<PAGE> cover
FINANCIAL STATEMENTS August 27, 1996
P I M C O
V E R S A S T Y L E E Q U I T Y F U N D I I
<PAGE>
STATEMENT OF OPERATIONS
<TABLE>
For the period ended August 27, 1996 (unaudited)
<CAPTION>
$ in thousands
<S> <C>
Investment Income:
Dividends $ 35
Interest 5
Total investment income 40
Expenses:
Investment advisory fees 7
Administration fees 4
Total expenses 11
Net Investment Income 29
Net Realized and Unrealized Gain
(Loss)
Net realized gain on investments 887
Net change in unrealized
depreciation on investments (798)
Net Gain 89
Net Increase in Assets Resulting $ 118
from Operations
</TABLE>
See Notes to Financial Statements
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
$ in thousands
Period ended
August 27,1996 Year ended
(unaudited) March 31, 1996
<S> <C> <C>
Increase (Decrease) in Net Assets from:
Operations
Net investment income $ 29 $ 109
Net realized gain on investments 887 925
Net change in unrealized appreciation
(depreciation) on investments (798) 544
Net increase resulting from operations 118 1,578
Distributions to Shareholders
From net investment income 0 (109)
From net realized capital gains 0 (465)
Total distributions 0 (574)
Fund Share Transactions
Receipts for shares sold 0 0
Issued as reinvestment of distributions 0 577
Cost of shares redeemed (6,870) 0
Net increase (decrease) resulting from
Fund share transactions (6,870) 577
Total Increase (Decrease) in Net Assets (6,752) 1,581
Net Assets
Beginning of period 6,752 5,171
End of period * $ 0 $ 6,752
* Including undistributed net
investment income of: $ 0 $ 238
</TABLE>
See Notes to Financial Statements
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
From
Commencement on
Selected Per Share Data for September 30, 1994
the Year or Period Ended: through
August 27, 1996(a) March 31, 1996 March 31, 1995
<S> <C> <C> <C>
Net asset value beginning of
period $12.17 $10.22 $10.00
Net investment income (loss) (0.43) 0.63 0.12
Net realized and unrealized
gain on investments 0.64 2.44 0.22
Total income from investment
operations 0.21 3.07 0.34
Dividends from net investment
income 0.00 (0.21) (0.12)
Distributions from net
realized capital gains 0.00 (0.91) 0.00
Liquidating redemption (12.38) 0.00 0.00
Total distributions (12.38) (1.12) (0.12)
Net asset value end of period $0.00 $12.17 $10.22
Total return (%) 5.32 30.53 3.44
Net assets end of period
(000's) $ 0 $6,752 $5,171
Ratio of expenses to average
net assets (%) 0.65+ 1.20 0.65+
Ratio of net investment
income to average net assets (%) 2.27+ 1.26 2.45+
Portfolio turnover rate (%) 40 185 159
Average commission rate (%) $0.03 $0.03
(a) unaudited
+ Annualized
</TABLE>
See Notes to Financial Statements
<PAGE>
NOTES TO FINANCIAL STATEMENTS
August 27, 1996 (unaudited)
1. Significant Accounting Policies
The VersaSTYLE Equity Fund II (the "Fund") (formerly the
VersaSTYLE Equity Fund), which commenced operations on
September 30, 1994, was a series of the PIMCO Funds:
Pacific Investment Management Series (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 investment management company. The
investment objective of the Fund was to seek to achieve a
total return which exceeded the total return performance of
the Standard & Poor's Composite Stock Price Index ("S&P
500"). The following is a summary of significant accounting
policies followed in the preparation of the Fund's financial
statements. These policies are in conformity with generally
accepted accounting principles. At August 27, 1996, the
Fund was terminated. Refer to "Fund Deactivation and
Liquidation" below.
Fund Deactivation and Liquidation. On June 28, 1996, the
shareholders of the Fund redeemed 554,736 shares,
(representing the issued and outstanding shares of the Fund)
at net asset value per share. Concurrently, Pacific
Investment Management Company ("PIMCO"), as adviser to the
Trust, funded an amount equal to receivables, net of
liabilities, in order to liquidate shareholders at June 28,
1996. On August 27, 1996, the Fund was liquidated and all
operations were terminated.
Security Valuation. Portfolio securities and other assets
for which market quotations were readily available were
stated at market value. Market value was determined on the
basis of last reported sales prices, or if no sales were
reported, as was 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. Short-term investments
having a maturity of sixty days or less were valued at
amortized cost, which approximated market value.
Securities Transactions and Investment Income. Security
transactions were recorded as of the trade date. Realized
gains and losses from securities sold were recorded on the
identified cost basis. Dividend income was recorded on the
ex-dividend date. Interest income was recorded on the
accrual basis and included the accretion of discounts and
amortization of premiums.
Dividends and Distributions to Shareholders. The Fund
declared and distributed dividends representing
substantially all net investment income on a quarterly
basis. Net long-term capital gains were distributed no less
frequently than once each year.
Income distributions and capital gain distributions were
determined in accordance with income tax regulations which
may differ from generally accepted accounting principles.
These differences were primarily due to differing treatments
for such items as wash sales, foreign currency transactions
and capital loss carryforwards.
Federal Taxes. It was 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
was made for federal income tax on net investment income and
realized or unrealized capital gains.
Estimates. The preparation of financial statements in
accordance with generally accepted accounting principles
required management to make estimates and assumptions that
affected the reported amounts and disclosures in the
financial statements. Actual results could differ from
those estimates.
<PAGE>
2. Fees, Expenses, and Related Party Transactions
Investment Advisory Fee. PIMCO served as investment adviser
(the "Adviser") to the Fund, pursuant to an investment
advisory contract. The Adviser received a monthly fee from
the Fund at an annual rate of 0.40% of the Fund's average
daily net assets.
Administration Fee. PIMCO also served as administrator, (the
"Administrator"), and provided administrative services to
the Fund for which it received a monthly administrative fee
at the annual rate of 0.25% of the Fund's average daily net
assets.
Expenses. The Trust was 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
$20,000, plus $2,500 for each Board of Trustees meeting
attended, plus reimbursement of related expenses. These
expenses are allocated to the Funds of the Trust according
to their respective net assets.
Related Party Transactions. PIMCO Advisors Distribution
Company ("PADCO"), an indirect wholly-owned subsidiary of
PIMCO Advisors L.P., served as the distributor of the Fund's
shares. Under the contract, all expenses relating to the
distribution of Fund shares were paid by the Adviser, the
Administrator or PADCO out of past profits and resources
which may have included fees received by the Adviser.
3. Purchases and Sales of Securities
Purchases and sales of investment securities (excluding
short-term instruments) for the Fund for the period ended
August 27, 1996 were as follows ($ in thousands):
Purchases Sales
U.S. Government Other U.S. Government Other
$21 $2,018 $166 $8,699
4. Shares of Beneficial Interest
<TABLE>
Changes in shares of beneficial interest were as follows (in
thousands):
<CAPTION>
Period ended Year ended
August 27, 1996 March 31, 1996
<S> <C> <C>
Shares sold 0 0
Shares issued as reinvestment
of dividends 0 49
Shares redeemed (555) 0
Net increase (decrease) (555) 49
</TABLE>
<PAGE>
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 Advisor 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, Missouri 64105
This report is submitted for the general information of the
shareholders of the PIMCO Funds. 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.
