, 1995. As
of September 30, 1996 the stock allocation would have ballooned to 71% of the
portfolio, while the bond portion would have fallen to 29%. As a result, a
reallocation would be necessary.
Recent Market's Performance May Have Impaired A Diversified Portfolio
<TABLE>
<CAPTION>
JANUARY 1, 1995 SEPTEMBER 30, 1996
Initial Initial Percent New New Percent
Allocation Allocation Allocation Allocation
- ------------------------------------------ --------------------------
<S> <C> <C> <C> <C>
Stocks $65,000 65% $101,367 71%
- ------------------------------------------ --------------------------
Bonds $35,000 35% $ 41,475 29%
- ------------------------------------------ --------------------------
</TABLE>
Stocks represented by the S&P 500 Index, an unmanaged index of common stocks.
Bonds represented by the Lehman Brothers Aggregate Bond Index, an unmanaged
index of bonds. It is not possible to invest in an unmanaged index, and results
are not indicative of any PIMCO Advisors Fund. Past performance is not
indicative of future results.
2.Don't Shun Stocks
Given the length of the bull market, it may be tempting to move out of stocks
and reenter after prices have fallen. But trying to "time the market" rarely
works. That's because market rallies often happen in short bursts. Consider what
happens to returns if you missed a few days of strong performance.
Annualized Stock Market Returns
Missing a few days of strong performance makes a big difference
<TABLE>
- ------------------------------------- ----------------------------------------
<S> <C> <C> <C>
Fully invested 16.5% Missed the 30 best days 4.2%
- ------------------------------------- ----------------------------------------
Missed the 10 best days 11.1% Missed the 40 best days 1.4%
- ------------------------------------- ----------------------------------------
Missed the 20 best days 7.3% Missed the 60 best days -3.4%
- ------------------------------------- ----------------------------------------
</TABLE>
Source: Miami Herald, showing the return of the S&P 500 Index, an unmanaged
index of common stocks, for the 5-year period ended 12/31/95. It is not possible
to invest in an unmanaged index and results are not indicative of any PIMCO
Advisors Fund. Past performance is not indicative of future results.
If you're still wary of the stock market's lofty level you may wish to
consider stock funds that are relatively more conservative. Examples include
equity income funds that seek growth and income, and "value" funds which seek to
invest in undervalued investments.
3.Consider Bond Funds
The combination of slower economic growth, manageable inflation and the
potential for falling interest rates could point to the prospects of strong
returns from bonds in the coming year. This forecast is being trumpeted by Bill
Gross of PIMCO Advisors' Pacific Investment Management Company. Morningstar
(2/96) has stated that Mr. Gross has "an uncanny ability to call interest rates"
and Louis Rukeyser calls him "the king of the bond world." Mr. Gross believes
that bonds prices will rebound in the coming months, and that long-term interest
rates could fall to the 5.75% range in the next year.
4.Establish A Regular Investment Program
It's impossible to invest only when prices are down and about to rise. So why
try? A better strategy is "dollar-cost averaging"--investing a set amount each
month, regardless of market conditions. Over time, this strategy can help to
lower the average cost of your investment purchases, and can help to keep you
focused on your longer-term goals in the face of market volatility.
Regular Investment Programs Can Lower Your Cost per Share
Dollar-Cost Averaging: $250 investment per month
<TABLE>
<CAPTION>
Number of Number of
Fund's Net Shares Fund's Net Shares
Month Asset Value Purchased Month Asset Value Purchased
- ------------------------------------- -------------------------------------
<S> <C> <C> <C> <C> <C>
1 $12.00 20.833 4 $ 9.00 27.777
- ------------------------------------- -------------------------------------
2 $10.00 25.000 5 $11.00 22.727
- ------------------------------------- -------------------------------------
3 $ 7.00 35.714 6 $12.00 20.833
- ------------------------------------- -------------------------------------
Average net asset value: $10.17 Average purchase price: $9.81
- ------------------------------------- -------------------------------------
Total shares purchased: 152.884 Amount saved, per share: $0.36
</TABLE>
Results are hypothetical and not indicative of any PIMCO Advisors Fund. Like all
investments, this approach can't protect you from a loss in declining markets or
guarantee a profit. Investors should consider their ability to continue
investing during periods of low price levels.
5. Maintain Realistic Expectations
Many new investors have become accustomed to the historically high stock and
bond market returns in recent years. Therefore, more than ever, you should be
aware that "past performance is no guarantee of future results." So don't be
disappointed if returns move closer to their historical averages in the coming
years.
Historical vs. Recent Annualized Returns
<TABLE>
<CAPTION>
LAST 65 YEARS LAST 5 YEARS
<S> <C> <C>
- -------------------------------------------------
Common Stocks 10.7% 16.6%
- -------------------------------------------------
Corporate Bonds 5.7% 12.2%
- -------------------------------------------------
Government Bonds 5.3% 8.8%
- -------------------------------------------------
</TABLE>
Source: Ibbotson Associates (12/31/30-12/31/95). Common Stocks represented by
the S&P 500 Index; Corporate Bonds represented by Salomon Brothers Long-Term
High Grade Corp. Bond Index; Government Bonds represented by a one bond
portfolio of intermediate-term bonds. Results are not indicative of any PIMCO
Advisors Fund. Past performance is not indicative of future results. It is not
possible to invest in an unmanaged index.
The only predictable part about investing is its unpredictability. That's why
it's so important to develop a long-term investment program with your financial
advisor--and stick to it. If market volatility begins to concern you, we'd urge
you to contact your financial advisor prior to making any hasty investment
decisions. .
*Bull market returns based on the performance of the Dow Jones Industrial
Average. Historical market returns (1926-1995) based on data from Ibbotson
Associates.
Investment return will fluctuate and the value of an investor's shares will
fluctuate and may be worth more or less than original cost when redeemed.
1996 Annual Report/5
<PAGE>
Fund Spotlight
PIMCO Advisors Innovation Fund
The PIMCO Advisors Innovation Fund seeks capital appreciation by investing in
technology-related stocks. While past performance is not a guarantee of future
results, since its inception, the Fund has been an outstanding performer--easily
outperforming competitive mutual funds.
Average Annual Total Returns*
For periods ended September 30, 1996
<TABLE>
<CAPTION>
1 Year Since Inception (12/22/94)
- ------------------------------------------------------------------------
<S> <C> <C>
Innovation Fund C 18.1% 36.9%
- ------------------------------------------------------------------------
Competitive Funds Average 7.7% 29.2%
</TABLE>
To learn more, we spoke with Tony Rizza from PIMCO Advisors' Columbus Circle
Investors.
Q: Since the Fund's inception in 1994, technology stocks have had two
substantial corrections. How has the Fund fared during those periods?
A: Extremely well, due in part to the Fund's broad definition of technology.
In addition to investing in traditional technology companies, we have the
flexibility to invest in firms in other industries that use technology to gain a
strategic, competitive advantage. We typically hold between 20-30% of the Fund's
portfolio in those types of companies.
Q: Can you give us some examples of non-traditional technology companies?
A: Early on we invested in Gillette, which utilized 3-D electron microscopes
and other proprietary lab equipment to develop their innovative Sensor Razor.
And we invested in Callaway Golf, which has revolutionized the golf industry
with its titanium clubs.
We've also experienced many successes in the healthcare industry. One
example is Guidant, which markets a lifesaving device that is implanted in
recent heart attack victims. The device senses when the heart is beating too
fast and responds by sending a shock to the heart so that normal rhythm is
restored.
Q: Where do you see the best opportunities in traditional technology
industries?
A: The Fund is focusing on several major themes. In the PC industry we've seen
continued strong worldwide demand for PCs. Couple that with exciting software
upgrades, increased acceptance of the Internet, and multimedia uses for PCs, and
we can see the potential for solid growth for years to come.
Next, reduced government regulations have led to explosive developments in
the interactive media and cable television industry. As the information
superhighway further evolves, we believe video-on-demand, interactive TV and in-
home information services could become household "appliances."
Q: Any other focal points for the Fund?
A: There has already been tremendous acceptance of cellular phones and beeper
equipment. And we feel the wireless communications industry is poised for
further expansion. This area will be especially attractive as costs decline,
quality improves and security concerns are addressed.
Outsourcing firms should continue to thrive as more companies turn over
their computing needs and payrolls to firms specializing in these areas.
Outsourcing is an effective way for a company to quickly lower their costs,
decrease capital expenditures and become more cost-efficient.
And finally, the shift from mainframes to PCs has led to the need for
expanded and enhanced networking of computers. As the shift to home offices
expands, the demand for more efficient computer links should accelerate.
[PHOTO ANTHONY RIZZA]
Anthony Rizza, Managing Director,
Columbus Circle Investors
Top Ten Holdings
9/30/96
- --------------------------- ---------------------------
Cisco Systems, Inc. 3COM Corp.
- --------------------------- ---------------------------
Cascade Communication Corp. Guidant Corp.
- --------------------------- ---------------------------
Ascend Communications, Inc. Adaptec, Inc.
- --------------------------- ---------------------------
Intel Corp. APAC Teleservices
- --------------------------- ---------------------------
Lucent Technologies, Inc. U.S. Robotics Corp.
- --------------------------- ---------------------------
6/PIMCO Advisors Funds
<PAGE>
Q: In general, what is your outlook for the technology sector?
A: It's been estimated that technology accounts for about 15% of the U.S.
economy and is growing 20% a year. You'd be hard pressed to find many industries
with that kind of growth potential.
Q: What type of investor do you feel the Fund is appropriate for?
A: Aggressive investors who are excited about the vast potential
technology-related stocks offer over the long-term. Because the Fund
concentrates its portfolio in the technology area, it will be more volatile than
a more diversified stock fund. Therefore, it should only be part of a more
diversified investment portfolio.
To learn more about the PIMCO Advisors Innovation Fund, refer to page 29 or
contact your financial advisor.
* Performance returns listed for Class C shares, which includes the effect of
paying the 1% contingent deferred sales charge (CDSC), which may apply to shares
purchased during the first year of ownership. Results include changes in share
price and reinvestment of all dividends and capital gains distributions.
Investment return will fluctuate and the value of an investor's shares will
fluctuate and may be worth more or less than original cost when redeemed.
The Fund also offers Class A and B shares as of 12/22/94 and 5/22/95,
respectively. Class A shares have a maximum initial sales charge of 5.75% and
Class B shares have a CDSC which declines from 5% in the first year to 0% at the
beginning of the seventh year. All investment classes have the same portfolio,
but different expenses. For performance data for other share classes refer to
page 29 of this report.
"Competitive Funds Average" represented by the Lipper Science & Technology Fund
Average, which is calculated by Lipper Analytical Services Inc. It's a
performance average of those funds tracked by Lipper which have an investment
objective of capital appreciation through investment in technology-oriented
companies. It does not take into account sales charges. The views of Mr. Rizza
are not indicative of any past or future performance of the Fund and portfolio
holdings are subject to change.
- --------------------------------------------------------------------------------
In The News
- --------------------------------------------------------------------------------
PIMCO Proposes
Consolidation of Fund Families
We're pleased to announce a proposal to restructure and consolidate the PIMCO
Advisors Funds with the institutional PIMCO Funds family. If approved by
shareholders, all of the funds will fall under the "PIMCO Funds" banner. Each of
our stock and bond funds will continue to utilize the same PIMCO Advisors
investment firms.* If the consolidation is approved, you'll experience a host of
potential benefits.
Strong Performance Histories To avoid duplication and confusion, several of our
Funds will merge into existing institutional PIMCO Funds. In almost all cases,
the funds' manager will stay the same. By and large, the institutional funds
have strong track records and longer performance histories.
Bond Fund Expenses Reduced In the future, the total expenses incurred by retail
investors in our taxable bond funds will be substantially lower than they have
been in the past.
Expanded Fund Family By offering nine additional institutional PIMCO funds that
have established track records our fund family will grow to 25 funds. That would
give you added flexibility should your investment objectives change, or if you
wish to make an exchange among our funds.
Investment Clout The consolidated fund family will be one of the largest fund
complexes in the country. With initial assets of $24 billion (based on current
values), this size can mean greater cost efficiencies when buying and selling
portfolio securities and negotiating fees.
Consolidation Timing By now, all investors who owned shares of PIMCO Advisors
Funds as of October 18, 1996 should have received one or more proxy statements
and ballots. To avoid the cost of follow-up mailings, we urge these shareholders
to cast their ballot as soon as possible. If the consolidation is approved, it's
anticipated that the changes would occur in mid-January.
*If approved, the PIMCO Advisors Money Market Fund will be merged into the PIMCO
Money Market Fund managed by PIMCO Advisors Pacific Investment Management
Company.
Opportunity Fund to
Reopen for A Limited Time
The PIMCO Advisors Opportunity Fund invests primarily in stocks of smaller,
emerging companies. On December 31, 1992, the Fund was closed to new investors.
Since the Fund's closing nearly four years ago, many exciting new companies
have been introduced to the marketplace. As a result, the manager believes it is
an appropriate time to reopen the Fund. In order to protect the interests of
current and new shareholders, the reopening will be for a limited time only,
starting January 27, 1997 (assuming market conditions do not change beforehand).
While the Fund is open, it will accept new accounts with a minimum investment of
$20,000 and maximum of $250,000 (subject to the discretion of the Distributor).
The Fund will close again to new investors as soon as new assets reach $250
million.
As in the past, once the Fund is closed to new investors, we plan to allow
existing Opportunity Fund shareholders to continue to add to their account.
1996 Annual Report/7
<PAGE>
--------------------------
Investor Services Corner
--------------------------
24-Hour Automated Telephone System
Have you ever needed to learn the price of your PIMCO Advisors Fund at the
end of the trading day? Or wanted a quick overview on the financial markets?
With PIMCO Advisors' Automated Telephone Information System these facts and more
are available 24-hours a day!
This system provides a wide variety of financial information, including:
[_] the latest day's fund prices
[_] fund dividend information
[_] account balances and details on recent transactions (for shareholders
who receive account statements directly from PIMCO Advisors)
[_] stock and bond market closing prices
[_] timely reviews of the financial markets.
The system is easy to use--simply dial 1-800-223-2413 from your touch-
tone phone.
- --------------------------------------------------------------------------------
MAIN MENU
- --------------------------------------------------------------------------------
[1] for information about the PIMCO Advisors Funds
(i.e., current prices, recent distributions)
[2] for information about your account
(i.e., account value, recent transactions)
[3] to make an account transaction with a customer service representative
(during business hours)
[4] to create or change a Personal Identification Number (PIN)
[5] for an update on the financial markets
Once you're connected you'll be asked to select from these options
- --------------------------------------------------------------------------------
HELP IN GETTING AROUND
- --------------------------------------------------------------------------------
[*] [1] to go to other items on the main menu
[*] [2] to fast-forward in the selection you're listening to
[*] [3] to delete your entry
[*] [4] to listen to more options
[*] [5] to return to the beginning of your selection from the main menu
[*] [6] to return to the main menu
[*] [7] to repeat the most recent information
[*] [8] to return to the shareholder identification process
[*] [9] to repeat information for the last account number entered
[*] [0] to speak with a customer service representative during regular business
hours
For help in moving about the system, you can use these options
We believe you'll find this service to be a convenient way to learn more about
your Funds and the financial markets in general. To receive a free brochure that
contains more information on the system, and details on the other shareholder
services available from PIMCO Advisors, call us today at 1-800-227-7337.
The PIMCO Advisors
Funds Family
The PIMCO Advisors Funds are managed by PIMCO Advisors L.P.--a publicly traded
company that specializes in the investment management business. Currently, PIMCO
Advisors has $104 billion in assets under management, including $24 billion in
mutual funds. Under the PIMCO Advisors L.P. umbrella are six institutional
investment management firms--each with a specific investment discipline or
style. As primarily "institutional" managers, these firms manage assets for
large corporations, pensions and endowments. In fact, they collectively manage
assets for 35 of the 100 largest corporations in the U.S.
In the past, their high minimum account balances (up to $75 million in
some cases) kept these managers' expertise out of reach for most investors.
However, as managers of the PIMCO Advisors Funds, their expertise is now
available to all investors. To learn more about a fund manager, call us at
1-800-227-7337 to receive a free brochure.
The PIMCO Advisors Funds Family consists of core stock and bond funds,
as well as more focused funds that allow investors to round out and customize
their portfolio. Together, the PIMCO Advisors Funds offer the breadth and
quality that will satisfy virtually every investor's needs.
Specialized Stock Fund Managers
PIMCO Advisors believes that different types of stock funds require specialized
expertise. To ensure that you get the highest quality management for whichever
PIMCO Advisors stock fund you choose, we have carefully matched each fund with a
PIMCO Advisors firm that specializes in that discipline.
Premier Bond Fund Managers
The PIMCO Advisors bond funds are primarily managed by PIMCO Advisors' Pacific
Investment Management Company--one of the most respected names in institutional
bond management. Pacific Investment Management actively manages these funds with
an emphasis on total return potential--income and price change--rather than
yield alone. Overall, they avoid investment fads in favor of a long-term,
conservative approach that includes aggressively seeking opportunities in all
sectors of the fixed income market.
8/PIMCO Advisors Funds
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
PIMCO Advisors Stock Funds
Fund Name
(Symbols: Class A, B, C) Description Primary Composition PIMCO Advisors Manager
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Equity Income Fund More conservative stock fund that Dividend-paying common stocks, Columbus Circle Investors
PQNAX, PQNBX, PQNCX also provides regular income preferred stocks, convertible
component securities
- ------------------------------------------------------------------------------------------------------------------------------------
Value Fund More conservative stock fund Common stocks, no market- NFJ Investment Group
PVLAX, PVLBX, PVLCX emphasizing relatively under- capitalization restrictions
priced stocks
- ------------------------------------------------------------------------------------------------------------------------------------
Growth Fund Solid core stock fund option with Stocks of larger, well-established Columbus Circle Investors
PGWAX, PGFBX, PGWCX over a 10-year record companies
- ------------------------------------------------------------------------------------------------------------------------------------
Target Fund Stock fund concentrating on the Stocks of medium-capitalized Columbus Circle Investors
PTAAX, PTABX, PTACX niche of medium-capitalized companies
companies
- ------------------------------------------------------------------------------------------------------------------------------------
Discovery Fund Aggressive fund focused on Stocks of smaller-capitalized Cadence Capital Management
PDSAX, PDSBX, PDSCX reasonably priced smaller- companies
capitalized companies
- ------------------------------------------------------------------------------------------------------------------------------------
Opportunity Fund Aggressive fund concentrating on Stocks of smaller-capitalized Columbus Circle Investors
POPAX, N/A, POPCX stocks of smaller-capitalized companies
(closed to new investors) growth companies
- ------------------------------------------------------------------------------------------------------------------------------------
Innovation Fund Aggressive fund specializing in Stocks of companies that use Columbus Circle Investors
PIVAX, PIVBX, PIVCX the stocks of technology-related technology in an innovative way
companies
- ------------------------------------------------------------------------------------------------------------------------------------
International Fund International stock fund providing Stocks of companies based outside Blairlogie Capital
PILAX, PILBX, PILCX access to developed and emerging the U.S. Management
international markets
- ------------------------------------------------------------------------------------------------------------------------------------
Precious Metals Fund Specialized stock fund offering an Stocks of companies which extract, Van Eck Associates
PPMAX, PPMBX, PPMCX efficient way to invest in the process, distribute, and market
gold sector precious metals
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
PIMCO Advisors Bond Funds
Fund Name Primary Composition
(Symbols: Class A, B, C) Description (Duration Range) PIMCO Advisors Manager
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Global Income Fund Globally diversified bond fund Investment-grade foreign and U.S. Pacific Investment
PGCAX, PGCBX, PGCCX bonds (3-6 years) Management
- ------------------------------------------------------------------------------------------------------------------------------------
High Income Fund Our highest yielding bond fund Intermediate-term portfolio of higher Pacific Investment
PHNAX, PHNBX, PHNCX yielding bonds (2-6 years) Management
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return Income Fund Good core bond fund option Intermediate-term portfolio of Pacific Investment
PTNAX, PRIBX, PTNCX investment-grade bonds (3-6 years) Management
- ------------------------------------------------------------------------------------------------------------------------------------
Tax Exempt Fund Nationally diversified, tax-exempt Investment-grade municipal Columbus Circle Investors
PTEAX, PETBX, PTECX municipal bond fund bonds (3-10 years)
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. Government Fund Our highest quality bond fund Intermediate-term portfolio of Pacific Investment
PUSAX, PUVBX, PUSCX U.S. government bonds (3-6 years) Management
- ------------------------------------------------------------------------------------------------------------------------------------
Short-Intermediate Fund More conservative, shorter-term Shorter-term portfolio of investment- Pacific Investment
PSNAX, PSNBX, PSNCX bond fund grade bonds (1-3 years) Management
- ------------------------------------------------------------------------------------------------------------------------------------
Money Market Fund Conservative, highly Short-term money market Columbus Circle Investors
PYAXX, PYBXX, PYCXX liquid bond fund instruments (less-than 1 year)
</TABLE>
Stock Fund notes: The Opportunity and Discovery Funds invest primarily in
companies with smaller capitalizations, which historically have been more
volatile than the general market and pose a greater chance of failure than
stocks of larger, more established companies. The Innovation and Precious Metals
Funds concentrate their portfolios and therefore may be more volatile than a
more diversified stock portfolio. As such, these Funds should be considered only
as part of a more diversified portfolio. The PIMCO Advisors stock funds can
invest a portion of their portfolios in foreign securities, with the
International Fund investing primarily in these securities. International
investing involves special risks due to foreign economic and political
developments. Van Eck Associates, the manager of the Precious Metals Fund, is
not a PIMCO Advisors L.P. firm.
Bond Fund notes: Duration is a measure of the Fund's price sensitivity in
response to changes in interest rates. The High Income, Total Return Income and
Short-Intermediate Funds can invest a portion of their assets in foreign
securities, with the Global Income Fund investing primarily in these securities.
Foreign securities involve special risks due to foreign economic and political
developments. These Funds and the Tax Exempt Fund can invest a portion of their
assets in high yield bonds, with the High Income Fund investing primarily in
these securities. High yield bonds entail greater risk, such as less liquidity
and the possibility of default. The U.S. Government Fund is not guaranteed by
the U.S. government. An investment in the Money Market Fund is neither insured
nor guaranteed by the U.S. government and there can be no assurances that the
Fund will be able to maintain a stable net asset value of $1.00 per share.
1996 Annual Report / 9
<PAGE>
PIMCO Advisors Funds Financial Information
We are pleased to present an in-depth review of the PIMCO Advisors Funds as of
September 30, 1996. In order to help analyze, compare and contrast the Funds,
the report is broken down into a number of sections. Listed below is a table of
contents and descriptions of the various sections.
PAGE 11-55 FUND SUMMARY/PORTFOLIO OF INVESTMENTS
A summary of a Fund's performance record and portfolio composition, and a review
from the Fund's investment manager. The portfolio of investments includes a
listing of securities in the Fund's portfolio as of September 30, 1996,
including the number of shares or principal amount and value as of that date.
Stock Funds Bond Funds
11 Equity Income Fund 38 Global Income Fund
14 Value Fund 41 High Income Fund
17 Growth Fund 44 Total Return Income Fund
20 Target Fund 47 Tax Exempt Fund
23 Discovery Fund 50 U.S. Government Fund
26 Opportunity Fund 52 Short-Intermediate Fund
29 Innovation Fund 55 Money Market Fund
31 International Fund
36 Precious Metals Fund
PAGE 58 FINANCIAL HIGHLIGHTS
This chart shows a per share breakdown of the factors that affect a Fund's NAV
for the current and past reporting periods. In addition to showing total return,
the chart reports distributions, asset size, expense ratios and portfolio
turnover rate.
PAGE 66 STATEMENT OF ASSETS AND LIABILITIES
A "balance sheet" of a Fund as of the last day of the fiscal period. It includes
the Fund's Class level NAVs per share by dividing the Fund's Class level net
assets (assets minus liabilities) by the number of Class level shares
outstanding.
PAGE 68 STATEMENT OF OPERATIONS
This statement lists a Fund's income, expenses, and gains and losses on
securities and currency transactions, and from appreciation or depreciation from
portfolio holdings.
PAGE 70 STATEMENT OF CHANGES IN NET ASSETS
This reports the increase or decrease in a Fund's net assets during the
reporting period. Changes in net assets are due to a variety of factors,
including investment operations, dividends, distributions and capital share
transactions.
PAGE 72 NOTES TO FINANCIAL STATEMENTS
A description of the significant accounting policies of the funds, and more
detailed information about the schedules and tables that appear in the report.
10 / PIMCO Advisors Funds
<PAGE>
PIMCO Advisors
Equity Income Fund September 30, 1996
Objective:
Long-term growth
of capital and current income.
Portfolio:
Primarily dividend-
paying common stocks, preferred stocks and
convertible securities.
Total Net Assets:
$266 million
Number of Securities
in the Portfolio:
53 (not including short-term
instruments)
PIMCO Advisors Institutional Manager:
Columbus Circle
Investors
PERFORMANCE*
Average Annual Total Return For periods ended 9/30/96
<TABLE>
<CAPTION>
A Shares B Shares C Shares Lipper Equity
(INCEP. 2/1/91) (INCEP. 5/22/95) (INCEP. 4/18/88) Income Fund
Adjusted Adjusted Adjusted S&P 500 Average
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 year 22.4% 15.6% 21.5% 16.5% 20.5% 20.3% 16.8%
3 years 13.0% 10.8% -- -- 12.1% 17.4% 12.6%
5 years 14.9% 13.6% -- -- 14.0% 15.2% 13.2%
Inception 17.0% 15.9% 26.6% 23.9% 10.9% -- --
</TABLE>
* The adjusted returns above include the effects of applicable sales charges.
The chart to the right reflects the performance of PIMCO Advisors Equity
Income Fund C through September 30, 1996. The performance of Equity Income
Fund A and B will be greater or less than the line shown based on differences
in inception dates, fees, and sales charges. Past performance is not an
indication of future results. See page 55 for Footnotes, which should be read
in connection with this material.
[GRAPH APPEARS HERE]
Change in value of $10,000 invested at the Fund's inception
<TABLE>
<CAPTION>
Equity Income C
S&P 500
<S> <C> <C>
03/31/88 10,000 10,000
06/30/88 10,230 10,548
09/30/88 10,190 10,584
12/31/88 10,572 10,910
03/31/89 10,915 11,683
06/30/89 11,586 12,712
09/30/89 12,010 14,071
12/31/89 11,753 14,360
03/31/90 11,447 13,928
06/30/90 11,716 14,803
09/30/90 9,847 12,771
12/31/90 9,936 13,914
03/31/91 11,107 15,932
06/30/91 11,377 15,894
09/30/91 12,451 16,742
12/31/91 13,239 18,144
03/31/92 13,449 17,686
06/30/92 13,429 18,022
09/30/92 13,679 18,590
12/31/92 14,268 19,524
03/31/93 14,889 20,376
06/30/93 15,395 20,474
09/30/93 17,012 21,001
12/31/93 17,298 21,489
03/31/94 16,609 20,704
06/30/94 16,016 20,791
09/30/94 17,132 21,807
12/31/94 16,425 21,804
03/31/95 17,261 23,927
06/30/95 18,032 26,212
09/30/95 19,727 28,296
12/31/95 20,959 29,999
03/31/96 22,100 31,610
06/30/96 23,011 33,030
09/30/96 23,971 34,050
</TABLE>
PORTFOLIO COMPOSITION
<TABLE>
<CAPTION>
Top 10 Holdings
Company Primary Business % of Net Assets
- --------------------------------------------------------------------------------------------
<S> <C>
Nalco Chemical Co. Specialty chemicals 3.6%
- --------------------------------------------------------------------------------------------
Sonat, Inc. Natural gas pipeline: drilling oil and gas 3.3%
- --------------------------------------------------------------------------------------------
Flowers Industries, Inc. Baked, convenience, snack food 3.1%
- --------------------------------------------------------------------------------------------
SCI Systems Electronic products/systems 2.9%
- --------------------------------------------------------------------------------------------
American Home Products Drugs, food, household ware, packaged medicine, medical
products 2.8%
- --------------------------------------------------------------------------------------------
Goodrich (B.F.) Company Aerospace products/specialty chemicals 2.7%
- --------------------------------------------------------------------------------------------
Greenpoint Financial Corp. Savings bank, New York 2.6%
- --------------------------------------------------------------------------------------------
Pier 1 Imports, Inc. Import specialty stores 2.6%
- --------------------------------------------------------------------------------------------
Allstate Corp. Property, liability life insurance 2.5%
- --------------------------------------------------------------------------------------------
Chase Manhattan Corp. Commercial banking, New York 2.5%
- --------------------------------------------------------------------------------------------
Top Ten Total 28.6%
</TABLE>
Portfolio Composition
Common Stocks 80% Convertible Bonds 6% Top 5 Industries % of Net Assets
---------------------------------
Corporate Bonds 2% Oil and Gas 11.3%
---------------------------------
Convertible Preferred 5% Chemicals 8.9%
---------------------------------
Preferred Stocks 2% Banks 6.5%
---------------------------------
Cash Equivalents 5% Food 6.3%
---------------------------------
[BAR GRAPH APPEARS HERE] Retail 4.7%
---------------------------------
Cash Equivalents include short-term instruments, cash and other assets less
liabilities.
PORTFOLIO INSIGHTS
The Equity Income Fund had an outstanding 12 months ended September 30, 1996,
with returns of 22.4% for Class A shares, 21.5% for Class B shares and 20.5% for
Class C shares. With these returns, the Fund outperformed both the Standard &
Poor's 500 (an unmanaged index of common stocks) and competitive funds (measured
by the Lipper Equity Income Fund Average).
As reported in the Fund's semi-annual report to shareholders, the manager made
moves during the year to increase the portfolio's common stock holdings. Among
these common stock holdings, those in the consumer staples sector provided some
of the strongest returns. Consumer staples includes those businesses that
manufacture personal or household products with a life of three years or less.
One of the Fund's winners within the sector was Flowers Industries, a large
independent bakery. While Flowers has faced some difficult operating conditions
during the last three years, these problems seem to be largely behind it and its
efforts are beginning to pay off with improved earnings and stock price
appreciation.
Another area of success for the Fund during the year was financial services. In
particular, the Fund saw solid contributions from Greenpoint Financial, a New
York savings and loan, and Fleet Financial Group, a Northeast banking concern.
In addition, Chase Manhattan has proven to be a strong holding as the company
continues to reduce costs due to its merger with Chemical Bank, while increasing
its overall client base.
The Fund's utility holdings did not do as well over the trailing 12 months.
Heading into August, the Fund was overweighted in utilities relative to the S&P
500 and several of the holdings were providing strong returns. But, by
September, a number of these utility holdings had given back some of their
earlier returns, resulting in relative underperformance in the utility sector.
With stock dividends in general close to record lows, the goal for the Fund's
manager will be to seek ways to provide investors the income they want, without
exposing them to undue risk. To do this, the manager expects to focus on lower
expectation stocks. These are described as stocks that have failed to meet
investors' expectations due to adverse operating conditions, but which are
exhibiting improving fundamentals. The manager believes these lower expectation
stocks will frequently pay above average dividends and represent a relatively
conservative investment.
1996 Annual Report/11
<PAGE>
PIMCO Advisors
Equity Income Fund
PORTFOLIO OF INVESTMENTS September 30, 1996
<TABLE>
<CAPTION>
Principal Value
($ in thousands) Amount (Note 2)
- ------------------------------------------------------------------
<S> <C> <C>
Short-Term Notes--5.0%
Bell Atlantic Network Funding Corp., 5.300%,
10/9/96 $ 4,800 $ 4,794
Corporate Asset Funding Co., Inc., 5.400%,
10/11/96 1,200 1,198
Goldman Sachs & Co., 5.350%, 10/1/96 4,500 4,499
Nestle Capital Corp., 5.240%, 10/1/96 3,000 3,000
-------
Total Short-Term Notes
(Cost $13,491) 13,491
-------
Corporate Bonds and Notes--2.3%
Financial Services--2.3%
Aames Financial Corp., 5.500%, 3/15/06 1,750 3,221
Xilinx, Inc., 5.250%, 11/1/02 3,000 2,910
-------
Total Corporate Bonds and Notes
(Cost $4,700) 6,131
-------
Convertible Bonds and Notes--6.4%
Computers--4.8%
Apple Computer, Inc., 6.000%, 6/1/01 5,000 4,950
SCI Systems, Inc., 5.000%, 5/1/06 5,920 7,829
-------
12,779
-------
Financial Services--1.6%
S III, Inc., 5.750%, 10/1/03 3,500 4,218
-------
Total Convertible Bonds and Notes
(Cost $15,467) 16,997
-------
<CAPTION>
Shares
- ------------------------------------------------------------------
<S> <C> <C>
Common Stocks--80.0%
Aerospace--1.9%
Lockheed Martin Corp. 55,400 4,993
-------
Apparel--2.4%
Liz Claiborne, Inc. 173,200 6,452
-------
Appliances--1.5%
Black & Decker Corp. 96,400 4,001
-------
Automotive Parts and Equipment--2.2%
Arvin Industries, Inc. 242,700 5,976
-------
Banks--6.5%
Chase Manhattan Corp. 82,300 6,594
Greenpoint Financial Corp. 180,900 6,897
Northern Trust Corp. 56,600 3,721
-------
17,212
-------
Chemicals--8.9%
B.F. Goodrich Co. 156,600 7,067
Monsanto Co. 113,600 4,146
Nalco Chemical Co. 261,800 9,490
SGL Carbon ADR 73,300 2,868
-------
23,571
-------
Computers--1.5%
International Business Machines 31,400 3,909
-------
Conglomerate--2.3%
Canadian Pacific Ltd. 265,600 6,142
-------
Electronics--3.2%
Intel Corp. 61,900 5,908
Kuhlman Corp. 175,500 2,567
-------
8,475
-------
<CAPTION>
Value
($ in thousands) Shares (Note 2)
- ------------------------------------------------------------------
<S> <C> <C>
Entertainment and Leisure--2.5%
Callaway Golf Co. 103,400 $ 3,528
Fleetwood Enterprises, Inc. 104,700 3,220
-------
6,748
-------
Financial Services--4.1%
Associates First Capital Corp. 79,300 3,251
Ryland Group, Inc. 183,100 2,724
Washington Mutual, Inc. 135,800 5,058
-------
11,033
-------
Food--6.3%
Dean Foods Co. 98,000 2,769
Flowers Industries, Inc. 409,700 8,348
Interstate Bakeries 157,500 5,748
-------
16,865
-------
Forest and Paper Products--3.7%
Georgia Pacific 73,000 5,776
Kimberly Clark Corp. 47,200 4,160
-------
9,936
-------
Homebuilders--1.2%
Herman Miller, Inc. 79,100 3,204
-------
Insurance--4.0%
Allstate Corp. 136,600 6,728
Provident Cos., Inc. 101,900 3,821
-------
10,549
-------
Machinery and Equipment--3.2%
Harnischfeger Industries, Inc. 106,100 4,005
Stanley Works 159,000 4,472
-------
8,477
-------
Medical Supplies--1.3%
Johnson & Johnson 66,800 3,424
-------
Miscellaneous Manufacturing--1.5%
Boeing Co. 41,300 3,903
-------
Oil and Gas--11.3%
British Petroleum Ltd. ADR 26,100 3,263
Consolidated Natural Gas Co. 93,000 4,987
El Paso Natural Gas 59,200 2,605
Mobil Corp. 34,200 3,959
Quaker State Corp. 190,100 3,279
Sonat, Inc. 199,200 8,815
Texaco, Inc. 33,400 3,072
-------
29,980
-------
Pharmaceuticals--2.8%
American Home Products Corp. 117,700 7,503
-------
Retail--4.7%
American Stores Co. 140,100 5,604
Pier 1 Imports, Inc. 427,058 6,886
-------
12,490
-------
Textile--1.3%
Russell Corp. 108,100 3,486
-------
Utilities: Electric--1.7%
Sierra Pacific Resources 180,200 4,662
-------
Total Common Stocks
(Cost $189,695) 212,991
-------
</TABLE>
12/PIMCO Advisors Funds See accompanying notes
<PAGE>
PIMCO Advisors
Equity Income Fund
PORTFOLIO OF INVESTMENTS September 30, 1996
<TABLE>
<CAPTION>
Value
($ in thousands) Shares (Note 2)
- -----------------------------------------------------------------
<S> <C> <C>
Preferred Stocks--1.9%
Financial Services--1.9%
Merrill Lynch & Co. 123,450 $ 4,969
--------
Total Preferred Stocks
(Cost $4,851) 4,969
--------
Convertible Preferred Stocks--4.6%
Financial Services--3.1%
American Bankers Ins. Group, Inc., Series B 88,200 5,204
Wendy's Financing 58,800 3,028
--------
8,232
--------
Industrial--1.5%
TJX Cos., Series E 20,550 4,105
--------
Total Convertible Preferred Stocks
(Cost $11,109) 12,337
--------
<CAPTION>
Value
($ in thousands) (Note 2)
- -----------------------------------------------------------------
<S> <C>
Total Investments (a)--100.2%
(Cost $239,313) $ 266,916
---------
Other Assets and Liabilities, Net--(0.2%) (533)
---------
Net Assets--100.0% $ 266,383
=========
</TABLE>
Notes to Portfolio of Investments ($ in thousands):
(a) The cost of investments for federal income tax purposes is
$239,422. At September 30, 1996, net unrealized appreciation was
$27,494. This consisted of aggregate gross unrealized appreciation
for all investments on which there was an excess of market value
over tax cost of $28,592 and aggregate gross unrealized depreci-
ation of all investments on which there was an excess of tax cost
over market value of $1,098.
Annual Report See accompanying notes/13
<PAGE>
PIMCO Advisors
Value Fund
September 30, 1996
Objective:
Long-term growth of capital and current income.
Portfolio:
Primarily stocks the manager believes are undervalued and/or offer above average
dividend yields.
Total Net Assets:
$62 million
Number of Securities in the Portfolio:
70 (not including short-term
instruments)
PIMCO Advisors Institutional Manager:
NFJ Investment Group
PERFORMANCE*
Average Annual Total Return For periods ended 9/30/96
<TABLE>
<CAPTION>
A Shares B Shares C Shares Lipper
(INCEP. 6/27/95) (INCEP. 6/27/95) (INCEP. 6/27/95) Growth & Income
Adjusted Adjusted Adjusted S&P 500 Fund Average
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 year 17.2% 10.8% 16.4% 11.4% 15.4% 20.3% 17.2%
Inception 20.1% 14.8% 19.3% 16.2% 19.3% -- --
</TABLE>
* The adjusted returns above include the effects of applicable sales charges.
The chart to the right reflects the performance of PIMCO Advisors Value Fund
A, B and C since inception through September 30, 1996. Past performance is not
an indication of future results. See page 55 for Footnotes, which should be
read in connection with this material.
Change in value of $10,000 invested at the Fund's inception.
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Value A Value B Value C S&P 500 Index
<S> <C> <C> <C> <C>
6/30/95 9,450 10,000 10,000 10,000
9/30/95 10,154 10,225 10,625 10,795
12/31/95 10,776 11,354 11,354 11,445
3/31/96 11,356 11,959 11,949 12,059
6/30/96 11,738 12,339 12,340 12,601
9/30/96 11,902 12,080 12,481 12,990
</TABLE>
PORTFOLIO COMPOSITION
<TABLE>
<CAPTION>
Top 10 Holdings
Company Primary Business % of Net Assets
- ----------------------------------------------------------------------------------------------------
<S> <C>
Ultramar Corp. Refiners; markets petroleum products 3.5%
- ----------------------------------------------------------------------------------------------------
Bear Stearns Co., Inc. Investment banking, brokerage 3.4%
- ----------------------------------------------------------------------------------------------------
Phelps Dodge Corp. Largest U.S. copper producer 3.2%
- ----------------------------------------------------------------------------------------------------
Northrop Grumman Corp. Aerospace, aircraft, missile 3.1%
- ----------------------------------------------------------------------------------------------------
Chase Manhattan Corp. Commercial banking, New York 2.6%
- ----------------------------------------------------------------------------------------------------
Repsol, S.A. ADR Integrated oil company in Spain 2.5%
- ----------------------------------------------------------------------------------------------------
Sprint Corp. Diversified telecommunication systems 2.5%
- ----------------------------------------------------------------------------------------------------
Amoco Corp. International oil company 2.5%
- ----------------------------------------------------------------------------------------------------
Maytag Corp. Manufacturer of major home appliances 2.5%
- ----------------------------------------------------------------------------------------------------
American Home Products Drugs, food, household ware, packaged medicine, medical
products 2.5%
- ----------------------------------------------------------------------------------------------------
Top Ten Total 28.3%
</TABLE>
Portfolio Composition
[BAR GRAPH APPEARS HERE]
Top 5 Industries % of Net Assets
Common Stocks 96% Utilities 11.8%
---------------------------------
Cash Equivs 4% Oil and Gas 11.0%
---------------------------------
Banking 7.0%
---------------------------------
Food, Beverages, Tobacco 6.0%
---------------------------------
Pharmaceuticals 5.8%
---------------------------------
Cash Equivalents include short-term instruments, cash and other assets less
liabilities.
PORTFOLIO INSIGHTS
The Value Fund produced solid results for the year ended September 30, 1996,
with Class A shares returning 17.2%, Class B shares 16.4% and Class C shares
15.4%. These results were in line with comparable funds, as measured by the
Lipper Growth and Income Fund Average.
In addition to an investment screen for low P/E (price-to-earnings ratio) and
dividend yield, the Value Fund employs a strict diversification policy,
generally holding securities in each of 50 different industries. Of these 50
industries, the Fund tended to invest a relatively larger portion of assets this
year in consumer-related industries, including food, beverages and tobacco.
Companies in these industries are generally considered cyclical, meaning they
are greatly influenced by the state of the economy--a situation that initially
was very beneficial for the Fund.
Heading into the summer, the Value Fund was having an outstanding year, thanks
in large part to its cyclical holdings. The generally held perception until June
or July was that the economy was growing strongly, driving up the Fund's
holdings sensitive to economic conditions. Examples of the stocks that benefited
the Fund during this time were Ford and PHH Corp. (a management services
company).
Later, however, investors began being hit with conflicting data on the economy,
causing the consensus opinion to shift to moderate economic growth, at best.
This sentiment encouraged investors to sell cyclicals, causing the Fund to give
back some of the profits gained earlier in the year. The Fund compensated for
these losses, however, with well selected non-cyclical holdings (companies
driven by industry or company circumstances, rather than the general economy).
For example, the Fund realized an outstanding return from Pharmacia & Upjohn, a
pharmaceutical company that specializes in the research and development of
health products. Like other pharmaceuticals, Pharmacia & Upjohn benefited from
the growing demand of an aging population and faster Food and Drug
Administration approval. At the same time, the company's newly approved cancer-
treating and glaucoma drugs contributed to its strong performance.
The manager of the Value Fund believes the Fund's long-term performance record
is a testament to the power of a disciplined value investment strategy. As such,
the manager will continue to seek out securities exhibiting lower than average
P/E's and/or higher than average dividend yields. In addition, the Fund remains
committed to its 50 industry rule, believing this diversification can help to
provide steady results in whatever economy we encounter.
14/PIMCO Advisors Funds
<PAGE>
PIMCO Advisors
Value Fund
PORTFOLIO OF INVESTMENTS September 30, 1996
<TABLE>
<CAPTION>
Value
($ in thousands) Shares (Note 2)
- -------------------------------------------------------------
<S> <C> <C>
Common Stocks--95.7%
Aerospace--4.1%
Northrop Grumman Corp. 24,000 $ 1,926
Raytheon Co. 11,000 612
--------
2,538
--------
Apparel--0.2%
Reebok International Ltd. 3,600 125
--------
Appliances--2.5%
Maytag Corp. 79,000 1,541
--------
Automotive Manufacturing--3.4%
Chrysler Corp. 53,000 1,517
Ford Motor Co. 19,000 594
--------
2,111
--------
Banks--7.0%
Bankers Trust Co. 7,000 550
Chase Manhattan Corp. 20,000 1,603
Mellon Bank Corp. 21,000 1,244
PNC Bank Corp. 17,000 567
Standard Federal Bancorporation 8,200 375
--------
4,339
--------
Beverage--2.4%
Anheuser-Busch Cos., Inc. 40,000 1,505
--------
Building Materials and Construction--0.9%
Lennar Corp. 25,000 556
--------
Chemicals--3.0%
Dow Chemical 6,900 554
PPG Industries, Inc. 10,000 544
Union Carbide Corp. 12,000 548
Wellman, Inc. 12,500 219
--------
1,865
--------
Commercial Services--2.4%
PHH Corp. 51,000 1,517
--------
Computers--1.1%
Seagate Technology Inc. (b) 12,000 671
--------
Containers--0.5%
Tupperware Corp. 6,000 294
--------
Copper Mining--3.2%
Phelps Dodge Corp. 31,000 1,988
--------
Copying--1.9%
Xerox Corp. 22,000 1,180
--------
Electronics--0.8%
Mentor Graphics Corp. (b) 20,000 178
Teradyne, Inc. (b) 20,800 346
--------
524
--------
Entertainment and Leisure--2.2%
Brunswick Corp. 56,000 1,344
--------
Financial Services--3.4%
Bear Stearns Cos., Inc. 92,000 2,139
--------
Food--0.4%
IBP, Inc. 11,700 272
--------
Forest and Paper Products--1.5%
Bowater, Inc. 8,000 304
Potlatch Corp. 16,000 620
--------
924
--------
Insurance--3.4%
Aetna Life & Casualty Co. 9,000 $ 633
Loews Corp. 4,000 310
Providian Corp. 27,000 1,161
--------
2,104
--------
Machinery and Engineering--1.1%
Deere & Co. 16,000 672
--------
Medical Supplies--2.3%
Baxter International, Inc. 13,000 608
Beckman Instruments, Inc. 14,000 544
Foundation Health Corp. (b) 7,500 254
--------
1,406
--------
Multi-Industry--1.0%
Unilever N.V. ADR 4,000 631
--------
Oil and Gas--11.0%
Amoco Corp. 22,000 1,551
Atlantic Richfield Co. 9,500 1,211
Repsol, S.A. ADR 47,000 1,557
Ultramar Corp. 72,000 2,178
Union Texas Petroleum Holdings, Inc. 14,000 303
--------
6,800
--------
Pharmaceuticals--5.8%
American Home Products Corp. 24,000 1,530
Bristol-Myers Squibb Co. 6,000 578
Pharmacia & Upjohn Co. 36,000 1,485
--------
3,593
--------
Printing--3.1%
Harland (John H.) Co. 23,000 690
Harris Corp. 19,000 1,237
--------
1,927
--------
Publishing--0.6%
Washington Post Co., Class B 1,000 350
--------
Real Estate--0.9%
Meditrust Corp. 17,000 589
--------
Retail--3.9%
Dillard Department Stores, Inc. 17,000 548
Penney (J.C.) Co. 9,400 509
Supervalu, Inc. 45,000 1,238
Tandy Corp. 3,800 153
--------
2,448
--------
Telecommunications--2.1%
Pacific Telesis Group 23,000 773
Southern New England Telecommunications
Corp. 14,000 516
--------
1,289
--------
Textiles--0.9%
Springs Industries, Inc., Class A 12,000 534
--------
Tire and Rubber--0.9%
Goodyear Tire & Rubber Co. (The) 12,000 553
--------
Tobacco--3.2%
Philip Morris Cos., Inc. 16,000 1,436
RJR Nabisco Holdings Corp. 22,000 572
--------
2,008
--------
Transportation: Air--0.9%
AMR Corp. (b) 7,000 557
--------
</TABLE>
Annual Report See accompanying notes / 15
<PAGE>
PIMCO Advisors
Value Fund
PORTFOLIO OF INVESTMENTS September 30, 1996
<TABLE>
<CAPTION>
Value
($ in thousands) Shares (Note 2)
- ------------------------------------------------------
<S> <C> <C>
Transportation: Rail--1.9%
Conrail, Inc. 8,000 $ 579
GATX Corp. 13,000 608
-------
1,187
-------
Utilities: Electric--5.4%
DTE Energy Co. 44,000 1,232
Pacific Gas & Electric Co. 42,000 913
PP&L Resources, Inc. 26,000 568
Washington Water Power Co. 32,000 604
-------
3,317
-------
Utilities: Gas--2.9%
NICOR, Inc. 36,000 1,215
Peoples Energy Corp. 18,000 612
-------
1,827
-------
Utilities: Telephone Systems--3.5%
Sprint Corp. 40,000 1,555
U.S. West, Inc. 20,000 595
-------
2,150
-------
Total Common Stocks
(Cost $55,418) 59,375
-------
Total Investments (a)--95.7%
(Cost $55,418) $59,375
-------
Other Assets and Liabilities, Net--4.3% 2,669
-------
Net Assets--100.0% $62,044
=======
</TABLE>
Notes to Portfolio of Investments ($ in thousands):
(a) The cost of investments for federal income tax purposes is $55,420. At
September 30, 1996, net unrealized appreciation was $3,955. This consisted of
aggregate gross unrealized appreciation for all investments on which there was
an excess of market value over tax cost of $5,190 and aggregate gross unrealized
depreciation of all investments on which there was an excess of tax cost over
market value of $1,235.
(b) Non-income producing security.
16 / PIMCO Advisors Funds See accompanying notes
<PAGE>
PIMCO Advisors
Growth Fund September 30, 1996
Objective:
Long-term growth of capital. Income is an incidental consideration.
Portfolio:
Primarily stocks of larger, well-established companies.
Total Net Assets:
$1,639 million
Number of Securities in the Portfolio:
50 (not including short-term instruments)
PIMCO Advisors Institutional Manager:
Columbus Circle Investors
PERFORMANCE*
<TABLE>
<CAPTION>
Average Annual Total Return For periods ended 9/30/96
A Shares B Shares C Shares Lipper
(INCEP. 10/26/90) (INCEP. 5/23/95) (INCEP. 2/24/84) Growth Fund
Adjusted Adjusted Adjusted S&P 500 Average
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 year 16.1% 9.7% 15.2% 10.2% 14.2% 20.3% 15.9%
5 years 13.0% 11.7% -- -- 12.2% 15.2% 13.7%
10 years -- -- -- -- 14.3% 15.0% 13.3%
Inception 16.7% 15.6% 19.3% 16.5% 16.2% -- --
</TABLE>
* The adjusted returns above include the effects of applicable sales charges.
The chart to the right reflects the performance of PIMCO Advisors Growth Fund
C through September 30, 1996. The performance of Growth Fund A and B will be
greater or less than the line shown based on differences in inception dates,
fees, and sales charges. Past performance is not an indication of future
results. See page 55 for Footnotes, which should be read in connection with
this material.
[LINE GRAPH APPEARS HERE]
Change in value of $10,000 invested at the Fund's inception
<TABLE>
<CAPTION>
Growth C S&P 500
<S> <C> <C>
12/31/83 10,000 10,000
03/31/84 10,250 10,173
06/30/84 10,180 9,912
09/30/84 10,986 10,873
12/31/84 11,211 11,077
03/31/85 12,138 12,094
06/30/85 13,073 12,981
09/30/85 12,628 12,449
12/31/85 14,632 14,591
03/31/86 16,917 16,649
06/30/86 17,949 17,630
09/30/86 17,409 16,401
12/31/86 18,026 17,315
03/31/87 22,172 21,012
06/30/87 23,277 22,066
09/30/87 24,641 23,522
12/31/87 19,396 18,224
03/31/88 20,074 19,258
06/30/88 21,608 20,537
09/30/88 21,007 20,607
12/31/88 21,214 21,242
03/31/89 23,104 22,747
06/30/89 26,247 24,751
09/30/89 29,903 27,398
12/31/89 29,160 27,961
03/31/90 28,352 27,120
06/30/90 31,667 28,822
09/30/90 27,508 24,866
12/31/90 29,246 27,092
03/31/91 33,847 31,021
06/30/91 33,555 30,946
09/30/91 37,155 32,598
12/31/91 41,493 35,328
03/31/92 39,838 34,437
06/30/92 38,914 35,090
09/30/92 39,722 36,197
12/31/92 42,356 38,015
03/31/93 43,420 39,674
06/30/93 43,933 39,865
09/30/93 46,416 40,891
12/31/93 46,303 41,840
03/31/94 45,393 40,319
06/30/94 44,352 40,488
09/30/94 46,650 42,468
12/31/94 45,958 42,461
03/31/95 48,646 46,595
06/30/95 53,790 51,045
09/30/95 57,281 55,103
12/31/95 58,583 58,420
03/31/96 62,342 61,557
06/30/96 63,612 64,321
09/30/96 65,997 66,309
</TABLE>
PORTFOLIO COMPOSITION
<TABLE>
<CAPTION>
Top 10 Holdings
<S> <C>
Company Primary Business % of Net Assets
- -------------------------------------------------------------------------------------------------
Intel Corp. Semiconductor memory circuits 3.3%
- -------------------------------------------------------------------------------------------------
Boeing Co. Manufacturer jet airplanes: missiles 3.2%
- -------------------------------------------------------------------------------------------------
Johnson & Johnson Healthcare products 2.9%
- -------------------------------------------------------------------------------------------------
Lucent Technologies, Inc. Manufacturer telecommunication systems, software, products 2.9%
- -------------------------------------------------------------------------------------------------
Black & Decker Corp. Manufacturer power tools/home products 2.9%
- -------------------------------------------------------------------------------------------------
Columbia HCA Healthcare Healthcare facilities/services 2.9%
- -------------------------------------------------------------------------------------------------
Schlumberger Ltd. Oil field services 2.9%
- -------------------------------------------------------------------------------------------------
Microsoft Corp. Software for microcomputers 2.7%
- -------------------------------------------------------------------------------------------------
American Home Products Drugs, food, household ware, packaged medicine, medical products 2.7%
- -------------------------------------------------------------------------------------------------
Cisco Systems, Inc. Manufacturer of computer network products 2.7%
- -------------------------------------------------------------------------------------------------
Top Ten Total 29.1%
</TABLE>
[BAR GRAPH APPEARS HERE]
Portfolio Composition
Common Stocks 92%
Cash Equivalents 8%
Cash Equivalents include short-term instruments, cash and other assets less
liabilities.
Top 5 Industries % of Net Assets
- -----------------------------------
Computer Serv. & Software 11.4%
- -----------------------------------
Retail 10.5%
- -----------------------------------
Electronics 6.5%
- -----------------------------------
Oil and Gas 6.2%
- -----------------------------------
Financial Services 5.9%
- -----------------------------------
PORTFOLIO INSIGHTS
Once again, the Growth Fund provided solid results for its shareholders, with
Class B shares returning 15.2%, Class C shares returning 14.2%, and Class A
shares beating the Lipper Growth Fund Average with a return of 16.1% for the
one- year period ended September 30, 1996. And while past performance is no
guarantee of future results, this year was yet another layer in the Fund's
history of strong performance, with its 10-year return of 14.3% also surpassing
the Lipper Average.
Technology was the Fund's number one sector throughout much of the year. As
this sector experienced a great deal of volatility during the past 12 months,
security selection was key to the Fund's success. Intel, Computer Associates and
Cisco Systems are a few of the names that proved to be solid longer-term
investments, providing positive results when technology was in and out of favor.
Another major contributor in the technology area was Lucent Technologies. Lucent
designs and manufactures telephones, as well as the networks that carry
telephone calls. Once owned by AT&T, Lucent recently completed a successful
spin-off. With "buy" ratings from several major brokerage firms, Lucent quickly
developed a strong following among investors. The company came through on these
high expectations when it announced the signing of a $1 billion contract with
ICG Communications.
In addition to technology, the Fund maintained a strong position in the
finance sector during the year. One of the Fund's best performing securities in
this sector was Green Tree Financial. Other strong performers in this sector
included Allstate Corporation and Associates First Capital.
Overall, the Fund remained underweighted in some of the year's worst
performing sectors. But, selected holdings in utilities and consumer staples
still hurt final performance results. In particular, Worldcom, a long-distance
telephone service company, suffered negative effects from their announced
acquisition of MFS Communication, a telecommunication firm. The manager of the
Fund continues to believe in the long-term value of this acquisition and the
company overall, expecting the stock to strengthen in coming months.
The Fund's manager believes that recent stock market highs, combined with a
growing sense of uncertainty about the economy, should encourage many investors
to move toward more stable, quality stocks. The manager further believes that
this "flight to quality" should spell good news for the large-cap growth
companies the Fund targets. To capitalize on this favorable environment, the
manager will continue to concentrate on bottom-up security selection, searching
for good companies that are surprising the market with better than expected
results.
1996 Annual Report/17
<PAGE>
PIMCO Advisors
Growth Fund
PORTFOLIO OF INVESTMENTS September 30, 1996
<TABLE>
<CAPTION>
Principal Value
($ in thousands) Amount (Note 2)
- ---------------------------------------------------------------------------
<S> <C> <C>
Short-Term Notes--10.1%
Apreco, Inc., 5.350%, 10/31/96 $ 4,500 $ 4,479
Bell Atlantic Network Funding Corp., 5.300%,
10/3/96 10,000 9,996
Bell South Telecommunications, 5.310%,
10/4/96 10,000 9,994
Ciesco L.P., 5.250%, 10/2/96 10,000 9,997
Commerzbank, 5.300%, 10/7/96 11,700 11,688
Corporate Asset Funding Co., Inc., 5.270%,
10/2/96 10,200 10,197
CSW Credit, 5.270%, 10/9/96 9,200 9,188
Dean Witter Discover Corp., 5.310%, 10/22/96 12,000 11,961
Federal National Mortgage Association, 5.150%,
10/10/96 13,000 12,981
Federal National Mortgage Association, 5.200%,
10/16/96 13,000 12,970
Goldman Sachs & Co., 5.340%, 10/10/96 12,000 11,982
Goldman Sachs & Co., 5.470%, 10/1/96 1,500 1,500
Government Development Bank of Puerto Rico,
5.400%, 10/21/96 9,000 8,972
National Rural Utilities Cooperative Finance Corp.,
5.260%, 10/1/96 10,000 9,999
PHH Corp., 5.350%, 10/9/96 5,400 5,393
SmithKline Beecham, 5.330%, 10/15/96 9,500 9,479
Stat Oil, 5.300%, 10/24/96 8,000 7,972
U.S. Central Credit Union, 5.330%, 10/17/96 6,700 6,683
--------
Total Short-Term Notes
(Cost $165,431) 165,431
--------
<CAPTION>
Shares
- ---------------------------------------------------------------------------
<S> <C> <C>
Common Stocks--91.6%
Aerospace--1.2 %
Lockheed Martin 210,000 18,926
--------
Appliances--2.9%
Black & Decker Corp. 1,140,000 47,310
--------
Banks--4.1 %
Chase Manhattan Corp. 500,000 40,063
NationsBank Corp. 310,000 26,931
--------
66,994
--------
Communication Equipment--1.6 %
U.S. Robotics Corp. (b) 400,000 25,850
--------
Computer Services and Software--11.4%
Cisco Systems, Inc. (b)(c) 700,000 43,444
Computer Associates International Inc. 700,000 41,825
Computer Sciences Corp. (b) 410,000 31,519
First Data Corp. 320,000 26,120
Microsoft Corp. (b) 340,000 44,838
--------
187,746
--------
Copying--0.9%
Xerox Corp. 275,000 14,747
--------
Cosmetics--1.1%
Gillette Co. 250,000 18,031
--------
Electronics--6.5%
Atmel Corp. (b) 800,000 24,700
Honeywell, Inc. 470,000 29,669
Intel Corp. 560,000 53,445
--------
107,814
--------
<CAPTION>
Value
($ in thousands) Shares (Note 2)
- ----------------------------------------------------------------------------
<S> <C> <C>
Energy--2.9%
Schlumberger Ltd. 555,000 $ 46,898
--------
Financial Services--5.9%
Associates First Capital Corp. 800,000 32,800
Green Tree Financial Corp. 1,000,000 39,250
Merrill Lynch & Co. 370,000 24,281
--------
96,331
--------
Food--1.0%
Campbell Soup Co. 220,000 17,160
--------
Forest and Paper Products--2.7%
Georgia Pacific (c) 220,000 17,408
Kimberly Clark Corp. 310,000 27,319
--------
44,727
--------
Health Management--4.9%
Columbia HCA Healthcare Corp. 830,000 47,206
HBO & Co. 498,000 33,242
--------
80,448
--------
Hotels And Gaming--1.7%
Hilton Hotels Corp. 1,000,000 28,375
--------
Insurance--2.6%
Allstate Corp. 850,000 41,863
--------
Media--2.3%
Infinity Broadcasting Corp., Class A (b) 650,000 20,475
Liberty Media Group, Series A (b) 600,000 17,175
--------
37,650
--------
Medical Supplies--4.1%
Johnson & Johnson 940,000 48,175
Medtronic, Inc. 300,000 19,238
--------
67,413
--------
Miscellaneous Manufacturing--4.4%
Boeing Co. 550,000 51,975
Nike Inc., Class B 160,000 19,440
--------
71,415
--------
Oil and Gas--6.2 %
Atlantic Richfield Co. 270,000 34,425
Burlington Resources Inc. 350,000 15,531
Sonat Inc. 450,000 19,913
Texaco Inc. 350,000 32,200
--------
102,069
--------
Pharmaceuticals--2.8%
American Home Products Corp. 700,000 44,625
--------
Retail--10.5%
Dayton-Hudson Corp. 753,000 24,849
Home Depot, Inc. 600,000 34,125
Price/Costco, Inc. (b) 600,000 12,300
Safeway, Inc. (b) 420,000 17,903
Staples, Inc. (b) 1,100,000 24,406
TJX Cos., Inc. 730,000 26,188
Toys "R" Us, Inc. (b) 625,000 18,203
Wal-Mart Stores, Inc. 560,000 14,770
--------
172,744
--------
Telecommunications--5.6%
Ascend Communications, Inc. (b) 410,000 27,110
Loral Space & Communications (b) 1,000,000 15,750
Lucent Technologies Inc. 1,050,000 48,168
--------
91,028
--------
</TABLE>
18/PIMCO Advisors Funds See accompanying notes
<PAGE>
PIMCO Advisors
Growth Fund
PORTFOLIO OF INVESTMENTS September 30, 1996
<TABLE>
<CAPTION>
Value
($ in thousands) Shares (Note 2)
- ---------------------------------------------------------------
<S> <C> <C>
Utilities:Telephone Systems--4.3%
MCI Communications Corp. 1,450,000 $ 37,155
Worldcom, Inc. (b) 1,560,000 33,344
----------
70,499
----------
Total Common Stocks
(Cost $1,248,235) 1,500,663
----------
Total Securities Owned (a)
(Cost $1,413,666) 1,666,094
----------
<CAPTION>
Contracts
- ---------------------------------------------------------------
<S> <C> <C>
Outstanding Call Options Written--0.0%
Cisco Systems, Inc., expiring
October '96 @ 60.00 502 (176)
Georgia Pacific, expiring
October '96 @ 80.00 340 (34)
----------
Total Outstanding Call Options Written
(Premiums Received $181) (210)
----------
<CAPTION>
Value
($ in thousands) (Note 2)
- --------------------------------------------------------------
<S> <C>
Total Investments,
Net of Outstanding Options Written--101.7%
(Cost $1,413,485) $1,665,884
----------
Other Assets and Liabilities, Net--(1.7%) (27,309)
----------
Net Assets--100.0% $1,638,575
==========
</TABLE>
Notes to Portfolio of Investments ($ in thousands):
(a) The cost of investments for federal income tax purposes is
$1,413,666. At September 30, 1996, net unrealized appreciation
was $252,428. This consisted of aggregate gross unrealized
appreciation for all investments on which there was an excess
of market value over tax cost of $259,523 and aggregate gross
unrealized depreciation of all investments on which there was
an excess of tax cost over market value of $7,095.
(b) Non-income producing security.
(c) See Outstanding Call Options Written.
Annual Report See accompanying notes/19
<PAGE>
PIMCO Advisors
Target Fund September 30, 1996
Objective:
Capital appreciation.
Portfolio:
Stocks of companies
with medium-sized
capitalizations.
Total Net Assets:
$1,181 million
Number of Securities
in the Portfolio:
57 (not including short-term
instruments)
PIMCO Advisors Institutional Manager:
Columbus Circle
Investors
PERFORMANCE*
<TABLE>
<CAPTION>
Average Annual Total Return For periods ended 9/30/96
A Shares B Shares C Shares S&P Lipper
(INCEP. 12/17/92) (INCEP. 5/22/95) (INCEP. 12/17/92) Mid-Cap Mid-Cap
Adjusted Adjusted Adjusted Index Fund Avg.
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 year 16.5% 10.1% 15.6% 10.6% 14.7% 14.0% 16.7%
3 years 15.4% 13.2% -- -- 14.5% 13.4% 14.8%
Inception 19.4% 17.6% 23.6% 20.8% 18.5% -- --
</TABLE>
* The adjusted returns above include the effects of applicable sales charges.
The chart to the right reflects the performance of PIMCO Advisors Target Fund
A and C through September 30, 1996. The performance of Target Fund B will be
greater or less than the lines shown based on differences in inception dates,
fees, and sales charges. Past performance is not an indication of future
results. See page 55 for Footnotes, which should be read in connection with
this material.
Change in value of $10,000 invested at the Fund's inception
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Target A Target C S&P Mid-Cap
<S> <C> <C> <C>
09/30/92 9,450 10,000 10,000
12/31/92 9,554 10,110 10,000
03/31/93 10,093 10,660 10,328
06/30/93 10,792 11,380 10,569
09/30/93 12,020 12,650 11,100
12/31/93 11,991 12,589 11,396
03/31/94 11,695 12,256 10,962
06/30/94 11,304 11,822 10,563
09/30/94 12,525 13,074 11,278
12/31/94 12,454 12,978 10,987
03/31/95 13,372 13,909 11,876
06/30/95 14,512 15,065 12,923
09/30/95 15,846 16,414 14,185
12/31/95 16,345 16,912 14,388
03/31/96 17,208 17,759 15,274
06/30/96 18,556 19,122 15,714
09/30/96 18,459 18,984 16,171
</TABLE>
PORTFOLIO COMPOSITION
<TABLE>
<CAPTION>
Top 10 Holdings
<S> <C>
Company Primary Business % of Net Assets
- --------------------------------------------------------------------------------
Gucci Group Manufacturer personal luxury accessories 3.8%
- --------------------------------------------------------------------------------
International Game Technology Coin operated video/reel games 3.5%
- --------------------------------------------------------------------------------
HEALTHSOUTH Rehabilitation Corp. Medical rehabilitation service 3.0%
- --------------------------------------------------------------------------------
USA Waste Services Non-hazard solid waste management 2.9%
- --------------------------------------------------------------------------------
Guidant Corp. Design/manufacturer cardiological equipment 2.9%
- --------------------------------------------------------------------------------
Diebold, Inc. Record storage/bank security 2.7%
- --------------------------------------------------------------------------------
Fore Systems, Inc. Manufacturer high-performance network products 2.7%
- --------------------------------------------------------------------------------
Republic Industries, Inc. Non-hazardous solid waste services 2.6%
- --------------------------------------------------------------------------------
Harley-Davidson, Inc. Manufactures motorcycles 2.5%
- --------------------------------------------------------------------------------
MGM Grand, Inc. Hotel/casino & airline operator 2.3%
- --------------------------------------------------------------------------------
Top Ten Total 28.9%
</TABLE>
Portfolio Composition
[BAR GRAPH APPEARS HERE]
Common Stocks 94%
Cash Equivalents 6%
Cash Equivalents include short-term instruments, cash and other assets less
liabilities.
Top 5 Industries % of Net Assets
- ---------------------------------------------
Entertainment and Leisure 12.0%
- ---------------------------------------------
Oil and Gas 6.7%
- ---------------------------------------------
Retail 6.4%
- ---------------------------------------------
Electronics 6.4%
- ---------------------------------------------
Telecommunications 6.2%
- ---------------------------------------------
PORTFOLIO INSIGHTS
The Target Fund outperformed its benchmark, the Standard & Poor's Mid-Cap Index
(an unmanaged index of common stocks), for the one-, three-, and since inception
periods ended September 30, 1996. Specifically, the Fund posted one-year returns
of 16.5% for Class A shares, 15.6% for Class B shares and 14.7% for Class C
shares.
Like the stock market in general, the Target Fund experienced relative
volatility during the year. For example, consider the Fund's holdings in the
technology sector. Technology was one of the Fund's larger sectors throughout
the year. While these holdings detracted from performance during the summer
months, when technology-related stocks in general were down, they rebounded and
contributed positively to the Fund's final performance. In particular, the Fund
realized significant gains from Fore Systems, a worldwide leader in the design,
development, manufacturing and sale of high performance local area networking
(LAN) products. The company dominates the asynchronous transfer mode (ATM)
market, a technology that increases network capacity and allows for transmission
of voice data over existing networks.
Two other industries that aided the Fund's performance this year were
healthcare and consumer discretionary. Healthcare companies in general were
supported by an aging population and a shortened approval time by the Food and
Drug Administration. Success in healthcare included Jones Medical, HEALTHSOUTH
and Guidant Corporation. Consumer discretionary benefited periodically from
positive economic news. Standout holdings in this sector included Gucci,
International Game Technology, Jones New York and Starbucks.
The Fund's underweighting in the financial sector somewhat limited potential
returns, as banks and finance companies were boosted by lower interest rates and
perceptions that the Federal Reserve Board would not raise rates until next
year. The Fund's exposure to this sector has been building, however, with a
particular focus on the housing related stocks.
The manager of the Target Fund expects sectors such as technology and energy
to stay in the limelight for a while. As a result, the Fund will look to
maintain a meaningful exposure in these sectors going forward, concentrating on
companies with better-than expected fundamentals. In addition, the Fund will
continue to hold stocks of companies the manager defines as "special
situations," which are companies that are improving their balance sheets through
mergers, acquisitions or consolidations.
20/PIMCO Advisors Funds
<PAGE>
PIMCO Advisors
Target Fund
PORTFOLIO OF INVESTMENTS September 30, 1996
<TABLE>
<CAPTION>
Principal Value
($ in thousands) Amount (Note 2)
- ------------------------------------------------------------------------
<S> <C> <C>
Short-Term Notes--7.6%
Bell Atlantic Network Funding Corp., 5.310%,
10/8/96 $ 11,100 $ 11,087
Bell South Telecommunications, 5.300%,
10/2/96 5,000 4,999
Canadian Wheat Board, 5.350%, 10/7/96 11,300 11,288
Ciesco L.P., 5.250%, 10/2/96 10,000 9,997
Cooperative Association of Tractor Dealers,
5.350%, 10/17/96 5,500 5,486
Corporate Asset Funding Co., Inc., 5.300%,
10/22/96 9,000 8,971
Dean Witter Discover Corp., 5.300%, 10/4/96 7,000 6,996
Federal National Mortgage Association,
5.150%, 10/10/96 10,000 9,986
Goldman Sachs & Co., 5.360%, 10/3/96 10,000 9,996
National Rural Utilities Cooperative Finance
Corp., 5.260%, 10/1/96 5,400 5,399
UBS Finance, 5.780%, 10/1/96 5,400 5,399
--------
Total Short-Term Notes 89,604
(Cost $89,604) --------
<CAPTION>
Shares
- ------------------------------------------------------------------------
<S> <C> <C>
Common Stocks--94.4%
Advertising--0.9%
Omnicon Group, Inc. 236,900 11,075
--------
Apparel--1.7%
Liz Claiborne, Inc. 556,700 20,737
--------
Automotive Manufacturing--2.5%
Harley-Davidson, Inc. 677,900 29,150
--------
Banks--1.0%
Greenpoint Financial Cos. 310,500 11,838
--------
Chemicals--1.8%
Raychem Corp. 285,400 21,405
--------
Commercial Services--1.5%
APAC Teleservices (b) 282,700 14,488
Robert Half International, Inc. (b) 83,700 3,086
--------
17,574
--------
Computer Services and Software--5.3%
Baan Co. N.V. (b) 480,200 16,027
Netscape Communications (b) 311,000 14,423
Peoplesoft, Inc. (b) 149,300 12,429
Sterling Commerce, Inc. (b) 660,100 19,473
--------
62,352
--------
Computers--3.1%
Acxiom Corp. (b) 282,400 11,614
Adaptec, Inc. (b) 425,000 25,500
--------
37,114
--------
Electronics--6.4%
Altera Cos. (b) 220,000 11,138
Diebold, Inc. 549,350 32,068
Fore Systems, Inc. (b) 770,000 31,859
--------
75,065
--------
Entertainment and Leisure--12.0%
Callaway Golf Co. 790,900 26,989
Fleetwood Enterprises, Inc. 496,800 15,277
Hospitality Franchise Systems, Inc. (b) 269,200 18,003
International Game Technology 2,000,000 41,000
MGM Grand, Inc. (b) 656,000 27,716
Regal Cinemas, Inc. (b) 489,850 12,246
--------
141,231
--------
<CAPTION>
Value
($ in thousands) Shares (Note 2)
- ------------------------------------------------------------------------
<S> <C> <C>
Environmental Control--5.5%
Republic Industries, Inc. (b) 1,059,900 $30,737
USA Waste Services, Inc. (b) 1,084,400 34,159
--------
64,896
--------
Financial Services--1.7%
Washington Mutual, Inc. 548,700 20,439
--------
Health Care--3.0%
HEALTHSOUTH Rehabilitation Corp. (b) 917,300 35,201
--------
Homebuilders--0.9%
Herman Miller, Inc. 275,600 11,162
--------
Household Products--1.4%
Sunbeam Corp. 702,700 16,250
--------
Insurance--1.9%
Everest Reinsurance Holdings, Inc. 893,400 22,112
--------
Media--4.0%
Clear Channel Communications, Inc. (b) 287,400 25,435
Gartner Group, Inc., Class A (b) 656,400 22,318
--------
47,753
--------
Medical Supplies--2.9%
Guidant Corp. 617,300 34,105
--------
Miscellaneous Manufacturing--3.8%
Harnischfeger Industries, Inc. 271,700 10,257
Oakley, Inc. (b) 408,600 17,366
Waters Cos. (b) 559,200 18,314
--------
45,937
--------
Oil and Gas--6.7%
Columbia Gas System 244,500 13,692
Diamond Offshore Drilling (b) 286,700 15,769
Ensco International, Inc. (b) 579,700 18,840
Helmerich & Payne, Inc. 270,400 11,796
Tosco Cos. 342,800 18,811
--------
78,908
--------
Pharmaceuticals--1.5%
Jones Medical Industries, Inc. 361,900 17,551
--------
Restaurants--2.6%
Planet Hollywood International, Inc., Class A (b) 210,400 5,891
Starbucks Corp. (b) 759,700 25,070
--------
30,961
--------
Retail--6.4%
Bed, Bath & Beyond, Inc. (b) 535,300 14,654
Dollar General Cos. 596,400 18,563
Fred Myer Inc. (b) 400,000 13,250
Saks Holding, Inc. (b) 477,200 16,702
Thrifty Payless Holdings, Inc. (b) 655,900 12,216
--------
75,385
--------
Telecommunications--6.2%
American Satellite Network, Inc.
(warrants expire 6/30/99)(b) 53,250 0
Andrew Corp. (b) 309,900 15,456
Aspect Telecommunications (b) 354,500 22,068
LCI International, Inc. (b) 386,400 12,172
Qualcomm, Inc. (b) 540,200 22,959
--------
72,655
--------
</TABLE>
Annual Report See accompanying notes/21
<PAGE>
PIMCO Advisors
Target Fund
PORTFOLIO OF INVESTMENTS September 30, 1996
<TABLE>
<CAPTION>
Value
($ in thousands) Shares (Note 2)
- ---------------------------------------------------------
<S> <C> <C>
Textiles--5.6%
Gucci Group N.V. 623,100 $ 45,175
Jones Apparel Group, Inc. (b) 333,200 21,242
----------
66,417
----------
Transportation: Air--0.9%
Atlas Air, Inc. (b) 241,800 10,336
----------
Utilities: Telephone Systems--1.5%
Cincinnati Bell, Inc. 339,500 17,993
----------
Wholesale Trade--1.7%
Tech Data Corp. (b) 703,300 19,603
----------
Total Common Stocks
(Cost $918,124) 1,115,205
----------
<CAPTION>
Value
($ in thousands) (Note 2)
- ---------------------------------------------------------
<S> <C>
Total Investments (a)--102.0%
(Cost $1,007,728) $1,204,809
----------
Other Assets and Liabilities, Net--(2.0%) (23,983)
----------
Net Assets--100.0% $1,180,826
==========
</TABLE>
Notes to Portfolio of Investments ($ in thousands):
(a) The cost of investments for federal income tax purposes is $1,007,734. At
September 30, 1996, net unrealized appreciation was $197,075. This consisted of
aggregate gross unrealized appreciation for all investments on which there was
an excess of market value over tax cost of $213,268 and aggregate gross
unrealized depreciation of all investments on which there was an excess of tax
cost over market value of $16,193.
(b) Non-income producing security.
22 / PIMCO Advisors Funds See accompanying notes
<PAGE>
PIMCO Advisors
Discovery Fund September 30, 1996
- --------------------------------------------------------------------------------
Objective:
Capital appreciation.
Portfolio:
Primarily stocks of
smaller-capitalization
companies.
Total Net Assets:
$70 million
Number of Securities
in the Portfolio:
96 (not including short-term
instruments)
PIMCO Advisors
Institutional Manager:
Cadence Capital
Management
PERFORMANCE*
<TABLE>
<CAPTION>
Average Annual Total Return For periods ended 9/30/96
Lipper Small
A Shares B Shares C Shares Russell Company
(INCEP. 6/27/95) (INCEP. 6/27/95) (INCEP. 6/27/95) 2000 Growth Fund
Adjusted Adjusted Adjusted Index Average
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 year 9.4% 3.4% 8.6% 3.6% 7.6% 13.1% 17.2%
Inception 14.9% 9.9% 14.0% 10.9% 14.0% -- --
</TABLE>
* The adjusted returns above include the effects of applicable sales charges.
The chart to the right reflects the performance of PIMCO Advisors Discovery
Fund A, B and C since inception through September 30, 1996. Past performance
is not an indication of future results. See page 55 for Footnotes, which
should be read in connection with this material.
[LINE GRAPH APPEARS HERE]
Change in value of $10,000 invested at the Fund's inception
<TABLE>
<CAPTION>
Discovery A Discovery B Discovery C Russell 2000 Index
<S> <C> <C> <C> <C>
6/30/95 9,450 10,000 10,000 10,000
9/30/95 10,291 10,860 10,860 10,959
12/31/95 9,984 10,430 10,430 11,197
3/31/96 10,357 10,800 10,800 11,771
6/30/96 10,556 11,080 11,080 12,360
9/30/96 11,255 11,390 11,790 12,402
</TABLE>
PORTFOLIO COMPOSITION
Top 10 Holdings
Company Primary Business % of Net Assets
- --------------------------------------------------------------------------------
Cadence Design Systems, Inc. Software for computer-aid-engineering 2.0%
- --------------------------------------------------------------------------------
Orthodotic Centers of America, Inc. Bone fracture treatment products 1.7%
- --------------------------------------------------------------------------------
Health Management Associates Inc. Operates acute care hospitals 1.7%
- --------------------------------------------------------------------------------
McAfee Associates, Inc. Develops personal computer software 1.6%
- --------------------------------------------------------------------------------
Cytec Industries, Inc. Integrated chemical production 1.6%
- --------------------------------------------------------------------------------
Rational Software Corp. Develop software/computer systems 1.5%
- --------------------------------------------------------------------------------
Richfood Holdings, Inc. Wholesale food distributor 1.5%
- --------------------------------------------------------------------------------
Parametric Technology Corp. Mechanical design, software products 1.4%
- --------------------------------------------------------------------------------
Methode Electronics, Inc. Electronic component devices 1.4%
- --------------------------------------------------------------------------------
Tiffany & Co. Retailer: jewelry, gift items 1.4%
- --------------------------------------------------------------------------------
Top Ten Total 15.8%
Portfolio Composition Top 5 Industries % of Net Assets
---------------------------------
Common Stocks 88% Insurance 12.2%
---------------------------------
Cash Computer Serv. & Software 8.9%
Equivalents 12% ---------------------------------
Banks 8.7%
---------------------------------
Oil and Gas 6.4%
[BAR GRAPH APPEARS HERE] ---------------------------------
Retail 6.3%
---------------------------------
Cash Equivalents include short-term instruments, cash and other assets less
liabilities.
PORTFOLIO INSIGHTS
While the Discovery Fund's recent performance has been quite strong, the Fund's
returns for the one-year period ended September 30, 1996 still fell short of its
benchmark, the Russell 2000 Index (an unmanaged index of small-cap stocks).
Specifically, for the three-months ended September 30, 1996, the Fund's shares
increased 6.6%, 6.4% and 5.4% for its Class A, B and C shares, respectively,
compared to an increase of only 0.3% for the benchmark. For the one-year
period, the Fund's shares increased 9.4%, 8.6% and 7.6% for its Class A, B and C
shares, respectively.
The Discovery Fund's top sector as of September 30, 1996 was finance, which
includes insurance companies (12.2%) and banks (8.7%). In general, finance-
related companies are very sensitive to interest rates, so the Fund's finance
holdings were boosted by the quarter's lower interest rates and the increasing
belief that the Federal Reserve Board will not raise rates in the near-term.
Another major area of investment for the Fund on September 30, 1996 was
retail. An example of a strong performer in this industry was Tiffany &
Company--the manufacturer and retailer of luxury jewelry and gift items. A new
marketing campaign helped this small-cap company push earnings up 55% in the
quarter, handily beating Wall Street estimates. With the holiday season
approaching (typically the best selling period for retailers), the Fund's
manager believes Tiffany & Company should be able to continue to expand sales
while widening its operating margin.
Computer and other technology-related companies also accounted for a sizable
portion of the Fund's assets at times during the year, and this sector
periodically caused the Fund some problems. During the first six months of the
period, the Fund was overweighted in technology, with a large percentage of its
technology investments centering around the semiconductor theme. Unfortunately,
semiconductor-related companies in general were hurt by a poor supply/demand
ratio--a situation that negatively affected the Fund's holdings.
Going forward, the Fund's manager will attempt to build on the Fund's recent
success through selective stock picking, concentrating as always on small-cap
companies that are reasonably priced given their assets and business prospects.
It will be this attention to price, the manager believes, that will allow the
Fund to avoid "hot" sectors and stocks that are overpriced.
1996 Annual Report/23
<PAGE>
PIMCO Advisors
Discovery Fund
PORTFOLIO OF INVESTMENTS September 30, 1996
<TABLE>
<CAPTION>
Value
($ in thousands) Shares (Note 2)
- --------------------------------------------------------------
<S> <C> <C>
Common Stocks--87.5%
Aerospace--1.1%
Alliant Techsystems, Inc. (b) 14,000 $ 726
Gencorp, Inc. 1,000 14
Greenwich Air Services, Inc. (b) 1,000 20
------
760
------
Apparel--1.2%
Tommy Hilfiger Corp. (b) 14,800 877
------
Automotive Manufacturing--0.1%
SPX Corp. 1,000 30
------
Banks--8.7%
Associated Banc-Corp. 20,800 840
Centura Banks, Inc. 20,000 772
City National Corp. 51,600 935
Colonial Bancgroup, Inc. 1,000 35
Cullen Frost Bankers 32,200 970
Finova Group 14,100 846
First Midwest Bancorp, Inc. 1,000 30
Mark Twain Bancshares 15,300 645
North Folk 1,000 32
One Valley Bancorp, Inc. 1,000 39
Union Planters Corp. 25,900 919
Westamerica Bancorporation 1,000 51
------
6,114
------
Biotechnology--1.4%
Physio-Control International Corp. (b) 38,300 967
------
Building Materials and Construction--4.3%
Lennar Corp. 28,000 623
Medusa Corp. 25,200 775
Oakwood Homes Corp. 31,400 864
Texas Industries, Inc. 11,900 713
------
2,975
------
Chemicals--3.3%
Cytec Industries Corp. (b) 27,900 1,085
Mississippi Chemical Corp. 19,900 465
Raychem Corp. 10,500 788
------
2,338
------
Computer Services and Software--8.9%
Bantec, Inc. (b) 1,000 21
Black Box Corp. (b) 1,000 33
Cadence Design Systems, Inc. (b) 39,150 1,400
Gateway 2000, Inc. (b) 14,500 694
McAfee Associates, Inc. (b) 15,800 1,090
Parametric Technology Corp. (b) 20,000 988
Rational Software Corp. (b) 31,400 1,072
Tech Data Corp. (b) 30,500 850
Veritas Software Corp. (b) 1,000 71
------
6,219
------
Containers--2.5%
Bemis Co. 25,900 877
First Brands Corp. 34,400 899
------
1,776
------
Electronics--5.8%
Belden, Inc. (b) 24,400 708
C-Cube Microsystems (b) 15,800 701
Methode Electronics, Inc., Class A (b) 52,500 978
Sanmina Corp. (b) 20,300 817
Tektronix, Inc. (b) 20,000 818
------
4,022
------
Entertainment and Leisure--2.6%
Ameristar Casinos, Inc. (b) 3,500 19
Callaway Golf Co. 27,000 921
K2, Inc. 29,600 773
Westwood One, Inc. (b) 4,700 86
------
1,799
------
Environmental Control--1.2%
United Waste Systems, Inc. (b) 24,100 837
------
Financial Services--4.8%
Countrywide Credit Industries, Inc. 34,800 892
Green Tree Financial Corp. 23,400 918
Magna Group, Inc. 27,100 759
Money Store, Inc. (The) 30,175 800
Olympic Financial Ltd. (b) 1,000 24
------
3,393
------
Food--1.5%
Richfood Holdings, Inc. 28,400 1,058
------
Health Care--1.7%
Orthodontic Centers of America, Inc. (b) 57,400 1,170
------
Health Management--3.4%
Health Management Associates, Inc.,
Class A (b) 46,575 1,159
PHP Healthcare Corp. (b) 15,100 432
Universal Health Services, Inc., Class B (b) 27,600 752
------
2,343
------
Industrial Components--1.4%
Roper Industries, Inc. 20,100 950
------
Insurance--12.2%
Allmerica Financial Corp. (b) 22,800 741
American Travellers Corp. (b) 1,000 33
Citizens Corp. 32,900 720
HCC Insurance Holdings, Inc. 33,750 975
Mid Ocean Limited (b) 21,300 908
Mutual Risk Management Ltd. 21,566 625
Nac Re Corp. 17,300 623
Penncorp Financial Group, Inc. 24,800 800
Protective Life Corp. 22,200 838
Reinsurance Group of America 17,300 759
Selective Insurance Group 21,600 724
Vesta Insurance Group, Inc. 19,800 760
------
8,506
------
Machinery and Engineering--1.1%
Duriron Company, Inc. 30,000 795
------
Media--1.4%
United Video Satellite Group, Class A (b) 47,800 968
------
</TABLE>
24/PIMCO Advisors Funds See accompanying notes
<PAGE>
PIMCO Advisors
Discovery Fund
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
Value
($ in thousands) Shares (Note 2)
- ------------------------------------------------------------------
<S> <C> <C>
Medical Supplies--2.7%
Inphynet Medical Management (b) 1,000 $ 18
Kinetic Concepts, Inc. 58,100 839
Orthologic Corp. (b) 1,000 11
Rotech Medical Corp. (b) 4,800 79
Sybron International Corp. (b) 33,300 965
-------
1,912
-------
Metal Fabrication--1.4%
Mueller Industries, Inc. (b) 22,800 926
Oregon Metallurgical Corp. (b) 1,000 32
-------
958
-------
Oil and Gas--6.4%
Camco International, Inc. 20,000 748
El Paso Natural Gas 16,000 704
Falcon Drilling Company (b) 30,200 785
Flores & Rucks, Inc. (b) 1,000 38
Oneok, Inc. 22,700 624
Tidewater, Inc. 20,200 755
Vintage Petroleum, Inc. 26,100 766
Zeigler Coal Holding Co. 1,000 17
-------
4,437
-------
Pharmaceuticals--0.7%
Biovail Corp. International (b) 13,800 493
Rexall Sundown 200 7
-------
500
-------
Retail--6.3%
Borders Group, Inc. (b) 24,000 894
Consolidated Stores Corp. (b) 22,200 888
Fred Myer, Inc. (b) 1,000 33
Friedman's, Inc., Class A (b) 5,000 94
Neiman-Marcus Group, Inc. 22,500 793
Ross Stores, Inc. 20,600 741
Tiffany & Co. 24,400 976
-------
4,419
-------
Telecommunications--1.1%
Vanguard Cellular Systems, Inc., Class A (b) 39,600 767
-------
Transportation: Rail--0.3%
Stolt Nielson S.A. ADR 11,300 177
-------
Total Common Stocks
(Cost $48,677) 61,067
-------
Total Investments (a)--87.5%
(Cost $48,677) 61,067
-------
Other Assets and Liabilities, Net--12.5% 8,749
-------
Net Assets--100.0% $69,816
=======
</TABLE>
Notes to Portfolio of Investments ($ in thousands):
(a) The cost of investments for federal income tax purposes is $48,679. At
September 30, 1996, net unrealized appreciation was $12,388. This consisted of
aggregate gross unrealized appreciation for all investments on which there was
an excess of market value over tax cost of $12,936 and aggregate gross
unrealized depreciation of all investments on which there was an excess of tax
cost over market value of $548.
(b) Non-income producing security.
Annual Report See accompanying notes/25
<PAGE>
PIMCO Advisors
Opportunity Fund September 30, 1996
Objective:
Capital appreciation.
Portfolio:
Primarily stocks of
small-capitalization
companies.
Total Net Assets:
$935 million
Number of Securities
in the Portfolio:
45 (not including short-term
instruments)
PIMCO Advisors
Institutional Manager:
Columbus Circle
Investors
PERFORMANCE*
<TABLE>
<CAPTION>
Average Annual Total Return For periods ended 9/30/96
A Shares C Shares Lipper Cap.
(INCEP. 12/17/90) (INCEP. 2/24/84) Russell Apprec. Fund
Adjusted Adjusted 2000 Index Average
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1 year 18.4% 11.8% 16.5% 13.1% 16.0%
5 years 26.2% 24.7% 25.2% 15.8% 14.2%
10 years -- -- 21.3% 11.9% 12.4%
Inception 31.5% 30.2% 20.1% -- --
</TABLE>
* The adjusted returns above include the effects of applicable sales charges.
The chart to the right reflects the performance of PIMCO Advisors Opportunity
Fund C through September 30, 1996. The performance of Opportunity Fund A will
be greater or less than the line shown based on differences in inception
dates, fees, and sales charges. Past performance is not an indication of
future results. See page 55 for Footnotes, which should be read in connection
with this material.
[LINE GRAPH APPEARS HERE]
Change in value of $10,000 invested at the Fund's inception
<TABLE>
<CAPTION>
Opportunity C Russell 2000 Index
<S> <C> <C>
12/31/83 10,000 10,000
03/31/84 10,090 10,059
06/30/84 10,280 9,757
09/30/84 11,214 10,293
12/31/84 11,199 9,995
03/31/85 12,752 11,386
06/30/85 13,311 11,789
09/30/85 12,462 11,276
12/31/85 14,543 13,099
03/31/86 16,247 14,953
06/30/86 17,825 15,678
09/30/86 14,610 13,758
12/31/86 15,197 13,843
03/31/87 19,250 17,209
06/30/87 18,858 17,087
09/30/87 20,487 17,803
12/31/87 16,170 12,629
03/31/88 17,981 15,038
06/30/88 19,477 16,029
09/30/88 18,642 15,878
12/31/88 18,437 15,773
03/31/89 20,012 16,988
06/30/89 22,137 18,070
09/30/89 24,846 19,290
12/31/89 24,089 18,335
03/31/90 23,504 17,930
06/30/90 25,633 18,621
09/30/90 21,162 14,052
12/31/90 22,320 14,758
03/31/91 28,718 19,147
06/30/91 27,914 18,850
09/30/91 32,667 20,387
12/31/91 37,517 21,555
03/31/92 40,315 23,193
06/30/92 37,477 21,591
09/30/92 39,449 22,209
12/31/92 48,195 25,524
03/31/93 51,899 26,614
06/30/93 57,353 27,195
09/30/93 55,695 29,573
12/31/93 65,622 30,348
03/31/94 61,282 29,542
06/30/94 52,978 28,393
09/30/94 61,767 30,364
12/31/94 62,515 29,797
03/31/95 66,997 31,170
06/30/95 76,734 34,091
09/30/95 85,629 37,360
12/31/95 88,479 38,171
03/31/96 91,692 40,129
06/30/96 101,529 42,135
09/30/96 100,591 42,278
</TABLE>
PORTFOLIO COMPOSITION
Top 10 Holdings
Company Primary Business % of Net Assets
- --------------------------------------------------------------------------------
DSP Communications, Inc. Develops chip sets for telecommunications 4.5%
- --------------------------------------------------------------------------------
Dura Pharmaceuticals, Inc. Pharmaceutical R&D 4.3%
- --------------------------------------------------------------------------------
Comverse Technology, Inc. Develop, market computer systems 4.2%
- --------------------------------------------------------------------------------
Global Marine, Inc. Oil & gas contract drilling 3.5%
- --------------------------------------------------------------------------------
Tommy Hilfiger Corp. Design, market men's sportswear 3.3%
- --------------------------------------------------------------------------------
Norrell Corp. Temporary personnel services 3.0%
- --------------------------------------------------------------------------------
Citrix Systems, Inc. Multi-user application server system 3.0%
- --------------------------------------------------------------------------------
Just For Feet Athletic/outdoor footwear 2.9%
- --------------------------------------------------------------------------------
Oakwood Homes Corp. Mobile home manufacturer/retail 2.9%
- --------------------------------------------------------------------------------
VeriFone, Inc. Manufacturer transaction automation system 2.9%
- --------------------------------------------------------------------------------
Top Ten Total 34.5%
Portfolio Composition Top 5 Industries % of Net Assets
---------------------------------
Common Stock 90% Electronics 11.5%
Cash ---------------------------------
Equivalents 10% Oil and Gas 11.4%
---------------------------------
Computer Serv. & Software 10.9%
---------------------------------
[BAR GRAPH APPEARS HERE] Computers 7.9%
---------------------------------
Telecommunications 6.3%
---------------------------------
Cash Equivalents include short-term instruments, cash and other assets less
liabilities.
PORTFOLIO INSIGHTS
The Opportunity Fund continued its trend of providing superior long- and short-
term results for its shareholders. Through September 30, 1996, the Fund has
soundly outperformed comparable funds (as measured by the Lipper Capital
Appreciation Fund Average) and its benchmark (the Russell 2000, an unmanaged
index of small-cap common stocks) in the one-, five- and ten-year periods.
During the last 12 month period, the Opportunity Fund defied a difficult
small-cap market to return 18.4% on its Class A shares and 16.5% on its Class C
shares. The manager attributes a large part of this success to careful security
selection, rather than sector bets. In the end, however, a majority of the
Fund's winners from the year could be found in the technology sector. These
successful technology holdings included Electronics for Imaging (a developer of
publishing software) and VeriFone (providers of an integrated service digital
network).
Stock market highs and increased market capitalizations among technology
holdings encouraged the Fund's manager to redirect a portion of the portfolio
out of this sector mid-way through the year. In a search for lower volatility
and overall risk (allowing the manager to better adapt to fragile market
conditions), the Fund picked up several energy securities. This move benefited
the Fund, as these companies were aided by surprisingly strong energy prices.
For example, the Fund's investment in Global Marine, Inc. produced significant
results. Global Marine is an oil and gas contract driller that showed better
than expected revenue and earnings thanks to higher utilization and dayrates for
offshore drilling rigs.
As a result of the changes described above, the Fund entered the final months
of this year ended September 30, 1996 in a somewhat defensive posture, a
strategy that proved successful given prevailing market conditions. As the
small-cap market has still not fully recovered from the summer sell-out and the
market's volatility remains high, the Fund's manager sees the single most
important challenge to be restricting the Fund's holdings to companies that
actually do exceed investor's expectations. The manager is confident, however,
that the long-term potential for small-cap stocks and for funds that invest in
them is strong.
26/PIMCO Advisors Funds
<PAGE>
PIMCO Advisors
Opportunity Fund
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
Principal Value
($ in thousands) Amount (Note 2)
- ---------------------------------------------------------------------
<S> <C> <C>
Short-Term Notes--10.4%
Apreco, 5.350%, 10/31/96 $ 8,000 $ 7,963
Bell Atlantic Network Funding Corp., 5.300%,
10/3/96 7,600 7,597
Bell South Telecommunications, 5.280%,
10/21/96 10,000 9,969
Commerzbank, 5.300%, 10/7/96 6,700 6,693
Corporate Asset Funding Co., Inc., 5.270%,
10/2/96 7,000 6,998
CSW Credit, Inc., 5.330%, 10/22/96 8,400 8,373
Dean Witter Discover Corp., 5.310%, 10/22/96 4,000 3,987
Federal National Mortgage Association,
5.150%-5.200%, 10/10/96-10/16/96 11,200 11,183
Goldman Sachs & Co., 5.340%, 10/4/96 12,000 11,993
National Rural Utilities Cooperative Finance
Corp., 5.260%, 10/1/96 8,400 8,399
Sheffield Receivables, 5.350%, 10/18/96 9,300 9,275
SmithKline Beecham, 5.330%, 10/15/96 4,900 4,889
--------
Total Short-Term Notes
(Cost $97,319) 97,319
--------
<CAPTION>
Shares
- --------------------------------------------------------------------
<S> <C> <C>
Common Stocks--89.9%
Advertising and Marketing--1.3%
Outdoor Systems Inc. (b) 250,000 11,750
--------
Aerospace--2.4%
Stanford Telecommunications (b) 225,000 11,250
Tracor, Inc. (b) 500,000 10,313
--------
21,563
--------
Apparel--3.4%
Tommy Hilfiger Corp. (b) 523,100 30,994
--------
Banks--2.1%
Glendale Federal Bank FSB (b) 1,100,000 19,525
--------
Building Materials and Construction--6.1%
Champion Enterprises, Inc. (b) 870,000 19,684
Oakwood Homes Corp. 1,000,000 27,500
U.S. Home Corp. (b) 500,000 10,250
--------
57,434
--------
Commercial Services--4.5%
Accustaff, Inc. (b) 540,000 13,973
Norrell Corp. 890,000 28,035
--------
42,008
--------
Computer Services and Software--10.9%
Citrix Systems, Inc. (b)(c) 545,000 27,931
Cognos, Inc. (b) 675,000 22,022
Computer Horizons Corp. (b) 600,000 17,100
HCIA, Inc. (b) 275,000 16,500
Imnet Systems, Inc. (b) 355,200 6,926
Network General Corp. (b) 500,000 11,438
--------
101,917
--------
Computers--7.9%
Comverse Technology, Inc. (b)(c) 1,000,000 38,875
Mylex Corp. (b) 850,000 13,388
PC Docs Group International, Inc. (b) 500,000 6,750
Vanstar Corp. (b) 620,000 15,035
--------
74,048
--------
Cosmetics--1.5%
Thermolase Corp. (b) 560,000 13,929
--------
Electronics--11.5%
BMC Industries, Inc. 375,000 10,734
Checkpoint Systems, Inc. (b) 900,000 23,850
Geotek Communications, Inc. (b) 1,700,000 14,237
Harman International Industries, Inc. 472,500 23,034
Lernout & Hauspie Speech Products N.V. (b) 365,500 8,681
Veri Fone, Inc. (b) 600,000 26,850
--------
107,386
--------
Energy--1.0%
Molten Metal Technology (b) 300,000 9,600
--------
Financial Services--0.5%
First Alliance Corp. (b) 200,000 4,500
--------
Insurance--2.4%
CMAC Investment Corp. 355,000 22,542
--------
Metals--2.1%
RMI Titanium Co. (b) 800,000 20,200
--------
Oil and Gas--11.4%
Flores & Rucks, Inc. (b) 350,000 13,519
Global Marine, Inc. (b) 2,100,000 33,075
Pogo Producing Co. 525,000 18,769
Transocean Offshore, Inc. 340,600 20,862
United Meridian Corp. (b) 465,000 21,157
--------
107,382
--------
Pharmaceuticals--4.2%
Dura Pharmaceuticals, Inc. (b) 1,080,000 39,825
--------
Restaurants--2.8%
Papa John's International, Inc. (b) 250,000 13,125
Rainforest Cafe, Inc. (b) 425,000 13,175
--------
26,300
--------
Retail--5.7%
Inacom Corp. (b) 400,000 13,700
Just For Feet (b) 550,000 27,569
Proffitt's, Inc. (b) 300,000 11,850
--------
53,119
--------
Telecommunications--6.3%
DSP Communications, Inc. (b)(c) 745,000 41,627
Winstar Communications, Inc. (b) 1,050,000 17,456
--------
59,083
--------
Wholesale--1.9%
U.S. Office Products Co. (b) 500,000 17,937
--------
Total Common Stocks
(Cost $591,021) 841,042
--------
Total Securities Owned (a)
(Cost $688,340) 938,361
--------
</TABLE>
Annual Report See accompanying notes/27
<PAGE>
PIMCO Advisors
Opportunity Fund
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
Value
($ in thousands) Contracts (Note 2)
- ------------------------------------------------------------------
<S> <C> <C>
Outstanding Call Options Written--(0.2%)
Citrix Systems, Inc., expiring
November '96 @ $50 540 $ (263)
Comverse Technology, Inc., expiring
November '96 @ $40 2,500 (781)
DSP Communications, Inc., expiring
October '96 @ $60 2,480 (388)
--------
Total Outstanding Call Options Written
(Premiums Received $1,636) (1,432)
--------
Total Investments,
Net of Outstanding Options Written--100.1%
(Cost $686,704) 936,929
--------
Other Assets and Liabilities, Net--(0.1%) (1,819)
--------
Net Assets--100.0% $935,110
========
</TABLE>
Notes to Portfolio of Investments ($ in thousands):
(a) The cost of investments for federal income tax purposes is $688,340. At
September 30, 1996, net unrealized appreciation was $250,021. This consisted of
aggregate gross unrealized appreciation for all investments on which there was
an excess of market value over tax cost of $269,323 and aggregate gross
unrealized depreciation of all investments on which there was an excess of tax
cost over market value of $19,302.
(b) Non-income producing security.
(c) See Outstanding Call Options Written.
28/PIMCO Advisors Funds See accompanying notes
<PAGE>
PIMCO Advisors
Innovation Fund September 30, 1996
<TABLE>
<S> <C> <C> <C> <C>
Objective: Portfolio: Total Net Assets: Number of Securities PIMCO Advisors
Capital appreciation. Technology-related stocks $222 million in the Portfolio: Institutional
of companies of all sizes. 46 (not including short-term Manager:
instruments) Columbus Circle
Investors
</TABLE>
PERFORMANCE*
Average Annual Total Return For periods ended 9/30/96
<TABLE>
<CAPTION>
A Shares B Shares C Shares Lipper
(INCEP 12/22/94) (INCEP 5/22/95) (INCEP. 12/22/94) Science &
Ajusted Adjusted Adjusted S&P 500 Tech. Avg.
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 year 19.9% 13.3% 19.0% 14.0% 18.1% 20.3% 7.7%
Inception 37.9% 33.5% 33.3% 30.7% 36.9% --- ---
</TABLE>
* The adjusted returns above include the effects of applicable sales charges.
The chart to the right reflects the performance of PIMCO Advisors Innovation
Fund A and C through September 30, 1996. The performance of Innovation Fund B
will be greater or less than the lines shown based on differences in inception
dates, fees, and sales charges. Past performance is not an indication of
future results. See page 55 for Footnotes, which should be read in connection
with this material.
<TABLE>
[GRAPH APPEARS HERE]
Change in value of $10,000 invested at the Fund's inception
<S> <C> <C> <C>
Innovation A Innovation C S&P 500
09/30/94 9,450 10,000 10,000
12/31/94 9,431 9,980 10,000
03/31/95 10,253 10,730 10,974
6/30/95 12,162 12,820 12,022
9/30/95 13,929 14,550 12,987
12/31/95 13,706 14,394 13,759
3/31/96 14,064 14,752 14,498
6/30/96 16,144 16,892 15,149
9/30/96 16,695 17,445 15,617
</TABLE>
PORTFOLIO COMPOSITION
<TABLE>
<CAPTION>
Top 10 Holdings
<S> <C>
Company Primary Business % of Net Assets
- ---------------------------------------------------------------------------------------------------------
Cisco Systems, Inc. Manufacturer computer network products 4.9%
- ---------------------------------------------------------------------------------------------------------
Cascade Communication Corp. Manufacturer data communication network products 4.0%
- ---------------------------------------------------------------------------------------------------------
Ascend Communications, Inc. Develop/market network access products 3.9%
- ---------------------------------------------------------------------------------------------------------
Intel Corp. Semiconductor memory circuits 3.9%
- ---------------------------------------------------------------------------------------------------------
Lucent Technologies, Inc. Manufactures telecommunication systems, software, products 3.3%
- ---------------------------------------------------------------------------------------------------------
3COM Corp. Manufactures computer communication systems 3.3%
- ---------------------------------------------------------------------------------------------------------
Guidant Corp. Design/manufacturer cardiological equipment 2.7%
- ---------------------------------------------------------------------------------------------------------
Adaptec, Inc. Manufacturer computer data flow systems 2.7%
- ---------------------------------------------------------------------------------------------------------
APAC Teleservices Provides marketing services 2.7%
- ---------------------------------------------------------------------------------------------------------
U.S. Robotics Corp. Telecommunication equipment 2.6%
- ---------------------------------------------------------------------------------------------------------
Top Ten Total 34.0%
</TABLE>
Portfolio Composition
[BAR GRAPH APPEARS HERE]
Common Stocks 93%
Cash Equivalents 7%
Cash Equivalents include short-term instruments, cash and other assets less
liabilities.
Top 5 Industries % of Net Assets
- -----------------------------------------------
Telecommunications 24.3%
- -----------------------------------------------
Computer Serv. & Software 21.8%
- -----------------------------------------------
Computers 12.4%
- -----------------------------------------------
Electrical Equipment 8.2%
- -----------------------------------------------
Electronics 5.6%
- -----------------------------------------------
PORTFOLIO INSIGHTS
Since its inception through September 30, 1996, the Innovation Fund has produced
outstanding results, posting annualized returns of 37.9% for Class A shares,
33.3% for Class B shares and 36.9% for Class C shares. And the Fund's one year
returns have also been impressive, with Class A shares up 19.9%, Class B shares
up 19.0% and Class C shares up 18.1%. These strong one-year results were
significantly better than competitive funds which averaged a return of only 7.7%
(as measured by the Lipper Science & Technology Funds Average).
Even though it suffered some well-publicized setbacks, technology was the
number one performing sector in the stock market for the year ended September
30, 1996. The Innovation Fund was able to successfully maneuver through this
changing investment environment with selective stock picking. For example, the
Fund realized outstanding returns from the stocks of several communications
equipment companies. These companies included Xylan Corporation and Cisco
Systems. Another major contributor in this field was 3COM, a networking company
that has benefited from the rapid expansion of the Internet and corporate
intranets.
The summer slump in technology was due to several factors, including some
high profile disappointments (i.e., Hewlett Packard and Motorola) and greater-
than-realistic expectations about numerous other technology companies. During
this time, the Fund continued to excel relative to com-parable funds thanks to
its broad definition of technology. The Innovation Fund invests not only in
traditional technology companies, but also in companies in other sectors that
are using technology in an innovative way. For example, during the year the
Innovation Fund held Guidant Corporation, a company that designs and
manufactures cardiological equipment. Guidant has been producing better-than-
expected results due to continually strong sales of a lifesaving heart
regulating device they created. The device is implanted in recent heart attack
victims. When the heart begins to beat too quickly, the device can send a shock
to the heart, causing normal rhythms to resume.
Going forward the manager of the Innovation Fund will continue to concentrate
on those subsections of the technology sector that are performing well and will
rely on the Fund's inclusive definition to provide opportunities denied more
narrowly defined funds. In the near-term, the manager will be paying particular
attention to the market for equipment that helps ease bandwidth bottlenecks
often present in local (LAN) and wide (WAN) area networks. In addition, the
manager will closely monitor the companies that won in the government airwaves
auction of 1995, and the wireless equipment providers who should benefit from
the development of these new networks.
1996 ANNUAL REPORT/29
4
<PAGE>
PIMCO Advisors
Innovation Fund
PORTFOLIO OF INVESTMENTS September 30, 1996
<TABLE>
<CAPTION>
Principal Value
($ in thousands) Amount (Note 2)
- -------------------------------------------------------------------
<S> <C> <C>
Short-Term Notes--7.3%
Bell Atlantic Network Funding Corp., 5.270%,
10/7/96 $ 5,000 $ 4,995
Ciceco, 5.250%, 10/2/96 4,000 3,999
Corporate Asset Funding Co., Inc., 5.400%,
10/11/96 2,300 2,296
Dean Witter Discover Corp., 5.300%, 10/4/96 1,600 1,599
Goldman Sachs & Co., 5.340%, 10/10/96 3,300 3,295
---------
Total Short-Term Notes 16,184
(Cost $16,184) ---------
<CAPTION>
Shares
- -------------------------------------------------------------------
<S> <C> <C>
Common Stocks--92.9%
Automotive Manufacturing--0.9%
Boyds Wheels, Inc. (b) 160,000 2,100
---------
Commercial Services--2.7%
APAC Teleservices (b) 115,000 5,894
---------
Communication Equipment--3.9%
Ericsson (L.M.) Telephone Co. ADR, Class B 110,000 2,791
U.S. Robotics Corp. (b) 90,000 5,816
---------
8,607
---------
Computer Services and Software--21.8%
BDM International, Inc. 50,000 2,975
CBT Group PLC ADR (b) 80,000 3,760
Cisco Systems, Inc. (b) 175,000 10,861
Clarify, Inc. (b) 13,000 806
Computer Associates International, Inc. 70,000 4,183
Pairgain Technologies, Inc. (b) 50,000 3,906
PRI Automation, Inc. (b) 90,000 2,948
Saville Systems Ireland ADR (b) 100,000 3,525
Sterling Commerce, Inc. (b) 80,000 2,360
Viasoft, Inc. (b) 120,000 5,040
Videoserver, Inc. (b) 70,000 2,433
Xylan Corp. (b) 100,000 5,425
---------
48,222
---------
Computers--12.4%
3Com Corp. (b) 120,000 7,208
Adaptec, Inc. (b) 100,000 6,000
Apple Computer, Inc. (b) 130,000 2,884
Dell Computer Corp. (b) 40,000 3,110
International Business Machines 40,000 4,980
Storage Technology Corp. (b) 85,000 3,219
---------
27,401
---------
Cosmetics--1.1%
Thermolase Corp. (b) 100,000 2,488
---------
Electrical Equipment--8.2%
Fore Systems, Inc. (b) 140,000 5,793
Intel Corp. 90,000 8,589
Linear Technology Corp. 100,000 3,688
---------
18,070
---------
Electronics--5.6%
Atmel Corp. (b) 160,000 4,940
Diebold, Inc. 70,000 4,086
Xilinx, Inc. (b) 100,000 3,400
---------
12,426
---------
Environmental Control--4.2%
USA Waste Services, Inc. (b) 130,000 4,095
U.S. Filter Corp. (b) 150,000 5,119
---------
9,214
---------
Medical Supplies--4.9%
Guidant Corp. 110,000 6,077
Sofamor Danek Group, Inc. (b) 85,000 2,624
Target Therapeutics, Inc. (b) 55,000 2,351
---------
11,052
---------
Miscellaneous Manufacturing--2.9%
Tag Heuer International ADR (b) 114,000 2,252
Waters Corp. (b) 130,000 4,258
---------
6,510
---------
Telecommunications--24.3%
Act Networks, Inc. (b) 70,000 1,960
America Online, Inc. (b) 130,000 4,631
Ascend Communications, Inc. (b) 130,000 8,596
Cascade Communications Corp. (b) 110,000 8,965
DSP Communications, Inc. (b) 60,000 3,352
Lucent Technologies, Inc. 160,000 7,340
Netscape Communications (b) 110,000 5,101
Newbridge Networks Corp. (b) 50,000 3,187
Qualcomm, Inc. (b) 120,000 5,100
Tellabs, Inc. (b) 80,000 5,650
---------
53,882
---------
Total Common Stocks
(Cost $161,666) 205,866
Total Investments (a)--100.2%
(Cost $177,850) 222,050
---------
Other Assets and Liabilities, Net--(0.2%) (453)
---------
Net Assets--100.0% $ 221,597
=========
</TABLE>
Notes to Portfolio of Investments ($ in thousands):
(a) The cost of investments for federal income tax purposes is $178,152. At
September 30, 1996, net unrealized appreciation was $43,898. This consisted of
aggregate gross unrealized appreciation for all investments on which there was
an excess of market value over tax cost of $47,200 and aggregate gross
unrealized depreciation of all investments on which there was an excess of tax
cost over market value of $3,302.
(b) Non-income producing security.
30/PIMCO Advisors Funds See accompanying notes
<PAGE>
PIMCO Advisors
International Fund September 30, 1996
<TABLE>
<S> <C> <C> <C> <C>
Objective: Portfolio: Total Net Assets: Number of Securities PIMCO Advisors
Capital appreciation. Stocks of foreign $229 million in the Portfolio: Institutional Manager:
Income is an incidental (non-U.S.) companies. 247 (not including short-term Blairlogie Capital
consideration. instruments) Management
</TABLE>
PERFORMANCE*
<TABLE>
<CAPTION>
Average Annual Total Return For periods ended 9/30/96
A Shares B Shares C Shares Lipper
(INCEP. 2/1/91) (INCEP. 5/22/95) (INCEP. 8/25/86) MSCI Int'l. Fund
Adjusted Adjusted Adjusted EAFE Index Average
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 year 6.9% 1.0% 6.2% 1.2% 5.1% 8.6% 9.4%
3 years 3.6% 1.7% -- -- 2.9% 8.1% 8.9%
5 years 7.1% 5.9% -- -- 6.3% 8.2% 9.5%
Inception 8.2% 7.2% 7.6% 4.7% 6.8% -- --
</TABLE>
* The adjusted returns above include the effects of applicable sales charges.
The chart to the right reflects the performance of PIMCO Advisors
International Fund C through September 30, 1996. The performance of
International Fund A and B will be greater or less than the line shown based
on differences in inception dates, fees, and sales charges. Past performance
is not an indication of future results. See page 55 for Footnotes, which
should be read in connection with this material.
[GRAPH APPEARS HERE]
Change in value of $10,000 invested at the Fund's inception
<TABLE>
<CAPTION>
INTERNATIONAL C MSCI EAFE Index
<S> <C> <C>
06/30/86 10,000 10,000
09/30/86 9,700 9,897
12/31/86 9,920 10,286
03/31/87 11,890 12,680
06/30/87 12,100 13,575
09/30/87 12,870 14,338
12/31/87 10,507 12,820
03/31/88 11,068 14,774
06/30/88 11,409 14,126
09/30/88 11,068 14,217
12/31/88 11,617 16,444
03/31/89 12,101 16,490
06/30/89 12,826 15,472
09/30/89 14,651 17,389
12/31/89 14,929 18,177
03/31/90 13,507 14,583
06/30/90 14,857 15,976
09/30/90 12,098 12,589
12/31/90 12,615 13,915
03/31/91 13,556 14,949
06/30/91 13,161 14,133
09/30/91 14,306 15,345
12/31/91 15,128 15,602
03/31/92 14,114 13,751
06/30/92 14,003 14,041
09/30/92 13,767 14,253
12/31/92 14,244 13,703
03/31/93 15,589 15,346
06/30/93 16,336 16,889
09/30/93 17,816 18,009
12/31/93 19,011 18,164
03/31/94 18,204 18,800
06/30/94 18,432 19,760
09/30/94 19,133 19,779
12/31/94 17,456 19,578
03/31/95 16,958 19,942
06/30/95 17,425 20,088
09/30/95 18,280 20,925
12/31/95 18,467 21,773
03/31/96 19,323 22,402
06/30/96 19,914 22,756
09/30/96 19,401 22,726
</TABLE>
PORTFOLIO COMPOSITION
<TABLE>
<CAPTION>
Top Holdings of Selected Countries
Country: Company Primary Business % of Net Assets
- -----------------------------------------------------------------------------------------
<S> <C>
Japan: Marubeni Corp. Wholesale & International Trade 1.5%
- -----------------------------------------------------------------------------------------
U.K.: Zeneca Group Chemicals 1.6%
- -----------------------------------------------------------------------------------------
Germany: Bayer AG Chemicals 1.0%
- -----------------------------------------------------------------------------------------
Switzerland: CS Holding Banking 1.2%
- -----------------------------------------------------------------------------------------
Mexico - Telefonos de Mexico Telecommunications 1.1%
- -----------------------------------------------------------------------------------------
Malaysia: Jaya Tiasa Holdings Berhad Materials & Processing 0.5%
- -----------------------------------------------------------------------------------------
Netherlands: Royal Dutch Petrol Energy Sources 1.0%
- -----------------------------------------------------------------------------------------
France: Elf Aquitaine Energy Sources 0.4%
- -----------------------------------------------------------------------------------------
Italy: Stet - Societa 'Finanziaria Telefonica SpA Telecommunications 0.4%
- -----------------------------------------------------------------------------------------
Brazil: Telebras SA ADR Telecommunications 0.8%
</TABLE>
Regional Breakdown
- -------------------------
Europe 44%
- -------------------------
Japan 21%
- -------------------------
Pacific Basin 13%
- -------------------------
The Americas 13%
- -------------------------
Mid-East/Africa 2%
- -------------------------
Portfolio Composition
[BAR GRAPH APPEARS HERE]
Common and Preferred Stocks 99%
Cash Equivalents 1%
Cash Equivalents include short-term instruments, cash and other assets less
liabilities.
PORTFOLIO INSIGHTS
After posting solid relative results earlier in the year, the International Fund
experienced disappointing results during the six month period ended September
30, 1996. As a result, the Fund's returns of 6.9% for Class A shares, 6.2% for
Class B shares and 5.1% for Class C shares slipped below the performance of
comparable funds (as measured by the Lipper International Fund Average).
The Fund ended the year with 23% of its assets invested in Japan, its largest
country allocation. A late-in-the-year drop in the Japanese stock market
increased doubts about the pace and magnitude of a real economic recovery. These
doubts prolonged the stock market slump, while hurting the country's relative
performance. The manager of the Fund believes these concerns are a temporary
setback, however, and that there is little doubt the economy is improving
(although more slowly than early figures led observers to believe).
Other markets in the Pacific Basin also suffered as declining global trade
hurt their export business--a business that accounts for some 40% of gross
national product. With approximately 14% of the Fund currently invested in the
Pacific Basin, this general decline represented a hindrance to overall
performance.
European markets accounted for the largest percentage of the Fund's holding.
Unfortunately, these markets were somewhat sluggish, distracted by political
concerns such as the deteriorating health of President Yeltsin and the Monetary
Union. The best returns in the region continue to come from Scandinavia,
especially Finland and Sweden.
Emerging markets presented numerous opportunities and the manager believes a
more promising future for the Fund. The Latin American markets in particular
were bullish, remaining resilient against the downward trend of global stock
prices. For example, the Fund saw significant growth from the stock of Telebras,
a holding company for the telecommunications systems in Brazil. Telebras has a
virtual monopoly in both the local and long-distance telephone services in this
rapidly industrializing nation. So, as Brazil continues to expand its
infrastructure, Telebras should continue to benefit from the increase in phone
line use.
Despite the problems existing in several of the foreign markets, the manager
firmly believes the arguments in favor of an internationally diversified
portfolio are powerful. A well-diversified fund, with balanced exposure to both
developed and emerging markets, can lead to strong long-term growth potential
for investors.
1996 Annual Report/31
<PAGE>
PIMCO Advisors
International Fund
PORTFOLIO OF INVESTMENTS September 30, 1996
<TABLE>
<CAPTION>
Value
($ in thousands) Shares (Note 2)
- -------------------------------------------------------------------------
<S> <C> <C>
Common Stocks--91.2%
Brazil--3.1%
Brasmotor SA 2,454,000 $ 906
Centrais Electricas Brasileiras SA-Electrobras 6,438,500 1,791
Companhia Energetica de Minas Gerais 20,730,000 618
Companhia Tecidos Norte De Minas PR 887,000 320
Souza Cruz SA 33,600 229
Telebras SA ADR 24,788 1,946
Telecomunicacoes Brasileiras SA 9,790,000 640
Usiminas Siderurgicas de Minas Gerais SA 689,170,000 682
---------
Total Brazil 7,132
---------
Colombia--1.1%
Banco Industrial Colombiano 72,000 1,341
Carulla ADR 69,600 487
Cementos Diamante SA ADR 16,200 207
Cementos Paz del Rio ADR 44,100 524
---------
Total Colombia 2,559
---------
Finland--1.3%
Hartwall Oy AB 9,900 325
Kemira Oy 13,650 157
Kesko 21,000 337
Nokia AB-A (b) 10,890 486
Stockmann AB 2,600 139
Upm-Kymmene Oy 22,650 472
Valmet Corp. 16,770 276
Werner Soderstrom Osakeyhtio, Class B 25,300 565
Yit Huber Oy 13,200 159
---------
Total Finland 2,916
---------
France--3.3%
Alcatel Alsthom 9,830 829
AXA 10,214 612
BIC 4,323 568
Carrefour SA 1,205 677
Clarins 3,903 545
Compagnie Banicare SA 3,715 388
Compagnie de Saint-Gobain 4,073 552
Elf Aquitaine SA 10,612 831
Rhone Poulenc, Series A 21,890 611
Roussel Uclaf 1,885 455
Salomon SA 485 431
Schneider SA 8,231 388
Societe Generale 6,610 731
---------
Total France 7,618
---------
Germany--6.5%
Allianz AG Holdings 1,076 1,900
Bayer AG 61,740 2,255
Commerzbank AG 2,600 592
Daimler-Benz AG 13,000 714
Degussa AG 3,167 1,154
Dresdner Bank AG 26,300 694
Mannesmann AG 5,660 2,122
Muenchener Rueckverscherungs-Gesellschaft AG 123 279
Siemens AG 26,700 1,405
VEBA AG 42,380 2,220
Volkswagen AG 4,310 1,605
---------
Total Germany 14,940
---------
Hong Kong--2.1%
Amoy Properties Ltd. 192,500 224
Cheung Kong Holdings Ltd. 94,000 723
Citic Pacific Ltd. 51,000 231
Guandong Investments 320,000 226
Hang Seng Bank 54,300 576
Hong Kong & China Gas Co. Ltd. 139,000 236
Hong Kong Telecommunications Ltd. 135,600 245
Hutchison Whampoa Ltd. 54,130 364
New World Development Co. Ltd. 69,000 362
Sun Hung Kai Properties Ltd. 80,182 853
Swire Pacific Ltd., Class A 77,448 694
---------
Total Hong Kong 4,734
---------
Hungary--0.9%
BorsodChem Rt. 9,700 185
EGIS Rt. 5,191 365
Graboplast Rt. 5,800 178
Mol Magyar Olaj Es Gazipari 39,200 360
OTP Rt. 23,600 373
Richter Gedeon Rt. 12,300 651
---------
Total Hungary 2,112
---------
Indonesia--0.2%
PT Bank Internasional Indonesia 39,467 58
PT United Tractors 243,000 455
---------
Total Indonesian 513
---------
Israel--2.3%
Bank Hapoalim Ltd. 469,000 644
Blue Square Chain Stores Ltd. (b) 53,000 782
Elite Industries Ltd. 69,000 268
Israel Chemical Ltd. 602,000 464
Koor Industries Ltd. (b) 8,520 756
Osem Investment Ltd. 75,000 437
Supersol Ltd. 17,640 403
Tadiran Ltd 127,400 518
Teva Pharmaceutical Industries Ltd. 1,946 897
---------
Total Israel 5,169
---------
</TABLE>
32/PIMCO Advisors Funds See accompanying notes
<PAGE>
PIMCO Advisors
International Fund
PORTFOLIO OF INVESTMENTS September 30, 1996
<TABLE>
<CAPTION>
Value
($ in thousands) Shares (Note 2)
- -------------------------------------------------------------------------
<S> <C> <C>
Italy--3.3%
Banca Fideuram 353,000 $ 840
Credito Italiano 565,000 649
Edison SpA 117,000 730
Ente Nazionale Idrocarburi SpA (b) 143,500 734
Istituto Nazionale delle Assicurazioni 480,000 695
Montedison SpA 755,540 488
Parmalat Finanziaria SpA 566,400 815
Pirelli SpA 342,500 624
Sasib SpA 204,000 361
Stet Societa' Finanziaria Telefonica SpA 252,000 875
Telecom Italia SpA 346,000 770
---------
Total Italy 7,581
---------
Japan--21.3%
Daiwa Securities Co. Ltd. 228,000 2,620
Fujisawa Pharmaceutical 336,000 3,198
Hitachi Ltd. 341,000 3,307
Marubeni Corp. 671,000 3,494
Matsushita Electric Works 282,000 2,785
Matsubishi Chemical Corp. 664,000 2,802
Mitsui Engineering & Shipbuilding 530,000 1,451
Mitsui Fudosan Co. 198,000 2,631
Mitsui O.S.K. Lines Ltd. (b) 745,000 2,301
Nippon Oil Co. Ltd. 425,000 2,599
Nippon Telegraph & Telephone Corp. 474 3,490
NKK Corp. (b) 897,000 2,304
Sumitomo Bank 173,000 3,200
Sumitomo Metal Mining Co. 169,000 1,428
Sumitomo Trust & Banking 247,000 3,105
Tokyo Electric Power 106,100 2,572
Tokyo Steel Manufacturing 147,000 2,600
Tokyu Corp. 430,000 3,027
---------
Total Japan 48,914
---------
Malaysia--4.0%
Gamuda Berhad 116,000 865
Jaya Tiasa Holdings Berhad 168,000 1,046
Land & General Holdings Berhad 140,000 299
Malayan Banking Berhad 88,000 874
Metacorp Berhad 304,000 873
Persusahaan Otomobil Nasional Berhad 139,000 754
Public Bank Berhad 441,000 816
Road Builder (M) Holdings Berhad 182,000 937
Sungei Way Holdings Berhad 179,000 957
Telekom Malaysia Berhad 117,000 1,032
UMW Holdings Berhad 191,000 735
---------
Total Malaysia 9,188
---------
Mexico--4.1%
Cemex SA de CV 232,000 $ 874
Cifra SA de CV (b) 490,300 707
Controladora Comercial Mexicana SA de CV,
Series B (b) 522,000 514
Desc SA de CV, Series B 67,200 377
Desc SA de CV, Series C 1,400 7
Empresas ICA Sociedad Controladora SA de CV 39,810 603
Fomento Economico Mexicano, SA de CV, Series B 96,500 296
Grupo Financial Banamex AC (b) 502,681 1,025
Grupo Mexico SA, Series B 86,100 267
Grupo Modelo SA de CV 101,300 523
Grupo Televisa SA ADR 15,500 448
Industrias Penoles SA 61,400 261
Kimberly Clark de Mexico 33,400 633
Telefonos de Mexico 77,220 2,481
Transportacion Maritima Mexicana SA de CV 750 6
Tubos de Acero de Mexico SA (b) 37,300 408
---------
Total Mexico 9,430
---------
Netherlands--3.5%
ABN AMRO Holdings NV 8,700 482
Akzo NV 4,280 519
DSM NV 4,223 415
Elsevier NV 51,017 844
Fortis Amev NV 10,580 317
ING Groep NV 14,155 442
Koninklijke Ahold NV 9,187 520
Koninklijke Ahold NV
(stock rights expire 10/17/96)(b) 9,187 0
Royal Dutch Petroleum Co. 14,230 2,225
Unilever NV 8,110 1,280
Vendex International NV 14,900 581
Verenigde Nederlandse Uitgeversbedrijven
Verenigd Bezit 26,000 509
---------
Total Netherlands 8,134
---------
Peru--1.0%
Banco Wiese ADR 27,600 176
Cervecer Backus & Johnston SA, T Shares 104,158 120
Compania de Minas Buenaventura, B Shares 6,392 61
Compania de Minas Buenaventura SA 12,569 113
CPT Telefonica del Peru SA 542,000 1,220
Credicorp Ltd. 10,736 204
Enriqu Ferreyros SA 63,500 68
Minsur SA Trabajo 10,043 94
Southern Peru Copper Corp., Series T 39,400 145
---------
Total Peru 2,201
---------
Philippines--2.5%
Ayala Corp., Series B 690,750 790
Metropolitan Bank & Trust Co. 51,875 1,236
Petron Corp. 1,548,375 561
Philippine Long Distance Telephone Co. 21,400 1,337
San Miguel Corp., Class B 326,640 1,071
SM Prime Holdings, Inc. 2,843,600 661
---------
Total Philippines 5,656
---------
</TABLE>
Annual Report See accompanying notes/33
<PAGE>
PIMCO Advisors
International Fund
PORTFOLIO OF INVESTMENTS September 30, 1996
<TABLE>
<CAPTION>
Value
($ in thousands) Shares (Note 2)
- -------------------------------------------------------------------------
<S> <C> <C>
Poland--2.1%
Bank Rozwoju Exsportu SA 40,310 $ 1,377
Bank Slaski SA 6,770 663
Debica SA 30,602 654
Elektrim Spolka Akcyjna SA 161,800 1,584
Polifarb-Cieszyn SA 115,148 541
---------
Total Poland 4,819
---------
Portugal--1.1%
Cimentos de Portugal SA 17,870 376
Empresa Fabril de Maquinas Electricas SA 22,348 252
Estabelecimentos Jeronimo Martins & Filho 5,790 527
Investec-Consultodoria Internacional (b) 6,600 221
Portugal Telecom SA (b) 27,190 700
Sonae Investimentos Sociedade Gestora de
Participacoes Sociais SA 14,730 428
---------
Total Portugal 2,504
---------
Singapore--1.8%
Comfort Group Ltd. 455,000 397
Cycle & Carriage Ltd. 37,000 402
DBS Land 131,000 434
Hong Leong Finance Ltd. 95,000 309
Keppel Corp. Ltd. 51,000 395
Oversea-Chinese Banking Corp. Ltd. 78,100 937
Overseas Union Bank Ltd. 129,000 902
Straits Steamship Land Ltd. 142,000 464
---------
Total Singapore 4,240
---------
South Korea--1.5%
Cho Hung Bank Co. Ltd. 39,640 436
Daewoo Securities Co. 16,400 347
Hanwha Chem Corp. 34,000 310
Korea Electric Power Corp. 18,580 614
Korea Fund (The), Inc. 85,625 1,563
Pohang Iron & Steel Co. Ltd. 6,470 138
---------
Total South Korea 3,408
---------
Spain--2.7%
Aumur-Autopistas del Mare Nostrum SA 62,400 894
Banco Bilbao Vizcaya SA 13,320 614
Banco Popular Espanol SA 5,925 1,089
Empresa Nacional de Electridad SA 17,383 1,024
Iberdrola I SA 85,120 825
Repsol SA 15,225 500
Telefonica De Espana 60,430 1,123
---------
Total Spain 6,069
---------
Switzerland--5.3%
ABB AG-Bearer 909 1,112
Alusuisse-Lonza Holding AG 804 604
Ciba-Geigy AG 960 1,228
Clariant AG 1,769 614
CS Holding AG 26,795 2,651
Holderbank Financiere Glaris AG 654 475
Nestle SA 1,590 1,773
Roche Holding AG 248 1,827
Sandoz AG 1,028 1,235
Winterthur Schweizerische Versicherungs-
Gesellschaft 1,014 626
---------
Total Switzerland 12,145
---------
Thailand--0.9%
Bangkok Bank Co. Ltd. 42,000 549
Dhana Siam Finance & Securities Public Co. Ltd. 45,600 215
Krung Thai Bank Ltd. 71,200 308
Land & House Co. Ltd. 14,900 184
Phatra Thanakit Co. Ltd. 29,000 166
Thai Farmers Bank Co. Ltd. 30,200 318
Total Access Communication Public Co. Ltd. 50,000 370
---------
Total Thailand 2,110
---------
Turkey--2.1%
Akal Tekstil Sanayii 5,312,250 359
Akbank Tas 3,705,000 379
Arcelik AS 4,482,500 468
Demirbank TAS 10,596,000 352
Eczacibasi Yapi Gerecleri Sanayi ve Ticaret AS 9,577,000 396
Erciyas Biracilik ve Malt Sanayii 797,000 412
Eregli Demir ve Celik Fabrikalari TAS 4,095,000 441
Kordsa Kord Bezi Sanayi ve Ticaret AS 1,770,000 559
Migros Turk TAS 550,800 492
Netas Telekomnik 2,433,000 636
Trakya Cam Sanayii AS 3,336,000 211
---------
Total Turkey 4,705
---------
United Kingdom--11.3%
Abbey National PLC 158,700 1,472
Boots Co. PLC 147,000 1,432
British Airport Authority PLC 146,000 1,128
Burmah Castrol PLC 70,300 1,257
Commercial Union PLC 93,000 873
EMI Group PLC 53,600 1,119
Granada Group PLC 94,000 1,259
Lloyd's TSB Group PLC 248,896 1,471
Marks & Spencer PLC 154,000 1,195
Pilkington PLC 300,550 890
Prudential Corp. PLC 172,000 1,209
Scottish & Newcastle PLC 141,300 1,481
Scottish Power PLC 204,972 979
Shell Transport & Trading Co. PLC 77,000 1,174
Smithkline Beecham PLC 75,000 915
Tesco PLC 305,000 1,447
Unilever PLC 66,000 1,410
Wolseley PLC 207,000 1,573
Zeneca Group PLC 150,300 3,731
---------
Total United Kingdom 26,015
---------
</TABLE>
34/PIMCO Advisors Funds See accompanying notes
<PAGE>
PIMCO Advisors
International Fund
<TABLE>
<CAPTION>
Value
($ in thousands) Shares (Note 2)
- -------------------------------------------------------------------------
<S> <C> <C>
Venezuela--1.9%
Banco Provincial SA 687,000 $ 1,359
CA La Electricidad de Caracas 2,220,000 2,204
Mavesa SA ADR 75,000 487
Siderrurgica Venez Sivens ADR 108,000 392
----------
Total Venezuela 4,442
----------
Total Common Stocks
(Cost $196,810) 209,254
----------
Preferred Stock--1.9%
Banco Bradesco SA 158,445,000 1,342
Banco Ganadero SA, Class C ADR 10,800 219
Ceval Alimentos SA 10,630,000 98
Cia Cervejaria Brahma 1,220,000 756
Companhia Vale do Rio Doce 27,368 543
Duratex SA 8,800,000 334
Fertilizantes Fosfatados 78,000,000 378
Petroleo Brasileiros SA 6,038,000 692
Telebras SA 605,000 48
----------
Total Preferred Stock
(Cost $4,083) 4,410
----------
Value
($ in thousands) (Note 2)
- -------------------------------------------------------------------------
<S> <C>
Total Investments (a)--93.1%
(Cost $200,893) $ 213,664
----------
Other Assets and Liabilities, Net--6.9% 15,829
----------
Net Assets--100.0% $ 229,493
==========
</TABLE>
Notes to Portfolio of Investments ($ in thousands):
(a) The cost of investments for federal income tax purposes is $201,557. At
September 30, 1996, net unrealized appreciation was $12,107. This consisted of
aggregate gross unrealized appreciation for all investments on which there was
an excess of market value over tax cost of $20,090 and aggregate gross
unrealized depreciation of all invesments on which there was an excess of tax
cost over market value of $7,983.
(b) Non-income producing security.
Annual Report See accompanying notes/35
<PAGE>
PIMCO Advisors
Precious Metals Fund September 30, 1996
Objective:
Capital appreciation.
Portfolio:
Primarily stocks of
companies which extract, process, distribute or
market precious metals.
Total Net Assets:
$46 million
Number of Securities
in the Portfolio:
64 (not including short-term
instruments)
Fund Manager:
Van Eck Associates
(an independent sub-advisor not owned by PIMCO Advisors L.P.)
PERFORMANCE*
<TABLE>
<CAPTION>
Average Annual Total Return For periods ended 9/30/96
A Shares B Shares C Shares Lipper
(INCEP. 2/1/91) (INCEP. 6/15/95) (INCEP. 10/10/88) Phil. Gold & Gold Fund
Adjusted Adjusted Adjusted Silver Index Average
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 year -1.7% -7.1% -2.4% -7.2% -3.3% -7.3% 9.8%
3 years 5.5% 3.5% -- -- 4.8% 3.4% 8.2%
5 years 10.1% 8.8% -- -- 9.3% 7.9% 9.8%
Inception 9.7% 8.6% 0.1% -0.3% 1.9% -- --
</TABLE>
* The adjusted returns above include the effects of applicable sales charges.
The chart to the right reflects the performance of PIMCO Advisors Precious
Metals Fund C through September 30, 1996. The performance of Precious Metals
Fund A and B will be greater or less than the line shown based on differences
in inception dates, fees, and sales charges. Past performance is not an
indication of future results. See page 55 for Footnotes, which should be read
in connection with this material.
[LINE GRAPH APPEARS HERE]
Change in value of $10,000 invested at the Fund's inception
<TABLE>
<CAPTION>
Precious Metals C Phil Gold & Silver Index
<S> <C> <C>
09/30/88 10,000 10,000
12/31/88 9,461 9,504
03/31/89 9,731 10,338
06/30/89 9,131 10,097
09/30/89 9,871 11,338
12/31/89 10,993 13,100
03/31/90 9,952 12,311
06/30/90 8,630 11,081
09/30/90 9,411 11,834
12/31/90 8,240 10,600
03/31/91 7,739 9,207
06/30/91 8,189 9,848
09/30/91 7,469 8,611
12/31/91 7,799 8,825
03/31/92 7,298 7,869
06/30/92 7,589 8,577
09/30/92 7,449 8,788
12/31/92 6,638 7,788
03/31/93 8,280 9,483
06/30/93 11,263 12,719
09/30/93 10,122 11,372
12/31/93 12,955 14,408
03/31/94 12,454 14,604
06/30/94 11,774 12,589
09/30/94 13,766 14,443
12/31/94 11,704 11,942
03/31/95 11,343 13,323
06/30/95 11,203 13,124
09/30/95 11,914 13,567
12/31/95 11,213 13,151
03/31/96 13,466 15,571
06/30/96 12,294 13,515
09/30/96 11,633 12,583
</TABLE>
PORTFOLIO COMPOSITION
Top 10 Holdings
Company % of Net Assets
- -------------------------------------------------
Getchell Gold Corp. 6.2%
- -------------------------------------------------
Newmont Mining Corp. 5.0%
- -------------------------------------------------
Rangold & Exploration Co. Ltd. 3.9%
- -------------------------------------------------
Sons of Gwalia LTD. N.L. 3.8%
- -------------------------------------------------
Barrick Gold Corp. 3.8%
- -------------------------------------------------
Placer Dome, Inc. 3.6%
- -------------------------------------------------
Homestake Mining Co. 3.3%
- -------------------------------------------------
Plutonic Resources Ltd. 3.0%
- -------------------------------------------------
Pegasus Gold, Inc. 2.7%
- -------------------------------------------------
Kloof Gold Mining Co. ADR 2.5%
- -------------------------------------------------
Top Ten Total 37.8%
Portfolio Composition
[BAR GRAPH APPEARS HERE]
Common and Preferred Stocks 99%
Cash Equivalents 1%
Cash Equivalents include short-term instruments, cash and other assets less
liabilities.
Geographic Breakdown
- ---------------------
Canada 28.7%
- ---------------------
United States 26.4%
- ---------------------
South Africa 23.7%
- ---------------------
Australia 20.0%
- ---------------------
Others 1.2%
- ---------------------
PORTFOLIO INSIGHTS
Investors in gold and other precious metals are continually advised about the
highly volatile nature of these markets. And perhaps nothing makes this point
better than a review of the Fund's performance for the year ended September 30,
1996. While the Fund ended the first six months of the period up 13.3% for Class
A shares and 13.0% for both Class B and C shares, it ended the year with
slightly negative returns in all three classes. Over time, of course, many of
these extreme highs and lows are leveled out and, in fact, over the five-years
ended September 30, 1996, the Fund provided a highly respectable annualized
return of 10.1% for Class A shares and 9.3% for Class C shares.
The majority of the Fund's assets are invested in the stocks of gold mining
companies throughout the world, making the Fund dependent on not only the price
of gold but also the prevailing conditions in various countries. During the last
12 months, the price of gold peaked at $415 an ounce in February after trading
in the $380-$390 range for most of 1995. The price subsequently fell, however,
to its previous range, and only broke out once again when it hit $390 per ounce
in late August. Gold closed on September 30, 1996 at $379.70 an ounce. This drop
in the price of gold during the second half of the year reclaimed much of the
Fund's earlier profits.
During this period of declining gold prices, the shares of gold exploration
companies tended to outperform the shares of most established gold producers. In
fact, the exploration success of a handful of such companies seems to have given
the other companies the benefit of a halo effect, so that even those companies
without proven reserves or notable discoveries saw price improvements. For
example, the Fund's investment in Barrick Gold, a Toronto-based gold-mining
company showed significant gains when it announced an as yet untested, but what
they consider to be a potentially significant, project in eastern Bolivia and
future operations at a potentially massive Chilean mine.
Despite recent volatility in the sector and the Fund, the manager of the
Precious Metals Fund continues to believe the long-term reasons for having a
gold component as part of a diversified portfolio are sound. Growing concerns
regarding rising government indebtedness to foreign holders and the increasing
debt burdens among American consumers are but two of the more persuasive
examples of economic instability and are therefore sound reasons to consider a
gold-oriented investment.
36/PIMCO Advisors Funds
<PAGE>
PIMCO Advisors
Precious Metals Fund
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
Principal Value
($ in thousands) Amount (Note 2)
- -----------------------------------------------------------------
<S> <C> <C>
Short-Term Notes--1.3%
General Electric Co., 5.300%, 10/1/96 $ 600 $ 600
--------
Total Short-Term Notes
(Cost $600) 600
--------
<CAPTION>
Shares
- -----------------------------------------------------------------
<S> <C> <C>
Common Stocks--98.4%
Australia--20.2%
Acacia Resources Ltd. (b) 170,000 313
Delta Gold N.L. Corp. 200,000 443
Eagle Mining Corp. (b) 280,000 616
Emperor Mines Ltd. 200,000 405
Ghana Gold Mines Ltd. 238,000 45
Great Central Mines N.L. 101,000 288
Herald Resources Ltd. 205,000 170
Kidston Gold Mines Ltd. 40,000 51
Macraes Mining Co. Ltd. 130,000 334
Menzies Gold N.L. 500,000 237
Newcrest Mining Ltd. 200,000 696
Normandy Mining Ltd. 574,999 783
North Flinders Mines Ltd. 100,000 657
Placer Pacific Ltd. 260,000 329
Plutonic Resources Ltd. 340,000 1,372
Resolute Samantha Ltd. 200,000 420
Sons of Gwalia Ltd. N.L. 290,000 1,767
St. Barbara Mines Ltd. 600,000 361
--------
Total Australia 9,287
--------
Canada--28.9%
Agnico-Eagle Mines Ltd. 60,000 915
Barrick Gold Corp. 70,000 1,759
Battle Mountain Canada 130,000 992
Cambior, Inc. 55,000 755
Echo Bay Mines Ltd. 74,999 661
Euro-Nevada Mining Corp. 10,800 313
Goldcorp, Inc., Class A 90,000 787
Iamgold International African Mining (b) 100,000 514
Meridian Gold, Inc. 60,000 248
Meridian Gold, Inc.- Institutional Receipt 294,000 669
Miramar Mining Corp. (b) 100,000 506
Namibian Minerals Corp. 200,000 954
Pangea Goldfields, Inc. 65,000 386
Placer Dome, Inc. 70,000 1,654
Richmont Mines, Inc. (b) 150,000 567
Royal Oak Mines, Inc. (b) 100,000 394
TVX Gold, Inc. (b) 130,000 878
Viceroy Resources Corp. (b) 75,000 380
--------
Total Canada 13,332
--------
Ghana--0.7%
Ashanti Goldfields Co. Ltd. GDR 20,000 335
--------
Total Ghana 335
--------
Peru--0.3%
Minas Buenaventura ADR 6,300 121
--------
Total Peru 121
--------
South Africa--23.9%
Beatrix Mines Ltd. ADR 145,000 1,007
Deelkraal Gold Mining Ltd. ADR (b) 300,000 271
Driefontein Consolidated Ltd. ADR 95,000 1,026
Elandsrand Gold Mining Co. Ltd. ADR 200,000 1,058
Free State Consolidated Gold Mines Ltd. ADR 105,000 1,011
Gold Fields of South Africa Ltd. ADR 35,000 1,002
Harmony Gold Mining Co. Ltd. 30,000 251
Kloof Gold Mining Co. ADR 140,000 1,137
Randgold & Exploration Co. Ltd. 250,000 1,805
St. Helena Gold Mines Ltd. ADR 105,000 643
Vaal Reefs Exploration & Mining Co. Ltd. ADR 100,000 800
West Rand Consolidated Mines 25,000 92
Western Deep Levels Ltd. ADR 30,000 930
--------
Total South Africa 11,033
--------
United Kingdom--0.2%
Reunion Mining PLC (b) 100,000 109
--------
Total United Kingdom 109
--------
United States--24.2%
Alta Gold Co. (b) 100,000 344
Bema Gold Corp. 25,000 176
Getchell Gold Corp. 60,000 2,842
Golden Star Resources Ltd. 57,000 905
Homestake Mining Co. 105,000 1,536
Newmont Mining Corp. 49,000 2,315
Pegasus Gold, Inc. 125,000 1,266
Royal Gold, Inc. 20,000 275
Santa Fe Pacific Gold Corp. 80,000 1,000
Stillwater Mining Co. (b) 25,000 469
--------
Total United States 11,128
--------
Total Common Stocks
(Cost $41,553) 45,345
--------
Convertible Preferred Stocks--0.8%
Durban Roodeport, 8.000%, 12/31/49 41,961 385
--------
Total Convertible Preferred Stocks
(Cost $276) 385
--------
<CAPTION>
Contracts
- -----------------------------------------------------------------
<S> <C> <C>
Purchased Call Options--0.4%
Durban Roodeport, expiring
December '99 @ 30 41,961 185
--------
Total Purchased Call Options
(Cost $64) 185
--------
Total Investments (a)100.9 %
(Cost $42,493) 46,515
--------
Other Assets and Liabilities, Net--(0.9%) (443)
--------
Net Assets--100.0% $ 46,072
========
</TABLE>
Notes to Portfolio of Investments ($ in thousands):
(a) The cost of investments for federal income tax purposes is $42,916. At
September 30, 1996, net unrealized appreciation was $3,599. This consisted of
aggregate gross unrealized appreciation for all investments on which there was
an excess of market value over tax cost of $8,552 and aggregate gross unrealized
depreciation of all investments on which there was an excess of tax cost over
market value of $4,953.
(b) Non-income producing security.
Annual Report See accompanying notes/37
<PAGE>
PIMCO Advisors
Global Income Fund September 30, 1996
Objective:
Maximum total return,
consistent with
preservation of capital.
Portfolio:
Primarily investment grade U.S. and foreign bonds.
Total Net Assets:
$14 million
Number of Securities
in the Portfolio:
42 (not including short-term
instruments)
PIMCO Advisors Institutional Manager:
Pacific Investment Management Company
PERFORMANCE*
<TABLE>
<CAPTION>
Total Return For period ended 9/30/96
A Shares B Shares C Shares
(INCEP. 10/2/95) (INCEP. 10/2/95) (INCEP. 10/2/95)
Adjusted Adjusted Adjusted
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Inception 15.0% 9.6% 14.5% 9.5% 13.5%
</TABLE>
*The adjusted returns above include the effects of applicable sales charges. The
chart to the right reflects the performance of the PIMCO Advisors Global Income
Fund A, B and C since inception through September 30, 1996. See page 55 for
Footnotes, which should be read in connection with this material.
[LINE GRAPH APPEARS HERE]
Change in value of $10,000 invested at the Fund's inception.
<TABLE>
<CAPTION>
SB CH
Global Income A Global Income B Global Income C World Govt. Index
<S> <C> <C> <C> <C>
9/30/95 9,525 10,000 10,000 10,000
12/31/95 10,163 10,672 10,672 10,420
3/31/96 10,180 10,683 10,683 10,405
6/30/96 10,403 10,896 10,897 10,599
9/30/96 10,955 10,954 11,354 10,950
</TABLE>
PORTFOLIO COMPOSITION
Top 10 Countries
- --------------------------------------
1. Netherlands 6. Germany
- --------------------------------------
2. U.S. 7. Sweden
- --------------------------------------
3. Canada 8. New Zealand
- --------------------------------------
4. Japan 9. Finland
- --------------------------------------
5. U.K. 10. Italy
- --------------------------------------
Maturity Profile
- --------------------------------------
1-5 years 50%
- --------------------------------------
6-10 years 27%
- --------------------------------------
11-20 years 23%
- --------------------------------------
Average Maturity 9.8 years
- --------------------------------------
Duration 5.8 years
- --------------------------------------
Quality Breakdown
[BAR GRAPH APPEARS HERE]
AAA 80%
AA 14%
A 2%
BBB 2%
BB 2%
PORTFOLIO INSIGHTS
The Global Income Fund commenced operations on October 2, 1995. Since its
inception through September 30, 1996, the Fund has posted impressive annualized
returns: 15.0% for Class A shares, 14.5% for Class B shares and 13.5% for Class
C shares. In addition, the Fund has just completed a strong six-month period,
with returns of 7.6% for Class A shares, 7.2% for Class B shares and 6.2% for
Class C shares.
The manager attributes the Fund's strong relative performance to a longer
than average duration position and strategic country allocations. Duration is a
measure of an investment's sensitivity to changes in interest rates. With a
longer duration an investment is more sensitive to rate changes, and a shorter
duration is less sensitive. The Global Income Fund maintains an average duration
of between 3-6 years, and as of September 30, 1996, the manager had the Fund's
duration at the upper end of this range at 5.8 years. This longer duration
position allowed the Fund to take maximum advantage of interest rate declines in
several of the world's major markets.
The advantages gained through strategic country allocations came down to
several important decisions, including relative under-investing in poorer
performing countries such as Japan and relative over-investing in better
performing countries such as Australia, New Zealand and Canada. Canada in
particular offered significant contributions to the Fund this year, thanks to
its low inflation and recent fiscal rectitude, which produced a budget deficit
well below expectations.
The manager of the Global Income Fund believes the case for international
diversification is particularly strong in the current fixed-income investing
environment. While the U.S. bond market has remained sluggish, numerous other
countries have seen yields decline, creating potentially profitable
opportunities. And, while the manager currently anticipates rate declines in the
U.S., he also foresees further declines across several of the world's major
markets.
In the months to come, the manager intends to slightly lessen investment in
Europe in favor of countries like Australia, Canada, and New Zealand, where real
rates of return remain quite high by international standards. Within Europe, the
manager will continue to look for superior returns from the peripheral markets
(Italy, Spain, Sweden), which are benefiting from declining inflation and
improved opinions on the viability of European Monetary Union.
38/PIMCO Advisors Funds
<PAGE>
PIMCO Advisors
Global Income Fund
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
Principal Value
($ in thousands) Amount (Note 2)
- -------------------------------------------------------------------------
<S> <C> <C>
Short-Term Notes--38.3%
Ameritech Corp., 5.420%, 10/28/96 $ 300 $ 299
AT&T Capital Corp., 5.250%, 11/12/96 200 199
Caisse D'Amortissement, 5.320%-5.340%,
10/7/96-11/20/96 600 598
Canadian Wheat Board, 5.270%, 11/6/96 700 696
Federal Home Loan Bank, 5.300%, 11/14/96 500 497
Ford Motor Credit Co., 5.290%, 10/29/96 700 697
General Electric Capital Corp., 5.280%, 11/12/96 400 397
Motorola, Inc., 5.320%, 10/21/96 600 598
National Rural Utilities Cooperative Finance Corp.
5.260%, 10/2/96 600 600
Shell Oil Co., 5.300%, 10/1/96 600 600
Wool International, 5.270%, 11/20/96 200 198
--------
Total Short-Term Notes
(Cost $5,379) 5,379
--------
Debt Securities--180.4%
Belgium (d)--2.6%
Kingdom of Belgium, 5.100%, 11/21/04 (b) BF 5,800 192
Kingdom of Belgium, 8.500%, 10/1/07 4,700 175
--------
Total Belgium 367
--------
Canada (d)--26.4%
Commonwealth of Canada, 8.000%-9.000%,
11/1/98-12/1/05 C$ 4,260 3,341
Rogers Cantel, Inc., 10.500%, 6/1/06 500 376
--------
Total Canada 3,717
--------
Czech Republic (d)--2.1%
Bayerische Landesbank, 11.500%, 10/9/97 CK 8,000 297
--------
Total Czech Republic 297
--------
Denmark (d)--1.2%
Kingdom of Denmark, 8.000%, 5/15/03 DK 900 167
--------
Total Denmark 167
--------
Finland (d)--4.5%
Republic of Finland, 3.763%, 8/15/97 FM 3,000 637
--------
Total Finland 637
--------
France (d)--2.5%
Republic of France, 7.750%, 10/25/25 FF 1,600 347
--------
Total France 347
--------
Germany (d)--10.0%
German Unity Fund, 8.000%, 1/21/02 DM 500 369
Republic of Germany, 6.875%-9.000%,
10/20/00-6/11/03 1,400 1,029
--------
Total Germany 1,398
--------
Italy (d)--4.3%
Republic of Italy, 10.500%, 9/1/05 IL 825,000 609
--------
Total Italy 609
--------
Japan (d)--16.8%
Government of Japan, 4.800%, 6/21/99 JY 65,000 641
Government of Japan, 6.400%, 3/20/00 97,000 1,017
Government of Japan, 5.500%, 3/20/02 67,000 705
--------
Total Japan 2,363
--------
Netherlands (d)--47.3%
Kingdom of Netherlands, 6.250%-9.000%,
7/15/98-2/15/07 DG 10,800 $6,652
--------
Total Netherlands 6,652
--------
New Zealand (d)--6.8%
Commonwealth of New Zealand, 6.500%-
10.000%, 7/15/97-11/15/06 NZ$ 1,370 962
--------
Total New Zealand 962
--------
Spain (d)--2.9%
Kingdom of Spain, 10.000%-10.900%,
8/30/03-2/28/05 SP 47,000 408
--------
Total Spain 408
--------
Supranational (d)--2.4%
International Bank of Reconstruction and
Development, 11.500%, 10/9/97 CK 9,000 334
--------
Total Supranational 334
--------
Sweden (d)--6.9%
Kingdom of Sweden, 11.000%, 1/21/99 SK 5,800 970
--------
Total Sweden 970
--------
United Kingdom (d)--13.4%
United Kingdom Gilt, 6.000%, 8/10/99 BP 1,220 1,878
--------
Total United Kingdom 1,878
--------
United States (d)--30.3%
Dean Witter Discover Corp., 5.618%,
2/1/99 (b) $ 250 250
First USA Bank, 5.963%, 3/14/97 (b) 200 200
Federal National Mortgage Association,
6.067%, 8/1/29 (b) 810 803
Government National Mortgage Association,
7.000%-7.250%, 11/20/21-7/20/22 (b) 1,609 1,630
Hewlett Packard Co., 5.625%, 11/20/00 DM 100 68
Student Loan Marketing Association, 6.070%,
10/25/07 (b) $ 900 900
TCI Communications Inc., 6.238%, 4/1/02 (b) 300 294
U.S. Treasury Bills, 5.070%-5.160%,
10/17/96-11/14/96 (e) 110 109
--------
Total United States 4,254
--------
Total Debt Securities
(Cost $25,376) 25,360
--------
</TABLE>
Annual Report See accompanying notes/39
<PAGE>
PIMCO Advisors
Global Income Fund
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
Principal Value
($ in thousands) Amount (Note 2)
- ------------------------------------------------------------------------
<S> <C> <C>
Purchased OTC Call Options (d)--8.9%
Commonwealth of Canada, 8.000%, 11/1/98,
expiring January '97 @ 94.27 (c) C$ 1,800 $ 134
Commonwealth of Canada, 8.000%, 11/1/98,
expiring January '97 @ 94.32 (c) 1,800 133
Kingdom of Denmark, 8.000%, 5/15/03,
expiring November '96 @ 96.25 (c) DK 900 19
Government of Japan, 4.800%, 6/21/99,
expiring November '96 @ 98.00 (c) JY 20,000 20
Government of Japan, 5.500%, 3/20/02,
expiring December '96 @ 104.00 (c) 10,000 11
Government of Japan, 6.400%, 3/20/00,
expiring December '96 @104.50 (c) 97,000 95
Government of Japan, 4.800%, 6/21/99,
expiring January '97 @ 98.44 10,000 9
Kingdom of Netherlands, 6.250%, 7/15/98,
expiring December '96 @ 93.50 (c) DG 9,100 560
Kingdom of Spain, 10.900%, 8/30/03,
expiring October '96 @ 97.10 (c) SP 45,000 70
Kingdom of Sweden, 11.000%, 1/21/99,
expiring November '96 @ 100.00 (c) SK 2,500 41
United Kingdom Gilt, 6.000%, 8/10/99,
expiring October '96 @ 88.30 (c) BP 1,050 167
-------
Total Purchased OTC Call Options
(Cost $1,210) 1,259
-------
Total Investments (a)--227.6%
(Cost $31,965) 31,998
-------
Other Assets and Liabilities, Net--(127.6%) (17,939)
-------
Net Assets--100.0% $14,059
=======
</TABLE>
Notes to Portfolio of Investments ($ in thousands):
(a) The cost of investments for federal income tax purposes is $31,968. At
September 30, 1996, net unrealized appreciation was $30. This consisted of
aggregate gross unrealized appreciation for all investments on which there was
an excess of market value over tax cost of $231 and aggregate gross unrealized
depreciation of all investments on which there was an excess of tax cost over
market value of $201.
(b) Variable rate security.
(c) Security subject to outstanding forward sale commitment.
(d) Principal amount denoted in indicated currency:
BF--Belgian Franc
BP--British Pound
C$--Canadian Dollar
CK--Czech Koruna
DG--Dutch Guilder
DK--Danish Krone
DM--German Mark
FF--French Franc
FM--Finnish Markka
IL--Italian Lira
JY--Japanese Yen
NZ$--New Zealand Dollar
SK--Swedish Krona
SP--Spanish Peseta
(e)--Either all or a portion of these securities has been segregated with the
custodian to cover futures contracts.
40 / PIMCO Advisors Funds See accompanying notes
<PAGE>
- --------------------------------------------------------------------------------
PIMCO Advisors
High Income Fund September 30, 1996
- --------------------------------------------------------------------------------
Objective:
Maximum total return, consistent with preservation of capital.
Portfolio:
Primarily high yield bonds.
Total Net Assets:
$258 million
Number of Securities in the Portfolio:
118 (not including short-term instruments)
PIMCO Advisors Institutional Manager:
Pacific Investment Management Company
PERFORMANCE*
Average Annual Total Return For periods ended 9/30/96
<TABLE>
<CAPTION>
A Shares B Shares C Shares
(INCEP. 2/6/91) (INCEP. 5/22/95) (INCEP. 2/24/84)
Adjusted Adjusted Adjusted
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1 year 11.2% 5.9% 10.5% 5.5% 9.3%
5 years 8.3% 7.2% -- -- 7.3%
10 years -- -- -- -- 6.9%
Inception 8.3% 7.4% 11.5% 8.6% 8.0%
</TABLE>
In November 1994, the High Income Fund changed its investment objective.
Therefore, longer-term comparisons with the Fund's new relevant indices are not
applicable.
*The adjusted returns above include the effects of applicable sales charges. The
chart to the right reflects the performance of PIMCO Advisors High Income Fund
C through September 30, 1996. The performance of High Income Fund A and B will
be greater or less than the line shown based on differences in inception dates,
fees, and sales charges. Past performance is not an indication of future
results. See page 55 for Footnotes, which should be read in connection with
this material.
[LINE GRAPH APPEARS HERE]
Change in value of $10,000 invested at the Fund's inception
<TABLE>
<CAPTION>
High Lehman BB 6 Month
Income C Int. Index CD Index
<S> <C> <C> <C>
12/31/83 10,000 10,000 10,000
03/31/84 9,900 9,833 10,086
06/30/84 9,497 9,497 10,376
09/30/84 10,218 10,523 10,682
12/31/84 10,593 11,421 10,941
03/31/85 11,050 11,802 11,189
06/30/85 11,759 12,867 11,417
09/30/85 11,952 13,198 11,645
12/31/85 12,617 14,219 11,875
03/31/86 13,172 15,275 12,100
06/30/86 13,447 15,501 12,302
09/30/86 13,495 15,903 12,488
12/31/86 13,957 16,513 12,670
03/31/87 14,561 17,080 12,862
06/30/87 14,466 16,754 13,088
09/30/87 14,296 16,278 13,324
12/31/87 14,583 17,243 13,583
03/31/88 15,162 18,096 13,817
06/30/88 15,493 18,424 14,075
09/30/88 15,735 18,869 14,374
12/31/88 16,060 19,105 14,694
03/31/89 16,094 19,382 15,059
06/30/89 16,597 20,800 15,423
09/30/89 16,719 21,115 15,757
12/31/89 16,940 21,714 16,084
03/31/90 16,564 21,631 16,421
06/30/90 17,067 22,495 16,770
09/30/90 17,085 22,319 17,111
12/31/90 17,287 22,860 17,450
03/31/91 17,515 23,995 17,745
06/30/91 17,768 24,609 18,018
09/30/91 18,529 25,986 18,284
12/31/91 19,353 27,273 18,508
03/31/92 19,257 27,335 18,703
06/30/92 20,010 28,502 18,890
09/30/92 20,822 29,817 19,048
12/31/92 20,780 29,837 19,214
03/31/93 21,614 31,426 19,372
06/30/93 21,964 32,600 19,529
09/30/93 22,785 33,658 19,692
12/31/93 22,272 33,695 19,855
03/31/94 21,342 32,617 20,037
06/30/94 20,831 32,055 20,272
09/30/94 21,079 32,415 20,539
12/31/94 20,689 32,619 20,859
03/31/95 21,879 34,648 21,201
06/30/95 23,164 37,302 21,523
09/30/95 24,929 39,033 21,835
12/31/95 24,837 40,470 22,145
03/31/96 25,004 40,259 22,436
06/30/96 25,241 40,734 22,747
09/30/96 26,387 42,136 23,073
</TABLE>
PORTFOLIO COMPOSITION
Sector Breakdown
[BAR GRAPH APPEARS HERE]
<TABLE>
<S> <C>
Industrial Bonds 61%
Governments 5%
Finance Bonds 5%
Utility Bonds 9%
Cash Equivalents 5%
Other 15%
</TABLE>
Cash Equivalents include short-term instruments, cash and other assets less
liabilities.
Quality Breakdown
[BAR GRAPH APPEARS HERE]
<TABLE>
<S> <C>
Non-Investment Grade 89%
BB 55%
B 34%
Investment Grade 11%
Govt. Oblig./AAA 7%
BBB 4%
</TABLE>
Maturity Profile
- -----------------------------------
1 year or less 14%
- -----------------------------------
1-5 years 27%
- -----------------------------------
6-10 years 44%
- -----------------------------------
11-20 years 13%
- -----------------------------------
21-30 years 2%
- -----------------------------------
Average Maturity 6.8 years
- -----------------------------------
Duration 4.2 years
- -----------------------------------
PORTFOLIO INSIGHTS
The high yield market offered good investment opportunities over the year ended
September 30, 1996, allowing the High Income Fund to post returns of 11.2% for
Class A shares, 10.5% for Class B shares and 9.3% for Class C shares. These
results were, however, slightly under the average set by comparable funds (as
measured by the Lipper High Yield Fund Average), most of which benefited more
from an improving economy.
In general, the Fund's manager does not invest in lower-tier high yield
bonds, and avoids debt issued by firms heavily dependent on strong economic
growth or consumer spending. However, it was this lower-tier category and these
cyclical companies that benefited most when economic indicators signaled strong
growth and surging corporate profits earlier this year. More recently, however,
investors have begun to temper their expectations for the economy, bringing mid-
and upper-tier high yield bonds and non-cyclical companies back into favor. In
fact, for the three months ended September 30, 1996, BB-rated bonds were the
best performing credit category. The Fund held more than half of its portfolio
in BB-rated bonds during this time period.
In terms of maturity, the Fund tended to emphasize shorter-maturity bonds
throughout the year in an effort to lessen the impact changing interest rates
have on price performance. In addition, the Fund made moves to lessen its
duration (sensitivity to interest rate changes), ending the year with an average
duration of 4.2 years. While the manager currently feels that the prospects for
declining interest rates are strong (a situation that would usually encourage a
longer duration), he is concerned about widening credit spreads, which would
have a more harmful impact on longer maturity instruments.
Looking ahead, the Fund's manager expects to see continued strength in the
high yield market, as many corporations improve their balance sheets and cash
flows. The Fund intends to continue to focus on solid below investment grade
credits with strong market positions, including investments in utilities,
independent-power producers, healthcare, cable and telecommunications
industries. The Fund will also continue to explore investments outside the
traditional corporate bond market, in areas such as the commercial mortgage
market, in search of securities with higher credit-adjusted yields.
1996 Annual Report / 41
<PAGE>
PIMCO Advisors
High Income Fund
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
Principal Value
($ in thousands) Amount (Note 2)
- --------------------------------------------------------------------------------
<S> <C> <C>
Short-Term Notes--2.7%
Caisse d'Amortissement, 5.310%-5.320%,
11/20/96-12/13/96 $ 1,300 $ 1,288
Ford Motor Credit Co., 5.290%-5.310%,
11/12/96-11/19/96 900 894
General Electric Capital Corp., 5.280%-5.420%,
10/8/96-3/3/97 3,500 3,474
Hewlett Packard Co., 5.400%, 11/27/96 1,400 1,388
----------
Total Short-Term Notes
(Cost $7,044) 7,044
----------
U.S. Government Agency Obligations--3.5%
Federal National Mortgage Association
(FNMA)--0.5%
FNMA (IO), 7.000%, 7/25/08 3,453 493
FNMA, 8.122%, 5/25/28 (b) 1,000 673
----------
1,166
----------
Resolution Trust Corporation (RTC)--3.0%
RTC, 6.723%, 9/25/20 (b) 315 208
RTC, 6.900%, 2/25/27 3,109 2,704
RTC, 8.000%, 6/25/26 4,200 3,618
RTC, 9.050%, 8/25/23 1,076 1,104
----------
7,634
----------
Total U.S. Government Agency Obligations
(Cost $8,828) 8,800
----------
Corporate Bonds and Notes--84.7%
Automotive Parts and Equipment--0.7%
Exide Corp., 0.000%, 12/15/04 (c) 850 765
Speedy Muffler King, Inc., 10.875%, 10/1/06 1,100 1,139
----------
1,904
----------
Banks--1.5%
First Nationwide Holdings, 10.625%-12.500%,
4/15/03-10/1/03 3,700 3,953
----------
Building Materials--1.5%
Building Materials, 0.000%, 7/1/04 (c) 4,930 3,969
----------
Computer Software and Peripherals--2.1%
Printpack, Inc., 9.875%, 8/15/04 2,750 2,812
Unisys Corp., 12.000%, 4/15/03 2,500 2,588
----------
5,400
----------
Containers--3.7%
Owens Illinois, Inc., 11.000%, 12/1/03 3,000 3,285
Sea Containers, 9.500%, 7/1/03 750 743
Stone Container Corp., 11.500%, 10/1/04 2,000 2,100
Sweetheart Cup, Inc., 9.625%, 9/1/00 3,250 3,323
----------
9,451
----------
Cosmetics--1.3%
Revlon, Inc., 9.375%, 4/1/01 1,500 1,523
Revlon Worldwide 0.000%, 3/15/98 2,000 1,755
----------
3,278
----------
Electronics--0.8%
Ametek Inc., 9.750%, 3/15/04 2,000 2,100
----------
Energy--0.8%
Panda Funding, 11.625%, 8/20/12 2,000 2,038
----------
Entertainment and Leisure--2.7%
Coleman Holdings, Inc., 0.000%, 5/27/98 3,250 2,771
Griffin Gaming & Entertainment, 0.000%,
6/30/00 1,750 1,680
Showboat, Inc., 9.250%, 5/1/08 550 548
Station Casinos, 9.625%, 6/1/03 2,000 1,950
----------
6,949
----------
Financial Services--2.6%
Mesa Operating, 10.625%, 7/1/06 1,000 1,050
Navistar Financial Corp., 8.875%, 11/15/98 1,500 1,496
UCC Investors, 10.500%, 5/1/02 1,000 1,069
Trizec Finance Ltd., 10.875%, 10/15/05 2,950 3,171
----------
6,786
----------
Forest and Paper Products--2.8%
Buckeye Cellulose Corp., 8.500%, 12/15/05 500 488
Pacific Lumber, 10.500%, 3/01/03 2,500 2,463
Repap Wisconsin, Inc., 9.250%, 2/1/02 2,300 2,329
Stone Consolidated Corp., 10.250%, 12/15/00 1,750 1,851
----------
7,131
----------
Health Management--4.6%
Abbey Healthcare Group, Inc., 9.500%, 11/1/02 2,750 2,833
Healthsouth Rehabilitation, 9.500%, 4/1/01 1,500 1,568
Integrated Health Services, 9.625%, 5/31/02 4,325 4,422
Paracelsus Healthcare, 10.000%, 8/15/06 1,500 1,551
Tenet Healthcare Corp., 10.125%, 3/1/05 1,500 1,627
----------
12,001
----------
Industrial Goods and Equipment--1.0%
Food Maker Inc., 9.250%, 3/1/99 2,245 2,245
Venture Holdings Trust, 9.750%, 4/1/04 390 339
----------
2,584
----------
Instruments and Controls--0.4%
IMO Industries Inc., 11.750%, 5/1/06 1,000 1,045
----------
Insurance--1.8%
Phoenix Re Corp., 9.750%, 8/15/03 2,000 2,110
Reliance Group Holdings, 9.000%, 11/15/00 2,500 2,547
----------
4,657
----------
Lodging--2.5%
HMH Properties, 9.500%, 5/15/05 2,500 2,500
Hammons, (J.Q.) Hotels L.P., 8.875%, 2/15/04 4,000 3,840
----------
6,340
----------
Media--12.6%
Benedek Broadcasting Corp., 11.875%, 3/1/05 2,000 2,185
Cablevision Systems Corp., 10.500%, 5/15/16 4,000 4,080
Cablevision Systems Corp., 9.875%, 4/1/23 1,000 940
Century Communications Corp., 11.875%,
10/15/03 2,750 2,943
CF Cable TV, Inc., 9.125%, 7/15/07 2,000 2,075
Granite Broadcasting Corp., 10.375%, 5/15/05 1,500 1,515
Jones Intercable, 10.500%, 3/1/08 1,400 1,484
K-III Communications, Inc., 8.500%, 2/1/06 2,500 2,325
Marcus Cable Co., 13.500%, 8/1/04 2,500 1,950
Muzak LP/Muzak Capital, 10.000%, 10/1/03 1,000 1,013
Rogers Cablesystems of America, Inc., 10.000%,
3/15/05 2,000 2,035
SCI Television, Inc., 11.000%, 6/30/05 3,100 3,317
Sinclair Broadcast Group, Inc., 10.000%, 9/30/05 500 505
Telewest Communications PLC, 9.625%, 10/1/06 3,500 3,465
Young Broadcasting, Inc., 9.000%, 1/15/06 3,000 2,835
----------
32,667
----------
</TABLE>
42 / PIMCO Advisors Funds See accompanying notes
<PAGE>
PIMCO Advisors
High Income Fund
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
Principal Value
($ in thousands) Amount (Note 2)
- --------------------------------------------------------------------------------
<S> <C> <C>
Medical Supplies--0.4%
Owens & Minor, 10.875%, 6/1/06 $ 1,000 $ 1,045
----------
Miscellaneous Manufacturing--5.2%
American Standard, Inc., 9.250%-11.375%,
5/15/04-12/1/16 4,750 5,001
Clark-Schwebel, Inc., 10.500%, 4/15/06 1,250 1,300
Doane Products Co., 10.625%, 3/1/06 500 517
Figgie International, Inc., 9.875%, 10/1/99 2,000 2,068
Magnetek, Inc., 10.750%, 11/15/98 2,000 2,035
Sequa Corp., 10.000, 5/14/01 2,500 2,576
----------
13,497
----------
Oil and Gas--9.2%
Clark Oil Refining Corp., 10.500%, 12/1/01 400 415
Clark R&M Holdings, 0.000%, 2/15/00 3,600 2,578
Falcon Drilling, Inc., 9.750%, 1/15/01 1,500 1,519
Ferrell Gas, Inc., 10.000%, 8/1/01 3,000 3,120
Flores & Rucks, Inc., 9.750%, 10/1/06 1,000 1,021
Gulf Canada Resources Ltd., 9.250%, 1/15/04 3,575 3,664
HS Resources, Inc., 9.875%, 12/01/03 1,000 988
KCS Energy, Inc., 11.000%, 1/15/03 1,500 1,631
Nuevo Energy Co., 9.500%, 4/15/06 500 510
Nuevo Energy Co., 12.500%,12/15/02 1,750 1,881
Transtexas Gas Corp., 11.500%, 6/15/02 1,750 1,859
Triton Energy Corp., 0.000%, 11/1/97 2,500 2,319
Vintage Petroleum, Inc., 9.000%, 12/15/05 2,250 2,233
----------
23,738
----------
Publishing--2.3%
Hollinger International Publishing, 9.250%,
2/1/06 2,000 1,950
World Color Press, Inc., 9.125%, 3/15/03 4,000 3,960
----------
5,910
----------
Private Asset-Backed: Mortgages--2.3%
Airplanes Pass Through Trust, 10.875%, 3/15/19 2,000 2,155
Asset Securitization Corp., 7.384%, 8/13/29 1,500 1,395
LTC, 9.200%, 8/4/23 1,000 1,034
Red Mountain Funding Corp., 9.150%, 11/28/27 1,500 1,330
----------
5,914
----------
Retail--2.7%
Cumberland Farms, 10.500%, 10/1/03 1,940 1,872
J Ray McDermott, 9.375%, 7/15/06 2,500 2,537
Pathmark Stores, Inc., 9.625%, 5/1/03 2,500 2,459
----------
6,868
----------
Steel--0.8%
Earle Jorgensen, 10.750%, 3/1/00 2,000 2,020
----------
Telecommunications--4.9%
Albritton Communications, 9.750%, 11/30/07 1,500 1,459
Lenfest Communications, 8.375%, 11/1/05 2,150 2,014
Paging Network, Inc., 8.875%-10.125%,
2/1/06-8/1/07 1,750 1,706
Rogers Cantel, Inc., 9.375%, 6/1/08 3,000 2,992
Teleport Communications, 0.000%, 7/1/07 4,000 2,560
Vanguard Cellular Systems, 9.375%, 4/15/06 2,000 1,995
----------
12,726
----------
Textiles--1.0%
West Point Stevens, 8.750%-9.375%,
12/15/01-12/15/05 2,500 2,521
----------
Transportation: Air--0.6%
Atlas Air, Inc., 12.250%, 12/1/02 1,000 1,070
US Air, Inc., 9.625%, 9/1/03 500 490
----------
1,560
----------
Transportation: Marine--0.7%
Teekay Shipping Corp., 8.320%, 2/1/08 1,750 1,697
----------
Utilities: Electric--10.2%
AES Corp., 10.250%, 7/15/06 3,500 3,727
California Energy Co., 0.000%, 1/15/04 (c) 4,650 4,754
California Energy Co., 9.875%, 6/30/03 2,000 2,040
Calpine Corp., 9.250%, 2/1/04 2,000 1,925
CTC Mansfield Funding Corp., 11.125%, 9/30/16 3,000 3,173
El Paso Electric Co., 8.900%, 2/01/06 2,250 2,289
First PV Funding, 10.150%, 1/15/16 2,000 2,120
Long Island Lighting Co., 7.125%, 6/1/05 3,000 2,661
Niagara Mohawk Power, 7.875%-9.500%,
3/1/21-4/1/24 2,500 2,192
North Atlantic Energy 9.050%, 6/1/02 1,636 1,594
----------
26,475
----------
Utilities: Gas--1.0%
Amerigas Partners, L.P., 10.125%, 4/15/07 2,500 2,575
----------
Total Corporate Bonds and Notes
(Cost $211,760) 218,799
----------
Sovereign Issues--2.7%
Republic of Argentina, 5.250%-6.625%,
3/31/05-3/31/23 6,880 5,501
United Mexican States, Series B, 6.250%,
12/31/19 2,000 1,385
United Mexican States, Value Recovery Rights,
12/31/19(d) 2,000 0
----------
Total Sovereign Issues
(Cost $6,100) 6,886
----------
<CAPTION>
Shares
- --------------------------------------------------------------------------------
<S> <C> <C>
Preferred Stocks--3.9%
Banks--0.3%
1st Nationwide Bank FSB,11.500% 8,000 908
----------
Media--3.6%
Newscorp Overseas, Ltd., 8.625% 133,200 3,247
Time Warner, Inc., 10.250% 5,867 6,190
----------
9,437
----------
Total Preferred Stocks
(Cost $10,109) 10,345
----------
Total Investments(a)--97.5%
(Cost $243,841) 251,874
----------
Other Assets and Liabilities, Net--2.5% 6,449
----------
Net Assets--100.0% $ 258,323
----------
</TABLE>
Notes to Portfolio Investments ($ in thousands):
(a) The cost of investments for federal income tax purposes is $243,875. At
September 30, 1996, net unrealized appreciation was $7,999. This consisted of
aggregate gross unrealized appreciation for all investments on which there was
an excess of market value over tax cost of $9,111 and aggregate gross unrealized
depreciation of all investments on which there was an excess of tax cost over
market value of $1,112.
(b) Variable rate security.
(c) Security becomes interest bearing at a future date.
(d) Non-income producing security.
Annual Report See accompanying notes / 43
<PAGE>
- --------------------------------------------------------------------------------
PIMCO Advisors
Total Return Income Fund September 30, 1996
- --------------------------------------------------------------------------------
Objective:
Maximum total return, consistent with preservation of capital.
Portfolio:
Primarily investment grade bonds.
Total Net Assets:
$221 million
Number of Securities in the Portfolio:
33 (not including short-term instruments)
PIMCO Advisors Institutional Manager:
Pacific Investment Management Company
PERFORMANCE*
<TABLE>
<CAPTION>
Average Annual Total Return For periods ended 9/30/96
A Shares B Shares C Shares Lehman Lipper Int.
(INCEP. 12/22/94) (INCEP. 5/22/95) (INCEP. 12/22/94) Aggregate Inv. Grade
Adjusted Adjusted Adjusted Bond Index Fund Avg.
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 year 4.8% -0.2% 4.0% -1.0% 3.0% 4.9% 4.3%
Inception 8.9% 6.0% 5.8% 2.9% 8.2% -- --
</TABLE>
*The adjusted returns above include the effects of applicable sales charges. The
chart to the right reflects the performance of PIMCO Advisors Total Return
Income Fund A and C through September 30, 1996. The performance of Total Return
Income Fund B will be greater or less than the lines shown based on differences
in inception dates, fees, and sales charges. Past performance is not an
indication of future results. See page 55 for Footnotes, which should be read
in connection with this material.
[LINE GRAPH APPEARS HERE]
Change in value of $10,000 invested at the Fund's inception.
<TABLE>
<CAPTION>
Leh. Agg. 6 Month
Total Return A Total Return C Index CD Index
<S> <C> <C> <C> <C>
09/30/94 9,525 10,000 10,000 10,000
12/31/94 9,525 10,000 10,000 10,000
03/31/95 9,913 10,289 10,504 10,164
06/30/95 10,356 10,834 11,144 10,318
09/30/95 10,581 10,949 11,362 10,468
12/31/95 11,099 11,569 11,846 10,617
03/31/96 10,846 11,276 11,636 10,756
06/30/96 10,880 11,288 11,703 10,905
09/30/96 11,085 11,490 11,919 11,061
</TABLE>
PORTFOLIO COMPOSITION
[BAR GRAPH APPEARS HERE]
Sector Breakdown
<TABLE>
<S> <C>
U.S. Government Agency Obligations 89%
Sovereign Issues 4%
Corporate Bonds and Notes 7%
</TABLE>
Cash Equivalents include short-term instruments, cash and other assets less
liabilities.
Quality Breakdown
[BAR GRAPH APPEARS HERE]
<TABLE>
<S> <C>
Government/AAA 88%
AA 2%
BBB 2%
BB 8%
</TABLE>
Maturity Profile
- ------------------------------
1 year or less 1%
- ------------------------------
1-5 years 45%
- ------------------------------
6-10 years 24%
- ------------------------------
11-20 years 25%
- ------------------------------
21-30 years 5%
- ------------------------------
Average Maturity 8.4 years
- ------------------------------
Duration 5.2 years
- ------------------------------
PORTFOLIO INSIGHTS
The Total Return Income Fund followed its strong start with solid performance in
the six months ended September 30, 1996. As a result, the Fund was able to post
returns of 4.0% for Class B shares, 3.0% for Class C shares, and 4.8% for Class
A shares--with Class A shares clearly beating the average for comparable funds
(as measured by the Lipper Intermediate Investment Grade Debt Fund Average).
The Total Return Income Fund is managed by Bill Gross of Pacific Investment
Management Company, a man Money magazine (5/96) described as a "fixed income
guru". It was Mr. Gross' mission this last year to guide the Total Return Income
Fund through a difficult fixed income investment environment. Yields on U.S.
Treasury bonds followed an erratic path up to September 30th, as concern over
actions by the Federal Reserve Board and a steady stream of conflicting economic
data alternately depressed and elevated the bond market. Rather than responding
to each of these shifts, Bill Gross held to his belief that rates would decline
and maintained the Total Return Income Fund's portfolio accordingly.
Throughout the year the Fund concentrated on Treasuries and mortgages as
opposed to the credit sensitive corporate sector. These mortgage-backed
securities, both fixed and adjustable rate, made particularly strong
contributions to the Fund's results during the year.
Another constant throughout the year was the Fund's focus on high quality
securities. In fact, as of September 30, 1996, 88% of the Fund's portfolio was
invested in AAA-rated bonds. This high quality portfolio provided shareholders
with a more conservative investment than funds that invest primarily in higher
yielding, lower-rated securities.
The Fund's manager continues to view the current investment environment as
part of a larger trend started in the early 1980's. As this trend evolves
further, he believes we can expect to see slower economic growth, lower
inflation and declining interest rates. In fact, the manager foresees rates
dropping to 6.5% for long-term Treasuries and 5% for 3-month T-bills by December
31, 1996. This forecast paints a rosy picture for the domestic bond market. To
capitalize on this situation, the Fund currently intends to continue to
emphasize intermediate-term securities with relatively longer durations. In
addition, the Fund anticipates maintaining its focus in the mortgage sector,
with ARM's (adjustable rate mortgages) and discount pass-thrus the areas that
the manager expects to offer the greatest relative value.
44 / PIMCO Advisors Funds
<PAGE>
PIMCO Advisors
Total Return Income Fund
PORTFOLIO OF INVESTMENTS September 30, 1996
<TABLE>
<CAPTION>
Principal Value
($ in thousands) Amount (Note 2)
- --------------------------------------------------------------------------------
<S> <C> <C>
Short-Term Notes--30.3%
Ameritech Corp., 5.330%-5.420%, 10/2/96-
10/28/96 $ 1,500 $ 1,496
Bell South Telecommunications, 5.270%, 11/4/96 4,200 4,174
Caisse D' Amortissement, 5.340%-5.420%,
10/7/96-10/23/96 7,400 7,387
Du Pont (E.I.) de Nemours, 5.260%, 11/19/96 7,500 7,443
Federal Home Loan Mortgage Corp.,
5.200%-5.300%, 10/17/96-11/13/96 6,800 6,778
Federal National Mortgage Association,
5.180%, 11/27/96 10,000 9,916
Ford Motor Credit Co., 5.310%-5.340%,
11/8/96-11/13/96 4,200 4,173
General Electric Capital Corp., 5.260%,
11/12/96 5,300 5,266
Hewlett Packard Co., 5.300%, 10/25/96 1,900 1,893
KFW Intl., 5.310%, 10/25/96 5,100 5,081
Mobil Corp., 5.340%, 10/21/96 1,700 1,695
Motorola, Inc., 5.320%, 10/23/96 1,000 997
National Rural Utilities Cooperative Finance
Corp., 5.280%, 11/13/96 9,300 9,239
Shell Oil Co., 5.330%, 10/4/96 1,500 1,499
----------
Total Short-Term Notes
(Cost $67,037) 67,037
----------
U.S. Treasury Obligations--40.9%
U.S. Treasury Bills, 4.980%-5.070%,
10/17/96-11/21/96 (e) 1,570 1,561
U.S. Treasury Notes, 5.625%-6.125%,
6/30/97-9/30/00 89,000 88,836
Total U.S. Treasury Obligations
(Cost $90,340) 90,397
U.S. Government Agency Obligations--46.2%
Federal Home Loan Mortgage Corp.
(FHLMC)--16.5%
FHLMC, 6.500%, 11/13/26 (c) 31,000 29,160
FHLMC, 7.000%, 7/15/23 205 169
FHLMC, 7.361%, 4/1/23 (b) 1,521 1,566
FHLMC, 7.890%, 1/1/24 (b) 1,491 1,539
FHLMC, 8.000%, 09/15/24 1,900 1,953
FHLMC, 8.010%, 8/1/24 (b) 2,045 2,112
----------
36,499
----------
Federal National Mortgage Association
(FNMA)--12.2%
FNMA, 6.073%, 12/1/27 9,524 9,447
FNMA, 6.124%, 10/23/26 (b)(c) 15,000 14,845
FNMA, 6.900%, 5/25/23 121 98
FNMA, 7.722%, 10/1/23 (b) 1,534 1,586
FNMA, 8.049%, 1/1/24 (b) 863 897
----------
26,873
----------
Government National Mortgage Association
(GNMA)--17.5%
GNMA, 5.500%, 7/20/24 (b) 505 505
GNMA, 6.500%, 3/20/23 3,448 3,478
GNMA, 6.500%, 2/20/23-10/20/24 (b) 5,990 6,079
GNMA, 6.500%, 11/19/26 (c) 10,000 9,356
GNMA, 7.000%, 10/17/26 (c) 20,000 19,250
----------
38,668
----------
Total U.S. Government Agency Obligations
(Cost $100,807) 102,040
----------
Corporate Bonds and Notes--7.9%
Chemical--2.7%
Indspec Chemical, 0.000%, 12/1/03 (f) 5,500 4,820
Varity Corp., 11.375%, 11/15/98 1,250 1,257
----------
6,077
----------
Containers--1.0%
Owens Illinois Inc., 11.000%, 12/1/03 2,000 2,190
----------
Financial Services--0.3%
Morgan Stanley Group, Inc., 7.790%, 2/3/97 625 629
----------
Media--0.5%
Time Warner Inc., 7.450%, 02/01/98 1,000 1,011
----------
Private Asset-Backed: Mortgages--0.9%
CMC Securities Corp. II, 7.500%, 12/29/25 (b) 738 751
DLJ Mortgage Acceptance Corp., 7.706%,
5/25/24 (b) 641 653
Ryland Mortgage Securities Corp., 7.822%,
9/25/23 (b) 654 664
----------
2,068
----------
Transportation: Air--0.5%
Delta Air Lines, Inc., 10.140%, 8/14/12 1,000 1,142
----------
Utilities: Electric--2.0%
California Energy, 0.000%, 1/15/04 (f) 3,750 3,834
CMS Energy, 9.500%, 10/1/97 500 511
----------
4,345
----------
Total Corporate Bonds and Notes
(Cost $17,133) 17,462
----------
Sovereign Issues (d)--4.2%
Commonwealth of Canada, 8.750%, 12/01/05 C$ 3,500 2,866
Republic of Argentina, 6.625%, 3/31/05 (b) $ 7,840 6,556
----------
Total Sovereign Issues
(Cost $8,731) 9,422
----------
</TABLE>
Annual Report See accompanying notes / 45
<PAGE>
PIMCO Advisors
Total Return Income Fund
PORTFOLIO OF INVESTMENTS September 30, 1996
<TABLE>
<CAPTION>
Value
($ in thousands) Contracts (Note 2)
- --------------------------------------------------------------------------------
<S> <C> <C>
Purchased Put Options--0.0%
Eurodollar Futures, expiring March '97 @ 91.50 250 $ 6
----------
Total Purchased Put Options
(Cost $4) 6
----------
Total Securities Owned (a)
(Cost $284,052) 286,364
----------
Outstanding Put Options Written--0.0%
Eurodollar futures, expiring June '97 @ 93.50 300 (143)
----------
Total Outstanding Put Options Written
(Premiums Received $156) (143)
----------
Total Investments,
Net of Outstanding Options Written--129.5%
(Cost $283,807) 286,221
----------
Other Assets and Liabilities, Net--(29.5%) (65,150)
----------
Net Assets--100.0% $ 221,071
==========
</TABLE>
Notes to Portfolio of Investments ($ in thousands):
(a) The cost of investments for federal income tax purposes is $284,039. At
September 30, 1996, net unrealized appreciation was $2,325. This consisted of
aggregate gross unrealized appreciation for all investments on which there was
an excess of market value over tax cost of $2,444 and aggregate gross unrealized
depreciation of all investments on which there was an excess of tax cost over
market value of $119.
(b) Variable rate security.
(c) Securities purchased on a to-be-announced basis.
(d) Principal amount denoted in indicated currency:
C$--Canadian Dollar
(e) Either all or a portion of these securities has been segregated with the
custodian to cover futures contracts.
(f) Security becomes interest bearing at a future date.
46 / PIMCO Advisors Funds See accompanying notes
<PAGE>
PIMCO Advisors
Tax Exempt Fund September 30, 1996
Objective: Portfolio: Total Net Assets: Number of PIMCO Advisors
High current Municipal bonds. $55 million Securities Institutional
income exempt in the Manager:
from federal Portfolio: Columbus
taxes, consis- 47 (not Circle
tent with including Investors
preservation short-term
of capital. instruments)
PERFORMANCE*
Average Annual Total Return For periods ended 9/30/96
<TABLE>
<CAPTION>
A Shares B Shares C Shares Lipper Muni.
(INCEP. 3/14/91) (INCEP. 5/30/95) (INCEP. 11/1/85) Lehman Bond Fund
Adjusted Adjusted Adjusted Muni. Index Average
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 year 5.2% 0.2% 4.5% -0.5% 3.5% 6.0% 5.6%
5 years 6.6% 5.5% -- -- 5.8% 7.5% 7.0%
10 years -- -- -- -- 6.3% 7.9% 7.4%
Inception 6.9% 5.9% 4.0% 1.0% 7.6% -- --
</TABLE>
* The adjusted returns above include the effects of applicable sales
charges. The chart to the right reflects the performance of PIMCO Advisors Tax
Exempt Fund C through September 30, 1996. The performance of Tax Exempt Fund A
and B will be greater or less than the line shown based on differences in
inception dates, fees, and sales charges. Past performance is not an indication
of future results. See page 55 for Footnotes, which should be read in connection
with this material.
[LINE GRAPH APPEARS HERE]
Change in value of $10,000 invested at the Fund's inception.
<TABLE>
<CAPTION>
Tax Exempt C Lehman Muni 6 Mo. CD
<S> <C> <C> <C>
09/30/85 10,000 10,000 10,000
12/31/85 10,523 10,450 10,130
03/31/86 11,707 11,508 10,323
06/30/86 11,488 11,437 10,495
09/30/86 12,159 12,051 10,654
12/31/86 12,697 12,468 10,809
03/31/87 12,948 12,770 10,973
06/30/87 12,307 12,423 11,166
09/30/87 11,907 12,115 11,367
12/31/87 12,515 12,656 11,588
03/31/88 12,739 13,091 11,787
06/30/88 13,008 13,345 12,008
09/30/88 13,383 13,687 12,263
12/31/88 13,690 13,942 12,536
03/31/89 13,708 14,034 12,847
06/30/89 14,649 14,865 13,158
09/30/89 14,555 14,875 13,443
12/31/89 15,133 15,446 13,721
03/31/90 14,918 15,515 14,009
06/30/90 15,231 15,878 14,306
09/30/90 15,216 15,886 14,597
12/31/90 15,843 16,572 14,887
03/31/91 16,028 16,946 15,138
06/30/91 16,237 17,308 15,371
09/30/91 16,857 17,982 15,598
12/31/91 17,418 18,584 15,789
03/31/92 17,279 18,640 15,956
06/30/92 17,965 19,346 16,116
09/30/92 18,369 19,861 16,250
12/31/92 18,720 20,222 16,392
03/31/93 19,410 20,973 16,526
06/30/93 20,017 21,660 16,661
09/30/93 20,810 22,392 16,799
12/31/93 21,036 22,705 16,939
03/31/94 19,324 21,460 17,094
06/30/94 19,365 21,696 17,295
09/30/94 19,408 21,845 17,522
12/31/94 19,031 21,533 17,795
03/31/95 20,543 23,054 18,087
06/30/95 20,914 23,610 18,362
09/30/95 21,358 24,287 18,628
12/31/95 22,318 25,290 18,893
03/31/96 21,804 24,987 19,140
06/30/96 21,842 25,177 19,406
09/30/96 22,311 25,753 19,684
</TABLE>
PORTFOLIO COMPOSITION
Sector Breakdown
[BAR CHART APPEARS HERE]
Municipal Bonds 100%
Quality Breakdown
[BAR CHART APPEARS HERE]
AAA 52%
AA 29%
A 19%
<TABLE>
<CAPTION>
Maturity Profile
<S> <C>
1 year or less 9%
- --------------------------------
1-5 years 16%
- --------------------------------
6-10 years 19%
- --------------------------------
11-20 years 32%
- --------------------------------
21-30 years 24%
- --------------------------------
Average Maturity 12.9 years
- --------------------------------
Duration 8.0 years
- --------------------------------
</TABLE>
PORTFOLIO INSIGHTS
The Tax Exempt Fund has a two part objective: to provide high current income
exempt from federal taxes; and to preserve capital. The Fund met the first
portion of this objective by providing a current (as of September 30, 1996) tax-
free standardized yield of 4.1%, 3.5% and 3.5% for Class A, B and C shares,
respectively. These yields are equivalent to a taxable yield of 6.4%, 5.5% and
5.5%, respectively, for investors in the 36% tax bracket.+ The Fund met the
second portion of its objective by maintaining a high quality portfolio. In
fact, as of September 30, 1996, 81% of the Fund's portfolio was rated AA or AAA,
making the Fund a relatively more conservative investment than funds that invest
in lower-rated, higher yielding securities.
In addition to providing current income and capital preservation, the Tax
Exempt Fund has also provided its shareholders with solid long-term total
returns. Total return includes both the income and the price appreciation
realized on an investment. For the one-year period ended September 30, 1996, the
Fund's Class A shares NAV increased 5.2%, Class B shares increased 4.5% and
Class C shares increased 3.5%.
For the year, the total return provided by the Tax Exempt Fund slightly
trailed the performance of the Lipper Municipal Bond Fund Average, due in part
to the emphasis the Fund's manager placed on maintaining conservative
investments. Volatility was high in the municipal bond market over the year as
investors absorbed conflicting economic data and inflation scares. In an attempt
to shield shareholders from this vola-tility, the Fund's manager concentrated on
sectors of the market that offered stability, sometimes even at the expense of
greater returns. For example, the Fund held significant positions in bonds
related to water and sewer projects, as these bonds are generally considered
more defensive and more stable than other types of municipal bonds.
Another way the manager sought to control volatility in the Fund was to reduce
average duration. Duration is a measure of an investment's sensitivity to
changes in interest rates. With a longer duration an investment is more
sensitive to rate changes and a shorter duration is less sensitive. By reducing
the Fund's average duration to 8 years, the manager attempted to lessen price
decreases that could result from an increase in interest rates.
The Fund's manager currently anticipates an attractive municipal bond market
ahead, but not necessarily reduced volatility. To counter the effects of this
volatility, the manager intends to lower the Fund's duration even further to a
market neutral range of 7.65-7.75 years.
1996 Annual Report/47
<PAGE>
PIMCO Advisors
Tax Exempt Fund
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
Principal Value
($ in thousands) Amount (Note 2)
- -------------------------------------------------------------------------------
<S> <C> <C>
Municipal Bonds and Notes--98.8%
Arizona--1.7%
Salt River Project Agricultural Improvement
and Power District, Electric Revenue Bond,
Series 1993 B, 5.250%, 1/1/13 $ 1,000 $ 961
--------
California--9.9%
City of San Jose, Redevelopment Agency,
Merged Area Redevelopment Project, Tax
Allocation Bonds (MBIA Insured),
Series 1993, 6.000%, 8/1/15 500 526
Los Angeles Convention and Exhibition Center
Authority, Certificates of Participation,
Series 1985, (Prerefunded 12/1/05),
9.000%, 12/1/10-12/1/20 3,000 3,885
Los Angeles County Transportation
Commission, Sales Tax Revenue
Refunding Bonds, Series 1991 B,
6.500%, 7/1/13 1,000 1,040
--------
5,451
--------
District of Columbia--1.9%
Metropolitan Washington Airports Authority
System Revenue Bond, (MBIA Insured),
Series 1992 A, 6.625%, 10/1/19 1,000 1,070
--------
Florida--7.1%
Florida State Board of Education, Capital
Outlay Bonds, Series E, 5.250%, 6/1/23 2,000 1,858
Jacksonville Electric Authority, Bulk Power
Supply System Revenue Bonds,
(Prerefunded 10/1/00), Scherer 4
Project, Issue One, Series 1991 A,
6.750%, 10/1/21 1,000 1,094
Jacksonville Electric Authority, St. Johns River
System Revenue Bonds, Issue Two, Series
11, 5.375%, 10/1/13 1,000 973
--------
3,925
--------
Hawaii--2.0%
State of Hawaii, Airport System Revenue
Bonds, Second Series of 1991,
6.900%, 7/1/12 1,000 1,115
--------
Illinois--9.5%
Illinois, Educational Facility Authority,
Northwestern University Revenue Bonds,
(Prerefunded 12/1/01), Series 1985,
6.900%, 12/1/21 1,000 1,115
State of Illinois, General Obligation Bonds,
Series of March 1992, 6.250%, 10/1/12 1,000 1,045
State of Illinois, Highway Authority, Highway
Revenue Bonds, Series 1992 A,
6.375%, 1/1/15 1,000 1,048
State of Illinois, Sales Tax Revenue Refunding
Bonds, Series Q, 6.000%, 6/15/12 1,000 1,033
University of Illinois Board of Trustees,
Auxiliary Facility System Revenue Bonds,
Series 1991, 5.750%, 4/1/22 1,000 996
--------
5,237
--------
Indiana--6.2%
Indiana Municipal Power Agency, Power
Supply System Revenue Bonds,
(Prerefunded 1/1/00), Series 1989 A,
7.100%, 1/1/15 1,000 1,091
Indianapolis, Local Public Improvement Bond
Bank, Transportation Revenue Bond,
Series 1992 and 1992 D, 6.000%-6.750%,
7/1/10-2/1/14 1,300 1,392
Petersburg County Pollution Control Refunding
Bonds, Indianapolis Power & Light,
Series 1993 B, 5.400%, 8/1/17 1,000 944
--------
3,427
--------
Michigan--2.5%
Detroit Michigan Sewer Disposal Revenue Bonds,
(MBIA Insured), Series B, 5.250%, 7/1/21 1,500 1,399
--------
Mississippi--2.3%
State of Mississippi, General Obligation
Bonds, Series 1994 A, 5.100%, 11/15/12 1,325 1,264
--------
Nebraska--2.5%
Nebraska Public Power District Revenue
Bonds, Series 1993 C, 5.000%, 1/1/17 1,500 1,354
--------
Nevada--1.9%
State of Nevada, General Purpose Revenue
Bonds, 6.500%, 10/1/09 1,000 1,061
--------
New Hampshire--2.0%
New Hampshire Turnpike System, Refunding
Revenue Bonds, (FGIC Insured),
Series 1991 A, 6.750%, 11/1/11 1,000 1,104
--------
New Jersey--3.5%
Washington Township Board of Education,
(Gloucester County) School Bonds,
Series 1996, 5.100%, 2/1/14 2,000 1,900
--------
New York--11.6%
New York City, General Obligation Bonds,
(LOC-Kredietbank N.V.),
Subseries 1993 A-5, Variable Rate
Note, 3.950%, 8/1/15 100 100
New York City, General Obligation Bonds,
(MBIA Insured), Variable Rate Note, Series
1994 B Subseries B-2, 3.950%, 8/15/03 800 800
New York City, General Obligation Bonds,
(LOC-Morgan Guaranty Trust),
Variable Rate Note, Series 1993 A-8,
3.700%, 8/1/17 200 200
New York City, General Obligation Bonds,
(MBIA Insured), Variable Rate Note, Series
1994 B Subseries B-4, 3.950%, 8/15/23 800 800
New York City, Municipal Water Finance
Authority, Water and Sewer System
Revenue Bonds, (FGIC Insured), Variable
Rate Note, Series 1993 C, 3.950%, 6/15/23 400 400
New York City, Municipal Water Finance
Authority, Water and Sewers Revenue
Bonds, (FGIC Insured), Variable Rate Note,
Series 1992 C, 3.950%, 6/15/22 800 800
</TABLE>
48/PIMCO Advisors Funds See accompanying notes
<PAGE>
PIMCO Advisors
Tax Exempt Fund
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
Principal Value
($ in thousands) Amount (Note 2)
- --------------------------------------------------------------------------------
<S> <C> <C>
New York Municipal Water Finance Authority,
Water and Sewer System Revenue Bonds,
(Prerefunded 6/15/01), Series
1991 C, 7.375%, 6/15/13 $ 1,000 $ 1,128
State of New York, Local Government
Assistance Corp., Sales Tax Revenue
Bonds, Series 1992 C, 6.000%, 4/1/12 650 676
State of New York, Thruway Authority,
Revenue Bonds, (MBIA Insured), Series
1995 A, 5.500%, 4/1/15 1,000 985
Triborough Bridge & Tunnel Authority,
General Purpose Revenue Bonds,
Series Y, 6.000%, 1/1/12 500 529
--------
6,418
--------
North Dakota--1.9%
Mercer County Pollution Control Revenue
Bonds, Series 1991, 6.900%, 2/1/19 1,000 1,070
--------
Ohio--1.8%
Cleveland Water and Sewer Revenue
Refunding and Improvement Revenue
Bonds, (MBIA Insured), Series 1993 G,
Number 1, 5.500%, 1/1/21 1,000 987
--------
Pennsylvania--6.4%
City of Pittsburgh, General Obligation Bonds,
(AMBAC Insured), Series 1993 A,
5.500%, 9/1/14 1,525 1,528
Delaware River Port Authority, 5.400%, 1/1/13 1,000 988
State of Pennsylvania, Industrial Development
Authority Revenue Bonds, (AMBAC Insured),
5.500%, 1/1/14 1,000 986
--------
3,502
--------
South Carolina--3.4%
Charleston County, Resource Recovery
Revenue Bonds, (Foster Wheeler
Charleston Resource Recovery Project),
Series 1987 A, 9.250%, 1/1/10 1,750 1,885
--------
Texas--11.8%
Board of Regents of the University of Texas
System, Revenue Financing System
Refunding Bonds, Series
1991 B, 6.750%, 8/15/13 1,000 1,093
City of Austin, Public Improvement Refunding
Bonds, Series 1993 A, 4.800%, 9/1/08 750 711
Dallas Water and Sewer System Revenue
Bonds, Series 1994, 5.250%, 4/1/13 1,000 957
Houston, Texas, Water and Sewer System
Revenue Bonds, Series 1993 B,
5.000%, 12/1/18 2,000 1,802
State of Texas, General Obligation Bonds,
Series 1992 C, 5.500%, 4/1/20 2,000 1,952
--------
6,515
--------
Utah--3.3%
Intermountain Power Agency, Utah,
Power Supply Revenue Bond, Series D,
5.000%, 7/1/21 $ 2,000 $ 1,790
--------
Washington--2.0%
Municipality of Metropolitan Seattle, Sewer
Revenue Bonds, (Prerefunded 1/1/00),
Series T, 6.875%, 1/1/31 1,000 1,086
--------
Wyoming--3.6%
Lincoln County Pollution Industrial Control
Revenue Bonds Variable Rate Demand
Notes, 3.800%, 11/1/14 2,000 2,000
--------
Total Municipal Bonds and Notes
(Cost $51,502) 54,521
--------
Total Investments (a)--98.8%
(Cost $51,502) 54,521
--------
Other Assets and Liabilities, Net--1.2% 683
--------
Net Assets--100.0% $ 55,204
========
</TABLE>
Notes to Portfolio of Investments ($ in thousands):
(a) The cost of investments for federal income tax purposes is $51,502. At
September 30, 1996, net unrealized appreciation was $3,019. This consisted of
aggregate gross unrealized appreciation for all investments on which there was
an excess of market value over tax cost of $3,190 and aggregate gross unrealized
depreciation of all investments on which there was an excess of tax cost over
market value of $171.
Annual Report See accompanying notes/49
<PAGE>
PIMCO Advisors
U.S. Government Fund September 30, 1996
Objective: Portfolio: Total Net Assets: Number of PIMCO Advisors
Maximum total U.S. government $259 million Securities Institutional
return, bonds. in the Manager:
consistent with Portfolio: Pacific
preservation of 48 (not Investment
capital. including Management
short-term Company
instruments)
PERFORMANCE*
Average Annual Total Return For periods ended 9/30/96
<TABLE>
<CAPTION>
A Shares B Shares C Shares Lipper Int. U.S.
(INCEP. 1/3/91) (INCEP. 6/2/95) (INCEP. 9/16/85) Lehman Govt. Fund
Adjusted Adjusted Adjusted Govt. Index Average
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 year 3.9% -1.0% 3.2% -1.6% 2.2% 4.4% 3.8%
5 years 5.9% 4.9% -- -- 5.0% 7.4% 6.1%
10 years -- -- -- -- 6.2% 8.1% 7.2%
Inception 6.7% 5.8% 3.6% 0.7% 7.0% -- --
</TABLE>
* The adjusted returns above include the effects of applicable sales
charges. The chart to the right reflects the performance of PIMCO Advisors U.S.
Government Fund C through September 30, 1996. The performance of U.S. Government
Fund A and B will be greater or less than the line shown based on differences in
inception dates, fees, and sales charges. Past performance is not an indication
of future results. See page 55 for Footnotes, which should be read in connection
with this material.
[GRAPH APPEARS HERE]
Change in value of $10,000 invested at the Fund's inception
<TABLE>
<CAPTION>
US
Government C Lehman Govt 6 Month CD
<S> <C> <C> <C>
06/30/85 10,000 10,000 10,000
09/30/85 10,000 10,000 10,000
12/31/85 10,562 10,727 10,197
03/31/86 11,030 11,656 10,391
06/30/86 11,202 11,810 10,565
09/30/86 11,509 12,040 10,724
12/31/86 11,879 12,370 10,880
03/31/87 12,029 12,515 11,045
06/30/87 11,709 12,296 11,240
09/30/87 11,309 11,965 11,442
12/31/87 11,867 12,641 11,664
03/31/88 12,234 13,058 11,865
06/30/88 12,337 13,181 12,087
09/30/88 12,535 13,404 12,344
12/31/88 12,585 13,530 12,619
03/31/89 12,686 13,674 12,932
06/30/89 13,566 14,773 13,245
09/30/89 13,599 14,895 13,531
12/31/89 14,127 15,455 13,812
03/31/90 13,927 15,263 14,101
06/30/90 14,273 15,797 14,401
09/30/90 14,328 15,927 14,694
12/31/90 15,039 16,802 14,985
03/31/91 15,342 17,166 15,238
06/30/91 15,533 17,398 15,473
09/30/91 16,445 18,390 15,701
12/31/91 17,432 19,375 15,894
03/31/92 16,974 19,036 16,061
06/30/92 17,505 19,789 16,222
09/30/92 17,955 20,767 16,357
12/31/92 17,887 20,776 16,500
03/31/93 18,420 21,714 16,636
06/30/93 18,816 22,342 16,771
09/30/93 19,271 23,068 16,910
12/31/93 19,153 22,990 17,051
03/31/94 18,626 22,298 17,207
06/30/94 18,302 22,044 17,409
09/30/94 18,246 22,137 17,638
12/31/94 18,141 22,214 17,913
03/31/95 19,088 23,260 18,206
06/30/95 19,975 24,702 18,483
09/30/95 20,392 25,139 18,751
12/31/95 21,297 26,288 19,017
03/31/96 20,597 25,694 19,266
06/30/96 20,660 25,817 19,534
09/30/96 21,032 26,251 19,813
</TABLE>
PORTFOLIO COMPOSITION
Sector Breakdown
[BAR CHART APPEARS HERE]
U.S. Government Agency Obligations 100%
Quality Breakdown
[BAR CHART APPEARS HERE]
AAA 100%
<TABLE>
<CAPTION>
Maturity Profile
- ----------------------------------
<S> <C>
1 year or less 1%
- ----------------------------------
1-5 years 50%
- ----------------------------------
6-10 years 28%
- ----------------------------------
11-20 years 10%
- ----------------------------------
21-30 years 11%
- ----------------------------------
Average Maturity 9.0 years
- ----------------------------------
Duration 5.8 years
- ----------------------------------
</TABLE>
PORTFOLIO INSIGHTS
For the year ended September 30, 1996, the value of the U.S. Government Fund
Class A shares posted returns of 3.9%, Class B shares posted returns of 3.2%,
and Class C shares posted returns of 2.2%. These results were competitive with
comparable funds (as measured by the Lipper Intermediate U.S. Government Fund
Average), with Class A shares exceeding the average and Class B and C shares
falling slightly short of it. What these numbers do not show, however, is the
strong finish the Fund turned in. For the last three-month period ended
September 30, 1996, the Fund posted returns of 1.9%, 1.8% and 0.8% for the Class
A, B and C shares, respectively--two of which exceed the Lipper Average for this
time period.
The manager attributes part of this final surge to the Fund's mortgage-backed
investments. This sector of the government securities market accounted for 32%
of the Fund's portfolio as of September 30, 1996, and contributed heavily to the
strong final results. In particular, the Fund realized solid returns from its
investments in adjustable rate mortgages (ARM's). ARM's thrive during periods of
increasing or stable interest rates, such as we have seen in the last six
months, as individuals are not as inclined to refinance and there is little risk
the bonds will be redeemed before maturity. Another profitable area of the
mortgage sector was discount pass-thrus. Going forward, the manager currently
expects ARM's and discount pass-thrus to continue to outperform Treasuries and
to play an important role for the Fund.
The Fund's future positions will be closely tied to the manager's continued
belief that we will be seeing declining interest rates in the latter part of
1996 and into 1997. Specific predictions call for 30-year U.S. Treasury bonds to
fall in a range between 5-7%. In response to this forecast, the manager has held
a longer than average duration for the Fund. As of September 30, 1996, in fact,
the Fund's duration was 5.8 years, which is close to the top of its stated range
of 3-6 years. The Fund's manager believes this longer duration will provide
relatively greater total returns when the predicted economic slowdown occurs.
50/PIMCO Advisors Funds
<PAGE>
PIMCO Advisors
U.S. Government Fund
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
Principal Value
($ in thousands) Amount (Note 2)
- --------------------------------------------------------------------------------
<S> <C> <C>
Short-Term Notes--0.8%
Federal Home Loan Mortgage Corp.,
5.230%, 10/10/96 $ 2,100 $ 2,097
--------
Total Short-Term Notes
(Cost $2,097) 2,097
--------
U.S. Treasury Obligations--12.0%
U.S. Treasury Bills, 5.070%-5.105%,
11/14/96 (d) 705 701
U.S. Treasury Note, 5.875%, 7/31/97 29,000 29,045
U.S. Treasury Bond, 12.375%, 5/15/04(d) 1,000 1,337
--------
Total U.S. Treasury Obligations
(Cost $31,185) 31,083
--------
U.S. Government Agency Obligations--100.8%
Federal Home Loan Mortgage Corp.
(FHLMC)--25.7%
FHLMC, 6.000%, 8/1/25-4/1/26 4,013 3,669
FHLMC, 6.500%, 3/15/24 11,701 8,878
FHLMC, 6.500%, 11/13/26 (c) 34,000 31,981
FHLMC, 7.000%, 10/15/03 6,458 6,513
FHLMC, 7.000%, 2/15/20 2,313 2,320
FHLMC, 7.360%, 4/1/24 (b) 2,784 2,868
FHLMC, 7.587%, 4/1/24 (b) 4,988 5,104
FHLMC, 8.250%, 6/15/22 5,000 5,182
--------
66,515
--------
Federal Housing Administration
(FHA)--14.9%
FHA, 7.125%, 2/1/34 4,521 4,223
FHA, 7.317%, 11/1/19 12,370 12,368
FHA, 7.375%, 1/1/24 4,971 4,845
FHA, 7.430%, 4/1/23-10/1/23 15,399 15,428
FHA, 9.680%, 5/1/24 1,670 1,761
--------
38,625
--------
Federal National Mortgage Association
(FNMA)--32.6%
FNMA, 6.000%, 11/1/03 5,364 5,251
FNMA, 6.000%, 8/25/23 5,137 4,423
FNMA, 6.020%, 12/1/16 (b) 857 851
FNMA, 6.059%, 11/1/23-5/1/29 (b) 19,458 19,300
FNMA, 6.060%, 1/1/16-5/1/18 (b) 1,370 1,360
FNMA, 6.069%, 10/1/19 (b) 131 130
FNMA, 6.073%, 11/1/18 (b) 52 52
FNMA, 6.091%, 8/1/20 (b) 23 23
FNMA, 6.500%, 10/25/22-10/17/24 8,785 6,684
FNMA (IO), 7.000%, 5/25/12 1,212 38
FNMA (IO), 7.000%, 8/25/16 2,296 205
FNMA, 7.000%, 10/10/26 (c) 10,000 9,651
FNMA, 7.000%, 10/25/21 7,047 6,391
FNMA, 7.500%, 5/25/05 6,700 6,748
FNMA, 7.500%, 5/25/22 6,263 5,976
FNMA, 8.000%, 2/1/09-4/1/22 3,885 3,945
FNMA, 8.000%, 6/25/22 2,807 2,651
FNMA, 8.500%, 9/1/24 8,998 9,249
FNMA, 8.750%, 1/25/07 1,713 1,734
--------
84,662
--------
Government National Mortgage Association
(GNMA)--23.0%
GNMA, 5.500%, 1/20/26 4,912 4,877
GNMA, 6.500%, 2/20/23-1/20/25 (b) 29,940 30,226
GNMA, 7.000% 10/20/23 (b) 1,659 1,686
GNMA, 7.250% 7/20/22 (b) 1,935 1,959
GNMA, 7.752% 4/20/23 (b) 1,126 1,153
GNMA, 9.000%, 1/15/20 5,380 5,649
GNMA, 9.500%, 5/15/16-9/15/19 7,705 8,276
GNMA, 10.000%, 4/15/16-9/15/19 4,904 5,357
GNMA, 10.250%, 11/15/98-12/15/99 421 444
GNMA, 11.250%, 12/20/15 85 94
--------
59,721
--------
U.S. Department of Veteran Affairs--4.6%
Vendee Mortgage, 7.000%, 2/15/00 6,231 6,252
Vendee Mortgage (IO), 7.250%, 6/15/23 245,727 5,710
--------
11,962
--------
Total U.S. Government Agency Obligations
(Cost $257,632) 261,485
--------
Contracts
- --------------------------------------------------------------------------------
Purchased OTC Call Options--1.5%
U.S. Treasury Note, 6.500%, 5/31/01,
expiring October '96 @ 93.25 603 3,813
--------
Total Purchased OTC Call Options
(Cost $4,085) 3,813
--------
Total Investments (a)--115.1%
(Cost $294,999) 298,478
--------
Other Assets and Liabilities, Net--(15.1%) (39,244)
--------
Net Assets--100.0% $259,234
========
</TABLE>
Notes to Portfolio of Investments ($ in thousands):
(a) The cost of investments for federal income tax purpose is $295,318 . At
September 30, 1996, net unrealized appreciation was $3,160. This consisted of
aggregate gross unrealized appreciation for all investments on which there was
an excess of market value over tax cost of $7,753 and aggregate gross unrealized
depreciation of all investments on which there was an excess of tax cost over
market value of $4,593.
(b) Variable rate security.
(c) Securities purchased on a to-be-announced basis.
(d) Either all or a portion of these securities have been segregated with the
custodian to cover futures contracts.
Annual Report See accompanying notes/51
<PAGE>
PIMCO Advisors
Short-Intermediate Fund September 30, 1996
Objective:
Current income, consistent with relatively low volatility of principal.
Portfolio:
Primarily shorter-term investment grade
bonds.
Total Net Assets:
$122 million
Number of Securities
in the Portfolio:
57 (not including short-term
instruments)
PIMCO Advisors Institutional Manager:
Pacific Investment Management Company
PERFORMANCE*
<TABLE>
<CAPTION>
Average Annual Total Return For periods ended 9/30/96
A Shares B Shares C Shares Lehman Lipper Short
(INCEP. 8/16/91) (INCEP. 5/22/95) (INCEP. 8/16/91) 1-3 year Int. Inv. Grade
Adjusted Adjusted Adjusted Govt. Index Fund Average
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 year 7.3% 4.0% 6.6% 1.6% 5.6% 5.7% 5.0%
3 years 5.6% 4.5% -- -- 4.9% 5.0% 4.2%
Inception 5.3% 4.6% 7.3% 4.4% 4.7% -- --
</TABLE>
* The adjusted returns above include the effects of applicable sales
charges. The chart to the right reflects the performance of PIMCO
Advisors Short-Intermediate Fund A and C through September 30, 1996. The
performance of Short-Intermediate Fund B will be greater or less than
the lines shown based on differences in inception dates, fees, and sales
charges. Past performance is not an indication of future results. See
page 55 for Footnotes, which should be read in connection with this
material.
[LINE GRAPH APPEARS HERE]
Change in value of $10,000 invested at the Fund's inception
<TABLE>
<CAPTION>
Short Int. A Short Int. C Lehman 1-3 6 Month
Yr Govt Index CD Index
<S> <C> <C> <C> <C>
06/30/91 9,700 10,000 10,000 10,000
09/30/91 9,774 10,077 10,106 10,047
12/31/91 10,118 10,431 10,477 10,170
03/31/92 10,085 10,385 10,491 10,277
06/30/92 10,258 10,539 10,792 10,380
09/30/92 10,360 10,642 11,108 10,467
12/31/92 10,389 10,648 11,131 10,558
03/31/93 10,519 10,779 11,372 10,645
06/30/93 10,619 10,857 11,499 10,731
09/30/93 10,711 10,948 11,656 10,821
12/31/93 10,744 10,946 11,731 10,910
03/31/94 10,690 10,889 11,673 11,010
06/30/94 10,712 10,897 11,673 11,140
09/30/94 10,758 10,929 11,790 11,286
12/31/94 10,704 10,849 11,791 11,462
03/31/95 11,085 11,198 12,182 11,650
06/30/95 11,512 11,629 12,576 11,827
09/30/95 11,755 11,860 12,766 11,999
12/31/95 12,135 12,216 13,081 12,169
03/31/96 12,164 12,229 13,133 12,328
06/30/96 12,341 12,391 13,274 12,500
09/30/96 12,608 12,645 13,497 12,678
</TABLE>
PORTFOLIO COMPOSITION
Sector Breakdown
[BAR GRAPH APPEARS HERE]
U.S. Government Agency Obligations 58%
Corporate Bond and Notes 37%
Sovereign Issues 4%
Cash Equivalents 1%
Cash Equivalents include short-term instruments, cash and other assets less
liabilities.
Quality Breakdown
[BAR GRAPH APPEARS HERE]
Government/AAA 70%
AA 3%
A 5%
BBB 13%
BB 9%
Maturity Profile
1 year or less 31%
1-5 years 58%
6-10 years 8%
11-20 years 3%
Average Maturity 2.6 years
Duration 2.0 years
PORTFOLIO INSIGHTS
Building on its strong performance for the first half of the year, the Short-
Intermediate Fund posted impressive returns in the second half as well,
finishing the year ended September 30, 1996 well ahead of comparable funds (as
measured by the Lipper Short Intermediate Investment Grade Fund Average).
Specifically, the Fund's Class A shares increased in value 7.3%, its Class B
shares increased 6.6% and its Class C shares increased 5.6%.
In terms of yield, the Fund had a standardized yield of 5.0%, 4.4% and 4.7% for
its Class A, B, and C shares, respectively, on September 30, 1996.+ This yield
compares to an average 7-day money market yield of 4.8% and an average six-month
CD yield of 4.7%, according to Banxquote Money Market. Shareholders comparing
the Fund's yield to these other investment products should bear in mind that
there are important differences between the Fund, money markets and CDs. For
example, money market funds attempt to maintain a fixed-share price; CDs are
guaranteed as to repayment of principal and interest. The Fund's shares, on the
other hand, are not guaranteed and its share price can fluctuate, either up or
down, depending on market conditions.
The Fund's investments in mortgage-backed securities made significant
contributions to total return throughout the year. In general, mortgage
securities outperformed Treasury instruments as both fixed and adjustable rate
mortgage-backed securities offered higher yields while interest rates remained
relatively unchanged.
Another successful area for the Fund was the small portion of the portfolio
invested in non-U.S. bonds. In particular, investments in bonds from Germany,
Belgium, and Argentina enabled the manager to add extra yield while also gaining
capital appreciation due to their relatively undervalued prices. By properly
managing any risk associated with these bonds, the Fund is able to pursue its
total return goal with low volatility.
The Fund's manager currently foresees declining interest rates and benign
inflation in the future, creating a backdrop for potentially attractive returns
in the latter part of 1996 and into 1997. To take advantage of this investing
environment, the Fund will maintain its longer than average relative maturity.
52 / PIMCO Advisors Fund
<PAGE>
PIMCO Advisors
Short-Intermediate Fund
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
Principal Value
($ in thousands) Amount (Note 2)
<S> <C> <C>
- ------------------------------------------------------------------------
Short-Term Notes--5.6%
AT&T Capital Corp., 5.280%, 10/1/96 $ 2,200 $ 2,200
Federal Home Loan Mortgage Corp.,
5.200%, 11/13/96 1,100 1,093
Hewlett Packard Co., 5.280%, 12/20/96 500 494
Illinois Tool Works, 5.310%, 11/26/96 2,200 2,181
National Rural Utilities Cooperative Finance Corp.,
5.280%, 10/30/96 800 796
-------
Total Short-Term Notes
(Cost $6,764) 6,764
-------
U.S. Treasury Obligations--4.2%
U.S. Treasury Bills, 5.070%-5.130%,
10/17/96-11/14/96 (e) 60 60
U.S. Treasury Notes, 6.500%-8.125%,
5/15/97-7/15/06 (e) 5,030 5,076
-------
Total U.S. Treasury Obligations
(Cost $5,132) 5,136
-------
U.S. Government Agency Obligations--53.5%
Federal Home Loan Bank (FHLB)--2.5%
FHLB, 5.110%, 4/19/99 (b) 3,000 3,002
-------
Federal Home Loan Mortgage Corp.
(FHLMC)--11.7%
FHLMC, 5.400%, 8/15/14 3,000 2,966
FHLMC, 5.650%, 11/15/19 2,700 2,687
FHLMC, 6.000%, 1/1/26-3/1/26 2,738 2,504
FHLMC, 6.375%, 3/1/17 (b) 460 468
FHLMC, 6.500%, 11/13/26 (c) 2,000 1,881
FHLMC, 7.000%, 07/15/97 1,012 1,015
FHLMC, 7.725%, 7/1/18 (b) 958 986
FHLMC, 7.796%, 3/1/24 (b) 449 463
FHLMC, 8.079%, 9/01/23 (b) 1,232 1,263
-------
14,233
-------
Federal National Mortgage Association
(FNMA)--11.9%
FNMA, 5.750%, 02/25/05 3,960 3,904
FNMA, 6.000%, 12/25/18-3/1/26 524 497
FNMA, 6.006%, 04/25/22 (b) 619 622
FNMA, 6.059%, 9/1/27-10/1/28 (b) 1,507 1,495
FNMA, 6.160%, 10/01/27 (b) 19 19
FNMA. 6.766%, 01/01/21 (b) 1,149 1,156
FNMA, 7.000%, 4/1/02-9/1/04 287 287
FNMA (IO), 7.000%, 4/15/19 11,978 1,068
FNMA, 7.144%, 11/01/17 (b) 800 815
FNMA, 7.275%, 07/01/17 (b) 1,293 1,331
FNMA, 7.316%, 11/01/18 (b) 633 648
FNMA, 7.322%, 05/01/24 (b) 2,107 2,173
FNMA (IO), 256.000%, 11/01/08 61 445
-------
14,460
-------
Government National Mortgage Association
(GNMA)--26.1%
GNMA, 5.000%, 1/20/26-5/20/26 (b) 18,523 17,999
GNMA, 5.000%, 4/20/26-8/20/26 3,013 2,905
GNMA, 5.500%, 07/20/26 (b) 1,790 1,754
GNMA, 6.500%, 01/20/22 (b) 1,629 1,648
GNMA, 7.000%, 9/20/23-11/20/24 (b) 7,409 7,524
-------
31,830
-------
Resolution Trust Corp. (RTC)--1.3%
RTC, 6.525%, 9/25/21 (b) 1,653 1,659
-------
Total U.S. Government Agency Obligations
(Cost $66,002) 65,184
-------
Corporate Bonds and Notes--37.0%
Financial Services--8.0%
Chrysler Financial Corp., 7.930%, 02/03/97 2,000 2,013
Ford Motor Credit Corp., 5.888%, 4/5/99 (b) 1,000 1,001
General Electric Capital Mortgage
Services, Inc., 7.750%, 4/25/07 1,470 1,477
Lehman Brothers Holding, Inc.,
0.000%, 05/16/98 2,000 1,802
Okobank, 7.138%, 10/29/49 (b) 750 769
Salomon Inc., 6.264%, 10/21/96 (b) 1,000 1,000
Salomon Inc., 6.360%, 4/01/98 1,725 1,719
-------
9,781
-------
Media--3.3%
Time Warner, Inc., 6.460%, 08/15/00 (b) 4,000 4,032
-------
Metals and Mining--0.8%
Noranda Inc., 6.250%, 8/18/00 (b) 1,000 1,016
-------
Oil and Gas--1.5%
Triton Energy, 0.000%, 11/01/97 2,000 1,855
-------
Private Asset-Backed: Mortgages--9.7%
Countrywide Mortgage-Backed
Securities, Inc., 6.500%, 3/25/24 1,848 1,843
Fleet Mortgage Securities, Inc.,
7.200%, 10/25/23 1,787 1,766
General Electric Capital Mortgage
Services, 6.500%, 7/25/18 792 793
Nomura Asset Securities Corp.,
6.625% 1/25/09 5,000 4,984
Prudential Home Mortgage Securities,
6.750%, 1/25/24 1,158 1,148
Sears Mortgage Securities, Inc.,
7.698%, 10/25/22 (b) 1,273 1,338
-------
11,872
-------
Telecommunications--2.5%
TCI Communications, Inc., 6.637%, 3/11/03(b) 3,000 2,999
-------
Tobacco--3.3%
RJR Nabisco, 8.625%, 12/1/02 4,000 4,007
-------
Transportation: Air--3.2%
Delta Air Lines, Inc., 10.430%, 1/2/11 1,810 2,146
United Air Lines, Inc., 10.850%, 2/19/15 1,500 1,797
-------
3,943
-------
Utilities: Electric--4.7%
Cleveland Electric Illuminating Co.,
8.170%, 11/30/98 1,000 1,014
El Paso Electric Co., 7.250%, 2/1/99 1,000 991
Gulf States Utilities, 9.720%, 7/1/98 333 340
Long Island Lighting Co., 6.250%-7.300%,
7/15/99-7/15/01 2,500 2,403
North Atlantic Energy Co., 9.050%, 06/1/02 945 921
-------
5,669
-------
Total Corporate Bonds and Notes
(Cost $45,225) 45,174
-------
</TABLE>
Annual Report See accompanying notes/ 53
<PAGE>
PIMCO Advisors
Short-Intermediate Fund
PORTFOLIO OF INVESTMENTS September 30, 1996
<TABLE>
<CAPTION>
Principal Value
($ in thousands) Amount (Note 2)
- ----------------------------------------------------------------------
<S> <C> <C>
Sovereign Issues (d)--4.1%
Commonwealth of Canada, 8.750%, 12/01/05 C$ 1,150 $ 942
Republic of Argentina, 6.625%, 3/31/05 (b) $ 4,900 4,098
---------
Total Sovereign Issues
(Cost $4,582) 5,040
---------
Total Securities Owned (a)
(Cost $127,705) 127,298
---------
<CAPTION>
Contracts
- ----------------------------------------------------------------------
<S> <C> <C>
Outstanding Put Options Written--(0.0%)
Eurodollar Futures, expiring March '97 @ 93.00 27 (2)
Eurodollar Futures, expiring June '97 @ 93.50 38 (18)
---------
Total Outstanding Put Options Written
(Premiums Received $49) (20)
---------
Total Investments,
Net of Outstanding Options Written--104.4%
(Cost $127,656) 127,278
---------
Other Assets and Liabilities, Net--(4.4%) (5,432)
---------
Net Assets--100.0% $ 121,846
=========
</TABLE>
Notes to Portfolio of Investments ($ in thousands):
(a) The cost of investments for federal income tax purposes is $128,174. At
September 30, 1996, net unrealized depreciation was $876. This consisted of
aggregate gross unrealized appreciation for all investments on which there was
an excess market value over tax cost of $1,075 and aggregate gross unrealized
depreciation of all investments on which there was an excess tax cost over
market value of $1,951.
(b) Variable rate security.
(c) Securities purchased on a to-be-announced basis.
(d) Principal amount denoted in indicated currency:
C$--Canadian Dollar
(e) Either all or a portion of these securities has been segregated with the
custodian to cover futures contracts.
54 / PIMCO Advisors Funds See accompanying notes
<PAGE>
PIMCO Advisors
Money Market Fund
September 30, 1996
Objective:
Current income,
preservation of capital and liquidity.
Portfolio:
Short-term fixed-income instruments.
Total Net Assets:
$100 million
Number of Securities
in the Portfolio:
24
PIMCO Advisors Institutional Manager:
Columbus Circle
Investors
PERFORMANCE
<TABLE>
<CAPTION>
7-Day Yields
A Shares B Shares C Shares
<S> <C> <C> <C>
As of 9/30/96 4.9% 4.1% 5.0%
As of 3/31/96 5.2% 4.2% 5.2%
As of 9/30/95 5.3% 4.5% 5.4%
</TABLE>
PORTFOLIO COMPOSITION*
Short-Term Instruments *As a percentage of net assets
[BAR GRAPH APPEARS HERE]
Commercial Paper 100%
PORTFOLIO INSIGHTS
PIMCO Advisors Money Market Fund continued over the last six months to offer a
very competitive yield. As of September 30, 1996, the Fund had a seven-day yield
of 4.9%, 4.1% and 5.0% for its Class A, B and C shares, respectively. These
yields compare to an average money market fund 7-day yield of 4.8%, as measured
by the IBC Donaghue Money Market Fund Average.
When evaluating the Fund's yield relative to other funds and other investment
options, shareholders should remember that money market funds are neither
guaranteed nor insured by the U.S. government and there can be no assurances
that the Fund will maintain a stable net asset value of $1.00 per share.
Looking ahead, the Fund's manager is currently forecasting higher short-term
rates over the next 3-6 months, and plans to gradually extend the Fund's average
maturity to take advantage of these higher rates. As changes are made, the
manager will continue to maintain the Fund's emphasis on safety, liquidity and
quality.
PIMCO ADVISORS FUNDS FOOTNOTES
In the following notes and definitions are needed for a complete understanding
of the performance figures.
Results represent past performance, not future results. Investment return will
fluctuate and the value of an investor's shares will fluctuate and may be worth
more or less than original cost when redeemed. Total return measures
performance, assuming that all dividends and capital gains distributions were
reinvested. Average annual total returns for more than one year assume a steady
compound rate of return.
Total return, both with and without a sales charge, has been presented. For
shareholders who have not bought or sold shares during the period quoted, the
non-adjusted figures are probably more meaningful than the adjusted figures.
The adjusted figures for Class A shares include the effect of paying the
maximum initial sales charge of either 5.5% (for all stock funds), 4.75%
(Global Income, High Income, Total Return Income, Tax Exempt And U.S.
Government Funds), or 3% (Short-Intermediate Fund). The adjusted figures for
Class B shares include the effect of paying the 5% contingent deferred sales
charge (CDSC), which declines from 5% in the first year to 0% at the beginning
of the seventh year. the adjusted figures for Class C shares includes the
effect of paying the 1% CDSC which may apply to shares redeemed during the
first year of ownership.
+Yield is quoted in accordance with current Securities and Exchange Commission
regulations and is based on the one-month period ended September 30, 1996.
Yield quoted for the Tax Exempt Fund does not include the impact, if any, of
state taxes.
Line graphs have been included so an investor can compare a Fund's historical
performance to that of an appropriate broad based index. Each index reflects a
group of unmanaged- securities, and it is not possible to invest in an
unmanaged index. The Standard & Poor's 500 and Standard & Poor's Mid-Cap are
indices of stocks of companies with larger- and medium-sized capitalizations,
respectively. The Russell 2000 is an index of stocks of companies with small
capitalizations. The MSCI EAFE is an index of foreign stocks. The Philadelphia
Gold And Silver Index is an index of stocks of companies in the gold and silver
mining industry.
The Salomon Brothers Currency-Hedged World Government Bond Index is an index of
currency-hedged U.S. and foreign government bonds. The Lehman BB Intermediate
Bond Index is an index of intermediate-term bonds with a BB rating. The Lehman
Aggregate Bond Index is an index of a variety of bonds. The Lehman Municipal
Bond Index is an index of municipal securities rated Baa or better. The Lehman
Government Index is an index of various government securities and the Lehman
Government 1-3 year Index is an index of a variety of government securities
with 1-3 year maturities. Duration is a measurement of a Fund's price
sensitivity expressed in years.
Lipper averages are calculated by Lipper Analytical Services, INC., a
nationally recognized mutual fund performance evaluation firm. They are
performance averages of those funds that are tracked by Lipper, with the
investment objective noted. Lipper rankings are based on total returns, not
adjusted for sales charges.
The PIMCO Advisors stock funds can invest in foreign securities and the
International Fund invests primarily in these securities, which can involve
special risks due to foreign economic and political developments. The
Opportunity and Discovery Funds generally invest in small-cap stocks, which can
be riskier than the overall stock market. The Innovation and Precious Metals
Funds concentrate their portfolios thereby possibly making them more volatile
than a more diversified stock portfolio, and, therefore, should be considered
as only part of a diversified portfolio. The High Income, Total Return Income
and Short-Intermediate Funds can invest a portion of their assets in foreign
bonds, and the Global Income Fund invests primarily in these securities, which
entails special risks. These funds and the Tax Exempt Fund can invest in high
yield bonds, which entail greater risk, such as less liquidity and possibility
of default. The U.S. Government Fund is not guaranteed by the U.S. government.
1996 ANNUAL REPORT / 55
<PAGE>
PIMCO Advisors
Money Market Fund
PORTFOLIO OF INVESTMENTS September 30, 1996
<TABLE>
<CAPTION>
Principal Value
($ in thousands) Amount (Note 2)
<S> <C> <C>
Short-Term Notes--88.2%
Apreco, Inc., 5.300%, 10/15/96 $4,000 $3,992
Bass Financial, 5.320%, 11/12/96 4,400 4,373
Bear Stearns Co., 5.340%, 12/9/96 3,000 2,969
Bell Atlantic Network Funding,
5.430%, 10/8/96 2,500 2,497
Canadian Wheat Board, 5.420%, 10/8/96 5,000 4,995
Ciesco L.P., 5.370%, 12/3/96 3,200 3,170
Cooperative Association of Tractor Dealers, Inc.,
5.330%, 10/11/96 3,400 3,395
Corporate Asset Funding Co., Inc.,
5.280%, 10/3/96 3,500 3,499
CSR Finance Ltd., 5.320%, 11/13/96 4,400 4,372
CWS Credit, Inc., 5.330%, 10/24/96 3,500 3,488
Dean Witter Discover Corp.,
5.310%, 10/22/96 3,800 3,788
General Electric Capital Corp.,
5.350%, 10/07/96 4,050 4,046
Golden Managers Acceptance Corp.,
5.380%, 10/16/96 3,200 3,193
Government Development Bank of Puerto Rico,
5.350%, 10/7/96 2,600 2,598
Merrill Lynch & Co., 5.410%, 10/31/96 2,000 1,991
Pearson, Inc., 5.340% 10/18/96 4,000 3,990
Petrofina Delaware, Inc., 5.400%, 10/3/96 4,000 3,999
PHH Corp., 5.350%, 10/9/96 3,500 3,496
Preferred Receivables Funding Corp.,
5.370%, 10/17/96 4,900 4,888
Redland Finance, Inc., 5.280%, 10/4/96 3,500 3,498
Sheffield Receivables Corp.,
5.350%,10/16/96 3,200 3,193
SmithKline Beecham Corp.,
5.350%, 10/23/96 4,000 3,987
Student Loan Corp., 5.370%, 10/21/96 5,100 5,085
Supplier Managers Acceptance Corp.,
5.400%, 10/16/96 4,000 3,991
--------
Total Short-Term Notes
(Cost $88,493) 88,493
--------
Total Investments--88.2%
(Cost $88,493) 88,493
--------
Other Assets and Liabilities, Net--11.8% 11,824
--------
Net Assets--100.0% $100,317
--------
</TABLE>
56 / PIMCO Advisors Funds See accompanying notes
<PAGE>
[This Page Intentionally Left Blank]
1996 Annual Report/57
<PAGE>
Financial Highlights Selected Per Share Data for the Year or Period Ended:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Equity Income Fund Class A Class B
------------------------------------------------------ -------------------
<S> <C> <C> <C> <C> <C> <C> <C>
5/22/95-
9/30/96 9/30/95 9/30/94 9/30/93 9/30/92 9/30/96 9/30/95
------------------------------------------------------ -------------------
Net Asset Value, Beginning of Period $ 14.14 $ 12.50 $ 12.88 $ 10.57 $ 9.92 $ 14.13 $ 12.55
------------------------------------------------------ -------------------
Income From Investment Operations:
Net Investment Income 0.23 0.36 0.34 0.33 0.34 0.09 0.11
Net Gains or Losses on Securities
(both realized and unrealized) 2.79 1.61 (0.17) 2.30 0.71 2.83 1.55
------------------------------------------------------ -------------------
Total From Investment Operations 3.02 1.97 0.17 2.63 1.05 2.92 1.66
------------------------------------------------------ -------------------
Less Distributions:
Dividends (from net investment income) (0.23) (0.33) (0.33) (0.32) (0.40) (0.11) (0.08)
Dividends (in excess of net investment
income) (0.07) 0.00 0.00 0.00 0.00 (0.04) 0.00
Distributions (from capital gain) (0.78) 0.00 (0.22) 0.00 0.00 (0.78) 0.00
------------------------------------------------------ -------------------
Total Distributions (1.08) (0.33) (0.55) (0.32) (0.40) (0.93) (0.08)
------------------------------------------------------ -------------------
Net Asset Value, End of Period $ 16.08 $ 14.14 $ 12.50 $ 12.88 $ 10.57 $ 16.12 $ 14.13
====================================================== ===================
Total Return (without sales charge) 22.37% 16.1% 1.4% 25.3% 10.7% 21.54% 13.3%
Ratios / Supplemental Data
Net Assets, End of Period (in 000s) $ 20,631 $ 12,933 $ 14,942 $ 6,328 $ 2,593 $ 15,693 $ 1,760
Ratio of Expenses to Average Net
Assets 1.25% 1.3% 1.3% 1.3% 1.4% 2.00% 2.1%*
Ratio of Net Investment Income to
Average Net Assets 1.60% 2.9% 2.7% 2.9% 3.3% 0.85% 2.2%*
Portfolio Turnover Rate 203.07% 176.9% 174.9% 167.9% 149.0% 203.07% 176.9%
Average Commission Rate $ 0.06 $ 0.06
*Annualized
</TABLE>
<TABLE>
<CAPTION>
Equity Income Fund Class C
<S> <C> <C> <C> <C> <C>
9/30/96 9/30/95 9/30/94 9/30/93 9/30/92
---------------------------------------------------
Net Asset Value, Beginning of Period $ 14.09 $ 12.47 $ 12.85 $ 10.56 $ 9.91
---------------------------------------------------
Income From Investment Operations:
Net Investment Income 0.12 0.27 0.24 0.25 0.29
Net Gains or Losses on Securities
(both realized and unrealized) 2.78 1.59 (0.16) 2.29 0.68
---------------------------------------------------
Total From Investment Operations 2.90 1.86 0.08 2.54 0.97
---------------------------------------------------
Less Distributions:
Dividends (from net investment income) (0.13) (0.24) (0.24) (0.25) (0.32)
Dividends (in excess of net investment
income) (0.03) 0.00 0.00 0.00 0.00
Distributions (from capital gain) (0.78) 0.00 (0.22) 0.00 0.00
---------------------------------------------------
Total Distributions (0.94) (0.24) (0.46) (0.25) (0.32)
---------------------------------------------------
Net Asset Value, End of Period $ 16.05 $ 14.09 $ 12.47 $ 12.85 $ 10.56
===================================================
Total Return (without sales charge) 21.52% 15.2% 0.7% 24.4% 9.9%
Ratios / Supplemental Data
Net Assets, End of Period (in 000s) $230,058 $174,316 $178,892 $ 94,247 $45,101
Ratio of Expenses to Average Net
Assets 2.00% 2.1% 2.0% 2.1% 2.1%
Ratio of Net Investment Income to
Average Net Assets 0.85% 2.1% 2.0% 2.2% 2.7%
Portfolio Turnover Rate 203.07% 176.9% 174.9% 167.9% 149.0%
Average Commission Rate $0.06
</TABLE>
*Annualized
<TABLE>
<CAPTION>
Value Fund Class A Class B Class C
------------------ ------------------ ------------------
6/27/95- 6/27/95- 6/27/95-
9/30/96 9/30/95 9/30/96 9/30/95 9/30/96 9/30/95
------------------ ------------------ ------------------
Net Asset Value, Beginning of Period $10.68 $10.00 $10.68 $10.00 $10.68 $10.00
------------------ ------------------ ------------------
<S> <C>
Income From Investment Operations:
Net Investment Income 0.22 0.07 0.14 0.05 0.14 0.05
Net Gains or Losses on Securities
(both realized and unrealized) 1.61 0.68 1.60 0.68 1.60 0.68
Total From Investment Operations 1.83 0.75 1.74 0.73 1.74 0.73
------------------ ------------------ ------------------
Less Distributions:
Dividends (from net investment income) (0.23) (0.06) (0.15) (0.04) (0.15) (0.04)
Dividends (in excess of net investment
income) (0.01) 0.00 (0.01) 0.00 (0.01) 0.00
Return of capital distribution 0.00 (0.01) 0.00 (0.01) 0.00 (0.01)
------------------ ------------------ ------------------
Total Distributions (0.24) (0.07) (0.16) (0.05) (0.16) (0.05)
------------------ ------------------ ------------------
Net Asset Value, End of Period $12.27 $10.68 $12.26 $10.68 $12.26 $10.68
================== ================== ==================
Total Return (without sales charge) 17.21% 7.5% 16.36% 7.3% 16.37% 7.3%
Ratios / Supplemental Data
Net Assets, End of Period (in 000s) $9,148 $2,492 $16,455 $3,975 $ 36,441 $ 6,643
Ratio of Expenses to Average Net Assets 1.33% 1.3%* 2.08% 2.1%* 2.08% 2.0%*
Ratio of Net Investment Income to
Average Net Assets 2.20% 2.7%* 1.45% 1.9%* 1.45% 1.9%*
Portfolio Turnover Rate 32.21% 0.5% 32.21% 0.5% 32.21% 0.5%
Average Commission Rate $0.06 $0.06 $0.06
</TABLE>
*Annualized
58 / PIMCO Advisors Funds See accompanying notes
<PAGE>
Financial Highlights Selected Per Share Data for the Year or Period Ended:
================================================================================
<TABLE>
<CAPTION>
Growth Fund Class A Class B
------------------------------------------------------- -------------------
<S> <C> <C> <C> <C> <C> <C> <C>
5/23/95-
9/30/96 9/30/95 9/30/94 9/30/93 9/30/92 9/30/96 9/30/95
------------------------------------------------------- -------------------
Net Asset Value,
Beginning of Period $25.73 $22.01 $23.64 $20.76 $20.63 $24.94 $22.63
------------------------------------------------------- -------------------
Income From
Investment Operations:
Net Investment
Income (Loss) 0.06 0.12 0.12 0.09 0.14 (0.07) (0.03)
Net Gains or Losses
on Securities (both
realized and unrealized) 3.72 4.79 0.12 3.53 1.38 3.52 2.34
------------------------------------------------------- -------------------
Total From
Investment Operations 3.78 4.91 0.24 3.62 1.52 3.45 2.31
------------------------------------------------------- -------------------
Less Distributions:
Dividends (from net
investment income) 0.00 0.00 0.00 0.00 (0.14) 0.00 0.00
Distributions
(from capital gain) (2.93) (1.19) (1.87) (0.74) (1.25) (2.93) 0.00
------------------------------------------------------- -------------------
Total Distributions (2.93) (1.19) (1.87) (0.74) (1.39) (2.93) 0.00
------------------------------------------------------- -------------------
Net Asset Value,
End of Period $26.58 $25.73 $22.01 $23.64 $20.76 $25.46 $24.94
======================================================= ===================
Total Return
(without sales charge) 16.11% 23.7% 1.3% 17.7% 7.7% 15.22% 10.2%
Ratios / Supplemental Data
Net Assets,
End of Period (in 000s) $151,103 $134,819 $107,269 $97,509 $71,209 $37,256 $7,671
Ratio of Expenses to
Average Net Assets 1.11% 1.1% 1.1% 1.1% 1.1% 1.86% 1.9%*
Ratio of Net Investment
Income to
Average Net Assets 0.24% 0.5% 0.6% 0.4% 0.7% (0.51)% (0.4)%*
Portfolio Turnover Rate 104.07% 110.6% 115.3% 109.9% 92.3% 104.07% 110.6%
Average Commission Rate $0.07 $0.07
*Annualized
</TABLE>
<TABLE>
<CAPTION>
Growth Fund Class C
-----------------------------------------------------------
<S> <C> <C> <C> <C> <C>
9/30/96 9/30/95 9/30/94 9/30/93 9/30/92
-----------------------------------------------------------
Net Asset Value,
Beginning of Period $ 24.94 $21.52 $23.32 $20.64 $20.54
-----------------------------------------------------------
Income From
Investment Operations:
Net Investment
Income (Loss) (0.12) (0.04) (0.04) (0.07) (0.01)
Net Gains or Losses
on Securities (both
realized and unrealized) 3.57 4.65 0.11 3.49 1.37
-----------------------------------------------------------
Total From
Investment Operations 3.45 4.61 0.07 3.42 1.36
-----------------------------------------------------------
Less Distributions:
Dividends (from net
investment income) 0.00 0.00 0.00 0.00 (0.01)
Distributions
(from capital gain) (2.93) (1.19) (1.87) (0.74) (1.25)
-----------------------------------------------------------
Total Distributions (2.93) (1.19) (1.87) (0.74) (1.26)
-----------------------------------------------------------
Net Asset Value,
End of Period $25.46 $24.94 $21.52 $23.32 $20.64
===========================================================
Total Return
(without sales charge) 15.22% 22.8% 0.5% 16.9% 6.9%
Ratios / Supplemental Data
Net Assets,
End of Period (in 000s) $1,450,216 $1,290,152 $1,085,427 $1,077,490 $853,121
Ratio of Expenses to
Average Net Assets 1.86% 1.9% 1.9% 1.9% 1.9%
Ratio of Net Investment
Income to
Average Net Assets (0.51)% (0.2)% (0.2)% (0.3)% (0.1)%
Portfolio Turnover Rate 104.07% 110.6% 115.3% 109.9% 92.3%
Average Commission Rate $0.07
*Annualized
</TABLE>
<TABLE>
<CAPTION>
Target Fund Class A Class B
---------------------------------------- --------------------
<S> <C> <C> <C> <C> <C> <C>
12/17/92- 5/22/95-
9/30/96 9/30/95 9/30/94 9/30/93 9/30/96 9/30/95
---------------------------------------- --------------------
Net Asset Value, Beginning of Period $16.40 $13.13 $12.72 $10.00 $16.06 $13.93
---------------------------------------- --------------------
Income From Investment Operations:
Net Investment Loss (0.05) (0.02) (0.04) (0.02) (0.09) (0.05)
Net Gains or Losses on Securities
(both realized and unrealized) 2.54 3.45 0.57 2.74 2.39 2.18
---------------------------------------- --------------------
Total From Investment Operations 2.49 3.43 0.53 2.72 2.30 2.13
---------------------------------------- --------------------
Less Distributions:
Distributions (from capital gain) (1.78) (0.16) (0.12) 0.00 (1.78) 0.00
---------------------------------------- --------------------
Net Asset Value, End of Period $17.11 $16.40 $13.13 $12.72 $16.58 $16.06
======================================== ====================
Total Return (without sales charge) 16.50% 26.5% 4.2% 27.2% 15.58% 15.3%
Ratios / Supplemental Data
Net Assets, End of Period (in 000s) $156,027 $121,915 $90,527 $48,787 $49,851 $7,554
Ratio of Expenses to Average Net Assets 1.18% 1.2% 1.2% 1.3%* 1.93% 2.0%*
Ratio of Net Investment Income to
Average Net Assets (0.34)% (0.1)% (0.3)% (0.3)%* (1.09)% (0.9)%*
Portfolio Turnover Rate 140.51% 128.3% 103.5% 76.0% 140.51% 128.3%
Average Commission Rate $0.06 $0.06
</TABLE>
*Annualized
<TABLE>
<CAPTION>
Target Fund Class C
----------------------------------------------
<S> <C> <C> <C> <C>
12/17/92-
9/30/96 9/30/95 9/30/94 9/30/93
----------------------------------------------
Net Asset Value, Beginning of Period $16.05 $ 12.95 $ 12.65 $ 10.00
----------------------------------------------
Income From Investment Operations:
Net Investment Loss (0.16) (0.12) (0.14) (0.09)
Net Gains or Losses on Securities
(both realized and unrealized) 2.47 3.38 0.56 2.74
----------------------------------------------
Total From Investment Operations 2.31 3.26 0.42 2.65
----------------------------------------------
Less Distributions:
Distributions (from capital gain) (1.78) (0.16) (0.12) 0.00
----------------------------------------------
Net Asset Value, End of Period $16.58 $16.05 $12.95 $12.65
Total Return (without sales charge) 15.66% 25.6% 3.4% 26.5%
Ratios / Supplemental Data
Net Assets, End of Period (in 000s) $974,948 $780,355 $556,043 $298,238
Ratio of Expenses to Average Net Assets 1.93% 2.0% 2.0% 2.0%*
Ratio of Net Investment Income to
Average Net Assets (1.09)% (0.9)% (1.1)% (1.0)%*
Portfolio Turnover Rate 140.51% 128.3% 103.5% 76.0%
Average Commission Rate $0.06
</TABLE>
*Annualized
1996 Annual Report See accompanying notes/59
<PAGE>
Financial Highlights Selected Per Share Data for the Year or Period Ended:
- -------------------------------------------------------------------------
<TABLE>
<CAPTION>
Discovery Fund Class A Class B Class C
--------------------- --------------------- ---------------------
6/27/95- 6/27/95- 6/27/95-
9/30/96 9/30/95 9/30/96 9/30/95 9/30/96 9/30/95
--------------------- --------------------- ---------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $10.89 $10.00 $10.86 $10.00 $10.86 $10.00
--------------------- --------------------- ---------------------
Income From Investment Operations:
Net Investment Income (Loss) 0.03 0.01 (0.05) (0.01) (0.05) (0.01)
Net Gains or Losses on Securities
(both realized and unrealized) 0.99 0.88 0.98 0.87 0.98 0.87
--------------------- --------------------- ---------------------
Total From Investment Operations 1.02 0.89 0.93 0.86 0.93 0.86
--------------------- --------------------- ---------------------
Net Asset Value, End of Period $11.91 $10.89 $11.79 $10.86 $11.79 $10.86
===================== ===================== =====================
Total Return (without sales charge) 9.37% 8.9% 8.56% 8.6% 8.56% 8.6%
Ratios / Supplemental Data
Net Assets, End of Period (in 000s) $10,979 $7,658 $20,993 $10,832 $37,844 $20,260
Ratio of Expenses to Average Net Assets 1.40% 1.3%* 2.15% 2.0%* 2.15% 2.0%*
Ratio of Net Investment Income to
Average Net Assets 0.24% 0.2%* (0.51)% (0.5)%* (0.51)% (0.5)%*
Portfolio Turnover Rate 98.89% 34.9% 98.89% 34.9% 98.89% 34.9%
Average Commission Rate $0.06 $0.06 $0.06
</TABLE>
*Annualized
<TABLE>
<CAPTION>
Opportunity Fund Class A
----------------------------------------------------------------
9/30/96 9/30/95 9/30/94 9/30/93 9/30/92
----------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $39.08 $28.87 $33.43 $19.84 $17.95
----------------------------------------------------------------
Income From Investment Operations:
Net Investment Loss (0.11) (0.11) (0.17) (0.15) (0.04)
Net Gains or Losses on Securities
(both realized and unrealized) 6.12 11.19 (2.02) 14.00 3.61
---------------------------------------------------------------
Total From Investment Operations 6.01 11.08 (2.19) 13.85 3.57
---------------------------------------------------------------
Less Distributions:
Distributions (from capital gain) (7.73) (0.87) (2.26) (0.26) (1.68)
Return of capital distribution 0.00 0.00 (0.11) 0.00 0.00
---------------------------------------------------------------
Total Distributions (7.73) (0.87) (2.37) (0.26) (1.68)
---------------------------------------------------------------
Net Asset Value, End of Period $37.36 $39.08 $28.87 $33.43 $19.84
===============================================================
Total Return (without sales charge) 18.35% 39.7% (6.7)% 70.4% 21.6%
Ratios / Supplemental Data
Net Assets, End of Period (in 000s) $134,859 $120,830 $95,261 $106,666 $22,454
Ratio of Expenses to Average Net
Assets 1.13% 1.2% 1.1% 1.2% 1.3%
Ratio of Net Investment Income to
Average Net Assets (0.32)% (0.4)% (0.6)% (0.6)% (0.2)%
Portfolio Turnover Rate 91.23% 101.6% 78.4% 105.4% 93.8%
Average Commission Rate $0.07
</TABLE>
<TABLE>
<CAPTION>
Opportunity Fund Class C
----------------------------------------------------------------
9/30/96 9/30/95 9/30/94 9/30/93 9/30/92
----------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $37.64 $28.04 $32.77 $19.60 $17.87
----------------------------------------------------------------
Income From Investment Operations:
Net Investment Loss (0.35) (0.34) (0.38) (0.34) (0.18)
Net Gains or Losses on Securities
(both realized and unrealized) 5.82 10.81 (1.98) 13.77 3.59
----------------------------------------------------------------
Total From Investment Operations 5.47 10.47 (2.36) 13.43 3.41
----------------------------------------------------------------
Less Distributions:
Distributions (from capital gain) (7.73) (0.87) (2.26) (0.26) (1.68)
Return of capital distribution 0.00 0.00 (0.11) 0.00 0.00
----------------------------------------------------------------
Total Distributions (7.73) (0.87) (2.37) (0.26) (1.68)
----------------------------------------------------------------
Net Asset Value, End of Period $35.38 $37.64 $28.04 $32.77 $19.60
================================================================
Total Return (without sales charge) 17.47% 38.6% (7.4)% 69.1% 20.8%
Ratios / Supplemental Data
Net Assets, End of Period (in 000s) $800,250 $715,191 $553,460 $618,193 $179,081
Ratio of Expenses to Average Net
Assets 1.88% 1.9% 1.9% 2.0% 2.0%
Ratio of Net Investment Income to
Average Net Assets (1.07)% (1.1)% (1.4)% (1.3)% (1.0)%
Portfolio Turnover Rate 91.23% 101.6% 78.4% 105.4% 93.8%
Average Commission Rate $0.07
</TABLE>
60 / PIMCO Advisors Funds See accompanying notes
<PAGE>
Financial Highlights Selected Per Share Data for the Year or Period Ended:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Innovation Fund Class A Class B Class C
--------------------- --------------------- ---------------------
12/22/94- 5/22/95- 12/22/94-
9/30/96 9/30/95 9/30/96 9/30/95 9/30/96 9/30/95
--------------------- --------------------- ---------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $14.74 $10.00 $14.66 $11.81 $14.65 $10.00
--------------------- --------------------- ---------------------
Income From Investment Operations:
Net Investment Loss (0.07) (0.06)/(1)/ (0.11) (0.08) (0.15) (0.13)/(1)/
Net Gains or Losses on Securities
(both realized and unrealized) 2.94 4.80 2.84 2.93 2.89 4.78
--------------------- --------------------- ---------------------
Total From Investment Operations 2.87 4.74 2.73 2.85 2.74 4.65
--------------------- --------------------- ---------------------
Less Distributions:
Distributions (from capital gain) (0.35) 0.00 (0.35) 0.00 (0.35) 0.00
--------------------- --------------------- ---------------------
Net Asset Value, End of Period $17.26 $14.74 $17.04 $14.66 $17.04 $14.65
===================== ===================== =====================
Total Return (without sales charge) 19.86% 47.4% 18.99% 24.1% 19.08% 46.5%
Ratios / Supplemental Data
Net Assets, End of Period (in 000s) $50,067 $28,239 $33,778 $6,509 $137,752 $63,952
Ratio of Expenses to Average Net
Assets 1.31% 1.4%* 2.06% 2.3%* 2.06% 2.2%*
Ratio of Net Investment Income to
Average Net Assets (0.61)% (0.6)%* (1.36)% (1.7)%* (1.36)% (1.4)%*
Portfolio Turnover Rate 123.14% 86.1% 123.14% 86.1% 123.14% 86.1%
Average Commission Rate $0.06 $0.06 $0.06
</TABLE>
(1) Reflecting voluntary waiver of investment advisory fee of $4,666 (0.00 per
share) by the Manager as more fully described in Note 3(a) to the Financial
Statements.
*Annualized
<TABLE>
<CAPTION>
International Fund Class A Class B
--------------------------------------------------------- -----------------------
5/22/95-
9/30/96 9/30/95 9/30/94 9/30/93 9/30/92 9/30/96 9/30/95
--------------------------------------------------------- -----------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $12.19 $12.92 $12.17 $10.04 $10.54 $11.75 $11.30
--------------------------------------------------------- -----------------------
Income From Investment Operations:
Net Investment Income (Loss) 0.07 0.07 0.04 0.07 0.05 0.00/(1)/ 0.00
Net Gains or Losses on Securities
(both realized and unrealized) 0.77 (0.56) 0.94 2.80 (0.37) 0.73/(1)/ 0.45
--------------------------------------------------------- -----------------------
Total From Investment Operations 0.84 (0.49) 0.98 2.87 (0.32) 0.73 0.45
--------------------------------------------------------- -----------------------
Less Distributions:
Distributions (from capital gain) 0.00 (0.24) (0.23) (0.74) (0.18) 0.00 0.00
--------------------------------------------------------- -----------------------
Net Asset Value, End of Period $13.03 $12.19 $12.92 $12.17 $10.04 $12.48 $11.75
========================================================= =======================
Total Return (without sales charge) 6.89% (3.7)% 8.2% 30.4% (3.1)% 6.21% 4.0%
Ratios / Supplemental Data
Net Assets, End of Period (in 000s) $20,056 $17,951 $23,289 $11,992 $471 $5,893 $503
Ratio of Expenses to Average Net
Assets 1.41% 1.5% 1.4% 1.4% 1.9% 2.16% 2.3%*
Ratio of Net Investment Income to
Average Net Assets 0.49% 0.6% 0.3% 0.6% 0.5% (0.26)% (0.1)%*
Portfolio Turnover Rate 109.58% 169.8% 55.1% 67.6% 159.6% 109.58% 169.8%
Average Commission Rate $0.00 $0.00
</TABLE>
<TABLE>
<CAPTION>
International Fund Class C
----------------------------------------------------------
9/30/96 9/30/95 9/30/94 9/30/93 9/30/92
----------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $11.75 $12.56 $11.92 $9.92 $10.49
----------------------------------------------------------
Income From Investment Operations:
Net Investment Income (Loss) (0.05) (0.02) (0.06) (0.01) (0.06)
Net Gains or Losses on Securities
(both realized and unrealized) 0.77 (0.55) 0.93 2.75 (0.33)
----------------------------------------------------------
Total From Investment Operations 0.72 (0.57) 0.87 2.74 (0.39)
----------------------------------------------------------
Less Distributions:
Distributions (from capital gain) 0.00 (0.24) (0.23) (0.74) (0.18)
----------------------------------------------------------
Net Asset Value, End of Period $12.47 $11.75 $12.56 $11.92 $9.92
==========================================================
Total Return (without sales charge) 6.13% (4.5)% 7.4% 29.4% (3.8)%
Ratios / Supplemental Data
Net Assets, End of Period (in 000s) $203,544 $215,349 $294,492 $147,194 $28,299
Ratio of Expenses to Average Net
Assets 2.16% 2.2% 2.2% 2.2% 2.6%
Ratio of Net Investment Income to
Average Net Assets (0.26)% (0.2)% (0.5)% (0.1)% (0.6)%
Portfolio Turnover Rate 109.58% 169.8% 55.1% 67.6% 159.6%
Average Commission Rate $0.00
</TABLE>
(1) Per share amounts based on average number of shares outstanding during the
period 10/1/95-9/30/96.
*Annualized
1996 Annual Report See accompanying notes/61
<PAGE>
Financial Highlights Selected Per Share Data for the Year or Period Ended:
================================================================================
<TABLE>
<CAPTION>
Precious Metals Fund Class A Class B
----------------------------------------------- -----------------
6/15/95-
9/30/96 9/30/95 9/30/94 9/30/93 9/30/92 9/30/96 9/30/95
----------------------------------------------- -----------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $12.33 $14.14 $10.32 $7.54 $7.51 $11.90 $11.61
----------------------------------------------- -----------------
Income From Investment Operations:
Net Investment Income (Loss) 0.03 0.07 0.08 0.06 (0.01) (0.03) (0.01)
Net Gains or Losses on Securities
(both realized and unrealized) (0.24) (1.88) 3.74 2.72 0.04 (0.25) 0.30
----------------------------------------------- -----------------
Total From Investment Operations (0.21) (1.81) 3.82 2.78 0.03 (0.28) 0.29
----------------------------------------------- -----------------
Net Asset Value, End of Period $12.12 $12.33 $14.14 $10.32 $7.54 $11.62 $11.90
=============================================== =================
Total Return (without sales charge) (1.70)% (12.8)% 37.0% 36.9% 0.4% (2.35)% 2.5%
Ratios/Supplemental Data
Net Assets, End of Period (in 000s) $6,245 $7,670 $11,229 $3,425 $668 $2,218 $251
Ratio of Expenses to Average Net
Assets 1.32% 1.4% 1.3% 1.4% 1.9%* 2.07% 2.2%*
Ratio of Net Investment Income
(Loss) to Average Net Assets 0.19% 0.6% 0.6% 0.6% (0.1)%* (0.56)% (0.2)%*
Portfolio Turnover Rate 35.27% 8.7% 11.0% 10.0% 29.6% 35.27% 8.7%
Average Commission Rate $0.02 $0.02
*Annualized
<CAPTION>
Precious Metals Fund Class C
-----------------------------------------------
9/30/96 9/30/95 9/30/94 9/30/93 9/30/92
-----------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $11.90 $13.75 $10.11 $7.44 $7.46
-----------------------------------------------
Income From Investment Operations:
Net Investment Income (Loss) (0.07) (0.02) (0.02) (0.02) (0.06)
Net Gains or Losses on Securities
(both realized and unrealized) (0.21) (1.83) 3.66 2.69 0.04
-----------------------------------------------
Total From Investment Operations (0.28) (1.85) 3.64 2.67 (0.02)
-----------------------------------------------
Net Asset Value, End of Period $11.62 $11.90 $13.75 $10.11 $7.44
===============================================
Total Return (without sales charge) (2.35)% (13.5)% 36.0% 35.9% (0.3)%
Ratios/Supplemental Data
Net Assets, End of Period (in 000s) $37,609 $42,341 $62,825 $23,884 $6,633
Ratio of Expenses to Average Net
Assets 2.07% 2.2% 2.1% 2.2% 2.6%
Ratio of Net Investment Income
(Loss) to Average Net Assets (0.56)% (0.2)% (0.2)% (0.2)% (0.8)%
Portfolio Turnover Rate 35.27% 8.7% 11.0% 10.0% 29.6%
Average Commission Rate $0.02
*Annualized
</TABLE>
<TABLE>
<CAPTION>
Global Income Fund Class A Class B Class C
-------- -------- --------
9/30/96 9/30/96 9/30/96
-------- -------- --------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period $10.00 $10.00 $10.00
-------- -------- --------
Income From Investment Operations:
Net Investment Income 0.32/(1)/ 0.30/(1)/ 0.30/(1)/
Net Gains or Losses on Securities
(both realized and unrealized) 0.95 0.92 0.92
-------- -------- --------
Total From Investment Operations 1.27 1.22 1.22
-------- -------- --------
Less Distributions:
Dividends (from net investment income) (0.31) (0.26) (0.26)
-------- -------- --------
Net Asset Value, End of Period $10.96 $10.96 $10.96
======== ======== ========
Total Return (without sales charge) 15.01% 14.54% 14.54%
Ratios/Supplemental Data
Net Assets, End of Period (in 000s) $7,360 $3,240 $3,459
Ratio of Expenses to Average Net
Assets:
With Waiver 1.27% 2.49% 2.49%
Without Waiver 1.57% 2.49% 2.49%
Ratio of Net Investment Income to
Average Net Assets:
With Waiver 4.88% 4.09% 4.09%
Without Waiver 4.58% 4.09% 4.09%
Portfolio Turnover Rate 1,245.62% 1,245.62% 1,245.62%
</TABLE>
(1) Reflecting voluntary waiver of investment advisory fee of $12,041 (0.01 per
share) by the Manager as more fully described in Note 3(a) to the Financial
Statements.
*Annualized
62/PIMCO Advisors Funds See accompanying notes
<PAGE>
Financial Highlights Selected Per Share Data for the Year or Period Ended:
================================================================================
<TABLE>
<CAPTION>
High Income Fund Class A Class B
--------------------------------------------------- ------------------
5/22/95-
9/30/96 9/30/95 9/30/94 9/30/93 9/30/92 9/30/96 9/30/95
--------------------------------------------------- ------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $7.94 $7.56 $8.78 $8.68 $8.36 $7.92 $7.75
--------------------------------------------------- ------------------
Income From
Investment Operations:
Net Investment Income 0.68 0.65 0.68 0.75 0.79 0.62 0.22
Net Gains or
Losses on Securities
(both realized
and unrealized) 0.17 0.39 (1.23) 0.10 0.29 0.18 0.16
--------------------------------------------------- ------------------
Total From
Investment Operations 0.85 1.04 (0.55) 0.85 1.08 0.80 0.38
--------------------------------------------------- ------------------
Less Distributions:
Dividends (from net
investment income) (0.69) (0.66) (0.67) (0.75) (0.76) (0.63) (0.21)
--------------------------------------------------- ------------------
Net Asset Value,
End of Period $8.10 $7.94 $7.56 $8.78 $8.68 $8.09 $7.92
=================================================== ==================
Total Return
(without sales charge) 11.16% 14.5% (6.5)% 10.3% 13.5% 10.48% 4.9%
Ratios/Supplemental Data
Net Assets, End
of Period (in 000s) $25,350 $7,791 $4,336 $5,675 $4,257 $38,928 $4,552
Ratio of Expenses to
Average Net Assets 1.09% 1.1% 1.1% 1.2% 1.2% 1.84% 1.9%*
Ratio of Net
Investment Income to
Average Net Assets 8.61% 8.5% 8.4% 8.7% 9.3% 7.86% 7.8%*
Portfolio Turnover Rate 51.87% 162.5% 133.9% 124.1% 162.8% 51.87% 162.5%
*Annualized
<CAPTION>
High Income Fund Class C
---------------------------------------------------
9/30/96 9/30/95 9/30/94 9/30/93 9/30/92
---------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $7.88 $7.51 $8.75 $8.65 $8.36
---------------------------------------------------
Income From
Investment Operations:
Net Investment Income 0.62 0.58 0.62 0.68 0.74
Net Gains or
Losses on Securities
(both realized
and unrealized) 0.16 0.39 (1.26) 0.10 0.25
---------------------------------------------------
Total From
Investment Operations 0.78 0.97 (0.64) 0.78 0.99
---------------------------------------------------
Less Distributions:
Dividends (from net
investment income) (0.63) (0.60) (0.60) (0.68) (0.70)
---------------------------------------------------
Net Asset Value,
End of Period $8.03 $7.88 $7.51 $8.75 $8.65
===================================================
Total Return
(without sales charge) 10.27% 13.5% (7.5)% 9.5% 12.4%
Ratios/Supplemental Data
Net Assets, End
of Period (in 000s) $194,045 $157,507 $179,274 $255,266 $242,160
Ratio of Expenses to
Average Net Assets 1.84% 1.9% 1.9% 2.0% 1.9%
Ratio of Net
Investment Income to
Average Net Assets 7.86% 7.7% 7.7% 8.0% 8.7%
Portfolio Turnover Rate 51.87% 162.5% 133.9% 124.1% 162.8%
*Annualized
</TABLE>
<TABLE>
<CAPTION>
Total Return Income Fund Class A Class B Class C
------------------ ----------------- ------------------
12/22/94- 5/22/95- 12/22/94-
9/30/96 9/30/95 9/30/96 9/30/95 9/30/96 9/30/95
------------------ ----------------- ------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $10.70 $10.00 $10.73 $10.48 $10.70 $10.00
------------------ ----------------- ------------------
Income From Investment Operations:
Net Investment Income 0.52 0.41 0.45 0.16 0.45 0.35
Net Gains or Losses on Securities
(both realized and unrealized) (0.03) 0.68 (0.03) 0.24 (0.03) 0.69
------------------ ----------------- ------------------
Total From Investment Operations 0.49 1.09 0.42 0.40 0.42 1.04
------------------ ----------------- ------------------
Less Distributions:
Dividends (from net investment income) (0.52) (0.39) (0.45) (0.15) (0.45) (0.34)
Dividends (in excess of net investment
income) (0.02) 0.00 (0.02) 0.00 (0.02) 0.00
Distributions (from capital gain) (0.30) 0.00 (0.30) 0.00 (0.30) 0.00
------------------ ----------------- ------------------
Total Distributions (0.84) (0.39) (0.77) (0.15) (0.77) (0.34)
------------------ ----------------- ------------------
Net Asset Value, End of Period $10.35 $10.70 $10.38 $10.73 $10.35 $10.70
================== ================= ==================
Total Return (without sales charge) 4.76% 11.1% 3.98% 3.8% 3.99% 10.5%
Ratios/Supplemental Data
Net Assets, End of Period (in 000s) $67,698 $37,714 $51,070 $8,805 $102,303 $45,631
Ratio of Expenses to Average Net
Assets 1.08% 1.2%* 1.83% 2.0%* 1.83% 2.0%*
Ratio of Net Investment Income to
Average Net Assets 5.00% 5.1%* 4.25% 4.2%* 4.25% 4.3%*
Portfolio Turnover Rate 567.11% 98.0% 567.11% 98.0% 567.11% 98.0%
*Annualized
</TABLE>
1996 Annual Report See accompanying notes/63
<PAGE>
Financial Highlights Selected Per Share Data for the Year or Period Ended:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Tax Exempt Fund Class A Class B
------------------------------------------------------ -----------
9/30/96 9/30/95 9/30/94 9/30/93 9/30/92 9/30/96
------------------------------------------------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning
of Period $11.83 $11.21 $12.74 $11.94 $11.53 $11.84
------------------------------------------------------ -----------
Income From Investment
Operations:
Net Investment Income 0.62 0.57 0.56 0.61 0.65 0.53
Net Gains or Losses on
Securities
(both realized and
unrealized) (0.01) 0.63 (1.31) 1.02 0.42 0.00
Total From Investment
Operations 0.61 1.20 (0.75) 1.63 1.07 0.53
Less Distributions:
Dividends (from net
investment income) (0.52) (0.58) (0.58) (0.64) (0.66) (0.44)
Dividends (in excess of
net investment
income) (0.05) 0.00 0.00 0.00 0.00 (0.04)
Distributions (from
capital gain) 0.00 0.00 (0.20) (0.19) 0.00 0.00
------------------------------------------------------ ----------
Total Distributions (0.57) (0.58) (0.78) (0.83) (0.66) (0.48)
------------------------------------------------------ ----------
Net Asset Value, End of
Period $11.87 $11.83 $11.21 $12.74 $11.94 $11.89
====================================================== ==========
Total Return (without
sales charge) 5.22% 11.0% (6.1)% 14.2% 9.5% 4.54%
Ratios / Supplemental Data
Net Assets, End of Period
(in 000s) $5,864 $2,701 $2,726 $2,852 $2,295 $2,258
Ratio of Expenses to
Average Net
Assets 1.07% 1.1% 1.1% 1.1% 1.1% 1.82%
Ratio of Net Investment
Income to
Average Net Assets 5.12% 5.0% 4.7% 5.0% 5.6% 4.37%
Portfolio Turnover Rate 49.33% 35.0% 63.2% 55.9% 107.4% 49.33%
*Annualized
<CAPTION>
Tax Exempt Fund Class B Class C
-------- ----------------------------------------------------
5/30/95-
9/30/95 9/30/96 9/30/95 9/30/94 9/30/93 9/30/92
--------- ----------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning
of Period $11.90 $11.82 $11.21 $12.73 $11.94 $11.53
--------- ----------------------------------------------------
Income From Investment
Operations:
Net Investment Income 0.16 0.52 0.48 0.47 0.52 0.58
Net Gains or Losses on
Securities
(both realized and
unrealized) (0.07) 0.00 0.62 (1.30) 1.01 0.41
--------- ----------------------------------------------------
Total From Investment
Operations 0.09 0.52 1.10 (0.83) 1.53 0.99
--------- ----------------------------------------------------
Less Distributions:
Dividends (from net
investment income) (0.15) (0.44) (0.49) (0.49) (0.55) (0.58)
Dividends (in excess of
net investment
income) 0.00 (0.04) 0.00 0.00 0.00 0.00
Distributions (from
capital gain) 0.00 0.00 0.00 (0.20) (0.19) 0.00
---------- ----------------------------------------------------
Total Distributions (0.15) (0.48) (0.49) (0.69) (0.74) (0.58)
---------- ----------------------------------------------------
Net Asset Value, End of
Period $11.84 $11.86 $11.82 $11.21 $12.73 $11.94
========== ====================================================
Total Return (without
sales charge) 0.8% 4.46% 10.1% (6.7)% 13.3% 8.8%
Ratios / Supplemental Data
Net Assets, End of Period
(in 000s) $288 $47,082 $54,224 $68,214 $81,475 $52,113
Ratio of Expenses to
Average Net
Assets 1.9%* 1.82% 1.8% 1.8% 1.8% 1.8%
Ratio of Net Investment
Income to
Average Net Assets 4.0%* 4.37% 4.3% 4.0% 4.2% 4.9%
Portfolio Turnover Rate 35.0% 49.33% 35.0% 63.2% 55.9% 107.4%
*Annualized
<CAPTION>
U.S. GOVERNMENT FUND
Class A Class B
------------------------------------------------------ -------------------
<S> <C> <C> <C> <C> <C> <C> <C>
6/2/95-
9/30/96 9/30/95 9/30/94 9/30/93 9/30/92 9/30/96 9/30/95
------------------------------------------------------ -------------------
Net Asset Value, Beginning
of Period $9.16 $8.68 $9.71 $9.61 $9.46 $9.15 $9.17
------------------------------------------------------ -------------------
Income From Investment Operations:
Net Investment Income 0.55 0.58 0.60 0.65 0.75 0.50 0.16
Net Gains or Losses on
Securities
(both realized and
unrealized) (0.20) 0.47 (1.03) 0.10 0.19 (0.21) (0.02)
------------------------------------------------------ -------------------
Total From Investment
Operations 0.35 1.05 (0.43) 0.75 0.94 0.29 0.14
------------------------------------------------------ -------------------
Less Distributions:
Dividends (from net
investment income) (0.56) (0.57) (0.60) (0.65) (0.79) (0.49) (0.16)
Dividends (in excess of
net investment
income) (0.01) 0.00 0.00 0.00 0.00 (0.01) 0.00
------------------------------------------------------ -------------------
Total Distributions (0.57) (0.57) (0.60) (0.65) (0.79) (0.50) (0.16)
------------------------------------------------------ -------------------
Net Asset Value, End of
Period $8.94 $9.16 $8.68 $9.71 $9.61 $8.94 $9.15
====================================================== ===================
Total Return (without
sales charge) 3.92% 12.6% (4.6)% 8.2% 10.3% 3.24% 1.6%
Ratios / Supplemental Data
Net Assets, End of Period
(in 000s) $ 14,173 $ 16,248 $ 15,250 $ 19,939 $ 15,224 $ 5,795 $ 1,671
Ratio of Expenses to
Average Net
Assets 1.07% 1.0% 1.0% 1.0% 1.0% 1.82% 1.8%*
Ratio of Net Investment
Income to
Average Net Assets 6.10% 6.5% 6.5% 6.8% 7.8% 5.35% 5.6%*
Portfolio Turnover Rate 192.62% 115.0% 121.0% 199.7% 156.4% 192.62% 115.0%
*Annualized
<CAPTION>
U.S. Government Fund Class C
-------------------------------------------------------
9/30/96 9/30/95 9/30/94 9/30/93 9/30/92
-------------------------------------------------------
<C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $9.13 $8.65 $9.68 $9.58 $9.45
-------------------------------------------------------
Income From Investment Operations:
Net Investment Income 0.48 0.51 0.53 0.58 0.69
Net Gains or Losses on
Securities
(both realized and
unrealized) (0.20) 0.48 (1.03) 0.10 0.15
-------------------------------------------------------
Total From Investment
Operations 0.28 0.99 (0.50) 0.68 0.84
-------------------------------------------------------
Less Distributions:
Dividends (from net
investment income) (0.49) (0.51) (0.53) (0.58) (0.71)
Dividends (in excess of
net investment
income) (0.01) 0.00 0.00 0.00 0.00
-------------------------------------------------------
Total Distributions (0.50) (0.51) (0.53) (0.58) (0.71)
-------------------------------------------------------
Net Asset Value, End of
Period $8.91 $9.13 $8.65 $9.68 $9.58
=======================================================
Total Return (without
sales charge) 3.14% 11.8% (5.3)% 7.4% 9.2%
Ratios / Supplemental Data
Net Assets, End of Period
(in 000s) $239,266 $287,086 $365,044 $533,288 $531,310
Ratio of Expenses to
Average Net
Assets 1.82% 1.8% 1.7% 1.7% 1.8%
Ratio of Net Investment
Income to
Average Net Assets 5.35% 5.8% 5.8% 6.1% 7.3%
Portfolio Turnover Rate 192.62% 115.0% 121.0% 199.7% 156.4%
</TABLE>
* ANNUALIZED
64 / PIMCO Advisors Funds See accompanying notes
<PAGE>
Financial Highlights Selected Per Share Data for the Year or Period Ended:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Short-Intermediate Fund Class A Class B
------------------------------------------------------- ---------------------
5/22/95-
9/30/96 9/30/95 9/30/94 9/30/93 9/30/92 9/30/96 9/30/95
------------------------------------------------------- ---------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $9.62 $9.37 $9.81 $9.96 $10.03 $9.62 $9.49
------------------------------------------------------- ---------------------
Income From Investment Operations:
Net Investment Income 0.51 0.59 0.47 0.48 0.60(/1/) 0.48 0.18
Net Gains or Losses on Securities
(both realized and unrealized) 0.17 0.25 (0.43) (0.15) (0.04) 0.14 0.13
------------------------------------------------------- ---------------------
Total From Investment Operations 0.68 0.84 0.04 0.33 0.56 0.62 0.31
------------------------------------------------------- ---------------------
Less Distributions:
Dividends (from net investment income) (0.53) (0.59) (0.48) (0.48) (0.62) (0.46) (0.18)
Distributions (from capital gain) 0.00 0.00 0.00 0.00 (0.01) 0.00 0.00
------------------------------------------------------- ---------------------
Total Distributions (0.53) (0.59) (0.48) (0.48) (0.63) (0.46) (0.18)
------------------------------------------------------- ---------------------
Net Asset Value, End of Period $9.77 $9.62 $9.37 $9.81 $9.96 $9.78 $9.62
======================================================= =====================
Total Return (without sales charge) 7.26% 9.3% 0.4% 3.4% 5.8% 6.56% 3.3%
Ratios / Supplemental Data
Net Assets, End of Period (in 000s) $50,614 $6,343 $4,913 $7,169 $13,535 $3,712 $941
Ratio of Expenses to Average Net
Assets 1.00% 1.0% 0.9% 1.0% 0.9% 1.75% 1.7%*
Ratio of Net Investment Income to
Average Net Assets 5.71% 6.3% 4.9% 4.9% 6.0% 4.96% 5.4%*
Portfolio Turnover Rate 175.35% 173.4% 86.2% 112.7% 132.8% 175.35% 173.4%
<CAPTION>
Class C
---------------------------------------------------
9/30/96 9/30/95 9/30/94 9/30/93 9/30/92
---------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $9.60 $9.37 $9.82 $9.97 $10.03
---------------------------------------------------
Income From Investment Operations:
Net Investment Income 0.49 0.54 0.42 0.44 0.55(/1/)
Net Gains or Losses on Securities
(both realized and unrealized) 0.13 0.23 (0.44) (0.16) (0.03)
---------------------------------------------------
Total From Investment Operations 0.62 0.77 (0.02) 0.28 0.52
---------------------------------------------------
Less Distributions:
Dividends (from net investment income) (0.48) (0.54) (0.43) (0.43) (0.57)
Distributions (from capital gain) 0.00 0.00 0.00 0.00 (0.01)
---------------------------------------------------
Total Distributions (0.48) (0.54) (0.43) (0.43) (0.58)
---------------------------------------------------
Net Asset Value, End of Period $9.74 $9.60 $9.37 $9.82 $9.97
===================================================
Total Return (without sales charge) 6.62% 8.5% (0.2)% 2.9% 5.4%
Ratios / Supplemental Data
Net Assets, End of Period (in 000s) $67,520 $65,608 $88,909 $123,857 $135,655
Ratio of Expenses to Average Net
Assets 1.50% 1.5% 1.4% 1.5% 1.3%
Ratio of Net Investment Income to
Average Net Assets 5.21% 5.7% 4.4% 4.4% 5.5%
Portfolio Turnover Rate 175.35% 173.4% 86.2% 112.7% 132.8%
</TABLE>
(1)Reflecting voluntary waiver of investment advisory fee of $138,110 (0.02 per
share) by the Manager as more fully described in Note 3(a) to the Financial
Statements.
*Annualized
<TABLE>
<CAPTION>
Money Market Fund Class A Class B
------------------------------------------------------------ ----------------------
7/17/95-
9/30/96 9/30/95 9/30/94 9/30/93 9/30/92 9/30/96 9/30/95
------------------------------------------------------------ -----------------------
<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 0.05(/5/) 0.05(/4/) 0.03(/3/) 0.03(/2/) 0.03(/1/) 0.04(/5/) 0.01
Less Distributions:
Dividends (from net investment income) (0.05) (0.05) (0.03) (0.03) (0.03) (0.04) (0.01)
------------------------------------------------------------ ----------------------
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) 5.27% 5.4% 3.0% 2.5% 3.2% 4.36% 0.7%
Ratios / Supplemental Data
Net Assets, End of Period (in 000s) $23,399 $13,553 $12,933 $3,729 $655 $1,224 $21
Ratio of Expenses to Average Net
Assets:
With Waiver 0.45% 0.5% 0.8% 0.8% 0.9% 1.35% 1.5%*
Without Waiver 0.85% 1.75%
Ratio of Net Investment Income to
Average Net Assets:
With Waiver 5.13% 5.4% 3.4% 2.5% 3.2% 4.23% 4.8%*
Without Waiver 4.73% 3.83%
<CAPTION>
Money Market Fund Class C
----------------------------------------------------------
9/30/96 9/30/95 9/30/94 9/30/93 9/30/92
----------------------------------------------------------
<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 0.05(5) 0.05(4) 0.03(3) 0.03(2) 0.03(1)
Less Distributions:
Dividends (from net investment income) (0.05) (0.05) (0.03) (0.03) (0.03)
----------------------------------------------------------
Net Asset Value, End of Period $1.00 $1.00 $1.00 $1.00 $1.00
==========================================================
Total Return (without sales charge) 5.28% 5.4% 3.0% 2.5% 3.4%
Ratios / Supplemental Data
Net Assets, End of Period (in 000s) $75,694 $69,364 $84,064 $44,657 $50,761
Ratio of Expenses to Average Net
Assets:
With Waiver 0.45% 0.5% 0.8% 0.8% 1.0%
Without Waiver 0.85%
Ratio of Net Investment Income to
Average Net Assets:
With Waiver 5.13% 5.4% 3.2% 2.5% 3.4%
Without Waiver 4.73%
</TABLE>
(1) Reflecting voluntary waiver of investment advisory fee of $31,042 (0.00 per
share) by the Manager as more fully described in Note 3(a) to the Financial
Statements.
(2) Reflecting voluntary waiver of investment advisory fee of $160,471 (0.00 per
share) by the Manager as more fully described in Note 3(a) to the Financial
Statements.
(3) Reflecting voluntary waiver of investment advisory fee of $142,336 (0.00 per
share) by the Manager as more fully described in Note 3(a) to the Financial
Statements.
(4) Reflecting voluntary waiver of investment advisory fee of $23,048 (0.00 per
share) by the Manager as more fully described in Note 3(a) to the Financial
Statements.
(5) Reflecting voluntary waiver of investment advisory fee of $356,930 (0.00 per
share) by the Manager as more fully described in Note 3(a) to the Financial
Statements.
*Annualized
1996 Annual Report See accompanying notes/65
<PAGE>
Statement of Assets and Liabilities
<TABLE>
<CAPTION>
====================================================================================================================================
Amounts in thousands, except per share amounts Equity Income Value Growth Target
Fund Fund Fund Fund
-------------- -------- ---------- ----------
<S> <C> <C> <C> <C>
Assets
Securities owned, at value (Note 2a) $266,916 $59,375 $1,666,094 $1,204,809
Foreign currency holdings, at value (Note 2b) 0 0 0 0
Forward foreign currency contracts purchased, at value (Notes 2e and 7) 0 0 0 0
Cash 2,182 3,010 0 0
Dividends receivable 321 155 547 150
Interest receivable 302 11 0 0
Variation margin receivable 0 0 0 0
Receivable for investments and foreign currencies sold 6,212 0 4,112 1,495
Receivable for Fund shares sold 1,031 387 1,479 2,131
Receivable for forward foreign currency contracts sold (Notes 2e and 7) 0 0 0 0
Other assets 5 38 57 35
--------------------------------------------------------
Total assets 276,969 62,976 1,672,289 1,208,620
--------------------------------------------------------
Liabilities
Payable for investments and foreign currencies purchased 9,661 720 23,408 19,938
Securities sold forward, at value (Note 2m) 0 0 0 0
Variation margin payable 0 0 0 0
Payable for forward foreign currency contracts purchased (Notes 2e and 7) 0 0 0 0
Payable for Fund shares redeemed 371 89 6,530 4,926
Payable to custodian 0 0 431 769
Dividends payable 6 0 11 7
Outstanding written options, at value (Notes 2c and 6) 0 0 210 0
Forward foreign currency contracts sold, at value (Notes 2e and 7) 0 0 0 0
Accrued expenses:
Investment advisory fee 155 34 854 660
Distribution fee 145 32 885 605
Servicing fee 52 12 325 232
Other 196 45 1,060 657
--------------------------------------------------------
Total liabilities 10,586 932 33,714 27,794
--------------------------------------------------------
Net Assets $266,383 $62,044 $1,638,575 $1,180,826
========================================================
Composition of Net Assets
Capital $204,649 $56,811 $1,192,644 $ 876,385
Undistributed (overdistributed) net investment income 21,658 1,121 5,470 0
Accumulated undistributed net realized gain (loss) 12,473 155 188,061 107,360
Net unrealized appreciation (depreciation) 27,603 3,957 252,400 197,081
--------------------------------------------------------
Total net assets $266,383 $62,044 $1,638,575 $1,180,826
========================================================
Calculation of Maximum Offering Price
Class A Shares/Net Assets $ 20,632 $ 9,148 $ 151,103 $ 156,027
Shares Outstanding 1,283 746 5,686 9,120
Net asset value and redemption price per share ($/share) $ 16.08 $ 12.27 $ 26.58 $ 17.11
Sales charge 0.94 0.71 1.55 1.00
--------------------------------------------------------
Maximum offering price $ 17.02 $ 12.98 $ 28.13 $ 18.11
========================================================
Class B Shares/Net Assets $ 15,693 $16,455 $ 37,256 $ 49,851
Shares Outstanding 974 1,342 1,463 3,007
Net asset value and offering price per share ($/share) $ 16.12 $ 12.26 $ 25.46 $ 16.58
--------------------------------------------------------
Redemption price per share * * * *
========================================================
Class C Shares/Net Assets $230,058 $36,441 $1,450,216 $ 974,948
Shares Outstanding 14,336 2,973 56,968 58,811
Net asset value and offering price per share ($/share) $ 16.05 $ 12.26 $ 25.46 $ 16.58
--------------------------------------------------------
Redemption price per share * * * *
========================================================
Cost of Investments Owned $239,313 $55,418 $1,413,666 $1,007,728
Proceeds from Investments Sold Forward 0 0 0 0
Cost of Foreign Currency Held 0 0 0 0
Cost of Foreign Currency Contracts Held 0 0 0 0
Cost of Foreign Currency Contracts Sold 0 0 0 0
Premiums Received on Written Options 0 0 181 0
Sales charge--% of offering price (Class A Shares) 5.50% 5.50% 5.50% 5.50%
*Varies by length of time shares are held (Note 3d)
<CAPTION>
- ----------------------------------------------------------------------------------------------------
Discovery Opportunity
Fund Fund
-------------- -----------
<S> <C> <C>
Assets
Securities owned, at value (Note 2a) $61,067 $938,361
Foreign currency holdings, at value (Note 2b) 0 0
Forward foreign currency contracts purchased, at value (Notes 2e and 7) 0 0
Cash 7,525 0
Dividends receivable 37 36
Interest receivable 25 0
Variation margin receivable 0 0
Receivable for investments and foreign currencies sold 2,801 11,831
Receivable for Fund shares sold 166 284
Receivable for forward foreign currency contracts sold (Notes 2e and 7) 0 0
Other assets 38 23
----------------------------
Total assets 71,659 950,535
----------------------------
Liabilities
Payable for investments and foreign currencies purchased 1,425 4,767
Securities sold forward, at value (Note 2m) 0 0
Variation margin payable 0 0
Payable for forward foreign currency contracts purchased (Notes 2e and 7) 0 0
Payable for Fund shares redeemed 272 7,249
Payable to custodian 0 265
Dividends payable 0 6
Outstanding written options, at value (Notes 2c and 6) 0 1,432
Forward foreign currency contracts sold, at value (Notes 2e and 7) 0 0
Accrued expenses:
Investment advisory fee 41 530
Distribution fee 35 479
Servicing fee 14 187
Other 56 510
----------------------------
Total liabilities 1,843 15,425
----------------------------
Net Assets $69,816 $935,110
============================
Composition of Net Assets
Capital $62,448 $557,912
Undistributed (overdistributed) net investment income 0 0
Accumulated undistributed net realized gain (loss) (5,020) 126,974
Net unrealized appreciation (depreciation) 12,388 250,224
----------------------------
Total net assets $69,816 $935,110
============================
Calculation of Maximum Offering Price
Class A Shares/Net Assets $10,979 $134,860
Shares Outstanding 922 3,610
Net asset value and redemption price per share ($/share) $ 11.91 $ 37.36
Sales charge 0.69 2.17
----------------------------
Maximum offering price $ 12.60 $ 39.53
============================
Class B Shares/Net Assets $20,993
Shares Outstanding 1,780
Net asset value and offering price per share ($/share) $ 11.79
----------------------------
Redemption price per share *
============================
Class C Shares/Net Assets $37,844 $800,250
Shares Outstanding 3,209 22,619
Net asset value and offering price per share ($/share) $ 11.79 $ 35.38
----------------------------
Redemption price per share * *
============================
Cost of Investments Owned $48,677 $688,340
Proceeds from Investments Sold Forward 0 0
Cost of Foreign Currency Held 0 0
Cost of Foreign Currency Contracts Held 0 0
Cost of Foreign Currency Contracts Sold 0 0
Premiums Received on Written Options 0 1,636
Sales charge--% of offering price (Class A Shares) 5.50% 5.50%
*Varies by length of time shares are held (Note 3d)
</TABLE>
66/PIMCO Advisors Funds See accompanying notes
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Innovation International Precious Global Income
Fund Fund Metals Fund Fund
---------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Assets
Securities owned, at value (Note 2a) $222,050 $213,664 $ 46,515 $31,998
Foreign currency holdings, at value (Note 2b) 0 2,652 0 75
Forward foreign currency contracts purchased, at value (Notes 2e and 7) 0 25,633 0 4,635
Cash 2,689 2,003 121 1,136
Dividends receivable 14 783 59 0
Interest receivable 0 218 0 558
Variation margin receivable 0 3 0 0
Receivable for investments and foreign currencies sold 2,570 13,123 863 15,127
Receivable for Fund shares sold 2,739 1,534 50 77
Receivable for forward foreign currency contracts sold (Notes 2e and 7) 0 22,491 0 7,584
Other assets 35 12 2 44
--------------------------------------------------
Total assets 230,097 282,116 47,610 61,234
--------------------------------------------------
Liabilities
Payable for investments and foreign currencies purchased 7,178 2,732 857 22,564
Securities sold forward, at value (Note 2m) 0 0 0 12,269
Variation margin payable 0 0 0 10
Payable for forward foreign currency contracts purchased (Notes 2e and 7) 0 26,044 0 4,676
Payable for Fund shares redeemed 912 755 534 12
Payable to custodian 0 0 0 0
Dividends payable 0 6 2 52
Outstanding written options, at value (Notes 2c and 6) 0 0 0 0
Forward foreign currency contracts sold, at value (Notes 2e and 7) 0 22,485 0 7,452
Accrued expenses:
Investment advisory fee 124 150 31 8
Distribution fee 95 128 26 4
Servicing fee 40 47 10 3
Other 151 276 78 125
--------------------------------------------------
Total liabilities 8,500 52,623 1,538 47,175
--------------------------------------------------
Net Assets $221,597 $229,493 $ 46,072 $14,059
==================================================
Composition of Net Assets
Capital $175,301 $211,834 $ 42,451 $13,181
Undistributed (overdistributed) net investment income 0 (407) 0 589
Accumulated undistributed net realized gain (loss) 2,096 5,696 (401) (47)
Net unrealized appreciation (depreciation) 44,200 12,370 4,022 336
--------------------------------------------------
Total net assets $221,597 $229,493 $ 46,072 $14,059
==================================================
Calculation of Maximum Offering Price
Class A Shares/Net Assets $ 50,067 $ 20,056 $ 6,245 $ 7,360
Shares Outstanding 2,900 1,539 515 672
Net asset value and redemption price per share ($/share) $ 17.26 $ 13.03 $ 12.12 $ 10.96
Sales charge 1.00 0.76 0.71 0.55
--------------------------------------------------
Maximum offering price $ 18.26 $ 13.79 $ 12.83 $ 11.51
==================================================
Class B Shares/Net Assets $ 33,778 $ 5,893 $ 2,218 $ 3,240
Shares Outstanding 1,982 472 191 295
Net asset value and offering price per share ($/share) $ 17.04 $ 12.48 $ 11.62 $ 10.96
--------------------------------------------------
Redemption price per share * * * *
==================================================
Class C Shares/Net Assets $137,752 $203,544 $ 37,609 $ 3,459
Shares Outstanding 8,086 16,320 3,237 316
Net asset value and offering price per share ($/share) $ 17.04 $ 12.47 $ 11.62 $ 10.96
--------------------------------------------------
Redemption price per share * * * *
==================================================
Cost of Investments Owned $177,850 $200,893 $ 42,493 $31,965
Proceeds from Investments Sold Forward 0 0 0 12,325
Cost of Foreign Currency Held 0 2,644 0 75
Cost of Foreign Currency Contracts Held 0 26,044 0 4,676
Cost of Foreign Currency Contracts Sold 0 22,491 0 7,584
Premiums Received on Written Options 0 0 0 0
Sales charge--% of offering price (Class A Shares) 5.50% 5.50% 5.50% 4.75%
*Varies by length of time shares are held (Note 3d)
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
High Income Total Return Tax Exempt U.S. Govt.
Fund Fund Fund Fund
----------- ------------ ---------- ----------
<S> <C> <C> <C> <C>
Assets
Securities owned, at value (Note 2a) $ 251,874 $286,364 $54,521 $298,478
Foreign currency holdings, at value (Note 2b) 0 41 0 0
Forward foreign currency contracts purchased, at value (Notes 2e and 7) 0 7,401 0 0
Cash 3,750 4,253 0 2,276
Dividends receivable 150 0 0 0
Interest receivable 5,081 1,576 928 1,639
Variation margin receivable 0 0 0 0
Receivable for investments and foreign currencies sold 1,645 26,866 0 7,382
Receivable for Fund shares sold 1,566 1,246 52 100
Receivable for forward foreign currency contracts sold (Notes 2e and 7) 0 10,018 0 0
Other assets 25 36 5 41
---------------------------------------------------
Total assets 264,091 337,801 55,506 309,916
---------------------------------------------------
Liabilities
Payable for investments and foreign currencies purchased 1,969 98,048 0 48,026
Securities sold forward, at value (Note 2m) 0 0 0 0
Variation margin payable 0 322 0 89
Payable for forward foreign currency contracts purchased (Notes 2e and 7) 0 7,477 0 0
Payable for Fund shares redeemed 506 611 51 1,775
Payable to custodian 0 0 74 0
Dividends payable 2,724 128 37 283
Outstanding written options, at value (Notes 2c and 6) 0 143 0 0
Forward foreign currency contracts sold, at value (Notes 2e and 7) 0 9,606 0 0
Accrued expenses:
Investment advisory fee 124 106 26 127
Distribution fee 139 92 30 151
Servicing fee 52 44 11 53
Other 254 153 73 178
---------------------------------------------------
Total liabilities 5,768 116,730 302 50,682
---------------------------------------------------
Net Assets $ 258,323 $221,071 $55,204 $259,234
===================================================
Composition of Net Assets
Capital $ 361,296 $223,217 $53,018 $310,690
Undistributed (overdistributed) net investment income 467 (579) 231 93
Accumulated undistributed net realized gain (loss) (111,473) (4,880) (1,064) (55,146)
Net unrealized appreciation (depreciation) 8,033 3,313 3,019 3,597
---------------------------------------------------
Total net assets $ 258,323 $221,071 $55,204 $259,234
Calculation of Maximum Offering Price ===================================================
Class A Shares/Net Assets $ 25,350 $ 67,698 $ 5,864 $ 14,173
Shares Outstanding 3,130 6,542 494 1,585
Net asset value and redemption price per share ($/share) $ 8.10 $ 10.35 $ 11.87 $ 8.94
Sales charge 0.40 0.52 0.59 0.45
---------------------------------------------------
Maximum offering price $ 8.50 $ 10.87 $ 12.46 $ 9.39
===================================================
Class B Shares/Net Assets $ 38,928 $ 51,070 $ 2,258 $ 5,795
Shares Outstanding 4,815 4,920 190 649
Net asset value and offering price per share ($/share) $ 8.09 $ 10.38 $ 11.89 $ 8.94
---------------------------------------------------
Redemption price per share * * * *
===================================================
Class C Shares/Net Assets $ 194,045 $102,303 $47,082 $239,266
Shares Outstanding 24,155 9,889 3,971 26,866
Net asset value and offering price per share ($/share) $ 8.03 $ 10.35 $ 11.86 $ 8.91
---------------------------------------------------
Redemption price per share * * * *
===================================================
Cost of Investments Owned $ 243,841 $284,052 $51,502 $294,999
Proceeds from Investments Sold Forward 0 0 0 0
Cost of Foreign Currency Held 0 42 0 0
Cost of Foreign Currency Contracts Held 0 7,477 0 0
Cost of Foreign Currency Contracts Sold 0 10,018 0 0
Premiums Received on Written Options 0 156 0 0
Sales charge--% of offering price (Class A Shares) 4.75% 4.75% 4.75% 4.75%
*Varies by length of time shares are held (Note 3d)
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
Short-Int. Money Market
Fund Fund
---------- ------------
<S> <C> <C>
Assets
Securities owned, at value (Note 2a) $127,298 $ 88,493
Foreign currency holdings, at value (Note 2b) 0 0
Forward foreign currency contracts purchased, at value (Notes 2e and 7) 6,424 0
Cash 2,342 552
Dividends receivable 0 0
Interest receivable 1,418 0
Variation margin receivable 0 0
Receivable for investments and foreign currencies sold 2,899 0
Receivable for Fund shares sold 665 13,083
Receivable for forward foreign currency contracts sold (Notes 2e and 7) 6,473 0
Other assets 0 6
---------------------
Total assets 147,519 102,134
---------------------
Liabilities
Payable for investments and foreign currencies purchased 12,096 0
Securities sold forward, at value (Note 2m) 0 0
Variation margin payable 0 0
Payable for forward foreign currency contracts purchased (Notes 2e and 7) 6,487 0
Payable for Fund shares redeemed 248 1,631
Payable to custodian 0 0
Dividends payable 35 58
Outstanding written options, at value (Notes 2c and 6) 20 0
Forward foreign currency contracts sold, at value (Notes 2e and 7) 6,321 0
Accrued expenses:
Investment advisory fee 49 7
Distribution fee 29 1
Servicing fee 25 7
Other 363 113
---------------------
Total liabilities 25,673 1,817
---------------------
Net Assets $121,846 $100,317
=====================
Composition of Net Assets
Capital $127,576 $100,317
Undistributed (overdistributed) net investment income 331 0
Accumulated undistributed net realized gain (loss) (5,770) 0
Net unrealized appreciation (depreciation) (291) 0
---------------------
Total net assets $121,846 $100,317
=====================
Calculation of Maximum Offering Price
Class A Shares/Net Assets $ 50,614 $ 23,399
Shares Outstanding 5,178 23,399
Net asset value and redemption price per share ($/share) $ 9.77 $ 1.00
Sales charge 0.30 --
---------------------
Maximum offering price $ 10.07 $ 1.00
=====================
Class B Shares/Net Assets $ 3,712 $ 1,224
Shares Outstanding 380 1,224
Net asset value and offering price per share ($/share) $ 9.78 $ 1.00
---------------------
Redemption price per share * *
=====================
Class C Shares/Net Assets $ 67,520 $ 75,694
Shares Outstanding 6,929 75,694
Net asset value and offering price per share ($/share) $ 9.74 $ 1.00
---------------------
Redemption price per share * *
=====================
Cost of Investments Owned $127,705 $ 88,493
Proceeds from Investments Sold Forward 0 0
Cost of Foreign Currency Held 0 0
Cost of Foreign Currency Contracts Held 6,487 0
Cost of Foreign Currency Contracts Sold 6,473 0
Premiums Received on Written Options 49 0
Sales charge--% of offering price (Class A Shares) 3.00% N/A
*Varies by length of time shares are held (Note 3d)
</TABLE>
Annual Report See accompanying notes/67
<PAGE>
<TABLE>
<CAPTION>
Statement of Operations
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Amounts in thousands Equity Income Value Growth Target Discovery Opportunity
Fund Fund Fund Fund Fund Fund
------------- ------------ ----------- ------------ ------------- ------------
Investment Income
Interest $ 1,979 $ 119 $ 7,085 $ 5,456 $ 261 $ 6,007
Dividends, net of foreign taxes 4,236 1,267 13,480 3,147 683 1,022
--------------------------------------------------------------------------------------------------
Total investment income 6,215 1,386 20,565 8,603 944 7,029
--------------------------------------------------------------------------------------------------
Expenses
Investment advisory fee (Note 3a) 1,628 274 9,988 7,296 434 6,184
Distribution fee (Class B)(Note 3b) 47 81 159 181 125 0
Distribution fee (Class C)(Note 3b) 1,474 164 10,195 6,513 237 5,592
Servicing fee (Class A)(Note 3b) 39 16 352 339 24 309
Servicing fee (Class B)(Note 3b) 16 27 53 60 42 0
Servicing fee (Class C)(Note 3b) 491 55 3,398 2,171 79 1,864
Transfer agent and custody fees 332 79 1,772 1,289 123 703
Professional fees 25 14 283 195 22 165
Trustees' fees and expenses (Note 3c) 25 4 215 147 5 124
Shareholder reports and notices 106 12 479 365 23 232
Amortization of organization costs 0 10 0 0 10 0
Miscellaneous 59 30 375 234 46 218
--------------------------------------------------------------------------------------------------
Total expenses 4,242 766 27,269 18,790 1,170 15,391
--------------------------------------------------------------------------------------------------
Fee waivers (Note 3a) 0 0 0 0 0 0
--------------------------------------------------------------------------------------------------
Net expenses 4,242 766 27,269 18,790 1,170 15,391
--------------------------------------------------------------------------------------------------
Net investment income (loss) 1,973 620 (6,704) (10,187) (226) (8,362)
--------------------------------------------------------------------------------------------------
Realized and unrealized gain (loss) on investments
Net realized gain (loss) on security
and foreign currency transactions 37,253 1,293 212,828 111,088 (4,506) 132,507
Net realized gain (loss) on forward
foreign currency transactions 0 0 0 0 0 0
Net realized gain (loss) on options
written 216 0 3,343 430 0 (4,748)
Net realized gain (loss) on futures
transactions 0 0 0 0 0 0
Net unrealized appreciation
(depreciation) on securities 3,195 3,472 8,461 51,973 10,733 26,370
Net unrealized appreciation
(depreciation) on translation of
assets and liabilities denominated in
foreign currencies 0 0 0 0 0 0
Net unrealized appreciation
(depreciation) on written options 0 0 137 (102) 0 (869)
Net unrealized appreciation
(depreciation) on futures contracts 0 0 0 0 0 0
Net unrealized appreciation
(depreciation) on forward foreign
currency contracts 0 0 0 0 0 0
--------------------------------------------------------------------------------------------------
Net realized and unrealized gain
(loss) on ionvestments 40,664 4,765 224,769 163,389 6,227 153,260
--------------------------------------------------------------------------------------------------
Net increase in net assets
resulting from operations $42,637 $5,385 $218,065 $153,202 $6,001 $144,898
==================================================================================================
Foreign taxes included in
Dividend Income $ 0 $ 5 $ 26 $ 51 $ 1 $ 0
</TABLE>
68/PIMCO Advisors Funds See accompanying notes
<PAGE>
<TABLE>
<CAPTION>
For the year ended September 30, 1996
- ------------------------------------------------------------------------------------------------------------------------------------
Innovation International Precious Global Income High Income Total Return Tax Exempt U.S. Govt. Short-Int. Money Market
Fund Fund Metals Fund Fund Fund Income Fund Fund Fund Fund Fund
---------- ------------- ----------- ------------- ----------- ------------ ---------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 855 $ 503 $ 147 $ 596 $19,729 $ 9,804 $3,439 $20,448 $6,691 $4,981
141 3,864 663 0 791 0 0 0 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
996 4,367 810 596 20,520 9,804 3,439 20,448 6,691 4,981
- ------------------------------------------------------------------------------------------------------------------------------------
1,064 1,873 398 74 1,269 965 333 1,679 496 446
125 282 11 11 138 229 11 26 16 4
675 1,324 323 12 1,316 581 375 1,994 331 0
88 42 21 12 44 132 10 31 78 19
42 8 4 4 46 76 4 9 5 1
225 535 108 4 439 195 125 675 166 69
249 562 96 15 282 160 57 318 116 121
21 52 16 7 51 26 13 53 24 15
14 27 4 1 27 13 6 66 14 9
40 123 21 3 87 44 22 129 31 32
10 0 0 7 0 10 0 0 10 0
98 73 30 27 67 119 24 87 54 43
- ------------------------------------------------------------------------------------------------------------------------------------
2,651 4,901 1,032 177 3,766 2,550 980 5,067 1,341 759
- ------------------------------------------------------------------------------------------------------------------------------------
0 0 0 (20) 0 0 0 0 0 (357)
- ------------------------------------------------------------------------------------------------------------------------------------
2,651 4,901 1,032 157 3,766 2,550 980 5,067 1,341 402
- ------------------------------------------------------------------------------------------------------------------------------------
(1,655) (534) (222) 439 16,754 7,254 2,459 15,381 5,350 4,579
- ------------------------------------------------------------------------------------------------------------------------------------
2,919 9,016 147 341 3,987 (5,489) (8) (867) 346 0
0 263 0 215 0 110 0 0 123 0
418 0 0 13 7 131 0 105 123 0
0 442 0 (58) 0 884 0 (821) 130 0
27,654 6,221 272 90 249 1,596 28 (4,652) 105 0
0 (54) 0 97 0 0 0 0 (2) 0
0 0 0 0 0 10 0 (93) (33) 0
0 (13) 0 58 0 510 0 (79) (17) 0
0 (1,434) 0 91 0 460 0 0 122 0
- ------------------------------------------------------------------------------------------------------------------------------------
30,991 14,441 419 847 4,243 (1,788) 20 (6,407) 897 0
- ------------------------------------------------------------------------------------------------------------------------------------
$29,336 $13,907 $ 197 $1,286 $20,997 $ 5,466 $2,479 $ 8,974 $6,247 $4,579
====================================================================================================================================
$ 6 $ 538 $ 57 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
</TABLE>
Annual Report See accompanying notes / 69
<PAGE>
<TABLE>
<CAPTION>
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Amounts in thousands Equity Income Value Growth Target
Fund Fund Fund Fund
--------------------- -------------------- --------------------- --------------------
Year Year Year Period Year Year Year Year
Ended Ended Ended Ended Ended Ended Ended Ended
9/30/96 9/30/95 9/30/96 9/30/95(a) 9/30/96 9/30/95 9/30/96 9/30/95
Operations
Net Investment income (loss) $ 1,973 $ 3,960 $ 620 $ 45 $ (6,704) $ (1,692) $ (10,187) $ (5,836)
Net realized gain (loss) 37,469 7,701 1,293 1 216,171 160,296 111,518 109,769
Net unrealized appreciation
(depreciation) 3,195 13,911 3,472 485 8,598 105,773 51,871 76,561
----------------------------------------------------------------------------------------------
Net increase (decrease) in net
assets resulting from
operations 42,637 25,572 5,385 531 218,065 264,377 153,202 180,494
----------------------------------------------------------------------------------------------
*Undistributed net investment
income included in price of
shares sold and reacquired
(note 2) (191) 0 (22) 0 0 0 0 0
----------------------------------------------------------------------------------------------
Distributions to shareholders
from net investment income
Class A (240) (344) (137) (12) 0 0 0 0
Class B (58) (6) (157) (12) 0 0 0 0
Class C (1,676) (3,191) (325) (22) 0 0 0 0
In excess of net investment
income
Class A (73) 0 (5) 0 0 0 0 0
Class B (18) 0 (4) 0 0 0 0 0
Class C (505) 0 (9) 0 0 0 0 0
From net realized gain on
investments
Class A (710) 0 0 0 (15,282) (5,788) (13,463) (1,095)
Class B (132) 0 0 0 (1,264) 0 (1,163) 0
Class C (9,562) 0 0 0 (150,649) (59,480) (87,762) (7,061)
In excess of net realized gain
on investments
Class A 0 0 0 0 0 0 0 0
Class B 0 0 0 0 0 0 0 0
Class C 0 0 0 0 0 0 0 0
Return of capital
Class A 0 0 0 (3) 0 0 0 0
Class B 0 0 0 (3) 0 0 0 0
Class C 0 0 0 (5) 0 0 0 0
----------------------------------------------------------------------------------------------
Total distributions (12,974) (3,541) (637) (57) (167,195) (65,268) (102,388) (8,156)
----------------------------------------------------------------------------------------------
Net equalization credits (debits)
(Note 2i) 0 (108) 0 22 0 0 0 0
Net increase (decrease) from
Fund share transactions
(Note 5) 47,711 (26,748) 44,186 12,614 155,063 40,837 220,187 90,917
Increase (decrease) in aggregate
paid in capital for reversal of
amounts previously allocated
to undistributed net investment
income (Note 2i) 191 0 22 0 0 0 0 0
----------------------------------------------------------------------------------------------
Net increase (decrease) in net assets 77,374 (4,825) 48,934 13,110 205,933 239,946 271,001 263,255
----------------------------------------------------------------------------------------------
Net Assets:
Beginning of period 189,009 193,834 13,110 0 1,432,642 1,192,696 909,825 646,570
----------------------------------------------------------------------------------------------
End of period* $266,383 $189,009 $62,044 $13,110 $1,638,575 $1,432,642 $1,180,826 $909,825
==============================================================================================
*Including undistributed
(overdistributed)net investment
income of: $ 21,658 $ 570 $ 1,121 $ 22 $ 5,470 $ 0 $ 0 $ 0
(a) From commencement on June 27, 1995.
(b) From commencement on December 22, 1994.
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Amounts in thousands Discovery Opportunity Innovation
Fund Fund Fund
--------------------- -------------------- ---------------------
Year Period Year Year Year Period
Ended Ended Ended Ended Ended Ended
9/30/96 9/30/95(a) 9/30/96 9/30/95 9/30/96 9/30/95(b)
Operations
Net Investment income (loss) $ (226) $ (23) $ (8,362) $ (6,920) $ (1,655) $ (398)
Net realized gain (loss) (4,506) (514) 127,759 195,179 3,337 2,293
Net unrealized appreciation
(depreciation) 10,733 1,655 25,501 48,975 27,654 16,546
----------------------------------------------------------------------
Net increase (decrease) in net
assets resulting from
operations 6,001 1,118 144,898 237,234 29,336 18,441
----------------------------------------------------------------------
*Undistributed net investment
income included in price of
shares sold and reacquired
(note 2i) 0 0 0 0 0 0
----------------------------------------------------------------------
Distributions to shareholders
from net investment income
Class A 0 0 0 0 0 0
Class B 0 0 0 0 0 0
Class C 0 0 0 0 0 0
In excess of net investment
income
Class A 0 0 0 0 0 0
Class B 0 0 0 0 0 0
Class C 0 0 0 0 0 0
From net realized gain on
investments
Class A 0 0 (23,619) (2,828) (689) 0
Class B 0 0 0 0 (219) 0
Class C 0 0 (145,763) (16,835) (1,571) 0
In excess of net realized gain
on investments
Class A 0 0 0 0 0 0
Class B 0 0 0 0 0 0
Class C 0 0 0 0 0 0
Return of capital
Class A 0 0 0 0 0 0
Class B 0 0 0 0 0 0
Class C 0 0 0 0 0 0
----------------------------------------------------------------------
Total distributions 0 0 (169,382) (19,663) (2,479) 0
----------------------------------------------------------------------
Net equalization credits (debits)
(Note 2i) 0 0 0 0 0 0
Net increase (decrease) from
Fund share transactions
(Note 5) 25,064 37,633 123,573 (30,272) 96,039 80,260
Increase (decrease) in aggregate
paid in capital for reversal of
amounts previously allocated
to undistributed net investment
income (Note 2i) 0 0 0 0 0 0
----------------------------------------------------------------------
Net increase (decrease) in net assets 31,065 38,751 99,089 187,299 122,896 98,701
----------------------------------------------------------------------
Net Assets:
Beginning of period 38,751 0 836,021 648,722 98,701 0
----------------------------------------------------------------------
End of period* 69,816 38,751 935,110 836,021 221,597 98,701
======================================================================
*Including undistributed
(overdistributed)net investment
income of: 0 0 0 0 0 0
</TABLE>
(a) From commencement on June 27, 1995.
(b) From commencement on December 22, 1994.
70/ PIMCO Advisors Funds See accompanying notes
<PAGE>
<TABLE>
<CAPTION>
Statement of Changes in Net Assets
- ---------------------------------------------------------------------------------------------------------------------------------
Amounts in thousands International Precious Global High Income
Fund Metals Fund Income Fund Fund
--------------------- -------------------- -------------- --------------------
Year Year Year Year Year Year Year
Ended Ended Ended Ended Ended Ended Ended
9/30/96 9/30/95 9/30/96 9/30/95 9/30/96 9/30/96 9/30/95
<S> <C> <C> <C> <C> <C> <C> <C>
Operations
Net investment income (loss) $ (534) $ (336) $ (222) $ (38) $ 439 $ 16,754 $ 12,340
Net realized gain (loss) 9,721 (3,829) 147 815 511 3,994 (50,397)
Net unrealized appreciation
(depreciation) 4,720 (12,902) 272 (10,774) 336 249 57,888
--------------------------------------------------------------------------------------------
Net increase (decrease) in net
assets resulting from
operations 13,907 (17,067) 197 (9,997) 1,286 20,997 19,831
--------------------------------------------------------------------------------------------
*Undistributed net investment
income included in price of
shares sold and reacquired
(Note 2i) 0 0 0 0 0 0 0
--------------------------------------------------------------------------------------------
Distributions to shareholders
From net investment income
Class A 0 0 0 0 (303) (1,516) (428)
Class B 0 0 0 0 (51) (1,448) (50)
Class C 0 0 0 0 (54) (13,910) (12,256)
In excess of net investment
income
Class A 0 0 0 0 0 0 0
Class B 0 0 0 0 0 0 0
Class C 0 0 0 0 0 0 0
From net realized gain on
investments
Class A 0 (428) 0 0 0 0 0
Class B 0 0 0 0 0 0 0
Class C 0 (5,584) 0 0 0 0 0
In excess of net realized gain
on investments
Class A 0 0 0 0 0 0 0
Class B 0 0 0 0 0 0 0
Class C 0 0 0 0 0 0 0
Return of capital
Class A 0 0 0 0 0 0 0
Class B 0 0 0 0 0 0 0
Class C 0 0 0 0 0 0 0
--------------------------------------------------------------------------------------------
Total distributions 0 (6,012) 0 0 (408) (16,874) (12,734)
--------------------------------------------------------------------------------------------
Net equalization credits (debits)
(Note 2i) 0 0 0 0 0 0 0
Net increase (decrease) from
Fund share transactions
(Note 5) (18,217) (60,899) (4,387) (13,795) 13,181 84,350 (20,857)
Increase (decrease) in aggregate
paid in capital for reversal of
amounts previously allocated
to undistributed net investment
income (Note 2i) 0 0 0 0 0 0 0
--------------------------------------------------------------------------------------------
Net increase (decrease) in net assets (4,310) (83,978) (4,190) (23,792) 14,059 88,473 (13,760)
--------------------------------------------------------------------------------------------
Net Assets:
Beginning of period 233,803 317,781 50,262 74,054 0 169,850 183,610
--------------------------------------------------------------------------------------------
End of period* $229,493 $233,803 $46,072 $ 50,262 $ 14,059 $ 258,323 $ 169,850
=============================================================================================
*Including undistributed
(overdistributed) net investment
income of: $ (407) $ (1,318) $ 0 $ 0 $ 589 $ 467 $ 283
(a) From commencement on June 27, 1995.
(b) From commencement on December 22, 1994.
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
Amounts in thousands Total Return Tax Exempt U.S. Govt. Short-Int.
Income Fund Fund Fund Fund
--------------------- -------------------- --------------------- --------------------
Year Year Year Year Year Year Year Year
Ended Ended Ended Ended Ended Ended Ended Ended
9/30/96 9/30/95 9/30/96 9/30/95 9/30/96 9/30/95 9/30/96 9/30/95
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Operations
Net investment income (loss) $ 7,254 $ 1,683 $ 2,459 $ 2,628 $ 15,381 $ 18,847 $ 5,350 $ 4,394
Net realized gain (loss) (4,364) 1,842 (8) (507) (1,583) (8,766) 722 (1,250)
Net unrealized appreciation
(depreciation) 2,576 737 28 3,556 (4,824) 24,946 175 2,781
-------------------------------------------------------------------------------------------
Net increase (decrease) in net
assets resulting from
operations 5,466 4,262 2,479 5,677 8,974 35,027 6,247 5,925
-------------------------------------------------------------------------------------------
*Undistributed net investment
income included in price of
shares sold and reacquired
(Note 2i) 0 0 0 0 0 0 0 0
-------------------------------------------------------------------------------------------
Distributions to shareholders
From net investment income
Class A (2,627) (848) (182) (130) (1,007) (981) (1,604) (385)
Class B (1,302) (60) (55) (3) (212) (10) (96) (11)
Class C (3,322) (734) (1,870) (2,540) (14,442) (17,838) (3,269) (4,027)
In excess of net investment
income
Class A (112) 0 (14) 0 (20) 0 0 0
Class B (55) 0 (4) 0 (4) 0 0 0
Class C (142) 0 (144) 0 (291) 0 0 0
From net realized gain on
investments
Class A (1,178) 0 0 0 0 0 0 0
Class B (417) 0 0 0 0 0 0 0
Class C (1,563) 0 0 0 0 0 0 0
In excess of net realized gain
on investments
Class A 0 0 0 0 0 0 0 0
Class B 0 0 0 0 0 0 0 0
Class C 0 0 0 0 0 0 0 0
Return of capital
Class A 0 0 0 0 0 0 0 0
Class B 0 0 0 0 0 0 0 0
Class C 0 0 0 0 0 0 0 0
-------------------------------------------------------------------------------------------
Total distributions (10,718) (1,642) (2,269) (2,673) (15,976) (18,829) (4,969) (4,423)
-------------------------------------------------------------------------------------------
Net equalization credits (debits)
(Note 2i) 0 0 0 0 0 0 0 0
Net increase (decrease) from
Fund share transactions
(Note 5) 134,173 89,530 (2,219) (16,731) (38,770) (91,487) 47,676 (22,432)
Increase (decrease) in aggregate
paid in capital for reversal of
amounts previously allocated
to undistributed net investment
income (Note 2i) 0 0 0 0 0 0 0 0
-------------------------------------------------------------------------------------------
Net increase (decrease) in net assets 128,921 92,150 (2,009) (13,727) (45,772) (75,289) 48,954 (20,930)
-------------------------------------------------------------------------------------------
Net Assets:
Beginning of period 92,150 0 57,213 70,940 305,006 380,295 72,892 93,822
-------------------------------------------------------------------------------------------
End of period* $221,071 $92,150 $55,204 $57,213 $259,234 $305,006 $121,846 $72,892
=============================================================================================
*Including undistributed
(overdistributed) net investment
income of: $ (579) $ 67 $ 231 $ (132) $ 93 $ 280 $ 331 $ 111
(a) From commencement on June 27, 1995.
(b) From commencement on December 22, 1994.
Statement of Changes in Net Assets
<CAPTION>
- ------------------------------------------------------------
Amounts in thousands Money Market
Fund
---------------------
Year Year
Ended Ended
9/30/96 9/30/95
<S> <C> <C>
Operations
Net investment income (loss) $ 4,579 $ 5,049
Net realized gain (loss) 0 0
Net unrealized appreciation
(depreciation) 0 0
-----------------------
Net increase (decrease) in net
assets resulting from
operations 4,579 5,049
-----------------------
*Undistributed net investment
income included in price of
shares sold and reacquired
(Note 2i) 0 0
-----------------------
Distributions to shareholders
From net investment income
Class A (1,005) (731)
Class B (21) (1)
Class C (3,553) (4,318)
In excess of net investment
income
Class A 0 0
Class B 0 0
Class C 0 0
From net realized gain on
investments
Class A 0 0
Class B 0 0
Class C 0 0
In excess of net realized gain
on investments
Class A 0 0
Class B 0 0
Class C 0 0
Return of capital
Class A 0 0
Class B 0 0
Class C 0 0
-----------------------
Total distributions (4,579) (5,050)
-----------------------
Net equalization credits (debits)
(Note 2i) 0 0
Net increase (decrease) from
Fund share transactions
(Note 5) 17,379 (14,058)
Increase (decrease) in aggregate
paid in capital for reversal of
amounts previously allocated
to undistributed net investment
income (Note 2i) 0 0
-----------------------
Net increase (decrease) in net assets 17,379 (14,059)
-----------------------
Net Assets:
Beginning of period 82,938 96,997
-----------------------
End of period* $100,317 $82,938
=======================
*Including undistributed
(overdistributed) net investment
income of: $ 0 $ 0
(a) From commencement on June 27, 1995.
(b) From commencement on December 22, 1994.
</TABLE>
Annual Report See accompanying notes/71
<PAGE>
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 series management investment company which
currently consists of sixteen 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 Global Income 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
72/ PIMCO Advisors Funds
<PAGE>
Notes to Financial Statements--Continued
================================================================================
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. 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, 1996 were as follows ($ in
thousands):
<TABLE>
<CAPTION>
Unrealized
Market Appreciation
Cost Value (Depreciation)
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
International Fund
Long LIFFE FT-SE 100 Index BP (12/96) $2,195 $2,182 $(13)
====
Global Income Fund
Long U.S. Treasury 10 Year Note (12/96) $2,844 $2,897 $ 53
Long Commonwealth of Australia
3 Year Note A$ (12/96) 266 269 3
Long Commonwealth of Australia
10 Year Note A$ (12/96) 100 102 2
-------------------------------------
$ 58
====
</TABLE>
<TABLE>
<CAPTION>
Unrealized
Market Appreciation
Cost Value (Depreciation)
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
Total Return Income Fund
Long June Eurodollar (6/97) $46,985 $46,950 $(35)
Long U.S. Treasury 10 Year Note (12/96) 63,699 64,261 562
Long U.S. Treasury 30 Year Bond (12/96) 12,433 12,557 124
-------------------------------------
$651
====
U.S. Government Fund
Long U.S. Treasury 5 Year Note (12/96) $ 1,984 $ 2,006 $ 22
Long U.S. Treasury 10 Year Note (12/96) 14,335 14,376 41
Long U.S. Treasury 30 Year Bond (12/96) 5,950 6,005 55
-------------------------------------
$118
====
</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.
Annual Report / 73
<PAGE>
Notes to Financial Statements--Continued
================================================================================
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: Prior to October 1, 1995, the Equity Income and Value Funds
used equalization accounting to keep a continuing shareholder's per share
interest in undistributed net investment income unaffected by shareholder
activity. This was accomplished by allocating a per share portion of the
proceeds from sales and the cost of redemptions of fund shares to undistributed
net investment income. As of October 1, 1995, these Funds discontinued using
equalization. This change has no effect on the Funds' net assets, net asset
values per share, or their net increases (decreases) in net assets resulting
from operations. Discontinuing the use of book equalization will result in
simpler financial statements. For the Equity Income Fund, the cumulative effect
of the change was to decrease undistributed net investment income and increase
paid in capital as previously reported from commencement of operations through
September 30, 1995 by $191,313. For the Value Fund, the cumulative effect of the
change was to increase undistributed net investment income and decrease paid in
capital as previously reported from commencement of operations through September
30, 1995 by $21,561.
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, original issue discount, market discount and net operating losses.
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, original issue discount,
market discount and net operating losses. The effect of these differences for
the year ended September 30, 1996 are as follows:
<TABLE>
<CAPTION>
Undistributed Accumulated
Net Investment Realized
Income Gain/(Loss)
- --------------------------------------------------------------------------------
<S> <C> <C>
Equity Income Fund $21,809,198 $(21,809,198)
Value Fund 1,138,443 (1,138,443)
Growth Fund 12,166,449 (12,166,449)
Target Fund (907) 907
Opportunity Fund (1,138) 1,138
Innovation Fund 656,428 (656,428)
International Fund 100,756 (100,756)
Precious Metals Fund 6,352 (6,352)
Global Income Fund 557,876 (557,876)
High Income Fund 129,617 (129,617)
Total Return Income Fund (825,415) 825,415
Tax Exempt Fund 659 (659)
U.S. Government Fund 69,822 (69,822)
Short-Intermediate Fund (99,442) 99,442
</TABLE>
The following Funds recorded entries against the capital of the Fund due to
current year net investment losses and/or prior year items primarily relating to
foreign currency transactions:
<TABLE>
<S> <C>
Equity Income Fund $ (124,072)
Value Fund (21,561)
Growth Fund 6,810
Target Fund 10,187,008
Discovery Fund 225,466
Opportunity Fund 8,363,595
Innovation Fund 998,052
International Fund 1,344,775
Precious Metals Fund 216,779
High Income Fund 174,469
Total Return Income Fund 485,727
Tax Exempt Fund 172,356
U.S. Government Fund 338,992
Short-Intermediate Fund (61,047)
</TABLE>
In addition, the capital loss carryforwards of the U.S. Government Fund in the
amount of $22,686,921 which expired in 1996 have been charged to capital of that
Fund.
m) Forward Sales: The following securities were subject to outstanding forward
sale commitments at September 30, 1996 (amounts in thousands):
<TABLE>
<CAPTION>
Principal Amount Value Proceeds
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Global Income Fund
Commonwealth of Canada C$ 3,600 $2,795 $2,745
Kingdom of Denmark DK 900 167 166
Government of Japan JY 127,000 1,319 1,318
Kingdom of the Netherlands DG 9,100 5,563 5,677
Kingdom of Spain SP 45,000 391 400
Kingdom of Sweden SK 2,500 418 415
United Kingdom Gilt BP 1,050 1,616 1,604
</TABLE>
74/PIMCO Advisors Funds
<PAGE>
Notes to Financial Statements--Continued
================================================================================
n) Delayed Delivery Transactions: A Fund may purchase or sell securities on a
when-issued or delayed delivery basis. These transactions involve a commitment
by a Fund to purchase or sell securities for a predetermined price or yield,
with payment and delivery taking place beyond the customary settlement period.
When delayed delivery purchases are outstanding, a Fund will set aside and
maintain until the settlement date in a segregated account, liquid assets in an
amount sufficient to meet the purchase price. When purchasing a security on a
delayed delivery basis, a Fund assumes the rights and risks of ownership of the
security, including the risk of price and yield fluctuations, and takes such
fluctuations into account when determining its net asset value. A Fund may
dispose of or renegotiate a delayed delivery transaction after it is entered
into, and may sell when-issued securities before they are delivered, which may
result in a capital gain or loss. When the Fund has sold a security on a delayed
delivery basis, the Fund does not participate in future gains and losses with
respect to the security. Forward sales commitments are accounted for by the Fund
in the same manner as forward currency contracts discussed above.
o) Estimates: The preparation of financial statements in accordance with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts and disclosures in the
financial statements. Actual results could differ from those estimates.
- --------------------------------------------------------------------------------
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>
Investment Sub-adviser Fee
Advisory Fee Paid By Manager
(as % of net assets) Sub-Adviser (as % of net assets)
- -----------------------------------------------------------------------------------
<S> <C> <C> <C>
Equity Income Fund .75% of first Columbus .375% of first
$200 million Circle $200 million
.70% of amounts Investors .350% of amounts
over $200 million over $200 million
Value Fund .70% NFJ Investment .350%
Group
Growth Fund .70% of first Columbus .350% of first
$200 million Circle $200 million
.65% of amounts Investors .325% of amounts
over $200 million over $200 million
Target Fund .75% of first Columbus .375% of first
$200 million Circle $200 million
.70% of amounts Investors .350% of amounts
over $200 million over $200 million
Discovery Fund .75% of first Cadence Capital .375% of first
$200 million Management $200 million
.70% of amounts .350% of amounts
over $200 million over $200 million
Opportunity Fund .75% of first Columbus .375% of first
$200 million Circle $200 million
.70% of amounts over Investors .350% of amounts
$200 million over $200 million
Innovation Fund .75% of first Columbus .375% of first
$200 million Circle $200 million
.70% of amounts Investors .350% of amounts
over $200 million over $200 million
International Fund .80% Blairlogie .40%
Capital
Management
Precious Metals Fund .75% of first Van Eck .375% of first
$200 million Associates $200 million
.70% of amounts Corporation .350% of amounts
over $200 million over $200 million
Global Income Fund .70% of first Pacific .350% of first
$250 million Investment $250 million
.60% of amounts Management .300% of amounts
over $250 million Company over $250 million
High Income Fund .60% of first Pacific .25%
$250 million Investment
.50% of amounts Management
over $250 million Company
Total Return Income Fund .60% of first Pacific .25%
$250 million Investment
.50% of amounts Management
over $250 million Company
Short-Intermediate Fund .50% of first Pacific .25%
$250 million Investment
.45% of next Management
$250 million Company
.40% of amounts
over $500 million
</TABLE>
Annual Report / 75
<PAGE>
Notes to Financial Statements--Continued
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Investment Sub-adviser Fee
Advisory Fee Paid By Manager
(as % of net (as % of net
assets) Sub-Adviser assets)
- ----------------------------------------------------------------------------------
<S> <C> <C> <C>
U.S. Government Fund .60% of first Pacific .25%
$250 million Investment
.50% of amounts Management
over $250 million Company
Tax Exempt Fund .60% Columbus .30%
Circle
Investors
Money Market Fund .50% of first Columbus 25% of first
$250 million Circle $250 million
.40% of amounts Investors .20% of amounts
over $250 million over $250 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 also waived a portion of its investment
advisory fees with respect to the Global Income Fund.
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 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 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: The Trustees have 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 Funds of the Trusts based on relative
net assets. The total Trustees' fees to be allocated are as follows:
<TABLE>
<CAPTION>
<S> <C>
Annual Retainer $35,000
Meeting Fee (each meeting attended) 3,000
Committees:
Contract Chairman 6,000
Audit Chairman 2,000
Audit Member 1,000
</TABLE>
In addition, the Trustees receive reimbursement for travel and out-of-pocket
costs.
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, 1996, those charges amounted to $769,851.
e) Initial Sales Charge: For the year ended September 30, 1996, sales charges
on Class A shares amounted to $4,019,930, of which $552,994 was retained by the
Trust's distributor.
76 / PIMCO Advisors Funds
<PAGE>
Notes to Financial Statements--Continued
- --------------------------------------------------------------------------------
4. Purchases and Sales of Securities
During the year ended September 30, 1996, purchases and sales of securities,
other than securities subject to repurchase transactions and short-term
interest bearing securities, were as follows
($ in thousands):
<TABLE>
<CAPTION>
Purchases Sales
- ----------------------------------------------------
<S> <C> <C>
Equity Income Fund $ 450,422 $ 419,628
Value Fund 54,751 11,735
Growth Fund 1,459,312 1,534,152
Target Fund 1,446,590 1,322,965
Discovery Fund 71,229 51,658
Opportunity Fund 707,268 808,509
Innovation Fund 246,163 159,847
International Fund 242,576 262,044
Precious Metals Fund 17,519 21,552
Global Income Fund 127,716 114,940
High Income Fund 184,140 101,128
Total Return Income Fund 976,121 793,843
Tax Exempt Fund 27,183 29,209
U.S. Government Fund 573,696 575,073
Short-Intermediate Fund 210,599 165,559
</TABLE>
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 sixteen series of shares, one series underlying each Fund. Each of the
Funds, except the Opportunity Fund which does not offer Class B shares, 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 (amounts in thousands):
<TABLE>
<CAPTION>
Year Ended Year Ended
September 30, 1996 September 30, 1995
----------------------------------------------
Shares Amount Shares Amount
- ---------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Equity Income Fund
Sold 559 $ 8,421 261 $ 3,289
Issued as reinvestment of
dividends 63 909 23 292
Reacquired (254) (3,756) (565) (7,089)
------------------------------------------------
Net increase (decrease) 368 $ 5,574 (281) $ (3,508)
================================================
Value Fund
Sold 605 $ 6,958 242 $ 2,473
Issued as reinvestment of
dividends 11 132 1 14
Reacquired (103) (1,195) (10) (102)
------------------------------------------------
Net increase 513 $ 5,895 233 $ 2,385
================================================
Growth Fund
Sold 1,783 $ 44,645 1,409 $ 32,051
Issued as reinvestment of
dividends 608 14,386 263 5,386
Reacquired (1,944) (48,670) (1,306) (29,329)
------------------------------------------------
Net increase 447 $ 10,361 366 $ 8,108
================================================
Target Fund
Sold 23,466 $ 372,363 13,544 $191,129
Issued as reinvestment of
dividends 817 12,468 80 1,005
Reacquired (22,596) (359,867) (13,087) (185,119)
------------------------------------------------
Net increase 1,687 $ 24,964 537 $ 7,015
================================================
Discovery Fund
Sold 543 $ 5,829 730 $ 7,663
Issued as reinvestment of
dividends 0 0 0 0
Reacquired (324) (3,517) (27) (286)
------------------------------------------------
Net increase 219 $ 2,312 703 $ 7,377
================================================
Opportunity Fund
Sold 1,508 $ 52,255 807 $ 24,964
Issued as reinvestment of
dividends 663 21,540 93 2,557
Reacquired (1,653) (56,734) (1,108) (34,506)
------------------------------------------------
Net increase (decrease) 518 $ 17,061 (208) $ (6,985)
================================================
Innovation Fund
Sold 3,281 $ 49,497 2,585 $ 30,962
Issued as reinvestment of
dividends 43 632 0 0
Reacquired (2,340) (34,767) (669) (8,736)
------------------------------------------------
Net increase 984 $ 15,362 1,916 $ 22,226
================================================
International Fund
Sold 6,580 $ 83,979 2,230 $ 26,178
Issued as reinvestment of
dividends 0 0 33 393
Reacquired (6,514) (83,424) (2,592) (30,562)
------------------------------------------------
Net increase (decrease) 66 $ 555 (329) $ (3,991)
================================================
Precious Metals Fund
Sold 11,051 $ 145,746 6,548 $ 77,229
Issued as reinvestment of
dividends 0 0 0 0
Reacquired (11,158) (147,981) (6,720) (79,721)
------------------------------------------------
Net decrease (107) $ (2,235) (172) $ (2,492)
================================================
Global Income Fund
Sold 803 $ 8,176
Issued as reinvestment of
dividends 4 43
Reacquired (135) (1,439)
------------------------------------------------
Net increase 672 $ 6,780
================================================
High Income Fund
Sold 3,670 $ 29,380 870 $ 6,731
Issued as reinvestment of
dividends 108 866 30 226
Reacquired (1,629) (12,944) (493) (3,774)
------------------------------------------------
Net increase 2,149 $ 17,302 407 $ 3,183
================================================
Total Return Income Fund
Sold 4,933 $ 51,852 4,276 $ 44,172
Issued as reinvestment of
dividends 271 2,843 44 462
Reacquired (2,186) (23,004) (796) (8,271)
------------------------------------------------
Net increase 3,018 $ 31,691 3,524 $ 36,363
================================================
</TABLE>
Annual Report/77
<PAGE>
Notes to Financial Statements--Continued
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended Year Ended
September 30, 1996 September 30, 1995
--------------------------------------------------
Shares Amount Shares Amount
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Tax Exempt Fund
Sold 320 $ 3,795 59 $ 678
Issued as reinvestment of
dividends 9 110 4 51
Reacquired (63) (757) (78) (891)
--------------------------------------------------
Net increase (decrease) 266 $ 3,148 (15) $ (162)
==================================================
U.S. Government Fund
Sold 685 $ 6,247 505 $ 4,469
Issued as reinvestment of
dividends 83 754 77 684
Reacquired (956) (8,625) (565) (4,959)
--------------------------------------------------
Net increase (decrease) (188) $ (1,624) 17 $ 194
==================================================
Short-Intermediate Fund
Sold 5,886 $ 57,258 530 $ 4,930
Issued as reinvestment of
dividends 160 1,595 39 364
Reacquired (1,527) (14,793) (434) (4,038)
--------------------------------------------------
Net increase 4,519 $ 44,060 135 $ 1,256
==================================================
Money Market Fund
Sold 601,601 $ 601,601 259,220 $ 259,220
Issued as reinvestment of
dividends 563 563 475 475
Reacquired (592,318) (592,318) (259,075) (259,075)
--------------------------------------------------
Net increase 9,846 $ 9,846 620 $ 620
==================================================
<CAPTION>
Class B transactions in shares of beneficial interest were as follows
(amounts in thousands):
<S> <C> <C> <C> <C>
Equity Income Fund
Sold 882 $ 13,373 127 $ 1,722
Issued as reinvestment of
dividends 12 169 1 5
Reacquired (45) (679) (3) (34)
--------------------------------------------------
Net increase 849 $ 12,863 125 $ 1,693
==================================================
Value Fund
Sold 1,058 $ 12,181 376 $ 3,853
Issued as reinvestment of
dividends 12 142 1 13
Reacquired (100) (1,160) (5) (53)
--------------------------------------------------
Net increase 970 $ 11,163 372 $ 3,813
==================================================
Growth Fund
Sold 1,222 $ 29,313 314 $ 7,526
Issued as reinvestment of
dividends 49 1,119 0 0
Reacquired (116) (2,796) (6) (144)
--------------------------------------------------
Net increase 1,155 $ 27,636 308 $ 7,382
==================================================
Target Fund
Sold 2,560 $ 40,171 475 $ 7,270
Issued as reinvestment of
dividends 74 1,097 0 0
Reacquired (97) (1,509) (5) (63)
--------------------------------------------------
Net increase 2,537 $ 39,759 470 $ 7,207
==================================================
Discovery Fund
Sold 1,004 $10,725 1,011 $10,649
Issued as reinvestment of
dividends 0 0 0 0
Reacquired (221) (2,402) (14) (149)
--------------------------------------------------
Net increase 783 $ 8,323 997 $10,500
==================================================
Innovation Fund
Sold 1,776 $27,246 458 $ 6,372
Issued as reinvestment of
dividends 14 211 0 0
Reacquired (252) (3,798) (14) (197)
--------------------------------------------------
Net increase 1,538 $23,659 444 $ 6,175
==================================================
International Fund
Sold 484 $ 5,925 43 $ 499
Issued as reinvestment of
dividends 0 0 0 0
Reacquired (55) (673) 0 0
--------------------------------------------------
Net increase 429 $ 5,252 43 $ 499
==================================================
Precious Metals Fund
Sold 249 $ 3,194 28 $ 328
Issued as reinvestment of
dividends 0 0 0 0
Reacquired (79) (1,010) (7) (81)
--------------------------------------------------
Net increase 170 $ 2,184 21 $ 247
==================================================
Global Income Fund
Sold 301 $ 3,155
Issued as reinvestment of
dividends 3 35
Reacquired (9) (96)
---------------------------
Net increase 295 $ 3,094
===========================
High Income Fund
Sold 4,285 $34,159 571 $ 4,491
Issued as reinvestment of
dividends 92 732 4 26
Reacquired (137) (1,086) 0 0
--------------------------------------------------
Net increase 4,240 $33,805 575 $ 4,517
==================================================
Total Return Income Fund
Sold 4,305 $45,356 825 $ 8,780
Issued as reinvestment of
dividends 133 1,387 4 45
Reacquired (339) (3,544) (8) (94)
--------------------------------------------------
Net increase 4,099 $43,199 821 $ 8,731
==================================================
Tax Exempt Fund
Sold 180 $ 2,150 27 $ 318
Issued as reinvestment of
dividends 3 32 0 0
Reacquired (17) (197) (3) (31)
--------------------------------------------------
Net increase 166 $ 1,985 24 $ 287
==================================================
U.S. Government Fund
Sold 521 $ 4,736 183 $ 1,658
Issued as reinvestment of
dividends 17 151 1 8
Reacquired (72) (646) (1) (11)
--------------------------------------------------
Net increase 466 $ 4,241 183 $ 1,655
==================================================
</TABLE>
78 PIMCO Advisors Funds
<PAGE>
Notes to Financial Statements--Continued
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended Year Ended
September 30, 1996 September 30, 1995
--------------------------------------------------
Shares Amount Shares Amount
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Short-Intermediate Fund
Sold 97 $ 735 109 $ 1,043
Issued as reinvestment of
dividends 258 2,697 1 9
Reacquired (72) (699) (12) (116)
------------------------------------------------
Net increase 283 $ 2,733 98 $ 936
================================================
Money Market Fund
Sold 5,014 $ 5,014 104 $ 104
Issued as reinvestment of
dividends 15 15 0 0
Reacquired (3,826) (3,826) (83) (83)
------------------------------------------------
Net increase 1,203 $ 1,203 21 $ 21
================================================
Class C transactions in shares of beneficial interest were as follows (amounts
in thousands):
<CAPTION>
Equity Income Fund
<S> <C> <C> <C> <C>
Sold 3,430 $ 51,279 2,571 $ 32,021
Issued as reinvestment of
dividends 752 10,718 225 2,833
Reacquired (2,213) (32,723) (4,777) (59,787)
------------------------------------------------
Net increase (decrease) 1,969 $ 29,274 (1,981) $ (24,933)
------------------------------------------------
Value Fund
Sold 2,680 $ 30,954 632 $ 6,515
Issued as reinvestment of
dividends 26 319 2 26
Reacquired (355) (4,145) (12) (125)
------------------------------------------------
Net increase 2,351 $ 27,128 622 $ 6,416
================================================
Growth Fund
Sold 12,080 $ 289,628 11,100 $ 244,929
Issued as reinvestment of
dividends 6,164 140,590 2,780 55,575
Reacquired (13,015) (313,152) (12,582) (275,157)
------------------------------------------------
Net increase 5,229 $ 117,066 1,298 $ 25,347
================================================
Target Fund
Sold 20,255 $ 314,741 20,641 $ 283,139
Issued as reinvestment of
dividends 5,536 82,368 537 6,668
Reacquired (15,586) (241,645) (15,505) (213,112)
------------------------------------------------
Net increase 10,205 $ 155,464 5,673 $ 76,695
================================================
Discovery Fund
Sold 2,779 $ 29,867 1,930 $ 20,459
Issued as reinvestment of
dividends 0 0 0 0
Reacquired (1,435) (15,438) (65) (703)
------------------------------------------------
Net increase 1,344 $ 14,429 1,865 $ 19,756
================================================
Opportunity Fund
Sold 12,429 $ 406,910 7,303 $ 227,266
Issued as reinvestment of
dividends 4,255 131,687 576 15,401
Reacquired (13,067) (432,085) (8,616) (265,954)
------------------------------------------------
Net increase (decrease) 3,617 $ 106,512 (737) $ (23,287)
================================================
Innovation Fund
Sold 7,695 $ 115,417 5,445 $ 66,152
Issued as reinvestment of
dividends 103 1,501 0 0
Reacquired (4,076) (59,900) (1,081) (14,293)
------------------------------------------------
Net increase 3,722 $ 57,018 4,364 $ 51,859
================================================
International Fund
Sold 6,776 $ 82,691 6,697 $ 76,415
Issued as reinvestment of
dividends 0 0 454 5,207
Reacquired (8,788) (106,715) (12,263) (139,029)
------------------------------------------------
Net decrease (2,012) $ (24,024) (5,112) $ (57,407)
================================================
Precious Metals Fund
Sold 11,876 $ 151,402 10,551 $ 120,946
Issued as reinvestment of
dividends 0 0 0 0
Reacquired (12,198) (155,738) (11,561) (132,496)
------------------------------------------------
Net decrease (322) $ (4,336) (1,010) $ (11,550)
================================================
Global Income Fund
Sold 352 $ 3,688
Issued as reinvestment of
dividends 5 48
Reacquired (41) (429)
-------------------
Net increase 316 $ 3,307
-------------------
High Income Fund
Sold 8,190 $ 65,062 3,379 $ 25,818
Issued as reinvestment of
dividends 1,021 8,103 872 6,583
Reacquired (5,036) (39,922) (8,149) (60,958)
------------------------------------------------
Net increase (decrease) 4,175 $ 33,243 (3,898) $ (28,557)
================================================
Total Return Income Fund
Sold 6,983 $ 73,448 4,809 $ 50,148
Issued as reinvestment of
dividends 418 4,382 59 623
Reacquired (1,777) (18,547) (603) (6,335)
------------------------------------------------
Net increase 5,624 $ 59,283 4,265 $ 44,436
================================================
Tax Exempt Fund
Sold 404 $ 4,814 362 $ 4,118
Issued as reinvestment of
dividends 122 1,456 157 1,784
Reacquired (1,141) (13,622) (2,019) (22,758)
------------------------------------------------
Net decrease (615) $ (7,352) (1,500) $ (16,856)
================================================
U.S. Government Fund
Sold 2,360 $ 21,352 2,046 $ 18,037
Issued as reinvestment of
dividends 957 8,659 1,164 10,237
Reacquired (7,907) (71,398) (13,959) (121,610)
------------------------------------------------
Net decrease (4,590) $ (41,387) (10,749) $ (93,336)
================================================
</TABLE>
Annual Report/ 79
<PAGE>
Notes to Financial Statements--Continued
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended Year Ended
September 30, 1996 September 30, 1995
---------------------- -----------------------
Shares Amount Shares Amount
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Short-Intermediate Fund
Sold 5,947 $ 57,488 5,708 $ 53,690
Issued as reinvestment of
dividends 7 76 321 3,013
Reacquired (5,862) (56,681) (8,682) (81,327)
--------------------------------------------------
Net increase (decrease) 92 $ 883 (2,653) $ (24,624)
==================================================
Money Market Fund
Sold 818,137 $ 818,137 554,885 $ 554,885
Issued as reinvestment of
dividends 2,723 2,723 3,480 3,480
Reacquired (814,530) (814,530) (573,064) (573,064)
--------------------------------------------------
Net increase (decrease) 6,330 $ 6,330 (14,699) $ (14,699)
==================================================
</TABLE>
6. Written Option Activity
Written option activity for the year ended September 30, 1996 were as follows
(amounts in thousands):
<TABLE>
<CAPTION>
Amount of Number of
Premiums Options
- ---------------------------------------------------------------------------
<S> <C> <C>
Equity Income Fund:
Options outstanding at
September 30, 1995 $ 0 0
Options written during the
year ended September 30, 1996 350 2
Options cancelled in
closing purchase
transactions (252) (1)
Options expired prior to
exercise 0 0
Options exercised (98) (1)
----------------------
Options outstanding at
September 30, 1996 $ 0 0
======================
Closing transactions
resulted in a net
realized gain of $216.
Growth Fund:
Options outstanding at
September 30, 1995 $ 3,167 11
Options written during the
year ended
September 30, 1996 22,730 77
Options cancelled in
closing purchase
transactions (17,856) (57)
Options expired prior to
exercise (4,678) (23)
Options exercised (3,182) (7)
----------------------
Options outstanding at
September 30, 1996 $ 181 1
======================
Closing transactions
resulted in a net
realized loss of $1,335.
Target Fund:
Options outstanding at
September 30, 1995 $ 164 1
Options written during the
year ended September 30, 1996 3,171 16
Options cancelled in
closing purchase
transactions (2,776) (14)
Options expired prior to
exercise (134) (1)
Options exercised (425) (2)
----------------------
Options outstanding at
September 30, 1996 $ 0 0
======================
Closing transactions
resulted in a net
realized gain of $296.
Opportunity Fund:
Options outstanding at
September 30, 1995 $ 4,970 15
Options written during the
year ended September
30, 1996 34,253 142
Options cancelled in
closing purchase
transactions (24,897) (99)
Options expired prior to
exercise (7,052) (27)
Options exercised (5,638) (25)
----------------------
Options outstanding at
September 30, 1996 $ 1,636 6
======================
Closing transactions
resulted in a net
realized loss of $11,800.
Innovation Fund:
Options outstanding at
September 30, 1995 $ 0 0
Options written during the
year ended September
30, 1996 1,960 6
Options cancelled in
closing purchase
transactions (1,814) (5)
Options expired prior to
exercise (45) (1)
Options exercised (101) 0
----------------------
Options outstanding at
September 30, 1996 $ 0 0
======================
Closing transactions
resulted in a net
realized gain of $373.
Global Income Fund:
Options outstanding at
September 30, 1995 $ 0 0
Options written during the
year ended September
30, 1996 13 103,004
Options cancelled in
closing purchase
transactions (1) (462)
Options expired prior to
exercise (12) (102,542)
Options exercised 0 0
----------------------
Options outstanding at
September 30, 1996 $ 0 0
======================
Closing transactions
resulted in a net
realized gain of $1.
High Income Fund:
Options outstanding at
September 30, 1995 $ 7 0
Options written during the
year ended
September 30, 1996 0 0
Options cancelled in
closing purchase
transactions 0 0
Options expired prior to
exercise (7) 0
Options exercised 0 0
----------------------
Options outstanding at
September 30, 1996 $ 0 0
======================
Total Return Income Fund:
Options outstanding at
September 30, 1995 $ 32 0
Options written during the
year ended September
30, 1996 257 1
Options cancelled in
closing purchase
transactions (44) 0
Options expired prior to
exercise (89) (1)
Options exercised 0 0
----------------------
Options outstanding at
September 30, 1996 $ 156 0
======================
Closing transactions
resulted in a net
realized gain of $42.
U.S. Government Fund:
Options outstanding at
September 30, 1995 $ 101 0
Options written during the
year ended September
30, 1996 4 0
Options cancelled in
closing purchase
transactions 0 0
Options expired prior to
exercise (105) 0
Options exercised 0 0
----------------------
Options outstanding at
September 30, 1996 $ 0 0
======================
Short-Intermediate Fund:
Options outstanding at
September 30, 1995 $ 94 0
Options written during the
year ended September
30, 1996 79 0
Options cancelled in
closing purchase
transactions 0 0
Options expired prior to
exercise (124) 0
Options exercised 0 0
----------------------
Options outstanding at
September 30, 1996 $ 49 0
======================
</TABLE>
80 / PIMCO ADVISORS FUNDS
<PAGE>
Notes to Financial Statements--Continued
- -------------------------------------------------------------------------------
7. Outstanding Forward Currency Contracts
Outstanding forward currency contracts at September 30, 1996 were as follows
($ in thousands):
<TABLE>
<CAPTION>
Unrealized
Market Settlement Appreciation
Value Date (Depreciation)
- ------------------------------------------------------------------------
<S> <C> <C> <C>
International Fund
Contracts to Buy:
2,850,000,000 JY $25,633 10/96 $(411)
----------- ------------
Total contracts to Buy
(Payable Amount $26,044) $25,633 $ (411)
=========== ============
Contracts to Sell:
2,500,000,000 JY $22,485 10/96 $ 6
----------- ------------
Total contracts to Sell
(Receivable Amount $22,491) $22,485 $ 6
=========== ============
Global Income Fund
Contracts to Buy:
30,000 BP 47 11/96 $ 0
27,190 C$ 20 10/96 0
14,942,350 CK 554 11/96 4
32,679 DG 19 12/96 (1)
986,400 DM 649 11/96 (11)
1,161,663 DM 765 12/96 (4)
136,000 DM 90 1/97 (5)
1,191,000 FF 232 12/96 (3)
201,000,000 IL 132 10/96 1
658,200,000 IL 430 12/96 (1)
322,000,000 IR 134 3/97 4
28,900,000 JY 260 10/96 (10)
32,000,000 JY 290 12/96 (5)
81,000 NZ$ 56 11/96 1
6,000 SK 1 10/96 0
1,852,000 SK 280 12/96 0
66,000,000 SP 514 10/96 (9)
20,827,607 SP 162 1/97 (2)
----------- ------------
Total contracts to Buy
(Payable Amount $4,676) $ 4,635 $ (41)
=========== ============
Contracts to Sell:
243,002 A$ $ 192 10/96 $ 0
100,000 BF 3 12/96 0
29,950 BP 47 11/96 0
70,000 BP 110 12/96 (1)
217,000 C$ 159 10/96 (1)
200,000 C$ 147 11/96 0
225,542 C$ 167 3/97 0
565,666 DG 332 12/96 9
37,000 DK 6 12/96 0
2,483,244 DM 1,636 12/96 54
417,000 DM 277 3/97 11
400,000 DM 266 4/97 7
1,210,000 FF 235 12/96 3
13,000 FM 3 11/96 0
412,000,000 IL 270 10/96 0
456,800,000 IL 299 12/96 0
6,300,000 IR 3 3/97 0
59,055,000 JY 531 10/96 21
19,372,860 JY 180 12/96 5
955,000 NZ$ 665 10/96 (7)
Global Income Fund (continued)
240,000 NZ$ $ 166 11/96 $ (3)
1,000,000 SF 801 11/96 34
300,000 SK 44 11/96 0
5,453,000 SK 822 12/96 0
11,663,500 SP 91 10/96 0
----------- ------------
Total contracts to Sell
(Receivable Amount $7,584) $ 7,452 $132
=========== ============
Total Return Income Fund
Contracts to Buy:
5,464,819 DM $ 3,602 12/96 $(38)
5,745,242 DM 3,799 1/97 (38)
----------- ------------
Total contracts to Buy
(Payable Amount $7,477) $ 7,401 $(76)
=========== ============
Contracts to Sell:
1,000,000 C$ $ 735 10/96 $ 1
2,000,000 C$ 1,478 3/97 (7)
11,210,061 DM 7,393 12/96 418
----------- ------------
Total contracts to Sell
(Receivable Amount $10,018) $ 9,606 $412
=========== ============
Short-Intermediate Fund
Contracts to Buy:
119,300,000 BF $ 3,849 4/97 $(41)
3,896,000 DM 2,575 1/97 (22)
----------- ------------
Total contracts to Buy
(Payable Amount $6,487) $ 6,424 $(63)
=========== ============
Contracts to Sell:
116,260,000 BF $ 3,751 4/97 $ 38
3,896,000 DM 2,570 12/96 114
----------- ------------
Total contracts to Sell
(Receivable Amount $6,473) $ 6,321 $152
=========== ============
</TABLE>
8. Proposed Restructuring
On September 17, 1996, the Board of Trustees of the PIMCO Advisors Funds
(the "PAF Trust") approved the restructuring of the PAF Trust and two other
investment companies affiliated with the PAF Trust; namely, PIMCO Funds: Equity
Advisors Series and PIMCO Funds: Pacific Investment Management Series. The
restructuring is subject to a number of conditions, including various
shareholder approvals, and is expected to occur in January 1997.
Annual Report / 81
<PAGE>
Notes to Financial Statements--Continued
- --------------------------------------------------------------------------------
9. Federal Income Taxes
For federal income tax purposes, the funds indicated below have capital loss
carryforwards as of September 30, 1996, which are available to offset future
capital gains, if any ($ in thousands).
<TABLE>
<CAPTION>
Capital Loss
Carryforward Expiration
<S> <C> <C>
- ---------------------------------------------------
Discovery Fund $ 843 2004
High Income Fund 10,520 1997
16,088 1998
28,820 1999
5,495 2002
50,541 2003
Tax-Exempt Fund 1,008 2003
U.S. Government Fund 12,490 1997
12,622 1998
17,277 2002
8,501 2003
Short-Intermediate Fund 929 2000
3,550 2002
1,170 2003
</TABLE>
82 / PIMCO Advisors Funds
<PAGE>
Report of Independent Accountants
- --------------------------------------------------------------------------------
To the Trustees and Shareholders of PIMCO Advisors Funds:
We have audited the accompanying statements of assets and liabilities, including
the portfolios of investments, 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 Global Income 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) as of September
30, 1996, and the related statements of operations, and changes in net assets
for the year then ended for all Funds, and the statements of changes in net
assets for the year ended September 30, 1995 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 PIMCO Advisors Global Income Fund which commenced operations
October 2, 1995 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, 1996, 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, 1996 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 22, 1996
ANNUAL REPORT /83
<PAGE>
Federal Income Tax Information (unaudited)
- --------------------------------------------------------------------------------
Capital gains distributions paid during the fiscal year ended September 30, 1996
were in amounts as follows:
<TABLE>
<CAPTION>
Per Share Per Share
Long-Term Short-Term
Capital Gains Capital Gains
- ----------------------------------------------------------
<S> <C> <C>
Equity Income Fund A $0.7238 $0.0548
Equity Income Fund B 0.7238 0.0548
Equity Income Fund C 0.7238 0.0548
Growth Fund A 2.3608 0.5730
Growth Fund B 2.3608 0.5730
Growth Fund C 2.3608 0.5730
Target Fund A 0.8068 0.9726
Target Fund B 0.8068 0.9726
Target Fund C 0.8068 0.9726
Opportunity Fund A 7.4719 0.2585
Opportunity Fund C 7.4719 0.2585
Innovation Fund A 0.2650 0.0818
Innovation Fund B 0.2650 0.0818
Innovation Fund C 0.2650 0.0818
Total Return Income Fund A 0.1500 0.1500
Total Return Income Fund B 0.1500 0.1500
Total Return Income Fund C 0.1500 0.1500
</TABLE>
For the benefit of shareholders of the Tax Exempt Fund, this is to inform you
that 100% of dividends paid by the Fund during its fiscal year qualify as
exempt-interest dividends.
For the benefit of corporate shareholders only, the portion of dividends paid
out of ordinary income earned during certain Funds' fiscal years ended September
30, 1996 which qualify for the corporate dividend-received deduction are as
follows:
Equity Income Fund 27.1%
Value Fund 43.6%
Growth Fund 40.8%
Target Fund 6.1%
Opportunity Fund 23.6%
Innovation Fund 3.3%
High Income Fund 1.7%
84 / PIMCO Advisors Funds
<PAGE>
[This Page Intentionally Left Blank]
<PAGE>
[This Page Intentionally Left Blank]
<PAGE>
[This Page Intentionally Left Blank]
<PAGE>
PIMCO Advisors Funds Investments built on expertise
PIMCO Advisors Funds offer discerning investors unique access to the
institutional investment expertise of PIMCO Advisors L.P. Managing over $104
billion in assets ($24 billion in mutual funds), PIMCO Advisors consists of six
institutional investment firms, each specializing in a particular investment
discipline or style. Together their reputation and performance record has
attracted many prestigious institutional clients, including 35 of the 100
largest U.S. corporations.
This material is authorized for use only when preceded or accompanied by a
current PIMCO Advisors Funds prospectus, which describes in greater detail the
investment policies, management fees and other matters of interest to
prospective investors. Please read the prospectus carefully before you invest or
send money.
Manager PIMCO Advisors L.P., 800 Newport Center Drive, Suite 100,
Newport Beach, CA 92660
Distributor PIMCO Advisors Distribution Company, 2187 Atlantic Street,
Stamford, CT 06902
Custodian The Bank of New York, 48 Wall Street, New York, NY 10005
Shareholder Shareholder Services, Inc., P.O. Box 5866, Denver, CO 80217
Servicing Agent and
Transfer Agent
Independent Coopers & Lybrand L.L.P., 1301 Avenue of the Americas,
Accountant New York, NY 10019
Legal Counsel Ropes and Gray, One International Place, Boston, MA 02110
For Account For PIMCO Advisors Funds account information contact your
Information financial advisor, or if you receive account statements
directly from PIMCO Advisors Funds, you can also call
1-800-426-0107. Telephone representatives are available
Monday-Friday 8:30 am to 8:00 pm eastern time.
This is a copy of a report by PIMCO Advisors Funds to its shareholders.
Distribution of this report to persons other than shareholders of the Trust is
authorized only when accompanied by the Trust's Prospectus. This report does not
offer for sale or solicit orders to buy any securities.
PZ 002 (11/96)
----------------
PIMCO Advisors BULK RATE
Distribution Company U.S. POSTAGE
PAID
P I M C O 2187 Atlantic Street SMITHTOWN, NY
Stamford, CT 06902 PERMIT NO. 700
----------------
