<PAGE> front cover
Semi - Annual Report
September 30, 1995
PIMCO
INTERNATIONAL FUND
<PAGE> inside front cover
CONTENTS
Chairman's Message 1
Statement of Assets and Liabilities 2
Statement of Operations 3
Statement of Change in Net Assets 4
Financial Highlights 5
Schedule of Investments 6
Notes to the Financial Statements 10
<PAGE> 1
CHAIRMAN'S MESSAGE
Dear Client:
We are pleased to present this semi-annual report for the six-
month period ended September 30, 1995. The International Fund
is offered exclusively to our separate account clients in
order to provide an efficient vehicle for opportunistic
investment in foreign fixed income markets.
PIMCO began reallocating client assets to the International
Fund in early May, pushing total assets to exceed $2.2 billion
by the end of September from an April low of less than $50
million. This dramatic shift reflects PIMCO's bullish outlook
for foreign bonds, particularly intermediate and long-term
German, Finnish and Danish issues. Our outlook takes into
account low inflation rates, slowing economic growth, and our
belief that European central banks will lower interest rates
in an effort to bolster flagging economies. While our shift
into foreign assets was not immediately beneficial, strong
third quarter returns in the International Fund provided a
significant boost to overall performance in client accounts.
Below is a summary of the International Fund's total return
performance compared to relevant market indices. Performance
is net of fees and reflects the reinvestment of dividends.
Cumulative Returns from Inception through September 30, 1995
[Table appears here]
<TABLE>
<CAPTION>
Annualized Returns Ended 9/30/95
Since
1 Yr. 3 Yrs. 5 Yrs. Inception
<S> <C> <C> <C> <C>
International
Fund (%) 13.35 6.36 8.26 7.50
Salomon World
Bond Index (%) 16.34 8.49 9.52 7.82
Lehman Gov't/
Corp. Index (%) 14.35 6.90 9.89 9.11
</TABLE>
[Graph appears here]
<TABLE>
<CAPTION>
International Salomon LBGC
Month Unit Foreign
Value Hedged
<S> <C> <C> <C>
12/31/89 1,000,000 1,000,000 1,000,000
12/31/90 1,070,758 1,033,413 1,082,841
12/31/91 1,223,513 1,148,200 1,257,457
12/31/92 1,309,150 1,238,152 1,352,790
12/31/93 1,496,037 1,400,508 1,502,023
12/31/94 1,353,748 1,348,529 1,449,322
09/30/95 1,515,817 1,541,829 1,651,278
</TABLE>
The line graph depicts the value of $1,000,000 invested at the
Fund's inception in December 1989 and held through September
1995, compared to the Salomon Brothers Non - $ U.S. World
Government Bond - 10 Currency Hedged Index and the Lehman
Brothers Government/Corporate Index, each an unmanaged market
index.
Thank you for granting us authority to invest in the
International Fund on your behalf. We remain confident that
an allocation to international fixed income markets is the
best course for the long-term investor.
Sincerely,
/s/ Brent R. Harris
BRENT R. HARRIS
Chairman of the Board
November 20, 1995
<PAGE> 2
Statement of Assets and Liabilities
September 30, 1995 (unaudited)
<TABLE>
<CAPTION>
Amounts in thousands, except per share amounts
<S> <C>
Assets:
Investments, at value $ 3,223,636
Cash and foreign currency 1,159
Receivable for investments and foreign currency sold 870,528
Interest and dividends receivable 98,268
Other assets 4
4,193,595
Liabilities:
Payable for investments purchased 1,983,086
Written options outstanding 74
Payable for Fund shares redeemed 13,000
Accrued investment adviser's fee 463
Accrued administrator's fee 208
Variation margin payable 660
Other accrued expenses and liablities 215
1,997,706
Net Assets $ 2,195,889
Net Assets Consist of:
Paid in capital $ 2,205,973
Undistributed net investment income 46,950
Accumulated undistributed net realized loss (30,730)
Net unrealized depreciation (26,304)
$ 2,195,889
Shares Issued and Outstanding 276,281
Net Asset Value, Offering and Redemption Price $ 7.95
Per Share (Net Assets Per Share Outstanding)
Cost of Investments Owned 3,194,377
Cost of Foreign Currency Held 1,184
</TABLE>
See Notes to Financial Statements
<PAGE> 3
Statement of Operations
For the six months ended September 30, 1995 (unaudited)
<TABLE>
<CAPTION>
$ in thousands
<S> <C>
Investment Income:
Interest $ 50,154
Expenses:
Investment advisory fees 1,889
Administration fees 752
Custodian and transfer agent fees 434
Audit fees 43
Legal fees 26
Trustees' fees 3
Miscellaneous 18
Total expenses 3,165
Fees paid indirectly (5)
Net expenses 3,160
Net Investment Income 46,994
Net Realized and Unrealized Gain (Loss)
Net realized gain on investments 6,666
Net realized gain on futures contracts and written options 1,195
Net realized gain on foreign currency transactions 46,358
Net change in unrealized appreciation on investments 29,222
Net change in unrealized depreciation on futures contracts
and written options (1,027)
Net change in unrealized depreciation on translation of
assets and Liabilities denominated in foreign currencies (55,136)
Net Gain 27,278
Net Increase in Assets Resulting from Operations $ 74,272
</TABLE>
See Notes to Financial Statements
<PAGE> 4
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
$ in thousands
Six months ended Year Ended
September 30, 1995 March 31,1995
(unaudited)
Increase (Decrease) in Net Assets from:
<S> <C> <C>
Operations
Net investment income $ 46,994 $ 25,941
Net realized gain (loss) 54,219 (108,960)
Net change in unrealized appreciation (26,941) 9,680
(depreciation)
Net increase (decrease) resulting from 74,272 (73,339)
operations
Distributions to Shareholders
From net investment income 0 (35,032)
From net realized capital gains 0 0
Total distributions 0 (35,032)
Fund Share Transactions
Receipts for shares sold 2,244,751 50,047
Issued as reinvestment of distributions 0 33,847
Cost of shares redeemed (169,084) (2,226,551)
Net increase (decrease) resulting from 2,075,667 (2,142,657)
Fund share transactions
Total Increase (Decrease) in Net Assets $ 2,149,939 $(2,251,028)
Net Assets
Beginning of period $ 45,950 $ 2,296,978
End of period * 2,195,889 45,950
* Including undistributed net
Investment income of: $ 46,950 $ (44)
</TABLE>
See Notes to Financial Statements
<PAGE> 5
Financial Highlights
<TABLE>
<CAPTION>
Selected Per Share Data 9/30/95
for the Year or (unaudited) 3/31/95 3/31/94 3/31/93 3/31/92 3/31/91
Period Ended:
<S> <C> <C> <C> <C> <C> <C>
Net asset value beginning
of period $ 7.44 $ 9.93 $ 10.53 $ 10.02 $ 9.94 $ 9.78
Net investment income 0.18 2.18 0.47 0.62 0.79 0.79
Net realized and 0.33 (2.41) 0.24 0.42 0.27 0.30
unrealized gain
Total income (loss) from 0.51 (0.23) 0.71 1.04 1.06 1.09
investment operations
Dividends from net 0.00 (2.26) (0.96) (0.48) (0.78) (0.83)
investment income
Distributions from net 0.00 0.00 (0.35) (0.05) (0.20)a (0.10)
realized capital gains
Total distributions 0.00 (2.26) (1.31) (0.53) (0.98) (0.93)
Net asset value end of
period $ 7.95 $ 7.44 $ 9.93 $ 10.53 $ 10.02 $ 9.94
Total return (%) 6.85 (1.27) 6.54 10.61 10.97 11.55
Net assets end of $2,195,889 $45,950 $2,296,978 $2,589,677 $1,314,661 $609,660
period (000's)
Ratio of expenses to 0.46 b 0.43 0.43 0.46 0.51 0.55
average net assets (%)
Ratio of net investment
income to 6.92 b 5.90 5.51 6.67 8.24 8.23
average net assets (%)
Portfolio turnover rate (%) 627 674 370 301 201 202
</TABLE>
(a) Gain distribution includes $0.14 per share characterized for
tax purposes as distributions from ordinary income.
(b) Annualized.
See Notes to Financial Statements
<PAGE> 6
Schedule of Investments
September 30, 1995
(unaudited)
<TABLE>
<CAPTION>
Principal Value
Amount (000's)
(000's)
<S> <C> <C>
ARGENTINA (c)(e) - 0.2%
Republic of Argentina
19.100% due 05/01/01 AP 6,700 $ 3,910
Total Argentina 3,910
(Cost $3,886)
CANADA (c)(e) - 3.1%
Government of Canada
9.000% due 12/01/04 C$ 2,500 2,014
8.750% due 12/01/05 82,900 66,048
Total Canada 68,062
(Cost $64,431)
DENMARK (c)(e) - 3.9%
Government of Denmark
7.000% due 11/10/24 DK 570,000 84,940
Total Denmark 84,940
(Cost $83,557)
FINLAND (c)(e) - 13.9%
Government of Finland
10.000% due 09/15/01 FM 253,000 65,229
9.500% due 03/15/04 931,000 239,150
Total Finland 304,379
(Cost $296,270)
FRANCE (c)(e) - 0.9%
Government of France
7.750% due 10/25/05 FF 100,370 20,700
Total France 20,700
(Cost $20,668)
Principal Value
Amount (000's)
(000's)
GERMANY (c)(e) - 40.1%
German Unity Fund
8.000% due 01/21/02 DM 4,000 $3,039
Government of Germany
8.375% due 05/21/01 60,000 46,417
8.000% due 07/22/02 99,000 75,341
7.500% due 11/11/04 78,000 57,493
7.375% due 01/03/05 350,000 256,022
6.000% due 06/20/16 160,000 96,067
6.250% due 01/04/24 575,500 346,750
Total Germany 881,129
(Cost $875,401)
IRELAND (c)(e) - 6.0%
Irish Gilt
9.750% due 06/01/98 IP 36,000 55,709
6.250% due 04/01/99 45,000 77,131
Total Ireland 132,840
(Cost $130,071)
PANAMA - 0.1%
Bladex
6.875% due 05/23/96 2,000 1,999
Total Panama 1,999
(Cost $1,999)
NETHERLANDS (c)(e) - 7.0%
Government of Netherlands
9.000% due 05/15/00 NG 2,400 1,697
7.000% due 06/15/05 50,000 32,004
8.250% due 02/15/07 171,800 119,094
Total Netherlands 152,795
(Cost $144,946)
</TABLE>
<PAGE> 7
<TABLE>
<CAPTION>
Principal Value
Amount (000's)
(000's)
<S> <C> <C>
SPAIN (c)(e) - 12.2%
7.300% due 07/30/97 500,000 $ 103,892
10.000% due 02/28/05 450,000 164,797
Total Spain 268,689
(Cost $269,175)
UNITED KINGDOM (c)(e) - 2.7%
United Kingdom Gilt
6.000% due 08/10/99 BP 40,000 60,117
Total United Kingdom 60,117
(Cost $60,245)
UNITED STATES - 31.0%
Corporate Bonds and Notes - 3.9%
Ford Motor Credit Corp.
5.570% due 03/23/99 (g) 12,500 12,362
General Motors
Acceptance Corp.
4.625% due 02/09/96 7,700 7,666
5.500% due 03/21/96 8,000 7,986
8.800% due 04/04/96 5,100 5,169
8.125% due 01/27/97 48,700 49,877
Long Island Lighting
Co.
8.750% due 05/01/96 2,000 2,025
Occidental Petroleum
11.750% due 03/15/11 250 268
85,353
Mortgage-Backed Securities - 27.1%
Federal Home Loan Mortgage Corp.
6.429% due 01/01/20-
06/01/30 (f)(g) 43,279 43,327
7.345% due 08/01/24(g) 8,509 8,732
7.573% due 01/01/24(g) 6,581 6,805
7.574% due 02/01/24(g) 6,879 7,038
7.955% due 08/01/22(g) 4,574 4,756
8.275% due 06/01/22(g) 8,005 8,191
Principal Value
Amount (000's)
(000's)
Federal National Mortgage Assn.
5.706% due 04/01/24(g) $5,143 $5,211
6.395% due 08/25/25(g) 98,890 99,014
6.429% due 12/01/27(g) 10,733 10,819
7.166% due 04/01/25(g) 10,373 10,613
7.575% due 01/01/23(g) 6,299 6,533
7.599% due 09/01/24(g) 7,110 7,295
7.624% due 11/01/22(g) 5,036 5,220
7.627% due 01/01/23(g) 6,516 6,756
7.831% due 02/01/23(g) 12,737 13,244
7.867% due 05/01/22(g) 15,135 15,749
7.909% due 08/01/23(g) 6,221 6,488
8.297% due 07/01/21(g) 4,229 4,419
Government National Mortgage Assn.
6.500% due 07/20/23-
10/20/24 (f)(g) 107,584 109,000
7.000% due 09/20/23-
05/20/25 (f)(g) 97,712 99,569
7.375% due 05/20/23-
06/20/24 (f)(g) 28,973 29,658
Kearny St. Real Estate Co.
6.600% due 10/15/02 2,000 1,999
Prudential Home Mortgage
6.100% due 10/25/24 9,826 9,770
6.750% due 08/25/08 10,000 9,984
Resolution Trust Corp.
6.979% due 06/25/21(g) 3,993 3,969
Ryland Acceptance Corp.
7.873% due 09/25/23(g) 60,436 61,342
595,501
Total United States 680,854
(Cost $679,916)
PURCHASED OTC OPTIONS(c)(e) - 1.0%
Call - Government of Germany
6.25% 01/04/24
Strike @ 74.00 Exp. 251,000 21,865
10/10/95 DM
Put - Japanese Yen v. U.S. Dollar
Strike @ 100.00 Exp.
10/03/95 JY 100,000 64
Total Purchased OTC Options 21,929
(Cost $22,501)
</TABLE>
<PAGE> 8
Schedule of Investments (Continued)
September 30, 1995 (unaudited)
<TABLE>
<CAPTION>
Principal Value
Amount (000's)
(000's)
<S> <C> <C>
SHORT-TERM INSTRUMENTS - 24.7%
Discount Notes - 24.2%
AT&T Corp.
5.690% due 10/20/95 2,600 2,593
5.650% due 11/03/95 4,000 3,980
5.640% due 11/22/95 43,700 43,351
Associates Corp. of North America
5.720% due 10/23/95 49,400 49,235
5.690% due 11/16/95 5,000 4,964
5.680% due 11/27/95 2,650 2,627
Caisse National Telecom
5.710% due 10/16/95 15,950 15,915
Emerson Electric
5.680% due 10/24/95 900 897
Federal National Mortgage Assn.
5.600% due 10/10/95 16,500 16,479
5.590% due 10/20/95 2,200 2,194
5.580% due 10/23/95 12,300 12,260
5.600% due 11/02/95 11,200 11,146
General Electric Capital Corp.
5.740% due 10/13/95 22,100 22,061
Hewlett Packard
5.630% due 11/21/95 102,300 101,500
Motorola
5.700% due 10/26/95 30,000 29,886
National Rural
Utilities Cooperative
5.840% due 10/03/95 4,000 3,999
New South Wales Treasury
5.660% due 11/10/95 700 696
5.700% due 11/20/95 27,800 27,584
Province of Ontario
5.840% due 12/07/95 2,100 2,076
Canadian Wheat Board
5.650% due 11/09/95 43,500 43,241
Proctor & Gamble Co.
5.630% due 11/17/95 3,750 3,723
Principal Value
Amount (000's)
(000's)
Queensland Treasury Corp.
5.630% due 11/08/95 $ 4,000 $ 3,977
5.630% due 12/12/95 12,500 12,347
Sprint Capital Corp.
6.030% due 11/20/95 25,000 24,795
Teco Finance, Inc.
5.660% due 10/12/95 5,600 5,591
USX Corp.
6.191% due 10/31/95 25,500 25,373
U.S. West Communications
5.690% due 10/20/95 1,600 1,595
5.710% due 10/24/95 16,900 16,841
Warner-Lambert Co.
5.830% due 10/13/95 11,200 11,180
5.620% due 10/17/95 21,000 20,951
Government of Western Australia
5.700% due 11/15/95 5,000 4,965
Abbott Laboratories
5.690% due 10/11/95 400 399
Eli Lilly & Co.
6.270% due 11/28/95 700 693
529,114
Repurchase Agreement - 0.1%
State Street Bank
5.250% due 10/02/95 2,405 2,403
(Dated 9/29/95.
Collateralized by
U.S. Treasury Note
6.625% 03/31/97
valued at $2,454,078.
Repurchase proceeds
are $2,406,052.)
U.S. Treasury Bill - 0.4%
5.136% due 10/26/95- 9,835 9,776
2/08/96 (b)(f)
Total Short-Term Instruments 541,293
(Cost $541,311)
</TABLE>
<PAGE> 9
Schedule of Investments (Continued)
September 30, 1995 (unaudited)
TOTAL INVESTMENTS (a) - 146.8% 3,223,636
(Cost $3,194,377)
WRITTEN OPTIONS (d) - 0.0% (74)
(Premiums $40)
OTHER ASSETS AND LIABILITIES (Net) - 6.8% (1,027,673)
NET ASSETS - 100.0% $2,195,889
Notes to Schedule of Investments ($ in thousands):
(a)At September 30, 1995, the net realized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess value over tax cost.
$ 37,026
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost over value.
(7,767)
Unrealized appreciation-net
$ 29,259
(b) Securities with an aggregate market value of $9,776
have been segregated with the custodian to cove margin
requirements for the following open future contracts at
September 30, 1995:
<TABLE>
<CAPTION>
Type Contracts Unrealized
Appreciation/
(Depreciation)
<S> <C> <C>
German Gov't 10 Year Bond(12/95) 193 $ 100
U.S. Treasury 10 Year Note(12/95) 763 (358)
$ (258)
</TABLE>
(c) Forward currency contracts outstanding at
September 30, 1995:
<TABLE>
<CAPTION>
Unrealized
Appreciation/
Type Amount Month (Depreciation)
<S> <C> <C> <C>
Sell BP 43,101 10/95 $ (798)
Buy C$ 119,358 10/95 1,387
Sell 87,966 10/95 (138)
Buy DK 126,960 10/95 249
Sell 215,737 10/95 (979)
Buy DM 92,170 10/95 114
Buy 29,052 11/95 (92)
Sell 1,099,705 10/95 (16,299)
Buy FF 228,635 09/96 1,331
Sell 229,320 10/95 42
Buy FM 321,153 10/95 (147)
Buy 158,400 09/96 583
Sell 511,864 10/95 (2,751)
Sell 315,990 11/95 0
Buy IL 181,630,337 09/96 443
Buy IP 31,646 09/96 950
Sell 72,617 10/95 (2,304)
Buy JY 365,901 10/95 (80)
Sell 9,701,970 10/95 (1,147)
Sell NG 341,271 10/95 (4,413)
Buy SK 488,907 09/96 1,422
Buy SP 13,092,361 10/95 3,179
Sell 12,813,475 10/95 (2,959)
$ (22,407)
</TABLE>
(d) Premiums received on OTC Written Options:
<TABLE>
<CAPTION>
Premium Market
Par Received Value
<S> <C> <C> <C>
Call - Japanese Yen v. U.S. Dollar
Strike @ 92.00 Exp. 10/03/95 100,000 $32 $41
Put - Japanese Yen v. U.S. Dollar
Strike @ 108.00 Exp. 10/03/95 100,000 8 33
$40 $74
</TABLE>
(e) Principal amount in indicated currency
AP Argentine Peso
BP British Pound
C$ Canadian Dollar
DK Danish Kroner
DM German Mark
FM Finnish Markka
FF French Franc
IP Irish Punt
JY Japanese Yen
NG Netherlands Guilder
SP Spanish Peseta
(f) Securities are grouped by coupon rate and represent a
range of maturities.
(g) Variable rate security. The rate listed is as of
September 30, 1995
<PAGE> 10
1. Significant Accounting Policies
The International Fund (the "Fund"), which commenced
operations on December 13, 1989, is a series of the PIMCO
Funds (the "Trust"). The Trust was organized under the laws
of the Commonwealth of Massachusetts on February 19, 1987,
and is registered under the Investment Company Act of 1940,
as amended, as a no-load, open-end management investment
company. The following is a summary of significant
accounting policies followed in the preparation of the Fund's
financial statements. The policies are in conformity with
generally accepted accounting principles.
Security Valuation. Portfolio securities and other assets
for which market quotations are readily available are stated
at market value. Market value is determined on the basis of
last reported sales prices, or if no sales are reported, as
is the case for most securities traded over-the-counter, the
mean between representative bid and asked quotations
obtained from a quotation reporting system or from
established market makers. Fixed income securities, including
those to be purchased under firm commitment agreements (other
than obligations having a maturity of sixty days or less),
are normally valued on the basis of quotes obtained from
brokers and dealers or pricing services. Foreign currency
amounts are converted to U.S. dollars using foreign exchange
quotations received from independent dealers. Short-term
investments having a maturity of sixty days or less are
valued at amortized cost, which approximates market value.
Certain fixed income securities for which daily market
quotations are not available may be valued, pursuant to
guidelines established by the Board of Trustees.
Security Transactions and Investment Income. Security
transactions are recorded as of the trade date. Securities
purchased or sold on a when-issued or delayed-delivery basis
may be settled a month or more after the trade date. Interest
income is recorded on the accrual basis and includes the
accretion of discounts and amortization of premiums.
Dividend income is recorded on the ex-dividend date. Realized
gain or loss from securities sold are recorded on the
identified cost basis.
Dividends and Distributions to Shareholders. The Fund
declares and distributes dividends representing substantially
all net investment income on a quarterly basis. Any net
realized capital gains from the sale of portfolio securities
will be distributed no less frequently than once each year.
The Fund records distributions to shareholders on the
ex-dividend date.
Distributions of foreign exchange gains or losses on
investments and the income generated from such investments,
arising from fluctuations of exchange rates of the non-dollar
denominated investment relative to the U.S. dollar, are
reported to shareholders as ordinary income distributions in
accordance with the provisions of the Internal Revenue Code.
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 such items as wash sales, foreign currency transactions
and capital loss carryforwards.
Federal Income Taxes. It is the Fund's policy to distribute
all of its taxable income to shareholders and otherwise
comply with the provisions of the Internal Revenue Code
applicable to regulated investment companies. Therefore, no
provision has been made for federal income tax on net
investment income and realized or unrealized capital gains.
Futures and Options. The Fund is authorized to enter into
futures contracts and options. The primary risks associated
with the use of futures contracts and options are imperfect
correlation between the change in market value of the
securities held by the Fund and the prices of futures
contracts and options,and the
<PAGE> 11
possibility of an illiquid market. Futures contracts and
purchased options are valued based upon their quoted daily
settlement prices. The premium received for a written option
is recorded as an asset with an equal liability which is
marked to market based on the option's quoted daily
settlement price. Fluctuations in value of such instruments
are recorded as unrealized appreciation (depreciation) until
terminated at which time realized gains and losses are
recognized.
Forward Foreign Currency Contracts. The Fund is authorized
to enter into forward foreign exchange contracts for the
purpose of hedging against foreign exchange risk arising from
the Fund's investment or anticipated investment in securities
denominated in foreign currencies. The aggregate principal
amounts of the contracts for which delivery is anticipated
are recorded in the Fund's accounts, while such amounts are
not recorded if the Fund intends to settle the contracts
prior to delivery. All commitments are marked-to-market daily
at the applicable translation rates and any resulting
unrealized gains or losses are recorded in the Fund's
financial statements. The Fund records realized gains or
losses at the time the forward contract is extinguished by
entry into a closing transaction or by delivery of the
currency. Risks may arise upon entering into these contracts
from the potential inability of counterparties to meet the
terms of their contracts and from unanticipated movements in
the value of a foreign currency relative to the U.S. dollar.
2. Fees, Expenses, and Related Party Transactions
Investment Advisory Fee. Pacific Investment Management
Company ("PIMCO") serves as investment adviser (the
"Adviser") to the Trust, pursuant to an investment advisory
contract. The Adviser received a monthly fee from the Fund
at an annual rate based on average daily net assets of the
Fund as follows: 0.30% of the first $150 million, and 0.25%
thereafter. Effective October 1, 1995, the Advisory fee will
be 0.25%.
Administration Fee. PIMCO also serves as Administrator,
("Administrator"), and provides administrative services to
the Fund for which it received a monthly administrative fee
at the annual rate of 0.10% of the Fund's average daily net
assets. Effective October 1, 1995, the Fund adopted a
"unified fee structure" whereby PIMCO provides services
necessary for the operation of the Fund for a single
administrative fee. The new administrative fee is 0.25%.
Expense Offset Arrangement. Fees paid indirectly represent
reductions in custody and transfer agent expenses from
interest income earned on incidental uninvested cash
balances. Such fees have been added to custody and transfer
agent fees to reflect total Fund expenses.
Expense Limitation. Prior to adoption of the unified fee
structure, the Adviser and the Administrator, in the interest
of limiting expenses of the Fund, agreed to limit the
expenses of the Fund, including the advisory and
administrative fees, to not more than 0.65% of its average
net assets on an annual basis.
Expenses. The Fund is responsible for the following expenses:
(i) salaries and other compensation of any of the Trust's
executive officers and employees who are not officers,
directors, stockholders or employees of PIMCO or its
subsidiaries or affiliates; (ii) taxes and governmental
fees; (iii) brokerage fees and commissions and other
portfolio transaction expenses; (iv) the costs of borrowing
money, including interest expenses; (v) fees and expenses of
the Trustees who are not "interested persons" of PIMCO or the
Trust, and any counsel retained exclusively for their
benefit; (vi) extraordinary expenses, including costs of
litigation and indemnification expenses; and (vii) expenses,
such as organizational expenses, which are capitalized in
accordance with generally accepted accounting principles.
Each unaffiliated Trustee receives an annual retainer of
$7,000, plus $2,000 for each Board of Trustees meeting
attended, plus reimbursement of related expenses. These
expenses are allocated to the Funds of the Trust according to
their respective net assets.
<PAGE> 12
Related Party Transactions. PIMCO Advisors Distribution
Company ("PADCO"), an indirect wholly-owned subsidiary of
PIMCO Advisors L.P., serves as the distributor of the Fund's
shares. Under the contract, all expenses relating to the
distribution of Fund shares will be paid by the Adviser, the
Administrator or PADCO out of past profits and resources
which may include fees received by the Adviser or the
Administrator.
3. Purchases and Sales of Securities
Purchases and sales of investment securities (excluding
short-term instruments) for the Fund for the period ended
September 30, 1995 were as follows ($ in thousands):
Purchases Sales
U.S. Government Other U.S. Government Other
$722,335 $10,348,885 $203,710 $8,215,868
4. Transactions in Written Call and Put Options were as
follows ($ in thousands):
<TABLE>
<CAPTION>
Premiums
<S> <C>
Balance at March $ 46
31, 1995
Sales -
Closing buys -
Expirations (6)
Exercised -
Balance at
September 30, 1995 $ 40
</TABLE>
5. Shares of Beneficial Interest
The Fund may issue an unlimited number of shares of
beneficial interest with a $.0001 par value. Changes in
shares of beneficial interest were as follows (in thousands):
<TABLE>
<CAPTION>
Six months
ended Year ended
September March 31,
30, 1995 1995
(unaudited)
<S> <C> <C>
Shares sold 291,802 5,258
Shares redeemed (21,700) (234,125)
Shares issued as
reinvestment of dividends 0 3,820
Net decrease 270,102 (225,047)
</TABLE>
<PAGE> inside back cover
Trustees and Officers
Brent R. Harris Chairman and Trustee
Guilford C. Babcock Trustee
Vern O. Curtis Trustee
Thomas P. Kemp Trustee
William J. Popejoy Trustee
R. Wesley Burns President
Garlin G. Flynn Secretary
John P. Hardaway Treasurer
Investment Adviser and Administrator
Pacific Investment Management Company
840 Newport Center Drive, Suite 360
Newport Beach, California 92660
Transfer Agent and Custodian
Investors Fiduciary Trust Company
127 West 10th Street
Kansas City, Missouri 64105
Counsel
Dechert Price & Rhoads
1500 K Street N.W.
Washington, D.C. 20005
Independent Accountants
Price Waterhouse LLP
1055 Broadway
Kansas City, MO 64105
<PAGE> back cover
P I M C O
840 Newport Center Drive, Suite 360
Newport Beach, CA 92660
(800) 927-4648
This report is submitted for the general information of the
shareholders of the PIMCO International Fund. It is not
authorized for distribution to prospective investors unless
accompanied or preceded by an effective Prospectus for the
PIMCO Funds, which contains information covering its
investment policies as well as other pertinent information.
