<PAGE>
[LOGO OF PIMCO FUNDS APPEARS HERE]
[LINE GRAPH APPEARS HERE]
PACIFIC INVESTMENT MANAGEMENT SERIES
SEMI-ANNUAL REPORT . SEPTEMBER 30, 1998
<PAGE>
30 YEAR AND 3 MONTH TREASURY YIELDS
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
MONTHLY 30 YEAR TREASURY 3 MONTH TREASURY
<S> <C> <C>
1/1/78 8.18 6.448
2/1/78 8.25 6.457
3/1/78 8.23 6.318999
4/1/78 8.339999 6.306
5/1/78 8.43 6.43
6/1/78 8.5 6.707
7/1/78 8.65 7.074
8/1/78 8.47 7.036
9/1/78 8.47 7.836
10/1/78 8.67 8.132
11/1/78 8.75 8.787
12/1/78 8.88 9.122
1/1/79 8.94 9.351
2/1/79 9 9.265
3/1/79 9.03 9.457
4/1/79 9.08 9.493
5/1/79 9.19 9.579
6/1/79 8.92 9.045
7/1/79 8.93 9.262
8/1/79 8.98 9.45
9/1/79 9.17 10.182
10/1/79 9.85 11.472
11/1/79 10.3 11.868
12/1/79 10.12 12.071
1/1/80 10.6 12.036
2/1/80 12.13 12.814
3/1/80 12.34 15.526
4/1/80 11.4 14.003
5/1/80 10.36 9.15
6/1/80 9.81 6.995
7/1/80 10.24 8.126
8/1/80 11 9.259
9/1/80 11.34 10.321
10/1/80 11.59 11.58
11/1/80 12.37 13.888
12/1/80 11.98 15.661
1/1/81 12.28 14.724
2/1/81 12.97 14.905
3/1/81 12.65 13.478
4/1/81 13.65 13.635
5/1/81 13.06 16.295
6/1/81 13.3 14.557
7/1/81 13.96 14.699
8/1/81 14.78 15.612
9/1/81 15.19 14.951
10/1/81 14.36 13.873
11/1/81 12.91 11.269
12/1/81 13.65 10.926
1/1/82 13.91 12.412
2/1/82 13.83 13.78
3/1/82 13.68 12.493
4/1/82 13.39 12.821
5/1/82 13.39 12.148
6/1/82 13.91 12.108
7/1/82 13.42 11.914
8/1/82 12.5 9.006
9/1/82 11.79 8.196
10/1/82 11.01 7.75
11/1/82 10.7 8.042
12/1/82 10.43 8.013
1/1/83 10.99 7.81
2/1/83 10.51 8.13
3/1/83 10.69 8.304
4/1/83 10.38 8.252
5/1/83 10.96 8.185
6/1/83 10.98 8.82
7/1/83 11.82 9.12
8/1/83 11.93 9.39
9/1/83 11.41 9.05
10/1/83 11.79 8.71
11/1/83 11.64 8.71
12/1/83 11.87 8.96
1/1/84 11.75 8.93
2/1/84 12.17 9.03
3/1/84 12.48 9.44
4/1/84 12.84 9.69
5/1/84 13.74 9.9
6/1/84 13.64 9.94
7/1/84 12.77 10.13
8/1/84 12.51 10.49
9/1/84 12.25 10.41
10/1/84 11.56 9.97
11/1/84 11.53 8.79
12/1/84 11.53 8.16
1/1/85 11.21 7.76
2/1/85 11.88 8.22
3/1/85 11.64 8.57
4/1/85 11.46 8
5/1/85 10.56 7.56
6/1/85 10.44 7.01
7/1/85 10.66 7.05
8/1/85 10.47 7.18
9/1/85 10.56 7.08
10/1/85 10.25 7.17
11/1/85 9.84 7.2
12/1/85 9.27 7.07
1/1/86 9.32 7.04
2/1/86 8.28 7.03
3/1/86 7.44 6.59
4/1/86 7.45 6.06
5/1/86 7.75 6.12
6/1/86 7.23 6.21
7/1/86 7.42 5.84
8/1/86 7.2 5.57
9/1/86 7.59 5.19
10/1/86 7.61 5.18
11/1/86 7.4 5.35
12/1/86 7.49 5.49
1/1/87 7.47 5.45
2/1/87 7.46 5.59
3/1/87 7.91 5.56
4/1/87 8.44 5.76
5/1/87 8.64 5.75
6/1/87 8.49 5.69
7/1/87 8.9 5.78
8/1/87 9.15 6
9/1/87 9.74 6.32
10/1/87 9.03 6.4
11/1/87 9.1 5.81
12/1/87 8.98 5.8
1/1/88 8.42 5.9
2/1/88 8.34 5.69
3/1/88 8.76 5.69
4/1/88 9.1 5.92
5/1/88 9.24 6.27
6/1/88 8.91 6.5
7/1/88 9.21 6.73
8/1/88 9.3 7.02
9/1/88 9.05 7.23
10/1/88 8.74 7.34
11/1/88 9.07 7.68
12/1/88 8.99 8.09
1/1/89 8.82 8.29
2/1/89 9.11 8.48
3/1/89 9.09 8.83
4/1/89 8.93 8.7
5/1/89 8.6 8.4
6/1/89 8.04 8.22
7/1/89 7.92 7.92
8/1/89 8.2 7.91
9/1/89 8.24 7.72
10/1/89 7.91 7.59
11/1/89 7.89 7.65
12/1/89 7.98 7.64
1/1/90 8.45 7.64
2/1/90 8.54 7.76
3/1/90 8.63 7.87
4/1/90 8.99 7.78
5/1/90 8.58 7.78
6/1/90 8.4 7.74
7/1/90 8.41 7.66
8/1/90 8.98 7.44
9/1/90 8.95 7.38
10/1/90 8.76 7.19
11/1/90 8.49 7.07
12/1/90 8.25 6.809999
1/1/91 8.2 6.299999
2/1/91 8.2 5.95
3/1/91 8.25 5.91
4/1/91 8.18 5.669999
5/1/91 8.27 5.509999
6/1/91 8.41 5.599999
7/1/91 8.34 5.58
8/1/91 8.06 5.389999
9/1/91 7.81 5.25
10/1/91 7.91 5.03
11/1/91 7.94 4.599999
12/1/91 7.4 4.12
1/1/92 7.76 3.8
2/1/92 7.79 3.84
3/1/92 7.96 4.04
4/1/92 8.04 3.75
5/1/92 7.84 3.63
6/1/92 7.78 3.66
7/1/92 7.46 3.21
8/1/92 7.41 3.13
9/1/92 7.38 2.91
10/1/92 7.63 2.86
11/1/92 7.6 3.13
12/1/92 7.4 3.22
1/1/93 7.2 3.06
2/1/93 6.9 2.93
3/1/93 6.93 2.95
4/1/93 6.93 2.87
5/1/93 6.98 2.96
6/1/93 6.67 3.07
7/1/93 6.56 3.04
8/1/93 6.09 3.02
9/1/93 6.03 2.95
10/1/93 5.97 3.02
11/1/93 6.3 3.1
12/1/93 6.35 3.06
1/1/94 6.24 2.98
2/1/94 6.66 3.25
3/1/94 7.09 3.5
4/1/94 7.31 3.68
5/1/94 7.43 4.14
6/1/94 7.61 4.14
7/1/94 7.4 4.33
8/1/94 7.45 4.48
9/1/94 7.82 4.76
10/1/94 7.97 4.95
11/1/94 8 5.29
12/1/94 7.88 5.6
1/1/95 7.7 5.71
2/1/95 7.44 5.77
3/1/95 7.43 5.73
4/1/95 7.34 5.65
5/1/95 6.65 5.67
6/1/95 6.62 5.47
7/1/95 6.85 5.42
8/1/95 6.65 5.4
9/1/95 6.5 5.28
10/1/95 6.33 5.49
11/1/95 6.13 5.47
12/1/95 5.95 5.08
1/1/96 6.03 5.05
2/1/96 6.47 5.03
3/1/96 6.67 5.14
4/1/96 6.91 5.15
5/1/96 6.99 5.18
6/1/96 6.87 5.16
7/1/96 6.97 5.31
8/1/96 7.12 5.28
9/1/96 6.92 5.03
10/1/96 6.64 5.15
11/1/96 6.35 5.13
12/1/96 6.64 5.17
1/1/97 6.79 5.15
2/1/97 6.8 5.22
3/1/97 7.1 5.32
4/1/97 7.14 5.23
5/1/97 6.91 4.94
6/1/97 6.74 5.17
7/1/97 6.45 5.23
8/1/97 6.61 5.22
9/1/97 6.4 5.1
10/1/97 6.15 5.2
11/1/97 6.05 5.2
12/1/97 5.92 5.35
1/1/98 5.805 5.183
2/1/98 5.919 5.308
3/1/98 5.932 5.125
4/1/98 5.951 4.978
5/1/98 5.803 5.007
6/1/98 5.626 5.093
7/1/98 5.714 5.080
8/1/98 5.256 4.830
9/1/98 4.965 4.356
</TABLE>
On the cover:
Depicted on the front cover and in greater detail here, is a Treasury Yield
graph comparing yields on 30-year and 3-month Treasuries for the ten-year period
ended September 30, 1998. Historical graphs such as this assist PIMCO in
evaluating the long-term trends in the financial markets. The 30-year Treasury
yield has trended lower over the ten-year period reflecting an overall decrease
in inflationary expectations. A parallel decrease in yields is discernible over
1998, as high-quality, liquid Treasuries were increasingly sought out by
investors fleeing the volatility of global markets. As a result, interest rates
were driven to 30-year lows as the benchmark 30-year Treasury yield dipped below
5%, providing continued capital gains to bond investors.
Contents
Chairman's Message .................................... 1
Market Review ......................................... 2
An Interview with William Gross ....................... 4
Financial Highlights .................................. 26
Statement of Assets and Liabilities ................... 36
Statement of Operations ............................... 39
Statement of Changes in Net Assets .................... 42
Statement of Cash Flows ............................... 48
Notes to Financial Statements ......................... 116
Fund Schedule of
Summary Investments
Total Return Fund ..................................... 5 49
Total Return Fund II .................................. 6 65
Total Return Fund III ................................. 7 68
Total Return Mortgage Fund ............................ 8 71
Moderate Duration Fund ................................ 9 72
Low Duration Fund ..................................... 10 75
Low Duration Fund II .................................. 11 81
Low Duration Fund III ................................. 12 83
Low Duration Mortgage Fund ............................ 13 84
Short-Term Fund ....................................... 14 85
Long-Term U.S. Government Fund ........................ 15 87
Real Return Bond Fund ................................. 16 89
Foreign Bond Fund ..................................... 17 91
Global Bond Fund ...................................... 18 95
Global Bond Fund II ................................... 19 98
Emerging Markets Bond Fund ............................ 20 101
High Yield Fund ....................................... 21 103
Municipal Bond Fund ................................... 22 107
Money Market Fund ..................................... 23 110
StocksPLUS Fund ....................................... 24 111
Strategic Balanced Fund ............................... 25 114
<PAGE>
Chairman's Letter
Dear PIMCO Funds Shareholder:
Foreign events had an unfavorable impact on the stock market over the six-month
period ended September 30, 1998 with stocks posting a negative return of 6.97%,
as measured by the Standard & Poor's 500 Index of stocks. By contrast, the bond
markets generally benefited from international unrest, and the overall bond
market, as measured by the Lehman Brothers Aggregate Bond Index, posted a 6.66%
return.
Volatile Conditions The stock market was shaken dramatically during the past
quarter as investors reacted to economic and political turmoil which began more
than a year ago in Asia. Eventually, the discord permeated international capital
markets with Russia's default and ruble devaluation, falling global stock
prices, concern about potential currency devaluations in Latin American
countries, the continued economic decline in Asia, and the well-publicized,
near-collapse of several large hedge funds. As a result, there was a "flight to
quality" allocation to the perceived safe haven of U.S. Treasury securities,
driving interest rates to 30-year lows and the benchmark 30-year U.S. Treasury
bond's yield down 0.66% to 4.97% over the six-month period ended September 30,
1998.
Looking Ahead As we head into 1999, inflation is expected to remain low as
foreign countries boost their exports in an effort to compensate for weak local
demand, thereby increasing competitive pressures on U.S. companies to not raise
prices. Slower economic growth and financial market uncertainty have motivated
the Federal Reserve Board to drop the Federal Funds rate twice in a one-month
period from 5.5% to 5.0%. There are indications that the Fed will decrease rates
further in the coming months which should contribute to an easing of the credit
crunch.
On the following pages you will find a more complete review of the bond and
stock markets, followed by a recent interview with Bill Gross, a Managing
Director and founder of Pacific Investment Management Company, and portfolio
manager for several of the Funds, including our flagship Total Return Fund. We
have also provided a complete analysis of each Fund's performance for the
six-month period ended September 30, 1998, including specific market commentary.
As always, we appreciate the trust you have placed in us, and we will continue
to work hard to meet your investment needs. If you have any questions regarding
your PIMCO Funds investment, please contact your account manager, or call one of
our shareholder associates at 1-800-927-4648. We also invite you to visit our
Web site at www.pimco.com.
Sincerely,
/s/ Brent R. Harris
Brent R. Harris
Chairman of the Board
October 30, 1998
1998 Semi-Annual Report 1
<PAGE>
Market Review
The Bond Market
Good Times for Bonds
Plunging interest rates led to strong gains in the price of bonds.
<TABLE>
<CAPTION>
- ----------------------
30-Year Treasury Rates
- ----------------------
<S> <C>
9/97 6.295
6.431
6.44
6.274
6.154
6.156
6.114
6.034
6.055
6.085
5.926
5.923
5.901
5.839
5.729
5.81
5.971
5.801
5.921
5.85
5.872
5.924
6.02
5.894
5.886
5.959
5.795
5.882
5.877
5.946
5.934
5.978
5.973
5.901
5.803
5.788
5.663
5.67
5.633
5.67
5.626
5.747
5.687
5.714
5.632
5.541
5.434
5.339
5.289
5.23
5.148
9/98 5.11
</TABLE>
Six months ago in our annual report to shareholders we predicted the yield on
long-term U.S. Treasury bonds could drop to 5.0%. This target was reached, and
then late in the third quarter yields went on to fall below 5.0% for the first
time since 1967. As bond prices move in the opposite direction of yields, prices
of Treasuries soared.
The Treasury market benefited from continued global turmoil. Asian financial
woes spread to Russia, and concern grew over problems in Brazil and Latin
America. Investor confidence was further unsettled by the unwillingness of the
International Monetary Fund to step in and buoy the failing Russian economy.
These uncertain conditions led to a massive flight to quality, as investors
around the world sought safety by pouring assets into U.S. Treasuries.
While Treasuries prospered, some other sectors of the fixed income market missed
out on the rally. For example, investment-grade corporate bonds along with
high-yield bonds were hurt by fears that global problems would affect U.S.
corporate earnings and growth. Although the municipal bond market did not
benefit from the global flight to quality, the sector is currently experiencing
a resurgence with some non-taxable yields actually higher than Treasuries.
Going forward, we expect to see more countries acting to defend their
currencies. Many will hike up interest rates as Brazil has done. This typically
leads to slowing growth. Other countries may favor the route taken by Malaysia
imposing capital controls - which hurts liquidity. In either case, we expect to
see an increase in financial uncertainties around the world. For additional
details on our view of the global economy please refer to the interview with
Bill Gross on page 4.
Domestically, we expect the economy to continue to slow. We believe the Federal
Reserve will need to move to buoy the U.S. economy and increase global
liquidity. As such, we expect further interest rate cuts, reducing the Fed Funds
rate to the 4.0% to 4.5% range in the coming year. If inflation remains in its
current low range, as we expect, the real rate of return on bonds should be
historically high, making this a relatively attractive opportunity for bond
investors.
2 PIMCO Funds
<PAGE>
The Stock Market
Equities Slow Down
Foreign economic unrest led to a sharp decline in the price of stocks.
<TABLE>
<CAPTION>
- --------------------------
S&P 500 Index
- --------------------------
<S> <C>
9/97 965.04
966.98
944.16
941.64
914.62
927.51
928.35
963.09
955.4
983.79
953.39
946.78
936.46
975.04
927.69
961.51
957.59
980.28
1012.46
1020.09
1034.21
1049.34
1055.69
1068.61
1099.16
1095.44
1122.7
1110.67
1122.72
1107.9
1121
1108.14
1108.73
1110.47
1090.82
1113.86
1098.84
1100.65
1133.2
1146.42
1164.33
1186.75
1140.8
1120.67
1089.45
1062.75
1081.18
1027.14
973.89
1009.6
1020.09
9/98 1044.75
- --------------------------
</TABLE>
After continuing its run in the first two quarters of 1998, the bull market
finally hit a speed bump in the third quarter. From a peak of 9,337 on July 17,
the Dow Jones Industrial Average closed on September 30 at 7,842. Though this
has been a significant short-term drop, the Dow has done very well relative to
where it was when the seven-year bull market began in October 1991, when the Dow
stood at a mere 2,365.
A market decline has been anticipated for several years, as 20%+ annual returns
could not be sustained. However, what precipitated this decline was perhaps
surprising: a global economic crisis that began in Asia last year which has
since spread to Russia and could be on its way to Latin America and Canada as
well.
The Asian currency crisis first appeared in 1997, causing a domestic stock
market correction in October of that year, as investors feared Asian woes and
cheap imports would affect United States GDP. However, the market quickly
recovered and continued to rise through the second quarter of 1998, as
investors' fears of "Asian contagion" subsided. In the third quarter, the spread
of the crisis to other economies was not well received by investors - nor were
reduced earnings expectations for many corporations, especially those with
international exposure.
As a result, third quarter results were lackluster. Few sectors performed well,
with the exception of non-cyclical stocks such as health care and consumer
staples. Utility stocks declined only modestly, as they are considered a safer
harbor in volatile markets, and gold stocks actually rose. Large-cap stocks,
despite more international exposure, outperformed small-caps. Internationally,
most regions saw poor performance. Asia, Europe and Latin America were all hard
hit, with a few country-specific exceptions.
Looking ahead, we believe the long-awaited decline will ultimately prove to be
healthy for the stock market. This descent will serve to temper run-away P/E
ratios and the kind of "irrational exuberance" that Federal Reserve Chairman
Alan Greenspan warned against. We see a continued lowering of interest rates in
the near-term and believe that, currently, fundamentals remain sound for many
domestic companies. We also believe the correction has served to underscore the
importance of portfolio diversification and long-term investing.
1998 Semi-Annual Report 3
<PAGE>
[PHOTO OF WILLIAM GROSS
APPEARS HERE]
Managing Director and Founder of Pacific Investment Management Company
William Gross
William Gross is a Managing Director and founder of Pacific Investment
Management Company, a PIMCO Advisors L.P. institutional investment firm. He is
also the portfolio manager of the highly-rated PIMCO Total Return and Low
Duration Funds and is leader of the team that manages the StocksPLUS,
Short-Term, Strategic Balanced and Moderate Duration Funds. Mr. Gross' views on
the financial markets are often featured in The Wall Street Journal, Barron's,
Money magazine and The New York Times. We recently spoke with him regarding his
latest outlook for the economy and the bond market.
Q: What do you see as the biggest threat to the U.S. economy?
A: Deflation. Simply stated, deflation is an annual price decrease in goods and
services, often accompanied by recession. This is a threat that most
Americans have only read about in their history books. But in the 1930s,
deflation led the U.S. - and the world - to bread lines and 25% unemployment.
Once it was overcome, many thought we would never see it again.
Q: What is the current condition of the global economy with regard to deflation?
A: While the U.S. is just now beginning to experience the symptoms of deflation,
much of the global economy has been bedridden for some time. Japan has been
"deflating" for nearly five years, and Southeast Asia caught the bug in
mid-1997. Since that time, one nation after another has succumbed to its
ravages, with Russia being its most recent victim. Not only was Russia forced
to devalue the ruble, but it defaulted on hundreds of billions of dollars of
debt, threatening countries in continents as far away as South America. North
America may be next.
Q: After an absence of more than fifty years, what caused deflation to return?
A: The germ of deflation was bred in an atmosphere of idyllic capitalistic
optimism after the fall of the Iron Curtain. Not only did Eastern Europe turn
capitalist, but Asia, South America and even Mexico took on a new glow that
promised expanding markets and escalating profits.
Hundreds of billions of dollars in loans poured out of U.S., Japanese and
European banks to finance nascent capitalism in emerging markets. The problem
was that there were limits to the ability of economic societies, especially
those in capitalistic infancy, to absorb new production. For example, only so
many cars can be bought in the short run because emerging nations have so few
roads on which to drive them.
When the collective global economy finally discovered it was producing too
many things for too few customers, it held a "garage sale." Prices came down,
inventory was sold and some of the bills were paid off. But under
deflationary conditions, the inventory did not sell at a high enough price to
pay off all the debts. In fact, because many emerging nations borrowed money
denominated in dollars instead of their own local currencies, their debts
have skyrocketed as the dollar has risen and their own currencies have done
nothing but sink. This is deflation at its worst, as country after country
crumbles under the burden of too much supply, sinking prices and an
over-arching burden of too much debt.
Q: But how does this affect the United States?
A: We are part of a global economy and, if an increasing number of countries are
effectively bankrupt, we have fewer and fewer potential customers. Keep in
mind that our stock market is fed by global profits and our consumers are
increasingly fed by our stock market. And that is the reason why the stock
market has been down - it smells a decline in corporate profits, if not the
economy itself, brought on by worldwide deflation that is difficult to
reverse.
Q: How can we reverse deflation?
A: What's required is a dose of lower interest rates in the U.S. and Europe, as
well as a reversal of fiscal attitudes that stress the necessity for balanced
budgets at all costs and under all circumstances. That, of course, requires
strong political leadership and strong central bank policy. The world
desperately needs new policies, new solutions and strong leaders in order to
combat deflation in a global economy.
4 PIMCO Funds
<PAGE>
PIMCO Total Return Fund
- --------------------------------------------------------------------------------
FUND CHARACTERISTICS
- --------------------------------------------------------------------------------
Objective:
Maximum total return, consistent with preservation of capital and prudent
investment management.
Portfolio:
Primarily intermediate-term investment grade bonds.
Duration:
4.5 years
Total Net Assets:
$22,366 million
Sector Breakdown:*
[PIE CHART APPEARS HERE]
Mortgage-Backed Securities 45.7%
Corporate Bonds and Notes 32.1%
U.S. Treasury Obligations 6.8%
Asset-Backed Securities 6.2%
Other 9.2%
Quality Breakdown:*
[PIE CHART APPEARS HERE]
AAA 67%
AA 4%
A 17%
BBB 6%
BB 6%
*% of Total Investments as of September 30, 1998
- --------------------------------------------------------------------------------
PERFORMANCE
- --------------------------------------------------------------------------------
TOTAL RETURN INVESTMENT PERFORMANCE For the Period Ended September 30, 1998
<TABLE>
<CAPTION>
Lipper Intermediate
Inst'l Class Admin. Class Lehman Brothers Investment Grade
(Incep. 5/11/87) (Incep. 9/7/94) Aggregate Bond Index Debt Fund Average
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
6 Months 7.67% 7.54% 6.66% 5.82%
1 Year 12.54% 12.26% 11.51% 10.03%
3 Years* 10.01% 9.77% 8.67% 7.75%
5 Years* 7.96% -- 7.21% 6.31%
10 Years* 10.38% -- 9.30% 8.50%
Since Inception* 10.08% 10.12% -- --
</TABLE>
* Annualized
CUMULATIVE RETURNS THROUGH SEPTEMBER 30, 1998
$5,000,000 invested at inception
<TABLE>
<CAPTION>
- ---------------------------------------------
Month Total Return Lehman Brothers
Fund Aggregate Bond
Index
- ---------------------------------------------
<S> <C> <C>
05/31/87 5,000,000 5,000,000
06/30/87 5,063,956 5,068,813
07/31/87 5,051,390 5,064,918
08/31/87 5,039,534 5,037,815
09/30/87 4,913,547 4,930,538
10/31/87 5,070,060 5,106,141
11/30/87 5,107,024 5,147,040
12/31/87 5,153,726 5,217,151
01/31/88 5,364,621 5,400,545
02/29/88 5,425,978 5,464,652
03/31/88 5,377,483 5,413,367
04/30/88 5,349,895 5,384,153
05/31/88 5,323,746 5,347,962
06/30/88 5,451,097 5,476,986
07/31/88 5,444,097 5,448,260
08/31/88 5,470,463 5,462,542
09/30/88 5,574,381 5,586,211
10/31/88 5,662,479 5,691,379
11/30/88 5,612,027 5,622,241
12/31/88 5,637,131 5,628,571
01/31/89 5,706,918 5,709,556
02/28/89 5,670,892 5,668,171
03/31/89 5,697,790 5,692,677
04/30/89 5,825,551 5,811,802
05/31/89 5,967,305 5,964,522
06/30/89 6,168,244 6,146,131
07/31/89 6,298,843 6,276,779
08/31/89 6,190,418 6,183,783
09/30/89 6,221,536 6,215,431
10/31/89 6,371,017 6,368,476
11/30/89 6,426,949 6,429,174
12/31/89 6,440,083 6,446,378
01/31/90 6,332,594 6,369,774
02/28/90 6,349,652 6,390,386
03/31/90 6,344,778 6,395,092
04/30/90 6,255,058 6,336,504
05/31/90 6,460,283 6,524,117
06/30/90 6,569,705 6,628,798
07/31/90 6,676,661 6,720,495
08/31/90 6,571,662 6,630,745
09/30/90 6,578,458 6,685,601
10/31/90 6,669,789 6,770,482
11/30/90 6,838,024 6,916,223
12/31/90 6,958,354 7,023,987
01/31/91 7,027,903 7,110,815
02/28/91 7,126,178 7,171,514
03/31/91 7,216,808 7,220,852
04/30/91 7,335,070 7,299,078
05/31/91 7,390,178 7,341,762
06/30/91 7,401,768 7,338,029
07/31/91 7,508,521 7,439,788
08/31/91 7,712,232 7,600,786
09/30/91 7,894,694 7,754,804
10/31/91 7,975,769 7,841,145
11/30/91 8,045,044 7,913,042
12/31/91 8,319,147 8,148,046
01/31/92 8,251,437 8,037,198
02/29/92 8,323,957 8,089,457
03/31/92 8,292,135 8,043,852
04/30/92 8,335,850 8,101,954
05/31/92 8,508,487 8,254,836
06/30/92 8,616,472 8,368,443
07/31/92 8,827,524 8,539,178
08/31/92 8,902,987 8,625,682
09/30/92 9,043,980 8,727,928
10/31/92 8,965,037 8,612,211
11/30/92 8,972,362 8,614,159
12/31/92 9,129,278 8,751,136
01/31/93 9,297,750 8,918,950
02/28/93 9,504,901 9,075,078
03/31/93 9,560,206 9,112,893
04/30/93 9,643,848 9,176,350
05/30/93 9,666,306 9,188,036
06/30/93 9,876,645 9,354,551
07/30/93 9,937,133 9,407,459
08/31/93 10,163,538 9,572,351
09/30/93 10,204,890 9,598,643
10/31/93 10,277,472 9,634,511
11/30/93 10,187,745 9,522,551
12/31/93 10,271,501 9,604,324
01/31/94 10,396,445 9,733,998
02/28/94 10,210,928 9,564,888
03/31/94 9,995,399 9,329,070
04/30/94 9,896,929 9,254,577
05/31/94 9,850,224 9,253,278
06/30/94 9,814,015 9,232,829
07/30/94 10,015,509 9,416,223
08/31/94 10,044,623 9,427,908
09/30/94 9,917,753 9,289,146
10/31/94 9,906,083 9,280,869
11/30/94 9,907,443 9,260,257
12/31/94 9,904,417 9,324,202
01/31/95 10,082,267 9,508,731
02/28/95 10,319,048 9,734,809
03/31/95 10,417,456 9,794,534
04/30/95 10,600,658 9,931,349
05/31/95 10,936,213 10,315,665
06/30/95 10,929,713 10,391,294
07/31/95 10,936,311 10,368,086
08/31/95 11,105,123 10,493,216
09/30/95 11,244,355 10,595,300
10/31/95 11,415,091 10,733,089
11/30/95 11,662,396 10,893,924
12/31/95 11,863,138 11,046,806
01/31/96 11,960,385 11,120,164
02/31/96 11,668,778 10,926,870
03/31/96 11,578,391 10,850,915
04/30/96 11,530,294 10,789,892
05/31/96 11,499,480 10,767,982
06/30/96 11,683,837 10,912,588
07/31/96 11,714,500 10,942,450
08/31/96 11,704,501 10,924,111
09/30/96 11,973,193 11,114,483
10/31/96 12,284,300 11,360,686
11/30/96 12,575,406 11,555,278
12/31/96 12,419,446 11,447,838
01/31/97 12,465,678 11,482,894
02/28/97 12,494,013 11,511,458
03/31/97 12,342,925 11,383,894
04/30/97 12,565,728 11,554,304
05/31/97 12,694,757 11,663,529
06/30/97 12,843,894 11,801,967
07/31/97 13,203,071 12,120,229
08/31/97 13,089,168 12,016,846
09/30/97 13,301,627 12,194,073
10/31/97 13,461,510 12,370,975
11/30/97 13,523,400 12,427,941
12/31/97 13,681,812 12,553,071
01/31/98 13,893,968 12,714,230
02/28/98 13,855,371 12,704,087
03/31/98 13,902,211 12,748,312
04/30/98 13,957,191 12,814,853
05/31/98 14,119,833 12,936,413
06/30/98 14,257,594 13,046,124
07/31/98 14,305,551 13,073,877
08/31/98 14,533,176 13,286,646
09/30/98 14,969,015 13,597,767
</TABLE>
Past performance is not an indication of future results. The line graph above
assumes the investment of $5,000,000 on 6/1/87, the first full month following
the Fund's Institutional Class inception on 5/11/87, compared to the Lehman
Brothers Aggregate Bond Index, an unmanaged market index. The performance of the
Administrative Class (shown above) reflects the payment of a service fee in an
amount not to exceed 0.25% on an annualized basis. The Administrative Class
commenced operations on 9/7/94. The Fund may invest in foreign securities which
involve potentially higher risks including foreign currency fluctuations and
political or economic uncertainty.
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
. The Total Return Fund's Institutional Class shares outperformed the Lehman
Brothers Aggregate Bond Index for the six-month period ended September 30,
1998, returning 7.67% compared to 6.66% for the benchmark.
. The Fund's duration was held longer than its benchmark which added to returns
as yields fell across the maturity spectrum.
. The Fund's movement from longer-maturity holdings during the first three
months of the period to intermediate-maturity holdings for the final three
months enhanced returns as the Fund was appropriately positioned to benefit
from the largest rate declines.
. While Treasuries outperformed during the period on a duration-adjusted basis,
effective security selection and yield curve positioning overcame an
underweight of the Treasury sector.
. The mortgage sector slightly outperformed the Index when adjusted for
duration. The Fund's overweight of this sector enhanced returns as its less
prepayment-sensitive holdings performed well in the declining rate
environment.
. The Fund's underweight allocation to investment-grade corporates enhanced
returns as global economic turmoil pressured corporate profit growth.
. Limited positions in dollar-denominated emerging markets and
below-investment-grade corporate debt detracted from returns as continued
financial and economic uncertainty forced investors to the safety of
higher-quality investments.
. The Fund's hedged non-U.S. dollar positions were neutral for performance as
these markets struggled with the uncertain global financial situation.
1998 Semi-Annual Report 5
<PAGE>
PIMCO Total Return Fund II
- --------------------------------------------------------------------------------
FUND CHARACTERISTICS
- --------------------------------------------------------------------------------
Objective:
Maximum total return, consistent with preservation of capital and prudent
investment management.
Portfolio:
Primarily intermediate-term investment grade bonds with quality and foreign
issuer restrictions.
Duration:
4.6 years
Total Net Assets:
$922 million
Sector Breakdown:*
[PIE CHART APPEARS HERE]
Mortgage-Backed Securities 45.5%
Corporate Bonds and Notes 38.8%
Asset-Backed Securities 6.0%
Other 9.7%
Quality Breakdown:*
[PIE CHART APPEARS HERE]
AAA 60%
AA 11%
A 22%
BBB 7%
*% of Total Investments as of September 30, 1998
- --------------------------------------------------------------------------------
PERFORMANCE
- --------------------------------------------------------------------------------
TOTAL RETURN INVESTMENT PERFORMANCE For the Period Ended September 30, 1998
<TABLE>
<CAPTION>
Lipper Intermediate
Inst'l Class Admin. Class Lehman Brothers Investment Grade
(Incep. 12/30/91) (Incep. 11/30/94) Aggregate Bond Index Debt Fund Average
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
6 Months 8.33% 8.19% 6.66% 5.82%
1 Year 13.10% 12.81% 11.51% 10.03%
3 Years* 9.68% 9.37% 8.67% 7.75%
5 Years* 7.78% -- 7.21% 6.31%
Since Inception* 8.87% 10.97% -- --
</TABLE>
* Annualized
CUMULATIVE RETURNS THROUGH SEPTEMBER 30, 1998
$5,000,000 invested at inception
<TABLE>
<CAPTION>
- -----------------------------------------------------------------
Total Return Lehman Brothers
MONTH Fund II Aggregate
Bond index
- -----------------------------------------------------------------
<S> <C> <C>
12/31/91 5,000,000 5,000,000
01/31/92 4,929,716 4,931,979
02/29/92 4,951,937 4,964,047
03/31/92 4,937,873 4,936,062
04/30/92 4,963,257 4,971,716
05/31/92 5,075,312 5,065,531
06/30/92 5,149,979 5,135,245
07,31/92 5,309,040 5,240,016
08/31/92 5,355,136 5,293,098
09/30/92 5,437,041 5,355,841
10/31/92 5,367,337 5,284,832
11/30/92 5,383,727 5,286,027
12/31/92 5,471,600 5,370,083
01/31/93 5,579,371 5,473,060
02/28/93 5,705,377 5,568,868
03/31/93 5,719,997 5,592,073
04/30/93 5,793,075 5,631,013
05/31/93 5,790,801 5,638,183
06/30/93 5,920,354 5,740,365
07/31/93 5,952,711 5,772,831
08/31/93 6,070,915 5,874,017
09/30/93 6,093,002 5,890,150
10/31/93 6,109,820 5,912,160
11/30/93 6,049,436 5,861,866
12/31/93 6,067,802 5,893,636
01/31/94 6,149,761 5,973,210
02/28/94 6,050,676 5,869,435
03/31/94 5,910,178 5,724,729
04/30/94 5,870,870 5,679,016
05/31/94 5,858,460 5,678,219
06/30/94 5,845,104 5,665,671
07/31/94 5,977,463 5,778,209
08/31/94 5,984,657 5,785,380
09/30/94 5,896,835 5,700,229
10/31/94 5,889,836 5,695,150
11/30/94 5,888,896 5,682,502
12/31/94 5,933,421 5,721,741
01/31/95 6,043,232 5,834,977
02/28/95 6,182,752 5,973,708
03/31/95 6,223,522 6,010,358
04/30/95 6,299,808 6,094,313
05/31/95 6,523,923 6,330,146
06/30/95 6,551,569 6,376,556
07/31/95 6,507,691 6,362,315
08/31/95 6,628,805 6,439,100
09/30/95 6,717,353 6,501,743
10/31/95 6,829,613 6,586,296
11/30/95 6,952,671 6,684,992
12/31/95 7,059,264 6,778,807
01/31/96 7,096,875 6,823,822
02/29/96 6,966,380 6,705,209
03/31/96 6,682,877 6,658,600
04/30/96 6,829,282 6,621,153
05/31/96 6,805,776 6,607,708
06/30/96 6,917,299 6,696,445
07/31/96 6,933,266 6,714,769
08/31/96 6,916,233 6,703,516
09/30/96 7,079,837 6,820,337
10/31/96 7,268,469 6,971,417
11/30/96 7,416,019 7,090,828
12/31/96 7,331,446 7,024,896
01/31/97 7,372,632 7,046,410
02/28/97 7,387,727 7,063,938
03/31/97 7,305,831 6,985,659
04/30/97 7,418,069 7,090,230
05/31/97 7,488,383 7,157,255
06/30/97 7,571,276 7,242,207
07/31/97 7,806,619 7,437,508
08/31/97 7,730,081 7,374,066
09/30/97 7,837,156 7,482,820
10/31/97 7,950,092 7,591,375
11/30/97 7,972,129 7,626,332
12/31/97 8,063,867 7,703,117
01/31/98 8,181,882 7,802,012
02/28/98 8,157,419 7,795,787
03/31/98 8,181,806 7,822,926
04/30/98 8,222,040 7,863,759
05/31/98 8,310,019 7,938,353
06/30/98 8,396,686 8,005,677
07/31/98 8,417,371 8,022,707
08/31/98 8,634,608 8,153,272
09/30/98 8,863,669 8,344,189
</TABLE>
Past performance is not an indication of future results. The line graph above
assumes the investment of $5,000,000 on 1/1/92, the first full month following
the Fund's Institutional Class inception on 12/30/91, compared to the Lehman
Brothers Aggregate Bond Index, an unmanaged market index. The performance of the
Administrative Class (shown above) reflects the payment of a service fee in an
amount not to exceed 0.25% on an annualized basis. The Administrative Class
commenced operations on 11/30/94.
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
. The Total Return Fund II delivered strong performance for the six months
ended September 30, 1998. Specifically, the Fund's Institutional Class shares
returned 8.33%, outperforming the Lehman Brothers Aggregate Bond Index return
of 6.66%.
. The Fund's duration was held longer than its benchmark during the period
which added to returns as yields fell across the maturity spectrum.
. The Fund's movement from longer-maturity holdings to intermediate-maturity
holdings during the period enhanced returns as the Fund was appropriately
positioned to benefit from the largest rate declines as the yield curve
flattened.
. Treasuries outperformed during the period on a duration-adjusted basis, and
the Fund's effective selection of Treasury holdings compensated for its
underweight of this sector.
. Overall, the mortgage sector slightly outperformed the broad Index when
adjusted for duration. The Fund's overweight of this sector enhanced returns
as its less prepayment-sensitive holdings performed well in the declining
rate environment.
. The Fund held only a modest allocation to the investment-grade corporate
sector which enhanced returns as global economic turmoil pressured corporate
profit growth.
6 PIMCO Funds
<PAGE>
PIMCO Total Return Fund III
- --------------------------------------------------------------------------------
FUND CHARACTERISTICS
- --------------------------------------------------------------------------------
Objective:
Maximum total return, consistent with preservation of capital and prudent
investment management.
Portfolio:
Primarily intermediate-term investment grade bonds with prohibitions on firms
engaged in socially sensitive practices.
Duration:
4.2 years
Total Net Assets:
$444 million
Sector Breakdown:*
[PIE CHART APPEARS HERE]
Mortgage-Backed Securities 51.9%
Corporate Bonds and Notes 25.5%
Short-Term Instruments 10.5%
Other 12.1%
Quality Breakdown:*
[PIE CHART APPEARS HERE]
AAA 76%
AA 5%
A 10%
BB 9%
*% of Total Investments as of September 30, 1998
- --------------------------------------------------------------------------------
PERFORMANCE
- --------------------------------------------------------------------------------
TOTAL RETURN INVESTMENT PERFORMANCE For the Period Ended September 30, 1998
<TABLE>
<CAPTION>
Lipper Intermediate
Inst'l Class Admin. Class Lehman Brothers Investment Grade
(Incep. 5/1/91) (Incep. 4/11/97) Aggregate Bond Index Debt Fund Average
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
6 Months 7.54% 7.40% 6.66% 5.82%
1 Year 12.68% 12.40% 11.51% 10.03%
3 Years* 9.82% -- 8.67% 7.75%
5 Years* 8.04% -- 7.21% 6.31%
Since Inception* 10.01% 13.70% -- --
</TABLE>
* Annualized
CUMULATIVE RETURNS THROUGH SEPTEMBER 30, 1998
$5,000,000 invested at inception
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------
Total Return Lehman Brothers
MONTH Fund III Aggregate
Bond Index
- ----------------------------------------------------------------------
<S> <C> <C>
04/30/91 5,000,000 5,000,000
05/31/91 5,024,573 5,029,239
08/30/91 5,011,360 5,026,682
07/31/91 5,091,347 5,096,389
08/31/91 5,231,902 5,206,675
09/30/91 5,362,299 5,312,180
10/31/91 5,419,024 5,371,326
11/30/91 5,475,902 5,420,576
12/31/91 5,678,512 5,581,558
01/31/92 5,605,239 5,505,825
02/29/92 5,649,578 5,541,424
03/31/92 5,621,306 5,510,184
04/30/92 5,643,874 5,549,984
05/31/92 5,752,958 5,654,712
06/30/92 5,844,833 5,732,534
07/31/92 6,028,857 5,849,491
08/31/92 6,069,916 5,908,747
09/30/92 6,112,922 5,978,788
10/31/92 6,061,053 5,899,520
11/30/92 6,110,005 5,900,854
12/31/92 6,200,947 5,994,686
01/31/93 6,262,534 6,109,641
02/31/93 6,404,215 6,216,592
03/31/93 6,434,449 6,242,496
04/30/93 6,497,518 6,285,965
05/31/93 6,501,189 6,293,970
06/30/93 6,644,496 6,408,036
07/31/93 6,697,102 6,444,279
08/31/93 6,880,114 6,557,233
09/30/93 6,894,099 6,575,243
10/31/93 6,957,037 6,599,813
11/30/93 6,917,372 6,543,670
12/31/93 6,984,685 6,579,135
01/31/94 7,060,374 6,667,964
02/28/94 6,937,795 6,552,118
03/31/94 6,797,242 6,390,581
04/30/94 6,731,751 6,339,552
05/31/94 6,676,376 6,336,662
06/30/94 6,881,328 6,324,654
07/31/94 6,815,349 6,450,282
08/31/94 6,830,651 6,458,287
09/30/94 6,760,588 6,363,232
10/31/94 6,777,181 6,357,562
11/30/94 6,726,341 6,343,443
12/31/94 6,745,188 6,387,246
01/31/95 6,870,185 6,513,652
02/28/95 7,076,265 6,668,520
03/31/95 7,131,606 6,709,432
04/30/95 7,251,354 6,803,153
05/31/95 7,479,227 7,066,416
06/30/95 7,468,982 7,118,224
07/31/95 7,469,280 7,102,326
08/31/95 7,577,254 7,188,042
09/30/95 7,661,664 7,257,971
10/31/95 7,778,032 7,352,359
11/30/95 7,920,241 7,462,534
12/31/95 8,042,735 7,567,261
01/31/96 8,110,490 7,617,512
02/29/96 7,917,045 7,485,103
03/31/96 7,846,991 7,433,072
04/30/96 7,813,232 7,391,271
05/31/96 7,795,663 7,376,262
06/30/96 7,938,312 7,475,319
07/31/96 7,953,817 7,495,775
08/31/96 7,937,131 7,483,213
09/30/96 8,134,267 7,613,621
10/31/96 8,353,533 7,782,274
11/30/96 8,530,260 7,915,573
12/31/96 8,415,107 7,841,975
01/31/97 8,452,273 7,865,999
02/28/97 8,465,767 7,885,556
03/31/97 8,379,284 7,798,172
04/30/97 8,523,528 7,914,906
05/31/97 8,625,020 7,989,727
06/30/97 8,714,471 8,084,560
07/31/97 8,945,988 8,302,575
08/31/97 8,888,809 8,231,756
09/30/97 9,006,608 8,353,160
10/31/97 9,140,798 8,474,341
11/30/97 9,172,684 8,513,363
12/31/97 9,274,215 8,599,079
01/31/98 9,418,706 8,709,477
02/28/98 9,404,616 8,702,528
03/31/98 9,436,938 8,732,823
04/30/98 9,472,905 8,778,405
05/31/98 9,559,386 8,861,676
06/30/98 9,655,888 8,936,830
07/31/98 9,697,309 8,955,841
08/31/98 9,643,713 9,101,592
09/30/98 10,148,628 9,314,715
</TABLE>
Past performance is not an indication of future results. The line graph above
assumes the investment of $5,000,000 on 5/1/91, the Fund's Institutional Class
inception date, compared to the Lehman Brothers Aggregate Bond Index, an
unmanaged market index. The performance of the Administrative Class (shown
above) reflects the payment of a service fee in an amount not to exceed 0.25% on
an annualized basis. The Administrative Class commenced operations on 4/11/97.
The Fund may invest in foreign securities which involve potentially higher risks
including foreign currency fluctuations and political or economic uncertainty.
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
. Total Return Fund III Institutional Class shares outperformed the Lehman
Brothers Aggregate Bond Index for the six months ended September 30, 1998,
returning 7.54% compared to 6.66% for the benchmark.
. The Fund's duration was held longer than its benchmark during the period
which added to returns as yields fell across the maturity spectrum.
. The Fund's yield curve emphasis shifted from longer-maturity holdings to
intermediate-maturity holdings during the period enhancing returns as the
Fund was appropriately positioned to benefit from the largest rate declines.
. The Fund's allocation to the Treasury sector was aided by successful security
selection which overcame its underweight of this sector.
. Overall, the mortgage sector slightly outperformed the Index when adjusted
for duration. The Fund's overweight of this sector enhanced returns as its
less prepayment-sensitive holdings performed well in the declining rate
environment.
. The Fund's underweight of the investment-grade corporate sector enhanced
returns as global economic turmoil pressured corporate profit growth.
. Limited allocations to dollar-denominated emerging markets and
below-investment-grade corporate debt detracted from returns as continued
financial and economic uncertainty forced investors to the safety of
higher-quality investments.
. The Fund's hedged non-U.S. dollar positions were neutral for performance as
these markets struggled with the uncertain global financial situation.
1998 Semi-Annual Report 7
<PAGE>
PIMCO Total Return Mortgage Fund
- --------------------------------------------------------------------------------
FUND CHARACTERISTICS
- --------------------------------------------------------------------------------
Objective:
Maximum total return, consistent with preservation of capital and prudent
investment management.
Portfolio:
Primarily intermediate-term mortgage-related securities.
Duration:
1.8 years
Total Net Assets:
$4 million
Sector Breakdown:*
[PIE CHART APPEARS HERE]
Mortgage-Backed Securities 71.3%
U.S. Treasury Obligations 22.5%
Short Term Securities 6.2%
*% of Total Investments as of September 30, 1998
- --------------------------------------------------------------------------------
PERFORMANCE
- --------------------------------------------------------------------------------
TOTAL RETURN INVESTMENT PERFORMANCE For the Period Ended September 30, 1998
Inst'l Class Lehman Brothers Lipper U.S. Mortgage
(Incep. 7/31/97) Mortgage Index Fund Average
- --------------------------------------------------------------------------------
6 Months 5.08% 4.41% 4.54%
1 Year 10.25% 8.62% 8.30%
Since Inception* 10.29% -- --
* Annualized
CUMULATIVE RETURNS THROUGH SEPTEMBER 30, 1998
$5,000,000 invested at inception
<TABLE>
<CAPTION>
- ---------------------------------------------------
Total Return Lehman Brothers
MONTH Mortgage Fund Mortgage Index
- ---------------------------------------------------
<S> <C> <C>
07/31/97 5,000,000 5,000,000
08/31/97 5,005,044 4,988,118
09/30/97 5,084,467 5,051,382
10/31/97 5,160,309 5,107,387
11/30/97 5,184,726 5,124,151
12/31/97 5,246,122 5,170,844
01/31/98 5,304,038 5,222,289
02/28/98 5,314,354 5,233,336
03/31/98 5,334,652 5,255,495
04/30/98 5,371,139 5,285,232
05/31/98 5,417,855 5,320,364
06/30/98 5,453,983 5,345,733
07/31/98 5,476,124 5,372,837
08/31/98 5,542,715 5,421,585
09/30/98 5,605,738 5,487,033
</TABLE>
Past performance is not an indication of future results. The line graph above
assumes the investment of $5,000,000 on 7/31/97, the Fund's Institutional Class
inception date, compared to the Lehman Brothers Mortgage Index, an unmanaged
market index.
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
. For the fiscal half-year ended September 30, 1998, the Total Return Mortgage
Fund outperformed the Lehman Brothers Mortgage Index with a return of 5.08%
versus 4.41%. This favorable result added to the Fund's relative performance
advantage versus its benchmark since its inception on July 31, 1997 (10.29%
for the Fund versus 8.29% for the Index).
. The Fund's duration was kept longer than its benchmark, which enhanced
returns as interest rates fell during the period.
. Maturity mix was held broader than the Index which increased returns. An
above-index concentration in intermediate-maturity instruments benefited as
yields in that segment of the curve fell by the greatest amount.
. The Fund's defensive positioning against prepayment risk improved returns
during the period.
. The Fund's use of adjustable rate mortgages detracted slightly from returns,
particularly in the latter portion of the measurement period.
. Limited exposure to well-structured, collateralized mortgage obligations
(CMOs) helped to increase returns and added prepayment protection.
8 PIMCO Funds
<PAGE>
PIMCO Moderate Duration Fund
- --------------------------------------------------------------------------------
FUND CHARACTERISTICS
- --------------------------------------------------------------------------------
Objective:
Maximum total return, consistent with preservation of capital and prudent
investment management.
Portfolio:
Primarily short- and intermediate-term investment grade bonds.
Duration:
3.9 years
Total Net Assets:
$257 million
Sector Breakdown:*
[PIE CHART APPEARS HERE]
Mortgage-Backed Securities 45.3%
Corporate Bonds and Notes 22.1%
Short-Term Instruments 9.3%
Sovereign Issues 7.9%
Foreign Currency Denomination Issues 6.6%
Other 8.8%
Quality Breakdown:*
[PIE CHART APPEARS HERE]
AAA 78%
AA 4%
A 5%
BBB 6%
BB 7%
*% of Total Investments as of September 30, 1998
- --------------------------------------------------------------------------------
PERFORMANCE
- --------------------------------------------------------------------------------
TOTAL RETURN INVESTMENT PERFORMANCE For the Period Ended September 30, 1998
Lehman Brothers Lipper Short
Inst'l Class Intermediate Government/ Intermediate Grade
(Incep. 12/31/96) Corporate Bond Index Debt Fund Average
- --------------------------------------------------------------------------------
6 Months 6.13% 6.45% 4.69%
1 Year 10.03% 10.42% 8.05%
Since Inception* 8.99% -- --
* Annualized
CUMULATIVE RETURNS THROUGH SEPTEMBER 30, 1998
$5,000,000 invested at inception
<TABLE>
<CAPTION>
- --------------------------------------------------------
Moderate Duration Lehman Brothers
Fund Intermed. Gov't/
MONTH Corporate Bond
Index
- --------------------------------------------------------
<S> <C> <C>
12/31/96 5,000,000 5,000,000
01/31/97 5,018,573 5,019,499
02/28/97 5,025,671 5,029,037
03/31/97 4,987,552 4,994,337
04/30/97 5,045,822 5,053,270
05/31/97 5,076,973 5,095,212
06/30/97 5,141,280 5,141,578
07/31/97 5,240,626 5,245,952
08/31/97 5,220,094 5,219,722
09/30/97 5,282,529 5,280,271
10/31/97 5,331,654 5,338,882
11/30/97 5,354,915 5,350,628
12/31/97 5,398,734 5,393,432
01/31/98 5,454,128 5,464,087
02/28/98 5,448,868 5,459,715
03/31/98 5,476,199 5,477,186
04/30/98 5,507,779 5,504,572
05/31/98 5,547,118 5,544,756
06/30/98 5,574,030 5,580,242
07/31/98 5,603,136 5,599,773
08/31/98 5,657,953 5,687,689
09/30/98 5,812,116 5,830,450
- --------------------------------------------------------
</TABLE>
Past performance is not an indication of future results. The line graph above
assumes the investment of $5,000,000 on 12/31/96, the Fund's Institutional Class
inception date, compared to the Lehman Brothers Intermediate Government/
Corporate Bond Index, an unmanaged market index. The Fund may invest in foreign
securities which involve potentially higher risks including foreign currency
fluctuations and political or economic uncertainty.
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
. The Moderate Duration Fund returned 6.13%, modestly underperforming the
benchmark Lehman Brothers Intermediate Government/Corporate Bond Index return
of 6.45% for the six-month period ended September 30, 1998.
. Positives for the Fund included an above-benchmark duration which boosted
returns significantly as interest rates declined by approximately 0.8% to
1.2% on short- to intermediate-maturity instruments. Focusing on intermediate
maturities (two to seven years) was also favorable as these yields declined
the most.
. Detracting from relative performance was the Fund's allocation to
mortgage-backed securities (mortgage-backed securities are not included in
the Index) which significantly underperformed as falling interest rates led
investors to anticipate higher prepayments.
. Underweighting the corporate sector added to relative returns as corporates
performed poorly due to worries about declining profits.
. However, the Fund's small allocation to below-investment-grade credits lagged
due to concerns about credit quality and liquidity.
. Currency-hedged, non-U.S. bonds (mostly the United Kingdom) performed better
than U.S. Treasuries, and the Fund's conservative allocation contributed
modestly to performance.
. Limited holdings of U.S. dollar-denominated Latin American and Korean issues
declined in price under the weight of general emerging markets troubles.
1998 Semi-Annual Report 9
<PAGE>
PIMCO Low Duration Fund
- --------------------------------------------------------------------------------
FUND CHARACTERISTICS
- --------------------------------------------------------------------------------
Objective:
Maximum total return, consistent with preservation of capital and prudent
investment management.
Portfolio:
Primarily shorter-term investment grade bonds.
Duration:
2.4 years
Total Net Assets:
$3,492 million
Sector Breakdown:*
[PIE CHART APPEARS HERE]
Mortgage-Backed Securities 57.4%
Corporate Bonds and Notes 22,3%
Short-Term Instruments 7.4%
Other 12.9%
Quality Breakdown:*
[PIE CHART APPEARS HERE]
AAA 89%
AA 2%
A 2%
BBB 4%
BB 3%
*% of Total Investments as of September 30, 1998
- --------------------------------------------------------------------------------
PERFORMANCE
- --------------------------------------------------------------------------------
TOTAL RETURN INVESTMENT PERFORMANCE For the Period Ended September 30, 1998
<TABLE>
<CAPTION>
Lipper Short
Inst'l Class Admin. Class Merrill Lynch 1-3 Investment Grade
(Incep. 5/11/87) (Incep. 12/31/94) Year Treasury Index Debt Fund Average
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
6 Months 4.42% 4.29% 4.65% 3.78%
1 Year 7.97% 7.71% 7.97% 6.70%
3 Years* 7.91% 7.64% 6.82% 6.22%
5 Years* 6.85% -- 5.95% 5.43%
10 Years* 8.36% -- 7.39% 7.01%
Since Inception* 8.32% 8.35% -- --
</TABLE>
* Annualized
CUMULATIVE RETURNS THROUGH SEPTEMBER 30, 1998
$5,000,000 invested at inception
<TABLE>
<CAPTION>
- ------------------------------------------------------
Low Duration Merrill Lynch
MONTH Fund 1-3 Year Treasury
Index
- ------------------------------------------------------
<S> <C> <C>
05/31/87 5,000,000 5,000,000
06/30/87 5,046,628 5,054,486
07/31/87 5,065,090 5,079,247
08/31/87 5,064,335 5,083,277
09/30/87 5,052,060 5,063,694
10/31/87 5,133,989 5,175,497
11/30/87 5,191,951 5,206,753
12/31/87 5,222,390 5,239,924
01/31/88 5,308,798 5,323,917
02/29/88 5,347,411 5,367,579
03/31/88 5,380,986 5,378,053
04/30/88 5,403,325 5,385,796
05/31/88 5,415,511 5,378,103
06/30/88 5,466,198 5,433,788
07/31/88 5,495,264 5,437,868
08/31/88 5,517,425 5,449,457
09/30/88 5,568,286 5,512,752
10/31/88 5,619,832 5,567,754
11/30/88 5,626,975 5,552,801
12/31/88 5,652,043 5,565,872
01/31/89 5,699,277 5,609,584
02/28/89 5,708,130 5,609,468
03/31/89 5,730,286 5,635,162
04/30/89 5,789,151 5,721,387
05/31/89 5,917,401 5,806,895
06/30/89 6,046,639 5,915,301
07/31/89 6,135,363 6,002,808
08/31/89 6,107,180 5,965,890
09/30/89 6,137,963 6,001,276
10/31/89 6,219,093 6,091,880
11/30/89 6,275,483 6,149,283
12/31/89 6,307,554 6,173,858
01/31/90 6,303,536 6,178,987
02/28/90 6,346,767 6,207,779
03/31/90 6,381,164 6,228,694
04/30/90 6,377,250 6,240,900
05/31/90 6,484,898 6,336,383
06/30/90 6,554,775 6,403,041
07/31/90 6,626,735 6,482,955
08/31/90 6,639,802 6,502,338
09/30/90 6,676,368 6,555,691
10/31/90 6,724,978 6,627,712
11/30/90 6,805,177 6,692,922
12/31/90 6,878,682 6,774,101
01/31/91 6,942,193 6,836,151
02/28/91 6,997,644 6,876,758
03/31/91 7,057,271 6,923,107
04/30/91 7,143,402 6,988,670
05/31/91 7,199,368 7,030,881
06/30/91 7,245,425 7,059,426
07/31/91 7,325,646 7,120,914
08/31/91 7,430,571 7,218,612
09/30/91 7,527,775 7,296,718
10/31/91 7,593,269 7,375,086
11/30/91 7,675,305 7,451,712
12/31/91 7,804,629 7,565,276
01/31/92 7,811,724 7,553,701
02/29/92 7,850,357 7,579,762
03/31/92 7,854,905 7,577,109
04/30/92 7,910,379 7,646,439
05/31/92 7,990,995 7,716,175
06/30/92 8,065,552 7,794,942
07/31/92 8,172,756 7,882,416
08/31/92 8,227,543 7,951,624
09/30/92 8,309,644 8,027,323
10/31/92 8,312,516 7,979,320
11/30/92 8,317,418 7,966,313
12/31/92 8,404,634 8,041,993
01/31/93 8,484,134 8,125,469
02/28/93 8,548,735 8,194,941
03/31/93 8,633,491 8,219,527
04/30/93 8,674,838 8,270,487
05/31/93 8,685,036 8,247,329
06/30/93 8,771,815 8,308,113
07/31/93 8,802,074 8,327,387
08/31/93 8,888,391 8,400,002
09/30/93 8,922,962 8,427,302
10/31/93 8,948,843 8,443,819
11/30/93 8,993,553 8,445,931
12/31/93 9,056,846 8,477,097
01/31/94 9,106,228 8,531,519
02/28/94 9,066,980 8,477,003
03/31/94 9,027,600 8,434,789
04/30/94 8,998,069 8,404,930
05/31/94 8,988,338 8,416,864
06/30/94 9,007,246 8,441,778
07/31/94 9,091,298 8,514,377
08/31/94 9,129,999 8,544,348
09/30/94 9,116,482 8,524,952
10/31/94 9,115,926 8,544,133
11/30/94 9,116,176 8,506,026
12/31/94 9,113,801 8,525,250
01/31/95 9,198,589 8,643,921
02/28/95 9,314,359 8,782,689
03/31/95 9,352,866 8,811,585
04/30/95 9,470,326 8,890,096
05/31/95 9,642,739 9,045,405
06/30/95 9,692,391 9,094,070
07/31/95 9,696,402 9,131,718
08/31/95 9,802,372 9,186,053
09/30/95 9,890,345 9,230,697
10/31/95 9,964,908 9,308,604
11/30/95 10,081,178 9,390,892
12/31/95 10,201,089 9,463,014
01/31/96 10,276,453 9,543,450
02/29/96 10,210,333 9,503,081
03/31/96 10,206,317 9,494,623
04/30/96 10,210,668 9,502,599
05/31/96 10,220,903 9,522,079
06/30/96 10,324,796 9,590,448
07/31/96 10,360,157 9,628,235
08/31/96 10,411,622 9,661,259
09/30/96 10,559,003 9,748,888
10/31/96 10,711,509 9,858,660
11/30/96 10,856,335 9,934,177
12/31/96 10,827,172 9,934,177
01/31/97 10,917,928 9,980,768
02/28/97 10,962,362 10,003,723
03/31/97 10,918,161 9,999,822
04/30/97 11,051,403 10,081,520
05/31/97 11,144,606 10,150,277
06/30/97 11,232,679 10,220,213
07/31/97 11,414,133 10,332,533
08/31/97 11,408,378 10,342,038
09/30/97 11,508,994 10,420,534
10/31/97 11,594,791 10,497,958
11/30/97 11,628,837 10,523,470
12/31/97 11,718,950 10,595,345
01/31/98 11,808,398 10,698,225
02/28/98 11,849,111 10,707,426
03/31/98 11,900,389 10,751,006
04/30/98 11,965,788 10,801,320
05/31/98 12,042,787 10,858,892
06/30/98 12,072,222 10,915,357
07/31/98 12,130,281 10,966,441
08/31/98 12,177,935 11,104,289
09/30/98 12,426,371 11,251,422
- ------------------------------------------------------
</TABLE>
Past performance is not an indication of future results. The line graph above
assumes the investment of $5,000,000 on 6/1/87, the first full month following
the Fund's Institutional Class inception on 5/11/87, compared to the Merrill
Lynch 1-3 Year Treasury Index, an unmanaged market index. The performance of the
Administrative Class (shown above) reflects the payment of a service fee in an
amount not to exceed 0.25% on an annualized basis. The Administrative Class
commenced operations on 12/31/94. The Fund may invest in foreign securities
which involve potentially higher risks including foreign currency fluctuations
and political or economic uncertainty.
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
. The Low Duration Fund's Institutional Class shares returned 4.42% for the
six-month period ended September 30, 1998, modestly underperforming the
benchmark Merrill Lynch 1-3 Year Treasury Index return of 4.65%.
. The Fund maintained an above-index duration throughout the period, which
increased returns as interest rates declined by approximately 0.8% to 1.2% on
short- to intermediate-maturity instruments.
. Concentrating on intermediate maturities (two to seven years), where yields
declined the most, was also a positive for relative performance.
. The Fund's substantial allocation to mortgage-backed bonds detracted from
returns throughout the period as expectations of rising prepayments caused
mortgage-backed bonds as a group to underperform like-duration Treasuries.
. Corporate sector holdings weakened returns relative to the all-Treasury
benchmark as concerns about declining profits caused yield premiums to widen,
erasing the yield advantage. However, the Fund's focus on higher-quality
corporates helped minimize this sector's negative impact on returns.
. The Fund's small allocation to currency-hedged, non-U.S. holdings in
developed markets could not keep pace with the rally in U.S. Treasuries.
. Limited holdings of U.S. dollar Latin American issues declined under the
weight of general emerging markets troubles.
10 PIMCO Funds
<PAGE>
PIMCO Low Duration Fund II
- --------------------------------------------------------------------------------
FUND CHARACTERISTICS
- --------------------------------------------------------------------------------
Objective:
Maximum total return, consistent with preservation of capital and prudent
investment management.
Portfolio:
Primarily shorter-term investment grade bonds with quality and foreign issuer
restrictions.
Duration:
2.2 years
Total Net Assets:
$420 million
Sector Breakdown:*
[PIE CHART APPEARS HERE]
Mortgage-Backed Securities 56.9%
Corporate Bonds and Notes 27.7%
Short-Term Instruments 8.2%
Other 7.2%
Quality Breakdown:*
[PIE CHART APPEARS HERE]
AAA 68%
AA 13%
A 18%
*% of Total Investments as of September 30, 1998
- --------------------------------------------------------------------------------
PERFORMANCE
- --------------------------------------------------------------------------------
TOTAL RETURN INVESTMENT PERFORMANCE For the Period Ended September 30, 1998
<TABLE>
<CAPTION>
Lipper Short
Inst'l Class Admin. Class Merrill Lynch 1-3 Investment Grade
(Incep. 11/1/91) (Incep. 2/2/98) Year Treasury Index Debt Fund Average
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
6 Months 4.65% 4.52% 4.65% 3.78%
1 Year 8.22% -- 7.97% 6.70%
3 Years* 7.37% -- 6.82% 6.22%
5 Years* 6.27% -- 5.95% 5.43%
Since Inception 6.74%* 5.12% -- --
</TABLE>
* Annualized
CUMULATIVE RETURNS THROUGH SEPTEMBER 30, 1998
$5,000,000 invested at inception
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
Low Duration Merrill Lynch
MONTH Fund II 1-3 Year
Treasury Index
- -----------------------------------------------------------------------------
<S> <C> <C>
10/31/91 5,000,000 5,000,000
11/30/91 5,070,496 5,051,950
12/31/91 5,150,788 5,128,941
01/31/92 5,126,506 5,121,094
02/29/92 5,159,358 5,138,762
03/31/92 5,157,326 5,136,964
04/30/92 5,197,109 5,183,966
05/31/92 5,240,589 5,231,244
06/30/92 5,302,476 5,284,645
07/31/92 5,355,736 5,343,949
08/31/92 5,377,728 5,390,869
09/30/92 5,426,036 5,442,189
10/31/92 5,423,401 5,409,645
11/30/92 5,417,545 5,400,827
12/31/92 5,471,783 5,452,135
01/31/93 5,544,427 5,508,728
02/28/93 5,600,313 5,555,828
03/31/93 5,619,040 5,572,496
04/30/93 5,660,962 5,607,045
05/31/93 5,649,149 5,591,344
06/30/93 5,710,514 5,632,553
07/31/93 5,724,808 5,645,621
08/31/93 5,775,444 5,694,851
09/30/93 5,794,689 5,713,359
10/31/93 5,802,333 5,724,557
11/30/93 5,799,743 5,725,988
12/31/93 5,831,720 5,747,117
01/31/94 5,872,093 5,784,014
02/28/94 5,850,184 5,747,054
03/31/94 5,796,320 5,718,434
04/30/94 5,779,212 5,698,191
05/31/94 5,767,710 5,706,282
06/30/94 5,772,326 5,723,172
07/31/94 5,831,607 5,772,392
08/31/94 5,826,033 5,792,711
09/30/94 5,810,813 5,779,561
10/31/94 5,821,529 5,792,565
11/30/94 5,828,521 5,766,731
12/31/94 5,850,354 5,779,763
01/31/95 5,935,515 5,860,217
02/28/95 6,029,620 5,940,737
03/31/95 6,074,370 5,973,886
04/30/95 6,107,608 6,027,114
05/31/95 6,211,631 6,132,407
06/30/95 6,235,805 6,165,399
07/31/95 6,243,368 6,190,923
08/31/95 6,297,641 6,227,760
09/30/95 6,346,020 6,258,027
10/31/95 6,405,255 6,310,844
11/30/95 6,478,110 6,366,632
12/31/95 6,539,804 6,415,528
01/31/96 6,580,351 6,470,061
02/29/96 6,535,860 6,442,692
03/31/96 6,518,000 6,436,958
04/30/96 6,505,764 6,442,365
05/31/96 6,502,485 6,455,572
06/30/96 6,575,782 6,501,923
07/31/96 6,606,321 6,527,541
08/31/96 6,630,457 6,549,930
09/30/96 6,719,145 6,609,338
10/31/96 6,816,464 6,683,760
11/30/96 6,887,004 6,734,957
12/31/96 6,881,011 6,734,957
01/31/97 6,918,655 6,766,544
02/28/97 6,946,342 6,782,107
03/31/97 6,930,530 6,779,461
04/30/97 6,993,758 6,834,850
05/31/97 7,044,400 6,881,464
06/30/97 7,099,424 6,928,877
07/31/97 7,200,340 7,005,026
08/31/97 7,201,737 7,011,470
09/30/97 7,257,640 7,084,687
10/31/97 7,324,878 7,117,177
11/30/97 7,343,098 7,134,473
12/31/97 7,405,208 7,183,201
01/31/98 7,464,768 7,252,950
02/28/98 7,477,590 7,259,187
03/31/98 7,505,393 7,288,733
04/30/98 7,541,498 7,322,844
05/31/98 7,593,666 7,361,875
06/30/98 7,623,903 7,400,156
07/31/98 7,657,543 7,434,789
08/31/98 7,746,767 7,528,244
09/30/98 7,854,078 7,627,994
</TABLE>
Past performance is not an indication of future results. The line graph above
assumes the investment of $5,000,000 on 11/1/91, the Fund's Institutional Class
inception date, compared to the Merrill Lynch 1-3 Year Treasury Index, an
unmanaged market index. The performance of the Administrative Class (shown
above) reflects the payment of a service fee in an amount not to exceed 0.25% on
an annual basis. The Administrative Class commenced operations on 2/2/98.
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
. Low Duration Fund II Institutional Class shares returned 4.65%, exactly
matching the return of the benchmark Merrill Lynch 1-3 Year Treasury Index
return of 4.65% for the semi-annual period ended September 30, 1998.
. The Fund maintained an above-index duration throughout the period, which
increased returns as interest rates declined by approximately 0.8% to 1.2% on
short- to intermediate-maturity instruments.
. Concentrating on intermediate maturities (two to seven years), where yields
declined the most, was also a positive for performance.
. Offsetting the Fund's favorable duration and yield curve strategies was a
substantial allocation to mortgage-backed bonds which detracted from returns
throughout the period as expectations of rising prepayments caused
mortgage-backed bonds as a group to underperform Treasuries.
. Limited holdings in the corporate sector also weakened returns relative to
the all-Treasury benchmark as concerns about declining profits caused yield
premiums to widen, erasing the yield advantage.
1998 Semi-Annual Report 11
<PAGE>
PIMCO Low Duration Fund III
- --------------------------------------------------------------------------------
FUND CHARACTERISTICS
- --------------------------------------------------------------------------------
Objective:
Maximum total return, consistent with preservation of capital and prudent
investment management.
Portfolio:
Primarily shorter-term investment grade bonds with prohibitions on firms engaged
in socially sensitive practices.
Duration:
2.4 years
Total Net Assets:
$25 million
Sector Breakdown:*
[PIE CHART APPEARS HERE]
Mortgage-Backed Securities 55.7%
Corporate Bonds and Notes 19.0%
Short-Term Instruments 16.4%
Sovereign Issues 5.3%
Other 3.6%
Quality Breakdown:*
[PIE CHART APPEARS HERE]
AAA 76%
AA 5%
A 10%
BB 9%
*% of Total Investments as of September 30, 1998
- --------------------------------------------------------------------------------
PERFORMANCE
- --------------------------------------------------------------------------------
TOTAL RETURN INVESTMENT PERFORMANCE For the Period Ended September 30, 1998
Lipper Short
Inst'l Class Merrill Lynch 1-3 Investment Grade
(Incep. 12/31/96) Year Treasury Index Debt Fund Average
- -----------------------------------------------------------------------------
6 Months 4.09% 4.65% 3.78%
1 Year 7.39% 7.97% 6.70%
Since Inception* 7.24% -- --
* Annualized
CUMULATIVE RETURNS THROUGH SEPTEMBER 30, 1998
$5,000,000 invested at inception
<TABLE>
<CAPTION>
- ----------------------------------------------------------------
Low Duration Merrill Lynch 1-3
MONTH Fund III Year Treasury
Index
- ----------------------------------------------------------------
<S> <C> <C>
12/31/96 5,000,000 5,000,000
01/31/97 5,019,544 5,023,450
02/28/97 5,044,724 5,035,003
03/31/97 5,028,885 5,033,040
04/30/97 5,074,774 5,074,180
05/31/97 5,116,879 5,108,766
06/30/97 5,156,800 5,143,965
07/31/97 5,193,007 5,200,497
08/31/97 5,219,920 5,205,281
09/30/97 5,260,771 5,244,790
10/31/97 5,310,323 5,283,758
11/30/97 5,313,692 5,296,598
12/31/97 5,355,776 5,332,774
01/31/98 5,393,985 5,384,555
02/28/98 5,402,862 5,389,186
03/31/98 5,427,616 5,411,120
04/30/98 5,458,772 5,436,444
05/31/98 5,490,624 5,465,421
06/30/98 5,503,181 5,493,840
07/31/98 5,527,294 5,519,552
08/31/98 5,543,567 5,588,932
09/30/98 5,649,590 5,662,986
</TABLE>
Past performance is not an indication of future results. The line graph above
assumes the investment of $5,000,000 on 12/31/96, the Fund's Institutional Class
inception date, compared to the Merrill Lynch 1-3 Year Treasury Index, an
unmanaged market index. The Fund may invest in foreign securities which involve
potentially higher risks including foreign currency fluctuations and political
or economic uncertainty.
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
. For the six-month period ended September 30, 1998, the Low Duration Fund III
returned 4.09%, underperforming the benchmark Merrill Lynch 1-3 Year Treasury
Index return of 4.65%.
. The Fund maintained an above-index duration throughout the period, which
increased returns as interest rates declined by approximately 0.8% to 1.2% on
short- to intermediate-maturity instruments.
. Concentrating on intermediate maturities (two to seven years), where yields
declined the most, was also a positive for the Fund's returns.
. While duration and yield curve strategies were positive, sector allocations
more than offset those gains. The most significant detractor was the Fund's
substantial allocation to mortgage-backed bonds which lagged throughout the
period as expectations of rising prepayments caused mortgage-backed bonds as
a group to underperform Treasuries.
. Corporate sector holdings also weakened returns relative to the all-Treasury
benchmark as concerns about declining profits caused yield premiums to widen,
erasing the yield advantage.
. Limited holdings of U.S. dollar Latin American issues declined under the
weight of general emerging markets troubles.
12 PIMCO Funds
<PAGE>
PIMCO Low Duration Mortgage Fund
- --------------------------------------------------------------------------------
FUND CHARACTERISTICS
- --------------------------------------------------------------------------------
Objective:
Maximum total return, consistent with preservation of capital and prudent
investment management.
Portfolio:
Primarily short- and intermediate-term mortgage-related securities.
Duration:
1.7 years
Total Net Assets:
$4 million
Sector Breakdown:*
[PIE CHART APPEARS HERE]
Mortgage-Backed Securities 86.1%
Asset-Backed Securities 5.7%
Other 8.2%
Quality Breakdown:*
[PIE CHART APPEARS HERE]
AAA 98%
A 2%
*% of Total Investments as of September 30, 1998
- --------------------------------------------------------------------------------
PERFORMANCE
- --------------------------------------------------------------------------------
TOTAL RETURN INVESTMENT PERFORMANCE For the Period Ended September 30, 1998
Inst'l Class Merrill Lynch 1-3 Lipper U.S. Mortgage
(Incep. 7/31/97) Year Treasury Index Fund Average
- --------------------------------------------------------------------------------
6 Months 4.74% 4.65% 4.54%
1 Year 8.46% 7.97% 8.30%
Since Inception* 9.25% -- --
* Annualized
CUMULATIVE RETURNS THROUGH SEPTEMBER 30, 1998
$5,000,000 invested at inception
<TABLE>
<CAPTION>
- ------------------------------------------------
Low Duration Merrill Lynch
MONTH Mortgage Fund 1-3 Year
Treasury Index
<S> <C> <C>
- ------------------------------------------------
07/31/97 5,000,000 5,000,000
08/31/97 5,018,286 5,004,600
09/30/97 5,111,651 5,042,585
10/31/97 5,159,820 5,080,051
11/30/97 5,172,284 5,092,396
12/31/97 5,216,267 5,127,177
01/31/98 5,260,371 5,176,962
02/28/98 5,285,796 5,181,414
03/31/98 5,293,096 5,202,503
04/30/98 5,311,809 5,226,850
05/31/98 5,351,927 5,254,709
06/30/98 5,392,191 5,282,034
07/31/98 5,408,563 5,306,753
08/31/98 5,477,311 5,373,459
09/30/98 5,543,973 5,444,658
</TABLE>
Past performance is not an indication of future results. The line graph above
assumes the investment of $5,000,000 on 7/31/97, the Fund's Institutional Class
inception date, compared to the Merrill Lynch 1-3 Year Treasury Index, an
unmanaged market index.
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
. The Low Duration Mortgage Fund's total return for the fiscal half-year ended
September 30, 1998 was 4.74%, outperforming the benchmark Merrill Lynch 1-3
Year Treasury Index return of 4.65%. Since its inception on July 31, 1997,
the Fund has outperformed its all-Treasury benchmark by 1.67% (9.25% for the
Fund versus 7.58% for the Index).
. The Fund's duration was kept longer than the Index which added to returns as
interest rates declined significantly during the period.
. A maturity mix that favored securities longer in maturity than the three-year
limit of the Index increased returns as intermediate yields (maturities from
two to seven years) fell by the greatest amount.
. As refinancing activity remained brisk, adjustable rate mortgages had
difficulty keeping up with Treasury returns during 1998's second and third
quarters.
1998 Semi-Annual Report 13
<PAGE>
PIMCO Short-Term Fund
- --------------------------------------------------------------------------------
FUND CHARACTERISTICS
- --------------------------------------------------------------------------------
Objective:
Maximum current income, consistent with preservation of capital and daily
liquidity.
Portfolio:
Primarily short-term investment grade bonds.
Duration:
0.5 years
Total Net Assets:
$402 million
Sector Breakdown:*
[PIE CHART APPEARS HERE]
Mortgage-Backed Securities 54.4%
Corporate Bonds and Notes 22.8%
Short-Term Instruments 8.0%
Asset Backed Securities 5.6%
Other 9.2%
Quality Breakdown:*
[PIE CHART APPEARS HERE]
AAA 70%
AA 2%
A 15%
BBB 7%
BB 6%
*% of Total Investments as of September 30, 1998
- --------------------------------------------------------------------------------
PERFORMANCE
- --------------------------------------------------------------------------------
TOTAL RETURN INVESTMENT PERFORMANCE For the Period Ended September 30, 1998
Lipper Ultra-
Inst'l Class Admin. Class Lipper Money Short Obligation
(Incep. 10/7/87) (Incep. 2/1/96) Market Index Fund Average
- --------------------------------------------------------------------------------
6 Months 2.73% 2.61% 2.55% 2.91%
1 Year 5.84% 5.59% 5.19% 5.65%
3 Years* 6.90% -- 5.12% 5.78%
5 Years* 6.26% -- 4.79% 5.35%
10 Years* 6.49% -- 5.41% 5.49%
Since Inception* 6.55% 6.27% -- --
* Annualized
CUMULATIVE RETURNS THROUGH SEPTEMBER 30, 1998
$5,000,000 invested at inception
<TABLE>
<CAPTION>
- -------------------------------------------------
Short-Term Lipper
MONTH Fund Money Market
Index
- -------------------------------------------------
<S> <C> <C>
10/31/87 5,000,000 5,000,000
11/30/87 5,029,461 5,028,003
12/31/87 5,060,119 5,057,166
01/31/88 5,094,787 5,085,483
02/29/88 5,116,118 5,111,420
03/31/88 5,144,560 5,138,509
04/30/88 5,173,186 5,163,690
05/31/88 5,202,593 5,191,059
06/30/88 5,232,291 5,219,609
07/31/88 5,259,411 5,249,882
08/31/88 5,293,423 5,282,958
09/30/88 5,328,409 5,316,238
10/31/88 5,375,276 5,350,261
11/30/88 5,411,635 5,383,970
12/31/88 5,443,779 5,421,120
01/31/89 5,483,420 5,460,149
02/28/89 5,522,499 5,496,732
03/31/89 5,571,029 5,539,060
04/30/89 5,613,569 5,580,602
05/31/89 5,665,094 5,625,247
06/30/89 5,708,266 5,667,437
07/31/89 5,756,794 5,709,374
08/31/89 5,788,039 5,749,912
09/30/89 5,828,328 5,789,009
10/31/89 5,883,335 5,829,532
11/30/89 5,922,983 5,868,010
12/31/89 5,957,698 5,907,325
01/31/90 5,987,232 5,947,492
02/28/90 6,024,238 5,983,180
03/31/90 6,064,842 6,022,072
04/30/90 6,090,417 6,061,216
05/31/90 6,148,665 6,101,825
06/30/90 6,189,318 6,140,264
07/31/90 6,232,885 6,180,788
08/31/90 6,267,095 6,220,985
09/30/90 6,309,632 6,258,290
10/31/90 6,358,334 6,298,971
11/30/90 6,409,912 6,338,025
12/31/90 6,462,141 6,377,954
01/31/91 6,509,418 6,416,859
02/28/91 6,545,494 6,449,583
03/31/91 6,576,473 6,483,125
04/30/91 6,618,103 6,515,539
05/31/91 6,656,338 6,547,464
06/30/91 6,682,104 6,576,275
07/31/91 6,722,727 6,607,838
08/31/91 6,766,617 6,638,234
09/30/91 6,804,471 6,666,779
10/31/91 6,844,965 6,696,114
11/30/91 6,882,973 6,722,899
12/31/91 6,892,228 6,750,464
01/31/92 6,919,339 6,775,439
02/29/92 6,934,403 6,796,441
03/31/92 6,948,634 6,818,190
04/30/92 6,979,006 6,839,326
05/31/92 7,001,946 6,859,847
06/30/92 7,031,009 6,879,740
07/31/92 7,061,296 6,899,690
08/31/92 7,080,606 6,917,632
09/30/92 7,100,505 6,934,232
10/31/92 7,109,622 6,950,875
11/30/92 7,119,728 6,966,860
12/31/92 7,142,089 6,984,279
01/31/93 7,167,580 7,001,040
02/28/93 7,187,715 7,015,741
03/31/93 7,222,352 7,031,879
04/30/93 7,248,666 7,047,351
05/31/93 7,279,042 7,062,147
06/30/93 7,309,491 7,077,686
07/31/93 7,337,521 7,093,258
08/31/93 7,358,333 7,109,572
09/30/93 7,378,551 7,125,210
10/31/93 7,406,168 7,140,887
11/30/93 7,435,531 7,156,597
12/31/93 7,472,268 7,173,058
01/31/94 7,487,037 7,189,554
02/28/94 7,497,133 7,204,654
03/31/94 7,486,772 7,221,944
04/30/94 7,500,714 7,240,000
05/31/94 7,507,684 7,260,269
06/30/94 7,544,131 7,281,328
07/31/94 7,581,551 7,303,901
08/31/94 7,613,244 7,328,743
09/30/94 7,623,522 7,353,648
10/31/94 7,645,459 7,380,856
11/30/94 7,653,660 7,408,906
12/31/94 7,688,576 7,440,763
01/31/95 7,728,764 7,474,248
02/28/95 7,801,580 7,505,640
03/31/95 7,820,739 7,540,914
04/30/95 7,906,502 7,574,851
05/31/95 7,988,187 7,611,211
06/30/95 8,016,388 7,646,219
07/31/95 8,066,388 7,681,394
08/31/95 8,106,191 7,715,959
09/30/95 8,183,875 7,749,906
10/31/95 8,244,808 7,784,781
11/30/95 8,323,417 7,818,256
12/31/95 8,396,279 7,852,655
01/31/96 8,438,474 7,887,206
02/28/96 8,455,531 7,917,969
03/31/96 8,484,975 7,949,641
04/30/96 8,526,887 7,981,437
05/31/96 8,573,734 8,014,160
06/30/96 8,622,971 8,045,418
07/31/96 8,649,616 8,079,208
08/31/96 8,706,604 8,114,140
09/30/96 8,792,582 8,144,784
10/31/96 8,865,196 8,178,174
11/30/96 8,947,374 8,210,888
12/31/96 8,984,288 8,245,372
01/31/97 9,039,631 8,280,004
02/28/97 9,081,953 8,310,639
03/31/97 9,089,081 8,344,714
04/30/97 9,142,882 8,378,927
05/31/97 9,211,364 8,414,958
06/30/97 9,273,987 8,450,300
07/31/97 9,348,891 8,486,635
08/31/97 9,379,554 8,523,128
09/30/97 9,444,784 8,558,926
10/31/97 9,469,319 8,595,729
11/30/97 9,513,992 8,631,831
12/31/97 9,569,434 8,669,809
01/31/98 9,628,194 8,707,958
02/28/98 9,663,998 8,741,919
03/31/98 9,730,989 8,779,511
04/30/98 9,777,926 8,815,504
05/31/98 9,824,621 8,853,411
06/30/98 9,860,451 8,889,709
07/31/98 9,921,920 8,927,934
08/31/98 9,927,830 8,966,352
09/30/98 9,996,273 9,003,090
</TABLE>
Past performance is not an indication of future results. The line graph above
assumes the investment of $5,000,000 on 11/1/87, the first full month following
the Fund's Institutional Class inception on 10/7/87, compared to the Lipper
<PAGE>
PIMCO Long-Term U.S. Government Fund
- --------------------------------------------------------------------------------
FUND CHARACTERISTICS
- --------------------------------------------------------------------------------
Objective:
Maximum total return, consistent with preservation of capital and prudent
investment management.
Portfolio:
Primarily longer-term U.S.
government bonds.
Duration:
9.8 years
Total Net Assets:
$194 million
Sector Breakdown:*
[PIE CHART APPEARS HERE]
Mortgage-Backed Securities 49.5%
U.S. Treasury Obligations 35.5%
Asset-Backed Securities 5.5%
Other 9.5%
Quality Breakdown:*
[PIE CHART APPEARS HERE]
AAA 98%
AA 1%
A 1%
*% of Total Investments as of September 30, 1998
- --------------------------------------------------------------------------------
PERFORMANCE
- --------------------------------------------------------------------------------
TOTAL RETURN INVESTMENT PERFORMANCE For the Period Ended September 30, 1998
<TABLE>
<CAPTION>
LB Int. & Lehman Brothers Lipper General
Inst'l Class Admin. Class 20+ Year Aggregate U.S. Government
(Incep. 7/1/91) (Incep. 9/23/97) Treasury Index Bond Index Fund Average
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
6 Months 13.66% 13.49% 11.90% 6.66% 6.99%
1 Year 22.67% 22.34% 20.53% 11.51% 11.63%
3 Years* 12.97% -- 11.62% 8.67% 7.82%
5 Years* 9.93% -- 8.81% 7.21% 6.10%
Since Inception* 13.82% 21.65% -- -- --
</TABLE>
* Annualized
CUMULATIVE RETURNS THROUGH SEPTEMBER 30, 1998
$5,000,000 invested at inception
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------
Long-Term Lehman Int & 20+ Lehman Brothers
MONTH U.S. Gov't Year Aggregate
Fund Treasury Index Bond Index
- ---------------------------------------------------------------------------
<S> <C> <C> <C>
06/30/91 5,000,000 5,000,000 5,000,000
07/31/91 5,068,858 5,078,653 5,069,337
08/31/91 5,265,511 5,253,833 5,179,037
09/30/91 5,442,627 5,415,685 5,283,983
10/31/91 5,470,292 5,423,958 5,342,814
11/30/91 5,543,810 5,449,855 5,391,803
12/31/91 5,909,199 5,774,939 5,551,931
01/31/92 5,742,566 5,595,656 5,476,401
02/29/92 5,771,828 5,625,075 5,512,010
03/31/92 5,753,678 5,562,934 5,480,935
04/30/92 5,725,465 5,551,125 5,520,525
05/31/92 5,930,074 5,707,247 5,624,696
06/30/92 6,016,162 5,781,880 5,702,106
07/31/92 6,300,744 6,023,037 5,818,441
08/31/92 6,427,326 6,061,588 5,877,383
09/30/92 6,540,767 6,149,824 5,947,052
10/31/92 6,378,211 6,022,902 5,868,205
11/30/92 6,445,336 6,055,985 5,869,532
12/31/92 6,614,191 6,221,353 5,962,865
01/31/93 6,790,743 6,388,329 6,077,211
02/28/93 7,063,398 6,593,498 6,183,594
03/31/93 7,101,318 6,608,592 6,209,360
04/30/93 7,156,851 6,657,303 6,252,599
05/31/93 7,184,508 6,685,270 6,260,561
06/30/93 7,540,954 6,950,671 6,374,021
07/31/93 7,650,608 7,066,676 6,410,072
08/31/93 7,942,707 7,331,491 6,522,427
09/30/93 7,968,888 7,351,540 6,540,341
10/31/93 8,009,725 7,404,297 6,564,781
11/30/93 7,792,708 7,233,849 6,508,935
12/31/93 7,842,784 7,252,703 6,544,212
01/31/94 8,022,521 7,413,784 6,632,570
02/28/94 7,708,576 7,126,553 6,517,340
03/31/94 7,394,709 6,825,285 6,356,659
04/30/94 7,268,749 6,744,159 6,305,901
05/31/94 7,246,140 6,693,854 6,305,016
06/30/94 7,204,478 6,829,252 6,291,082
07/31/94 7,383,601 6,861,152 6,416,044
08/31/94 7,399,922 6,802,522 6,424,006
09/30/94 7,169,097 6,580,310 6,329,455
10/31/94 1,122,283 6,559,449 6,323,816
11/30/94 7,100,894 6,601,562 6,309,771
12/31/94 7,263,266 6,705,670 6,353,342
01/31/95 7,453,074 6,883,563 6,479,077
02/28/95 7,711,268 7,070,315 6,633,122
03/31/95 7,801,463 7,134,690 6,673,818
04/30/95 7,935,436 7,258,496 6,767,041
05/31/95 8,543,447 7,792,055 7,028,907
06/30/95 8,641,206 7,879,508 7,080,440
07/31/95 8,492,085 7,759,077 7,064,626
08/31/95 8,683,920 7,924,423 7,149,887
09/30/95 8,871,163 8,063,754 7,219,445
10/31/95 9,089,923 8,278,998 7,313,332
11/30/95 9,313,423 8,471,111 7,422,922
12/31/95 9,556,575 8,682,059 7,527,093
01/31/96 9,571,589 8,688,221 7,577,078
02/29/96 9,125,878 8,293,222 7,445,371
03/31/96 8,958,506 8,135,410 7,393,617
04/30/96 8,759,744 8,006,952 7,352,037
05/31/96 8,771,139 7,969,721 7,337,108
06/30/96 8,947,395 8,133,816 7,435,639
07/31/96 8,918,333 8,136,866 7,455,987
08/31/96 8,856,612 8,036,207 7,443,491
09/30/96 9,102,968 8,252,684 7,573,207
10/31/96 9,493,678 8,566,251 7,740,965
11/30/96 9,851,090 8,833,466 7,873,557
12/31/96 9,624,385 8,631,621 7,800,349
01/31/97 9,576,361 8,569,404 7,824,236
02/28/97 9,598,405 8,572,900 7,843,699
03/31/97 9,359,770 8,360,698 7,755,779
04/30/97 9,570,437 8,557,405 7,872,893
05/31/97 9,684,481 8,651,795 7,947,317
06/30/97 9,875,451 8,816,262 8,041,646
07/31/97 10,424,177 9,309,083 8,258,504
08/31/97 10,161,918 9,067,905 8,188,061
09/30/97 10,427,124 9,303,828 8,308,820
10/31/97 10,761,870 9,598,856 8,429,358
11/30/97 10,884,053 9,721,316 8,468,174
12/31/97 11,070,318 9,873,400 8,553,435
01/31/98 11,276,193 10,064,364 8,663,246
02/28/98 11,199,620 9,999,353 8,656,334
03/31/98 11,253,545 10,021,549 8,686,469
04/30/98 11,318,487 10,058,381 8,731,809
05/31/98 11,539,028 10,237,616 8,814,637
06/30/98 11,809,161 10,459,638 8,889,393
07/31/98 11,801,731 10,422,257 8,908,303
08/31/98 12,300,067 10,851,859 9,053,280
09/30/98 12,791,270 11,213,683 9,265,272
- ---------------------------------------------------------------------------
</TABLE>
Past performance is not an indication of future results. The line graph above
assumes the investment of $5,000,000 on 7/1/91, the Fund's Institutional Class
inception date, compared to the Lehman Brothers Aggregate Bond Index, and a 10
year duration blend of the Lehman Brothers Intermediate and 20+Yr. Treasury
Indices, each an unmanaged market index. The performance of the Administrative
Class (shown above) reflects the payment of a service fee in an amount not to
exceed 0.25% on an annual basis. The Administrative Class commenced operations
on 9/23/97.
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
. The Long-Term U.S. Government Fund's Institutional Class shares posted a
return of 13.66% for the semi-annual reporting period ended September 30,
1998, strongly outperforming the 11.90% return of the Fund's blended Treasury
benchmark.
. The dominant theme impacting market performance was a "flight to quality"
which made the Treasury sector the best performing U.S. fixed income sector
as credit spreads widened.
. Treasury yields fell most in the intermediate-maturity range, producing an
overall steeper yield curve, while longer duration Treasuries delivered the
best price performance over the six-month period.
. The Fund's yield curve strategy improved relative returns by overweighting
longer-maturity issues in the first fiscal quarter and intermediate-maturity
holdings in the second fiscal quarter.
. Average Fund duration did not contribute significantly to relative
performance as the Fund's duration was equivalent to the benchmark over the
period.
. Security selection was helpful as specific longer-maturity Treasuries
contributed strongly to performance.
. Exposure to longer-term mortgages detracted from performance due to higher
than expected prepayment rates and widening yield spreads relative to the
safety of Treasuries.
1998 Semi-Annual Report 15
<PAGE>
PIMCO Real Return Bond Fund
- --------------------------------------------------------------------------------
FUND CHARACTERISTICS
- --------------------------------------------------------------------------------
Objective:
Maximum real return, consistent with preservation of real capital and prudent
investment management.
Portfolio:
Primarily inflation-indexed bonds.
Duration:
3.0 years
Total Net Assets:
$11 million
Sector Breakdown:*
[PIE CHART APPEARS HERE]
U.S. Treasury Obligations 42.7%
U.S. Government Agencies 21.6%
Short-Term Instruments 14.6%
Corporate Bonds and Notes 11.6%
Other 9.5%
Quality Breakdown:*
[PIE CHART APPEARS HERE]
AAA 89%
AA 2%
A 3%
BBB 3%
BB 3%
*% of Total Investments as of September 30, 1998
- --------------------------------------------------------------------------------
PERFORMANCE
- --------------------------------------------------------------------------------
TOTAL RETURN INVESTMENT PERFORMANCE For the Period Ended September 30, 1998
<TABLE>
<CAPTION>
Inst'l Class Lehman Brothers Inflation Lipper Short U.S.
(Incep. 1/29/97) Linked Treasury Index Government Fund Average
- ------------------------------------------------------------------------------------
<S> <C> <C> <C>
6 Months 4.53% 4.09% 4.00%
1 Year 6.60% 5.67% 6.77%
Since Inception* 5.61% -- --
</TABLE>
* Annualized
CUMULATIVE RETURNS THROUGH SEPTEMBER 30, 1998
$5,000,000 invested at inception
<TABLE>
<CAPTION>
- ----------------------------------------------
Real Return Lehman Borthers
MONTH Bond Fund Inflation Linked
Treasury Index
- ----------------------------------------------
<S> <C> <C>
01/31/97 5,000,000 5,000,000
02/28/97 5,017,061 5,016,499
03/31/97 4,971,983 4,947,776
04/30/97 5,002,809 4,977,955
05/31/97 5,032,748 5,004,838
06/30/97 5,021,938 4,988,823
07/31/97 5,083,742 5,036,214
08/31/97 5,094,469 5,051,322
09/30/97 5,104,457 5,061,426
10/31/97 5,159,085 5,113,556
11/30/97 5,196,006 5,142,195
12/31/97 5,169,329 5,120,599
01/31/98 5,199,466 5,145,691
02/28/98 5,193,833 5,141,057
03/31/98 5,205,501 5,138,489
04/30/98 5,233,211 5,157,501
05/31/98 5,254,770 5,194,120
06/30/98 5,272,877 5,207,097
07/31/98 5,313,726 5,231,257
08/31/98 5,317,549 5,243,132
09/30/98 5,441,195 5,348,519
- ----------------------------------------------
</TABLE>
Past performance is not an indication of future results. The line graph above
assumes the investment of $5,000,000 on 2/1/97, the first full month following
the Fund's Institutional Class inception date on 1/29/97, compared to the Lehman
Brothers Inflation Linked Treasury Index, an unmanaged market index. The Fund
may invest in foreign securities which involve potentially higher risks
including foreign currency fluctuations and political or economic uncertainty.
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
. For the semi-annual period ended September 30, 1998, the Real Return Bond
Fund returned 4.53%, outperforming the 4.09% return of its benchmark, the
Lehman Brothers Inflation Linked Treasury Index.
. The Fund bested the Index due in part to holding an above-benchmark duration
in a falling rate environment. Relative performance also benefited from the
yield pick-up offered by U.S. corporate and agency inflation-indexed issues,
and limited holdings of non-inflation-indexed securities.
. The non-inflation-indexed Treasury curve steepened with intermediate yields
dropping the furthest.
. The U.S. inflation-indexed curve became slightly positively sloped as
intermediate real yields benefited most directly from falling inflation
expectations.
. Real and non-inflation-indexed yield spreads declined by an average of 1.0%.
. The "break-even" inflation adjustment, equating inflation-adjusted yields
with non-inflation-indexed yields, became less than 1.0% for intermediate
issues.
16 PIMCO Funds
<PAGE>
PIMCO Foreign Bond Fund
- --------------------------------------------------------------------------------
FUND CHARACTERISTICS
- --------------------------------------------------------------------------------
Objective:
Maximum total return, consistent with preservation of capital and prudent
investment management (non-U.S.).
Portfolio:
Primarily investment grade foreign bonds.
Duration:
6.2 years
Total Net Assets:
$561 million
Country Allocation:*
[PIE CHART APPEARS HERE]
United States 32.6%
Australia 8.1%
United Kingdom 7.5%
Italy 6.5%
Short-Term Instruments 20.1%
Other 25.2%
Quality Breakdown:*
[PIE CHART APPEARS HERE]
AAA 64%
AA 19%
A 6%
BBB 6%
BB 4%
B 1%
*% of Total Investments as of September 30, 1998
- --------------------------------------------------------------------------------
PERFORMANCE
- --------------------------------------------------------------------------------
TOTAL RETURN INVESTMENT PERFORMANCE For the Period Ended September 30, 1998
<TABLE>
<CAPTION>
Inst'l Class Admin. Class J.P. Morgan Non- Lipper International
(Incep. 12/3/92) (Incep. 1/28/97) U.S. Index (Hedged) Income Fund Average
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
6 Months 4.88% 4.75% 7.81% 7.03%
1 Year 10.53% 10.26% 14.18% 7.72%
3 Years* 14.96% -- 13.13% 6.88%
5 Years* 10.68% -- 10.17% 6.21%
Since Inception* 11.45% 9.76% -- --
</TABLE>
* Annualized
CUMULATIVE RETURNS THROUGH SEPTEMBER 30, 1998
$5,000,000 invested at inception
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------
Foreign Bond J.P. Morganch
MONTH Fund Non-U.S. Index
(Hedged)
- ------------------------------------------------------------------------------
<S> <C> <C>
12/31/92 5,000,000 5,000,000
01/31/93 5,041,660 5,045,501
02/28/93 5,152,513 5,136,826
03/31/93 5,171,807 5,139,908
04/30/93 5,171,804 5,140,421
05/31/93 5,218,564 5,169,209
06/30/93 5,342,019 5,274,661
07/31/93 5,426,186 5,333,737
08/31/93 5,558,061 5,444,678
09/30/93 5,580,127 5,468,090
10/31/93 5,653,151 5,540,815
11/30/93 5,679,152 5,579,601
12/31/93 5,820,067 5,695,098
01/31/94 5,827,680 5,666,624
02/28/94 5,673,113 5,539,12?
03/31/94 5,574,498 5,488,718
04/30/94 5,522,099 5,449,747
05/31/94 5,441,127 5,389,254
06/30/94 5,340,992 5,334,283
07/31/94 5,374,816 5,369,488
08/31/94 5,322,015 5,317,942
09/30/94 5,330,821 5,322,728
10/31/94 5,351,402 5,343,487
11/30/94 5,430,650 5,418,829
12/31/94 5,395,132 5,406,367
01/31/95 5,431,819 5,465,297
02/28/95 5,467,726 5,535,800
03/31/95 5,471,621 5,648,728
04/30/95 5,605,512 5,738,544
05/31/95 5,825,529 5,926,769
06/30/95 5,790,386 5,907,210
07/31/95 5,900,948 5,981,642
08/31/95 6,013,433 6,033,680
09/30/95 6,099,110 6,129,012
10/31/95 6,201,268 6,197,659
11/30/95 6,444,451 6,333,387
12/31/95 6,540,017 6,392,287
01/31/96 6,700,408 6,469,635
02/29/96 6,557,601 6,993,293
03/31/96 6,664,336 6,446,357
04/30/96 6,825,851 6,523,713
05/31/96 6,852,155 6,568,075
06/30/96 6,930,027 6,622,589
07/31/96 6,997,369 6,672,259
08/31/96 7,169,036 6,761,000
09/30/96 7,370,202 6,905,010
10/31/96 7,552,295 7,018,941
11/30/96 7,735,101 7,159,321
12/31/96 7,775,388 7,169,345
01/31/97 7,899,810 7,258,963
02/28/97 7,942,561 7,305,419
03/31/97 7,843,570 7,266,703
04/30/97 7,917,253 7,345,183
05/31/97 7,958,788 7,383,378
06/30/97 8,118,878 7,508,894
07/31/97 8,239,266 7,628,287
08/31/97 8,206,198 7,637,441
09/30/97 8,383,475 7,772,623
10/31/97 8,286,145 7,822,367
11/30/97 8,398,755 7,878,689
12/31/97 8,522,040 7,981,113
01/31/98 8,645,607 8,087,245
02/28/98 8,725,510 8,159,239
03/31/98 8,835,222 8,231,855
04/30/98 8,855,827 8,273,838
05/31/98 8,942,528 8,387,190
06/30/98 8,987,048 8,423,255
07/31/98 9,130,620 8,501,590
08/31/98 9,058,201 8,669,071
09/30/98 9,266,649 8,874,530
</TABLE>
Past performance is not an indication of future results. The line graph above
assumes the investment of $5,000,000 on 1/1/93, the first full month following
the Fund's Institutional Class inception on 12/3/92, compared to the J.P. Morgan
Non-U.S. Index (Hedged), an unmanaged market index. The performance of the
Administrative Class (shown above) reflects the payment of a service fee in an
amount not to exceed 0.25% on an annualized basis. The Administrative Class
commenced operations on 1/28/97. Foreign investing involves potentially higher
risks including foreign currency fluctuations and political or economic
uncertainty.
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
. For the semi-annual period ended September 30, 1998, the Foreign Bond Fund
Institutional Class shares posted a return of 4.88%, underperforming the
7.81% return of the Fund's benchmark, the J.P. Morgan Non-U.S. Index
(Hedged).
. The second half of the period saw heightened turmoil in the emerging markets
dominated by Russia's default. Although the Fund had no exposure to Russia
and only modest exposure to the better performing emerging markets, contagion
effects and an underweight bond position in Japan were the primary factors
limiting relative returns.
. A bullish duration stance added to performance overall as yields declined
during the period.
. In addition to the Fund's underweight in Japan, an overweight position in
Greece also hurt performance as an EMU convergence rally and lower than
expected inflation numbers gave way to an indiscriminate flight to quality
during August. As yield premiums in dollar denominated Latin American and
Eastern European issues continued to widen, modest emerging market positions
also declined. On a positive note, an overweight in 30-year German Bunds
added to performance as core European markets rallied on flight to quality
and continued subdued inflation.
. The Fund's currency strategy detracted from both absolute and relative
performance. In Europe, the Fund overweighted the Norwegian krone versus the
Deutschemark and the Swiss franc. As Russia's financial crisis decreased the
demand for Scandinavian currencies, the long Norwegian krone position
declined, falling up to 8% against the Deutschemark, following the central
bank's comments that they would temporarily suspend attempts to support the
currency. Underweighting the yen versus the dollar and Deutschemark detracted
from performance as the yen strengthened largely on technical factors.
1998 Semi-Annual Report 17
<PAGE>
PIMCO Global Bond Fund
- --------------------------------------------------------------------------------
FUND CHARACTERISTICS
- --------------------------------------------------------------------------------
Objective:
Maximum total return, consistent with preservation of capital and prudent
investment management (U.S. and non-U.S.).
Portfolio:
Primarily investment grade U.S. and foreign bonds.
Duration:
6.1 years
Total Net Assets:
$277 million
Country Allocation:*
[PIE CHART APPEARS HERE]
United States 44.5%
United Kingdom 8.2%
Australia 7.6%
Italy 5.1%
Short-Term Instruments 10.4%
Other 24.2%
Quality Breakdown:*
[PIE CHART APPEARS HERE]
AAA 65%
AA 15%
A 8%
BBB 6%
BB 5%
B 1%
*% of Total Investments as of September 30, 1998
- --------------------------------------------------------------------------------
PERFORMANCE
- --------------------------------------------------------------------------------
TOTAL RETURN INVESTMENT PERFORMANCE For the Period Ended September 30, 1998
<TABLE>
<CAPTION>
J.P. Morgan
Inst'l Class Admin. Class Global Index Lipper Global Income
(Incep. 11/23/93) (Incep. 8/1/96) (Unhedged) Fund Average
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
6 Months 7.61% 7.61% 10.87% 0.88%
1 Year 8.63% 8.50% 12.84% 3.40%
3 Years* 8.66% -- 7.01% 6.55%
Since Inception* 8.78% 7.51% -- --
</TABLE>
* Annualized
CUMULATIVE RETURNS THROUGH SEPTEMBER 30, 1998
$5,000,000 invested at inception
- --------------------------------------------------------------------------------
Global Bond J.P Morgan
MONTH Fund Global Index
(Unhedged)
- --------------------------------------------------------------------------------
11/30/93 5,000,000 5,000,000
12/31/93 5,159,354 5,051,001
01/31/94 5,172,612 5,098,479
02/28/94 5,050,687 5,042,396
03/31/94 4,981,799 5,019,201
04/30/94 4,983,396 5,015,186
05/31/94 4,957,155 4,973,560
06/30/94 4,993,232 5,032,746
07/31/94 5,040,972 5,080,054
08/31/94 5,023,423 5,066,846
09/30/94 5,045,769 5,091,673
10/31/94 5,117,441 5,168,048
11/30/94 5,070,101 5,102,929
12/31/94 5,071,554 5,114,666
01/31/95 5,158,708 5,217,982
02/28/95 5,306,429 5,352,606
03/31/95 5,497,439 5,625,054
04/30/95 5,586,069 5,714,492
05/31/95 5,774,015 5,873,926
06/30/95 5,791,402 5,910,344
07/31/95 5,833,592 5,938,122
08/31/95 5,749,603 5,773,043
09/30/95 5,839,678 5,902,936
10/31/95 5,966,448 5,960,786
11/30/95 6,121,958 6,027,545
12/31/95 6,238,009 6,102,287
01/31/96 6,250,544 6,039,434
02/29/96 6,152,157 6,004,405
03/31/96 6,159,100 5,995,399
04/30/96 6,210,796 5,973,217
05/31/96 6,191,536 5,979,190
06/30/96 6,265,488 6,031,208
07/31/96 8,379,395 6,142,182
08/31/96 6,491,924 6,167,980
09/30/96 8,584,759 6,201,904
10/31/96 6,764,325 6,324,702
11/30/96 6,923,739 6,415,146
12/31/96 6,879,967 6,370,239
01/31/97 6,702,769 6,210,983
02/28/97 6,656,620 6,168,128
03/31/97 6,576,929 6,121,249
04/30/97 6,536,080 6,086,970
05/31/97 6,699,780 6,230,822
06/30/97 6,783,140 6,301,651
07/31/97 6,758,664 6,278,337
08/31/97 6,721,424 6,270,802
09/30/97 6,895,854 6,410,014
10/31/97 6,891,415 6,545,905
11/30/97 6,834,927 6,467,355
12/31/97 6,817,645 6,460,241
01/31/98 8,851,128 6,545,843
02/28/98 8,915,929 6,573,126
03/31/98 6,961,654 6,523,829
04/30/98 7,063,593 6,624,295
05/31/98 7,059,363 6,652,780
06/30/98 7,070,889 6,671,407
07/31/98 7,130,372 6,689,420
08/31/98 7,124,542 6,874,048
09/30/98 7,491,180 7,232,874
- --------------------------------------------------------------------------------
Past performance is not an indication of future results. The line graph above
assumes the investment of $5,000,000 on 12/1/93, the first full month following
the Fund's Institutional Class inception on 11/23/93, compared to the J.P.
Morgan Global Index (Unhedged), an unmanaged market index. The performance of
the Administrative Class (shown above) reflects the payment of a service fee in
an amount not to exceed 0.25% on an annualized basis. The Administrative Class
commenced operations on 8/1/96. Foreign investing involves potentially higher
risks including foreign currency fluctuations and political or economic
uncertainty.
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
. The Global Bond Fund posted favorable absolute performance for the period
with Institutional Class shares returning 7.61%. However, relative
performance lagged the return of the Fund's benchmark, the J.P. Morgan Global
Index (Unhedged) which returned 10.87%.
. Russia's default and heightened discord in the emerging markets characterized
the second fiscal quarter. Contagion effects and an underweight bond position
in Japan were the primary factors limiting relative returns, although the
Fund had no exposure to Russia and only modest exposure to the better
performing emerging markets.
. A bullish duration stance added to performance overall as yields declined
during the period.
. An overweight position in Greece hurt performance as an EMU convergence rally
and lower than expected inflation numbers gave way to a flight to quality
during August. As yield premiums in dollar denominated Latin American and
Eastern European bonds continued to widen, modest emerging market positions
declined. An overweight in 30-year German Bunds added to performance as core
European markets rallied on flight to quality and continued subdued
inflation.
. The Fund's currency strategy detracted from performance. An overweight, long
Norwegian krone position declined as Russia's financial crisis decreased the
demand for Scandinavian currencies, while an underweight in the yen versus
the dollar and Deutschemark also detracted from performance as the yen
strengthened largely on technical factors.
. Overall, the decline of the U.S. dollar helped unhedged portfolios, like the
Fund, as the period saw the dollar decline against both the yen and European
currencies.
18 PIMCO Funds
<PAGE>
PIMCO Global Bond Fund II
- --------------------------------------------------------------------------------
FUND CHARACTERISTICS
- --------------------------------------------------------------------------------
Objective:
Maximum total return, consistent with preservation of capital and prudent
investment management (U.S. and non-U.S.).
Portfolio:
Primarily investment grade U.S. and foreign bonds.
Duration:
6.2 years
Total Net Assets:
$42 million
Country Allocation:*
[PIE CHART APPEARS HERE]
United States 39.9%
Australia 8.7%
United Kingdom 6.5%
Short-Term Instruments 17.0%
Other 27.9%
Quality Breakdown:*
[PIE CHART APPEARS HERE]
AAA 65%
AA 15%
A 7%
BBB 6%
BB 6%
B 1%
*% of Total Investments as of September 30, 1998
- --------------------------------------------------------------------------------
PERFORMANCE
- --------------------------------------------------------------------------------
TOTAL RETURN INVESTMENT PERFORMANCE For the Period Ended September 30, 1998
Inst'l Class J.P Morgan Global Lipper Global Income
(Incep. 2/25/98) Index (Hedged) Fund Average
- -------------------------------------------------------------------------------
6 Months 4.02% 8.18% 0.88%
Since Inception 5.63% -- --
* Annualized
CUMULATIVE RETURNS THROUGH SEPTEMBER 30, 1998
$5,000,000 invested at inception
<TABLE>
<CAPTION>
- ---------------------------------------------
Global Bond J.P. Morgan
MONTH Fund II Global Index
(Hedged)
- ---------------------------------------------
<S> <C> <C>
02/28/98 5,000,000 5,000,000
03/31/98 5,069,096 5,032,502
04/30/98 5,092,746 5,057,159
05/31/98 5,121,536 5,120,376
06/30/98 5,146,064 5,157,242
07/31/98 5,210,272 5,190,249
08/31/98 5,156,019 5,308,584
09/30/98 5,273,043 5,443,954
- ---------------------------------------------
</TABLE>
Past performance is not an indication of future results. The line graph above
assumes the investment of $5,000,000 on 3/1/98, the first full month following
the Fund's Institutional Class inception on 2/25/98, compared to the J.P. Morgan
Global Index (Hedged), an unmanaged market index. Foreign investing involves
potentially higher risks including foreign currency fluctuations and political
or economic uncertainty.
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
. The Global Bond Fund II returned 4.02% for the six-month period ended
September 30, 1998, compared to the 8.18% return of the J.P. Morgan Global
Index (Hedged).
. The second half of the period saw heightened turmoil in the emerging markets
dominated by Russia's default. Although the Fund had no exposure to Russia
and only modest exposure to the better performing emerging markets, contagion
effects and an underweight bond position in Japan were the primary factors
limiting relative returns.
. A bullish duration stance added to performance overall as yields declined
during the period.
. In addition to the Fund's Japan underweight, an overweight position in Greece
also hurt performance as an EMU convergence rally and lower than expected
inflation numbers gave way to an indiscriminate flight to quality during
August. As yield premiums in dollar denominated Latin American and Eastern
European issues continued to widen, modest emerging market positions also
declined. On a positive note, an overweight in 30-year German Bunds added to
performance as core European markets rallied on flight to quality and
continued subdued inflation.
. The Fund's currency strategy detracted from both absolute and relative
performance. In Europe, the Fund overweighted the Norwegian krone versus the
Deutschemark and the Swiss franc. In addition, the yen was favored versus the
dollar and subsequently the Deutschemark. As Russia's financial crisis
decreased the demand for Scandinavian currencies, the long Norwegian krone
position declined, falling up to 8% against the Deutschemark. The underweight
in the yen versus the dollar and Deutschemark also detracted from performance
as the yen strengthened largely on technical factors.
1998 Semi-Annual Report 19
<PAGE>
PIMCO Emerging Markets Bond Fund
- --------------------------------------------------------------------------------
FUND CHARACTERISTICS
- --------------------------------------------------------------------------------
Objective:
Maximum total return, consistent with preservation of capital and prudent
investment management (non-U.S.).
Portfolio:
Primarily emerging market bonds.
Duration:
4.9 years
Total Net Assets:
$4 million
Country Allocation:*
[PIE CHART APPEARS HERE]
Argentina 15.6%
Mexico 14.4%
Brazil 13.1%
United States 12.3%
South Korea 12.1%
Venezuela 5.8%
Short-Term Instruments 9.2%
Other 17.5%
Quality Breakdown:*
[PIE CHART APPEARS HERE]
AAA 15%
A 5%
BBB 12%
BB 60%
B 7%
CCC 1%
*% of Total Investments as of September 30, 1998
- --------------------------------------------------------------------------------
PERFORMANCE
- --------------------------------------------------------------------------------
TOTAL RETURN INVESTMENT PERFORMANCE For the Period Ended September 30, 1998
Inst'l Class J.P Morgan Emerging Lipper Emerging Markets
(Incep. 7/31/97) Markets Plus Index Debt Fund Average
- --------------------------------------------------------------------------------
6 Months (25.91)% (25.94)% (32.90)%
1 Year (24.78)% (25.29)% (31.22)%
Since Inception* (20.61)% -- --
* Annualized
CUMULATIVE RETURNS THROUGH SEPTEMBER 30, 1998
$5,000,000 invested at inception
<TABLE>
<CAPTION>
- ------------------------------------------------------
Emerging Markets J.P. Morgan
MONTH Bond Fund Emerging Markets
Plus Index
- ------------------------------------------------------
<S> <C> <C>
07/31/97 5,000,000 5,000,000
08/31/97 4,941,202 4,979,763
09/30/97 5,077,992 5,132,145
10/31/97 4,500,427 4,540,921
11/30/97 4,738,197 4,756,615
12/31/97 4,859,660 4,920,720
01/31/98 4,866,472 4,910,880
02/28/98 5,005,158 5,051,329
03/31/98 5,155,188 5,177,076
04/30/98 5,168,205 5,189,638
05/31/98 5,002,060 5,012,513
06/30/98 4,838,082 4,867,654
07/31/98 4,912,199 4,901,240
08/31/98 3,543,793 3,492,624
09/30/98 3,819,422 3,834,203
</TABLE>
Past performance is not an indication of future results. The line graph above
assumes the investment of $5,000,000 on 7/31/97, the Fund's Institutional Class
inception date, compared to the J.P. Morgan Emerging Markets Plus Index, an
unmanaged market index. The Fund may invest in foreign securities which involve
potentially higher risks including currency fluctuations and political or
economic uncertainty.
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
. The Emerging Markets Bond Fund narrowly outperformed the J.P. Morgan Emerging
Markets Plus Index for the six-month period ended September 30, 1998 (-25.91%
for the Fund versus -25.94% for the Index).
. All segments of the high yield bond market have been hit hard by investor
fears and consequent market volatility, precipitating heavy selling and
resulting in significantly higher yields and lower bond prices.
. In this market environment, the Fund's above-index duration detracted from
relative returns as yield premiums widened.
. Significantly underweighted positions in Russia and Venezuela helped relative
returns.
. Overweighted allocations to higher quality credits in Korea, Argentina,
Brazil, Poland, and the Philippines also boosted performance.
20 PIMCO Funds
<PAGE>
PIMCO High Yield Fund
- --------------------------------------------------------------------------------
FUND CHARACTERISTICS
- --------------------------------------------------------------------------------
Objective:
Maximum total return, consistent with preservation of capital and prudent
investment management.
Portfolio:
Primarily high yield bonds.
Duration:
4.8 years
Total Net Assets:
$2,470 million
Sector Breakdown:*
[PIE CHART APPEARS HERE]
Corporate Bonds and Notes 82.0%
Short-Term Instruments 6.2%
Other 11.8%
Quality Breakdown:*
[PIE CHART APPEARS HERE]
AAA 1%
BBB 4%
BB 55%
B 40%
*% of Total Investments as of September 30, 1998
- --------------------------------------------------------------------------------
PERFORMANCE
- --------------------------------------------------------------------------------
TOTAL RETURN INVESTMENT PERFORMANCE For the Period Ended September 30, 1998
Lehman Brothers Lipper High
Inst'l Class Admin. Class BB Intermediate Current Yield
(Incep. 12/16/92) (Incep. 1/16/95) Corp. Index Fund Average
- --------------------------------------------------------------------------------
6 Months (0.27)% (0.39)% 1.60% (6.85)%
1 Year 5.07% 4.82% 6.00% (1.75)%
3 Years* 10.72% 10.45% 9.46% 8.23%
5 Years* 10.88% -- 9.25% 7.78%
Since Inception* 11.83% 12.50% -- --
* Annualized
CUMULATIVE RETURNS THROUGH SEPTEMBER 30, 1998
$5,000,000 invested at inception
<TABLE>
<CAPTION>
- ---------------------------------------------------
High Yield Lehman BB
MONTH Fund Intermed.
Corp. Index
- ---------------------------------------------------
<S> <C> <C>
12/31/92 5,000,000 5,000,000
01/31/93 5,113,886 5,105,500
02/28/93 5,208,126 5,180,551
03/31/93 5,313,333 5,239,092
04/30/93 5,369,686 5,283,100
05/31/93 5,409,077 5,322,195
06/30/93 5,556,254 5,435,026
07/31/93 5,595,567 5,489,919
08/31/93 5,568,345 5,553,602
09/30/93 5,686,689 5,594,144
10/31/93 5,839,376 5,669,106
11/30/93 5,884,380 5,683,845
12/31/93 5,935,129 5,732,726
01/31/94 6,061,596 5,828,463
02/28/94 6,060,370 5,822,051
03/31/94 5,879,246 5,643,896
04/30/94 5,828,068 5,610,598
05/31/94 5,870,524 5,615,648
06/30/94 5,878,587 5,632,494
07/31/94 5,934,013 5,701,210
08/31/94 5,984,086 5,761,643
09/30/94 6,025,467 5,772,015
10/31/94 6,028,706 5,785,289
11/30/94 6,004,787 5,745,950
12/31/94 6,077,394 5,781,575
01/31/95 6,137,436 5,874,658
02/28/95 6,305,367 6,053,248
03/31/95 6,397,464 6,110,148
04/30/95 6,537,390 6,232,351
05/31/95 6,727,023 6,415,582
06/30/95 6,761,902 6,472,039
07/31/95 6,872,762 6,530,935
08/31/95 6,925,387 6,568,814
09/30/95 7,022,543 6,639,758
10/31/95 7,125,446 6,692,211
11/30/95 7,212,331 6,776,533
12/31/95 7,334,202 6,883,602
01/31/96 7,453,084 6,995,117
02/29/96 7,460,951 6,968,934
03/31/96 7,402,000 6,933,691
04/30/96 7,434,433 6,930,917
05/31/96 7,459,688 6,940,621
06/30/96 7,490,201 7,015,579
07/31/96 7,557,060 7,053,463
08/31/96 7,680,144 7,110,596
09/30/96 7,858,765 7,263,475
10/31/96 7,937,607 7,364,437
11/30/96 8,110,110 7,513,198
12/31/96 8,191,022 7,529,728
01/31/97 8,275,049 7,601,259
02/28/97 8,402,615 7,693,234
03/31/97 8,292,841 7,601,685
04/30/97 8,381,534 7,695,946
05/31/97 8,572,658 7,827,547
06/30/97 8,699,809 7,928,522
07/31/97 8,924,236 8,164,792
08/31/97 8,921,803 8,087,226
09/30/97 9,072,091 8,214,195
10/31/97 9,081,530 8,242,125
11/30/97 9,188,890 8,299,819
12/31/97 9,273,057 8,376,177
01/31/98 9,432,639 8,476,692
02/28/98 9,483,456 8,515,684
03/31/98 9,557,939 8,570,184
04/30/98 9,581,967 8,613,893
05/31/98 9,631,622 8,669,883
06/30/98 9,702,825 8,722,769
07/31/98 9,806,262 8,768,128
08/31/98 9,412,663 8,526,128
09/30/98 9,532,027 8,706,882
</TABLE>
Past performance is not an indication of future results. The line graph above
assumes the investment of $5,000,000 on 1/1/93, the first full month following
the Fund's Institutional Class inception on 12/16/92, compared to the Lehman
Brothers BB Intermediate Corporate Index, an unmanaged market index. The
performance of the Administrative Class (shown above) reflects the payment of a
service fee in an amount not to exceed 0.25% on an annualized basis. The
Administrative Class commenced operations on 1/16/95. The investments made by
the High Yield Fund may involve high risk and may have speculative
characteristics.
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
. For the six months ended September 30, 1998, the High Yield Fund's
Institutional Class shares posted a return of -0.27%, underperforming the
1.60% return of the Lehman Brothers BB Intermediate Corporate Index.
. The principal source of underperformance was an exposure to B-rated bonds
which significantly lagged higher quality BB-rated issues as the lingering
Asian crisis and slower U.S. economic growth concerned investors.
. However, performance of the Fund was strong relative to more aggressive high
yield funds aided by a more conservative credit quality posture and industry
sector emphasis.
. Significantly benefiting returns was the Fund's cautious sector allocation
favoring healthcare, media and utility bonds.
. Avoiding aggressive "business plan" start-up bonds heavily issued during the
1990's bull market helped relative returns as their prices fell sharply
during the market sell-off.
. Fund holdings included only negligible Asian corporate debt and securities of
U.S. corporations heavily influenced by the Asian economy.
. Small positions in Japanese bank debt, however, detracted from performance as
the Japanese economy and banking sector remained weak.
1998 Semi-Annual Report 21
<PAGE>
PIMCO Municipal Bond Fund
- --------------------------------------------------------------------------------
FUND CHARACTERISTICS
- --------------------------------------------------------------------------------
Objective:
High current income exempt from federal income tax, consistent with preservation
of capital. Capital appreciation is a secondary objective.
Portfolio:
Primarily debt securities whose interest is exempt from federal income tax.
Duration:
7.2 years
Total Net Assets:
$57 million
Sector Breakdown:*
[PIE CHART APPEARS HERE]
Municipal Bonds and Notes 99.9%
Other 0.1%
Quality Breakdown:*
[PIE CHART APPEARS HERE]
AAA 59%
AA 15%
A 15%
BBB 10%
BB 1%
*% of Total Investments as of September 30, 1998
- --------------------------------------------------------------------------------
PERFORMANCE
- --------------------------------------------------------------------------------
TOTAL RETURN INVESTMENT PERFORMANCE For the Period Ended September 30, 1998
<TABLE>
<CAPTION>
Inst'l Class Lehman Brothers General Lipper General Municipal
(Incep. 12/31/97) Municipal Bond Index Bond Fund Average
- --------------------------------------------------------------------------------------
<S> <C> <C> <C>
6 Months 5.04% 4.64% 4.29%
Since Inception 5.87% -- --
</TABLE>
* Annualized
CUMULATIVE RETURNS THROUGH SEPTEMBER 30, 1998
$5,000,000 invested at inception
<TABLE>
<CAPTION>
- -------------------------------------------------------
Municipal Bond Lehman Brothers
MONTH Fund General Municipal
Bond Index
- -------------------------------------------------------
<S> <C> <C>
12/31/97 5,000,000 5,000,000
01/31/98 5,058,771 5,051,500
02/28/98 5,035,172 5,053,016
03/31/98 5,039,397 5,057,562
04/30/98 5,006,296 5,034,805
05/31/98 5,105,540 5,114,354
06/30/98 5,122,719 5,134,299
07/31/98 5,128,447 5,147,137
08/31/98 5,223,548 5,226,915
09/30/98 5,293,484 5,292,252
- -------------------------------------------------------
</TABLE>
Past performance is not an indication of future results. The line graph above
assumes the investment of $5,000,000 on 12/31/97 the Fund's Institutional Class
inception date, compared to the Lehman Brothers General Municipal Bond Index, an
unmanaged market index. The Administrative Class commenced operations on
9/30/98.
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
. The Municipal Bond Fund returned 5.04% for the six-month period ended
September 30, 1998, outperforming the 4.64% return of its benchmark, the
Lehman Brothers General Municipal Bond Index.
. Municipal yields fell by similar amounts across all maturities, producing a
downward and nearly parallel shift in the municipal yield curve.
. Yields offered on longer-maturity (five-plus years), AAA-rated municipals
increased to 90% or more of like-maturity Treasuries.
. Credit spreads widened much less for municipal bonds than they did in the
taxable debt markets.
. The Fund's above-benchmark duration, or sensitivity to changes in interest
rates, enhanced returns as rates declined across all maturities.
. Call-protected securities enhanced relative returns as they could not be
refunded in a falling rate environment.
22 PIMCO Funds
<PAGE>
PIMCO Money Market Fund
- --------------------------------------------------------------------------------
FUND CHARACTERISTICS
- --------------------------------------------------------------------------------
Objective:
Maximum current income, consistent with preservation of capital and daily
liquidity.
Portfolio:
Primarily money market instruments.
Duration:
0.1 years
Total Net Assets:
$274 million
- --------------------------------------------------------------------------------
PERFORMANCE
- --------------------------------------------------------------------------------
TOTAL RETURN INVESTMENT PERFORMANCE For the Period Ended September 30, 1998
Inst'l Class Admin. Class Lipper Money Lipper Money Market
(Incep. 3/1/91) (Incep. 1/24/95) Market Index Fund Average
- ------------------------------------------------------------------------------
7 Day yield* 5.21% 5.28% -- --
6 Months 2.66% 2.57% 2.55% 2.43%
1 Year 5.39% 5.21% 5.19% 4.93%
3 Years* 5.46% 5.21% 5.12% 4.91%
5 Years* 5.06% -- 4.79% 4.66%
Since Inception* 4.68% 5.27% -- --
* Annualized
CUMULATIVE RETURNS THROUGH SEPTEMBER 30, 1998
$5,000,000 invested at inception
<TABLE>
<CAPTION>
- -------------------------------------------------------
Lipper
MONTH Money Market Money Market
Fund Index
- -------------------------------------------------------
<S> <C> <C>
02/28/91 5,000,000 5,000,000
03/31/91 5,025,170 5,026,003
04/30/91 5,050,085 5,051,132
05/31/91 5,075,810 5,075,881
06/30/91 5,098,544 5,098,217
07/31/91 5,122,151 5,122,686
08/31/91 5,146,158 5,146,251
09/30/91 5,168,071 5,168,380
10/31/91 5,189,068 5,191,122
11/30/91 5,209,752 5,211,886
12/31/91 5,235,296 5,233,256
01/31/92 5,253,666 5,252,618
02/29/92 5,269,348 5,268,900
03/31/92 5,286,316 5,285,761
04/30/92 5,302,529 5,302,146
05/31/92 5,318,495 5,318,055
08/30/92 5,333,833 5,333,477
07/31/92 5,349,339 5,348,943
08/31/92 5,362,691 5,362,852
09/30/92 5,375,416 5,375,721
10/31/92 5,388,548 5,388,623
11/30/92 5,400,824 5,401,016
12/31/92 5,415,417 5,414,520
01/31/93 5,427,493 5,427,514
02/28/93 5,439,092 5,438,911
03/31/93 5,452,504 5,451,422
04/30/93 5,464,658 5,463,416
05/31/93 5,475,877 5,474,887
08/30/93 5,489,090 5,486,933
07/31/93 5,501,737 5,499,005
08/31/93 5,515,161 5,511,652
09/30/93 5,527,714 5,523,776
10/31/93 5,541,036 5,535,929
11/30/93 5,554,511 5,548,108
12/31/93 5,567,081 5,560,870
01/31/94 5,580,537 5,573,658
02/28/94 5,592,446 5,585,364
03/31/94 5,606,276 5,598,768
04/30/94 5,620,505 5,612,766
05/31/94 5,637,321 5,628,480
06/30/94 5,654,814 5,644,806
07/31/94 5,672,813 5,662,305
08/31/94 5,694,234 5,681,556
09/30/94 5,714,049 5,700,891
10/31/94 5,738,363 5,721,964
11/30/94 5,759,664 5,743,709
12/31/94 5,785,415 5,766,407
01/31/95 5,813,735 5,749,366
02/28/95 5,839,234 5,818,701
03/31/95 5,887,023 5,846,048
04/30/95 5,892,850 5,872,358
05/31/95 5,923,104 5,900,545
06/30/95 5,950,960 5,927,685
07/31/95 5,979,025 5,954,954
08/31/95 6,006,869 5,981,750
09/30/95 6,032,542 6,008,067
10/31/95 6,061,076 6,035,104
11/30/95 6,105,719 6,061,056
12/31/95 6,136,175 6,087,723
01/31/96 6,164,350 6,114,509
02/29/96 6,191,072 6,138,357
03/31/96 6,217,237 6,162,911
04/30/96 6,244,019 6,187,560
05/31/96 6,273,132 6,212,929
08/30/96 6,297,220 6,237,162
07/31/96 6,234,461 6,263,357
08/31/96 6,354,570 6,289,663
09/30/96 6,379,780 6,314,194
10/31/96 6,406,912 6,340,079
11/30/96 6,433,601 6,365,441
12/31/96 6,460,353 6,392,175
01/31/97 6,488,472 6,419,023
02/28/97 6,513,657 6,442,772
03/31/97 6,539,911 6,469,189
04/30/97 6,567,988 6,495,712
05/31/97 6,598,555 6,523,645
06/30/97 6,626,256 6,551,043
07/31/97 6,655,217 6,579,213
08/31/97 6,686,098 6,607,504
09/30/97 6,714,110 6,635,256
10/31/97 6,746,003 6,663,786
11/30/97 6,773,457 6,691,775
12/31/97 6,805,247 6,721,217
01/31/98 6,836,094 6,750,792
02/28/98 6,863,584 6,777,120
03/31/98 6,893,016 6,806,263
04/30/98 6,922,674 6,834,166
05/31/98 6,953,532 6,863,553
06/30/98 6,983,538 6,891,693
07/31/98 7,016,569 6,921,326
08/31/98 7,045,879 6,951,089
09/30/98 7,076,192 6,979,591
</TABLE>
Past performance is not an indication of future results. The line graph above
assumes the investment of $5,000,000 on 3/1/91, the Fund's Institutional Class
inception date, compared to the Lipper Money Market Index, an index consisting
of the 30 largest equal weighted Money Market Funds. The performance of the
Administrative Class (shown above) reflects the payment of a service fee in an
amount not to exceed 0.25% on an annualized basis. The Administrative Class
commenced operations on 1/24/95. An investment in the Money Market Fund is
neither insured nor guaranteed by the Federal Deposit Insurance Corporation or
any other U.S. Government Agency. Although the Fund seeks to preserve the value
of your investment at $1.00 per share, it is possible to lose money by investing
in the Fund. If there is a material difference between the quoted total return
and the quoted current yield, the yield quotation more closely reflects the
current earnings of the Money Market Fund than the total return quotation.
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
. The Money Market Fund's Institutional Class shares returned 2.66% for the
six-month period ended September 30, 1998, outperforming the 2.55% return of
the Lipper Money Market Index.
. U.S. money market funds, with more than $1.3 trillion in combined assets,
have attracted investors under present uncertain circumstances because of
ample liquidity and safety of principal.
. Of importance to money market investors, the Federal Reserve lowered the
Federal Funds overnight lending rate by 25 basis points in late September in
response to global financial turmoil. In response, Treasury yields dropped
sharply across all maturities with T-bill yields falling an average of 0.8%.
. Commercial paper yield spreads relative to similar maturity T-Bills widened
by 0.3% to 0.4% as investors paid a premium for the liquidity of Treasuries.
. In this market environment, an emphasis on high-quality-commercial paper and
short-term, fully collateralized repurchase agreements enhanced returns.
1998 Semi-Annual Report 23
<PAGE>
PIMCO StocksPLUS Fund
- --------------------------------------------------------------------------------
FUND CHARACTERISTICS
- --------------------------------------------------------------------------------
Objective:
Total return which exceeds that of the S&P 500 Index.
Portfolio:
Primarily S&P 500 Index futures and short-term bonds.
Duration:
0.8 years
Total Net Assets:
$780 million
Sector Breakdown:*
[PIE CHART APPEARS HERE]
Corporate Bonds and Notes 34.6%
Short-Term Instruments 33.0%
Mortgage-Backed Securities 17.9%
U.S. Treasury Obligations 5.7%
Other 8.8%
Quality Breakdown:*
[PIE CHART APPEARS HERE]
AAA 46%
AA 6%
A 20%
BBB 17%
BB 11%
*% of Total Investments as of September 30, 1998
- --------------------------------------------------------------------------------
PERFORMANCE
- --------------------------------------------------------------------------------
TOTAL RETURN INVESTMENT PERFORMANCE For the Period Ended September 30, 1998
<TABLE>
<CAPTION>
Inst'l Class Admin. Class Lipper Growth &
(Incep. 5/14/93) (Incep. 1/7/97) S&P 500 Index Income Fund Average
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
6 Months (6.99)% (7.22)% (6.97)% (12.21)%
1 Year 8.48% 8.05% 9.05% (1.04)%
3 Years* 22.60% -- 22.60% 16.66%
5 Years* 20.78% -- 19.91% 15.13%
Since Inception* 20.42% 19.98% -- --
</TABLE>
* Annualized
CUMULATIVE RETURNS THROUGH SEPTEMBER 30, 1998
$5,000,000 invested at inception
<TABLE>
<CAPTION>
StocksPLUS Fund S&P 500 Index
MONTH
<S> <C> <C>
05/31/93 5,000,000 5,000,000
06/30/93 5,027,261 5,014,650
07/31/93 5,017,471 4,994,491
08/31/93 5,208,380 5,183,982
09/30/93 5,157,774 5,144,221
10/31/93 5,271,731 5,250,655
11/30/93 5,212,275 5,200,616
12/31/93 5,306,421 5,263,492
01/31/94 5,480,662 5,442,451
02/28/94 5,311,701 5,294,743
03/31/94 5,077,284 5,063,892
04/30/94 5,141,283 5,128,811
05/31/94 5,237,282 5,212,974
06/30/94 5,128,078 5,085,204
07/31/94 5,325,725 5,252,202
08/31/94 5,568,540 5,467,543
09/30/94 5,473,357 5,333,861
10/31/94 5,561,106 5,453,713
11/30/94 5,391,092 5,255,089
12/31/94 5,461,225 5,333,022
01/31/95 5,612,304 5,471,307
02/28/95 5,864,102 5,684,524
03/31/95 6,023,776 5,852,274
04/30/95 6,219,204 6,024,624
05/31/95 6,500,850 6,265,428
06/30/95 6,643,179 6,410,974
07/31/95 6,854,074 6,623,561
08/31/95 6,900,939 6,640,187
09/30/95 7,193,848 6,920,403
10/31/95 7,181,918 6,895,697
11/30/95 7,527,891 7,198,418
12/31/95 7,673,723 7,337,059
01/31/96 7,949,045 7,586,813
02/29/96 7,970,224 7,857,142
03/31/96 8,076,117 7,730,881
04/30/96 8,177,430 7,844,834
05/31/96 8,365,584 8,047,152
06/30/96 8,445,187 8,077,812
07/31/96 8,052,904 7,720,934
08/31/96 8,223,140 7,883,768
09/30/96 8,704,242 8,327,467
10/31/96 8,981,877 8,557,139
11/30/96 9,649,702 9,203,973
12/31/96 9,444,048 9,021,642
01/31/97 10,025,985 9,585,314
02/28/97 10,100,806 9,660,483
03/31/97 9,646,437 9,263,515
04/30/97 10,244,078 9,816,548
05/31/97 10,892,224 10,414,178
06/30/97 11,344,245 10,880,733
07/31/97 12,278,977 11,746,513
08/31/97 11,616,167 11,088,473
09/30/97 12,220,454 11,695,789
10/31/97 11,632,913 11,305,149
11/30/97 12,315,186 11,828,465
12/31/97 12,546,229 12,031,560
01/31/98 12,716,721 12,164,629
02/26/98 13,569,183 13,041,941
03/31/98 14,253,076 13,709,819
04/30/98 14,425,043 13,847,740
05/31/98 14,141,803 13,609,698
06/30/98 14,691,669 14,162,524
07/31/98 14,528,428 14,011,693
08/31/98 12,314,475 11,985,882
</TABLE>
Past performance is not an indication of future results. The line graph above
assumes the investment of $5,000,000 on 6/1/93, the first full month following
the Fund's Institutional Class inception on 5/14/93, compared to the Standard
and Poor's 500 Index, an unmanaged market index. The performance of the
Administrative Class (shown above) reflects the payment of a service fee in an
amount not to exceed 0.25% on an annualized basis. The Administrative Class
commenced operations on 1/7/97. The Fund may invest in foreign securities which
involve potentially higher risks including foreign currency fluctuations and
political or economic uncertainty.
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
. The S&P 500 Index fell substantially during August as global financial
uncertainty, including increased concerns about corporate profitability,
spread to the U.S. stock market. Although the Index rebounded partially
during September, total returns for the semi-annual period ended September
30, 1998 were down 6.97%. The performance of the StocksPLUS Fund's
Institutional Class shares nearly matched the Index posting a 6.99% decline.
. The extended duration on the fixed income portfolio backing the Fund's S&P
500 Index exposure (exposure achieved through investments in S&P futures and
swaps contracts) significantly enhanced performance as Treasury rates fell
substantially during the period, most notably during August and September.
. Mortgage-backed security holdings performed poorly relative to Treasuries as
declining interest rates elevated prepayment risks. Investment-grade and
high-yield corporate holdings also detracted from overall performance amid
heightened concerns about credit risk.
. A small allocation to select emerging market securities suffered the greatest
relative price decline as risk premiums in this sector increased
significantly. Conversely, inflation-linked bond positions contributed to
returns as expectations of a Fed easing increased.
24 PIMCO Funds
<PAGE>
PIMCO Strategic Balanced Fund
- --------------------------------------------------------------------------------
FUND CHARACTERISTICS
- --------------------------------------------------------------------------------
Objective:
Maximum total return, consistent with preservation of capital and prudent
investment management.
Portfolio:
Primarily a combination of short- and intermediate-term investment grade bonds,
and S&P 500 Index futures.
Duration:
2.4 years
Total Net Assets:
$38 million
Sector Breakdown:*
[PIE CHART APPEARS HERE]
Mortgage-Backed Securities 37.3%
Corporate Bonds and Notes 26.9%
Short-Term Instruments 14.3%
U.S. Treasury Obligations 8.0%
Sovereign Issues 5.6%
Other 7.9%
Quality Breakdown:*
[PIE CHART APPEARS HERE]
AAA 78%
AA 6%
A 6%
BBB 4%
BB 6%
*% of Total Investments as of September 30, 1998
- --------------------------------------------------------------------------------
PERFORMANCE
- --------------------------------------------------------------------------------
TOTAL RETURN INVESTMENT PERFORMANCE For the Period Ended September 30, 1998
<TABLE>
<CAPTION>
60% S&P 500 Index and Lipper Lipper
Inst'l Class 40% Lehman Brothers Balanced Balanced
(Incep. 6/28/96) Aggregate Bond Index Index Fund Average
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
6 Months (2.00)% (1.35)% (4.40)% (5.36)%
1 Year 9.78% 10.61% 4.66% 3.25%
Since Inception* 18.37% -- -- --
</TABLE>
* Annualized
CUMULATIVE RETURNS THROUGH SEPTEMBER 30, 1998
$5,000,000 invested at inception
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Strategic 60% S&P 500 Index Lipper
Balanced Fund and 40% Lehman Balanced
Brothers Aggregate Index
MONTH Bond Index
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
06/30/96 5,000,000 5,000,000 5,000,000
07/31/96 4,865,000 4,872,933 4,871,300
08/31/96 4,940,000 4,931,328 4,871,300
09/30/96 5,175,000 5,132,224 5,131,196
10/31/96 5,320,000 5,262,627 5,240,029
11/30/96 5,615,000 5,537,365 5,484,214
12/31/96 5,511,545 5,450,953 5,416,758
01/31/97 5,743,214 5,661,975 5,582,512
02/28/97 5,775,539 5,694,243 5,603,167
03/31/97 5,591,600 5,528,617 5,440,115
04/30/97 5,848,009 5,759,756 5,603,862
05/31/97 6,089,593 5,991,928 5,833,060
06/30/97 6,275,398 6,181,439 6,020,301
07/31/97 6,659,382 6,543,230 6,362,857
08/31/97 6,423,506 6,300,974 6,161,154
09/30/97 6,659,150 6,545,208 6,406,984
10/31/97 6,565,126 6,452,023 6,290,376
11/30/97 6,736,582 6,643,105 6,405,490
12/31/97 6,843,897 6,738,297 6,500,291
01/31/98 6,937,730 6,817,616 6,545,793
02/28/98 7,213,362 7,110,452 6,805,661
03/31/98 7,459,339 7,338,829 7,013,914
04/30/98 7,524,460 7,398,449 7,062,310
05/31/98 7,477,498 7,350,213 6,990,981
06/30/98 7,662,852 7,554,287 7,117,518
07/31/98 7,621,044 7,512,443 7,034,243
08/31/98 6,904,331 6,909,658 6,427,891
09/30/98 7,310,278 7,239,958 6,705,576
- --------------------------------------------------------------------------------
</TABLE>
Past performance is not an indication of future results. The line graph above
assumes the investment of $5,000,000 on 7/1/96, the first full month following
the Fund's Institutional Class inception on 6/28/96, compared to a static 60/40
blend of the Standard and Poor's 500 Index and the Lehman Brothers Aggregate
Bond Index, and the Lipper Balanced Index, each an unmanaged market index. The
Fund may invest in foreign securities which involve potentially higher risks
including foreign currency fluctuations and political or economic uncertainty.
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
. The Strategic Balanced Fund outperformed the Lipper Balanced Fund Index by
2.40% with a return of -2.00% versus the benchmark's -4.40% result.
. The Fund's equity allocation was reduced from 62% to 57% at quarter-end,
based on our consensus forecast of a near-term peak in the current U.S.
economic expansion.
. An overweighting in equities (62% average versus a "neutral" point of 60%)
reduced relative performance as stocks generally underperformed bonds.
. The S&P 500 Index declined 6.97% as turmoil in global financial markets
negatively affected earnings expectations. However, the stocks in the S&P 500
Index outperformed the average return of actively managed growth and income
funds by 5.24% (source: Lipper Analytical Services).
. The Fund's equity market exposure (S&P 500 futures and swaps contracts)
outperformed the S&P 500 Index due principally to a favorable above-index
duration on the underlying cash portfolio.
. The Lehman Brothers Aggregate Bond Index gained 6.66% as declining yields
across all maturities created price appreciation for all Index asset classes.
. The Fund's fixed income portfolio bested the Lehman Index due to above-index
duration and an overweighting of intermediate maturities.
1998 Semi-Annual Report 25
<PAGE>
Financial Highlights
<TABLE>
<CAPTION>
Net Asset Net Realized Total Dividends Dividends in
Value and Unrealized Income from from Net Excess of Net
Selected Per Share Data for Beginning Net Investment Gain (Loss) on Investment Investment Investment
the Year or Period Ended: of Period Income Investments Operations Income Income
------------ --------------- ---------------- ------------ ----------- --------------
<S> <C> <C> <C> <C> <C> <C>
Total Return Fund
Institutional Class
09/30/98 (b) $ 10.62 $ 0.33(a) $ 0.47(a) $ 0.80 $ (0.33) $ 0.00
- ------------------------------------- ------------ --------------- ---------------- ------------ ----------- --------------
03/31/98 10.27 0.64(a) 0.62(a) 1.26 (0.62) (0.02)
- ------------------------------------- ------------ --------------- ---------------- ------------ ----------- --------------
03/31/97 10.29 0.68 (0.02) 0.66 (0.66) (0.02)
- ------------------------------------- ------------ --------------- ---------------- ------------ ----------- --------------
03/31/96 10.02 0.81 0.29 1.10 (0.61) (0.10)
- ------------------------------------- ------------ --------------- ---------------- ------------ ----------- --------------
03/31/95 10.25 0.64 (0.24) 0.40 (0.56) (0.05)
- ------------------------------------- ------------ --------------- ---------------- ------------ ----------- --------------
03/31/94 10.91 0.68 (0.16) 0.52 (0.71) (0.15)
- ------------------------------------- ------------ --------------- ---------------- ------------ ----------- --------------
Administrative Class
09/30/98 (b) 10.62 0.31(a) 0.48(a) 0.79 (0.32) 0.00
- ------------------------------------- ------------ --------------- ---------------- ------------ ----------- --------------
03/31/98 10.27 0.61(a) 0.63(a) 1.24 (0.60) (0.02)
- ------------------------------------- ------------ --------------- ---------------- ------------ ----------- --------------
03/31/97 10.29 0.66(a) (0.02)(a) 0.64 (0.64) (0.02)
- ------------------------------------- ------------ --------------- ---------------- ------------ ----------- --------------
03/31/96 10.01 0.80 0.29 1.09 (0.60) (0.09)
- ------------------------------------- ------------ --------------- ---------------- ------------ ----------- --------------
09/07/94-03/31/95 10.00 0.31 0.06 0.37 (0.32) (0.03)
- ------------------------------------- ------------ --------------- ---------------- ------------ ----------- --------------
Total Return Fund II
Institutional Class
09/30/98 (b) $ 10.26 $ 0.30(a) $ 0.54(a) $ 0.84 $ (0.30) $ 0.00
- ------------------------------------- ------------ --------------- ---------------- ------------ ----------- --------------
03/31/98 9.85 0.63(a) 0.52(a) 1.15 (0.60) (0.03)
- ------------------------------------- ------------ --------------- ---------------- ------------ ----------- --------------
03/31/97 9.89 0.61 (0.02) 0.59 (0.62) (0.01)
- ------------------------------------- ------------ --------------- ---------------- ------------ ----------- --------------
11/01/95-03/31/96 10.21 0.25 (0.17) 0.08 (0.26) 0.00
- ------------------------------------- ------------ --------------- ---------------- ------------ ----------- --------------
10/31/95 9.39 0.69 0.76 1.45 (0.62) 0.00
- ------------------------------------- ------------ --------------- ---------------- ------------ ----------- --------------
10/31/94 10.38 0.51 (0.88) (0.37) (0.51) 0.00
- ------------------------------------- ------------ --------------- ---------------- ------------ ----------- --------------
10/31/93 9.99 0.61 0.74 1.35 (0.61) 0.00
- ------------------------------------- ------------ --------------- ---------------- ------------ ----------- --------------
Administrative Class
09/30/98 (b) 10.26 0.28(a) 0.55(a) 0.83 (0.29) 0.00
- ------------------------------------- ------------ --------------- ---------------- ------------ ----------- --------------
03/31/98 9.85 0.60(a) 0.52(a) 1.12 (0.57) (0.03)
- ------------------------------------- ------------ --------------- ---------------- ------------ ----------- --------------
03/31/97 9.89 0.59 (0.02) 0.57 (0.60) (0.01)
- ------------------------------------- ------------ --------------- ---------------- ------------ ----------- --------------
11/01/95-03/31/96 10.22 0.24 (0.17) 0.07 (0.26) 0.00
- ------------------------------------- ------------ --------------- ---------------- ------------ ----------- --------------
11/30/94-10/31/95 (b) 9.34 0.56 0.88 1.44 (0.55) 0.00
- ------------------------------------- ------------ --------------- ---------------- ------------ ----------- --------------
Total Return Fund III
Institutional Class
09/30/98 (b) $ 9.55 $ 0.29(a) $ 0.42(a) $ 0.71 $(0.29) $ 0.00
- ------------------------------------- ------------ --------------- ---------------- ------------ ----------- --------------
03/31/98 9.15 0.57(a) 0.56(a) 1.13 (0.54) (0.03)
- ------------------------------------- ------------ --------------- ---------------- ------------ ----------- --------------
03/31/97 9.13 0.55 0.05 0.60 (0.55) (0.02)
- ------------------------------------- ------------ --------------- ---------------- ------------ ----------- --------------
03/31/96 8.99 0.72 0.17 0.89 (0.54) (0.09)
- ------------------------------------- ------------ --------------- ---------------- ------------ ----------- --------------
03/31/95 9.18 0.59 (0.16) 0.43 (0.52) (0.02)
- ------------------------------------- ------------ --------------- ---------------- ------------ ----------- --------------
03/31/94 9.81 0.59 (0.03) 0.56 (0.66) (0.12)
- ------------------------------------- ------------ --------------- ---------------- ------------ ----------- --------------
Administrative Class
09/30/98 (b) 9.55 0.28(a) 0.42(a) 0.70 (0.28) 0.00
- ------------------------------------- ------------ --------------- ---------------- ------------ ----------- --------------
04/11/97-03/31/98 9.12 0.54(a) 0.58(a) 1.12 (0.50) (0.03)
- ------------------------------------- ------------ --------------- ---------------- ------------ ----------- --------------
Total Return Mortgage Fund
Institutional Class
09/30/98 (b) $10.24 $ 0.29(a) $ 0.22(a) $ 0.51 $(0.29) $ 0.00
- ------------------------------------- ------------ --------------- ---------------- ------------ ----------- --------------
07/31/97-03/31/98 10.00 0.41(a) 0.30(a) 0.71 (0.46) 0.00
- ------------------------------------- ------------ --------------- ---------------- ------------ ----------- --------------
</TABLE>
+ Annualized
(a) Per share amounts based on average number of shares outstanding during the
period.
(b) Unaudited
26 PIMCO Funds See accompanying notes
<PAGE>
<TABLE>
<CAPTION>
Distributions Distributions
from Net in Excess of Tax Basis Net Asset
Selected Per Share Data for Realized Net Realized Return of Total Value End
the Year or Period Ended: Capital Gains Capital Gains Capital Distributions of Period
-------------- --------------- ----------- --------------- -----------
<S> <C> <C> <C> <C> <C>
Total Return Fund
Institutional Class
09/30/98 (b) $ 0.00 $ 0.00 $ 0.00 $ (0.33) $ 11.09
- ------------------------------------- -------------- --------------- ----------- --------------- -----------
03/31/98 (0.27) 0.00 0.00 (0.91) 10.62
- ------------------------------------- -------------- --------------- ----------- --------------- -----------
03/31/97 0.00 0.00 0.00 (0.68) 10.27
- ------------------------------------- -------------- --------------- ----------- --------------- -----------
03/31/96 (0.12) 0.00 0.00 (0.83) 10.29
- ------------------------------------- -------------- --------------- ----------- --------------- -----------
03/31/95 0.00 0.00 (0.02) (0.63) 10.02
- ------------------------------------- -------------- --------------- ----------- --------------- -----------
03/31/94 (0.30) (0.02) 0.00 (1.18) 10.25
- ------------------------------------- -------------- --------------- ----------- --------------- -----------
Administrative Class
09/30/98 (b) 0.00 0.00 0.00 (0.32) 11.09
- ------------------------------------- -------------- --------------- ----------- --------------- -----------
03/31/98 (0.27) 0.00 0.00 (0.89) 10.62
- ------------------------------------- -------------- --------------- ----------- --------------- -----------
03/31/97 0.00 0.00 0.00 (0.66) 10.27
- ------------------------------------- -------------- --------------- ----------- --------------- -----------
03/31/96 (0.12) 0.00 0.00 (0.81) 10.29
- ------------------------------------- -------------- --------------- ----------- --------------- -----------
09/07/94-03/31/95 0.00 0.00 (0.01) (0.36) 10.01
- ------------------------------------- -------------- --------------- ----------- --------------- -----------
Total Return Fund II
Institutional Class
09/30/98 (b) $ 0.00 $ 0.00 $ 0.00 $ (0.30) $ 10.80
- ------------------------------------- -------------- --------------- ----------- --------------- -----------
03/31/98 (0.11) 0.00 0.00 (0.74) 10.26
- ------------------------------------- -------------- --------------- ----------- --------------- -----------
03/31/97 0.00 0.00 0.00 (0.63) 9.85
- ------------------------------------- -------------- --------------- ----------- --------------- -----------
11/01/95-03/31/96 (0.09) (0.05) 0.00 (0.40) 9.89
- ------------------------------------- -------------- --------------- ----------- --------------- -----------
10/31/95 (0.01) 0.00 0.00 (0.63) 10.21
- ------------------------------------- -------------- --------------- ----------- --------------- -----------
10/31/94 (0.05) 0.00 (0.06) (0.62) 9.39
- ------------------------------------- -------------- --------------- ----------- --------------- -----------
10/31/93 (0.35) 0.00 0.00 (0.96) 10.38
- ------------------------------------- -------------- --------------- ----------- --------------- -----------
Administrative Class
09/30/98 (b) 0.00 0.00 0.00 (0.29) 10.80
- ------------------------------------- -------------- --------------- ----------- --------------- -----------
03/31/98 (0.11) 0.00 0.00 (0.71) 10.26
- ------------------------------------- -------------- --------------- ----------- --------------- -----------
03/31/97 0.00 0.00 0.00 (0.61) 9.85
- ------------------------------------- -------------- --------------- ----------- --------------- -----------
11/01/95-03/31/96 (0.09) (0.05) 0.00 (0.40) 9.89
- ------------------------------------- -------------- --------------- ----------- --------------- -----------
11/30/94-10/31/95 (b) (0.01) 0.00 0.00 (0.56) 10.22
- ------------------------------------- -------------- --------------- ----------- --------------- -----------
Total Return Fund III
Institutional Class
09/30/98 (b) $ 0.00 $ 0.00 $ 0.00 $ (0.29) $ 9.97
- ------------------------------------- -------------- --------------- ----------- --------------- -----------
03/31/98 (0.16) 0.00 0.00 (0.73) 9.55
- ------------------------------------- -------------- --------------- ----------- --------------- -----------
03/31/97 0.00 (0.01) 0.00 (0.58) 9.15
- ------------------------------------- -------------- --------------- ----------- --------------- -----------
03/31/96 (0.12) 0.00 0.00 (0.75) 9.13
- ------------------------------------- -------------- --------------- ----------- --------------- -----------
03/31/95 0.00 0.00 (0.08) (0.62) 8.99
- ------------------------------------- -------------- --------------- ----------- --------------- -----------
03/31/94 (0.20) (0.21) 0.00 (1.19) 9.18
- ------------------------------------- -------------- --------------- ----------- --------------- -----------
Administrative Class
09/30/98 (b) 0.00 0.00 0.00 (0.28) 9.97
- ------------------------------------- -------------- --------------- ----------- --------------- -----------
04/11/97-03/31/98 (0.16) 0.00 0.00 (0.69) 9.55
- ------------------------------------- -------------- --------------- ----------- --------------- -----------
Total Return Mortgage Fund
Institutional Class
09/30/98 (b) $ 0.00 $ 0.00 $ 0.00 $ (0.29) $ 10.46
- ------------------------------------- -------------- --------------- ----------- --------------- -----------
07/31/97-03/31/98 (0.01) 0.00 0.00 (0.47) 10.24
- ------------------------------------- -------------- --------------- ----------- --------------- -----------
<CAPTION>
Ratio of Net
Ratio of Investment
Expenses to Income to
Selected Per Share Data for Net Assets End Average Net Average Net Portfolio
the Year or Period Ended: Total Return of Period (000s) Assets Assets Turnover Rate
-------------- --------------- ----------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Total Return Fund
Institutional Class
09/30/98 (b) 7.67% $ 19,607,819 0.43%+ 6.14%+ 103%
- ------------------------------------- -------------- --------------- ----------- --------------- ---------------
03/31/98 12.63 16,484,119 0.43 6.06 206
- ------------------------------------- -------------- --------------- ----------- --------------- ---------------
03/31/97 6.60 12,528,536 0.43 6.60 173
- ------------------------------------- -------------- --------------- ----------- --------------- ---------------
03/31/96 11.14 10,247,605 0.42 6.85 221
- ------------------------------------- -------------- --------------- ----------- --------------- ---------------
03/31/95 4.22 7,239,735 0.41 6.72 98
- ------------------------------------- -------------- --------------- ----------- --------------- ---------------
03/31/94 4.55 5,008,160 0.41 6.27 177
- ------------------------------------- -------------- --------------- ----------- --------------- ---------------
Administrative Class
09/30/98 (b) 7.54 1,107,029 0.68+ 5.83+ 103
- ------------------------------------- -------------- --------------- ----------- --------------- ---------------
03/31/98 12.36 481,730 0.68 5.74 206
- ------------------------------------- -------------- --------------- ----------- --------------- ---------------
03/31/97 6.34 151,194 0.68 6.35 173
- ------------------------------------- -------------- --------------- ----------- --------------- ---------------
03/31/96 10.99 104,618 0.68 6.64 221
- ------------------------------------- -------------- --------------- ----------- --------------- ---------------
09/07/94-03/31/95 3.76 9,037 0.66+ 6.54+ 98
- ------------------------------------- -------------- --------------- ----------- --------------- ---------------
Total Return Fund II
Institutional Class
09/30/98 (b) 8.33% $ 862,092 0.50%+ 5.77%+ 86%
- ------------------------------------- -------------- --------------- ----------- --------------- ---------------
03/31/98 11.99 574,587 0.50 6.15 361
- ------------------------------------- -------------- --------------- ----------- --------------- ---------------
03/31/97 6.15 478,451 0.50 6.38 293
- ------------------------------------- -------------- --------------- ----------- --------------- ---------------
11/01/95-03/31/96 0.78 455,583 0.51+ 6.36+ 73
- ------------------------------------- -------------- --------------- ----------- --------------- ---------------
10/31/95 15.96 442,091 0.50 6.47 41
- ------------------------------------- -------------- --------------- ----------- --------------- ---------------
10/31/94 (3.58) 357,900 0.50 5.22 99
- ------------------------------------- -------------- --------------- ----------- --------------- ---------------
10/31/93 13.79 371,260 0.50 5.38 50
- ------------------------------------- -------------- --------------- ----------- --------------- ---------------
Administrative Class
09/30/98 (b) 8.19 60,103 0.74+ 5.34+ 86
- ------------------------------------- -------------- --------------- ----------- --------------- ---------------
03/31/98 11.71 15,172 0.75 5.86 361
- ------------------------------------- -------------- --------------- ----------- --------------- ---------------
03/31/97 5.88 5,304 0.75 6.13 293
- ------------------------------------- -------------- --------------- ----------- --------------- ---------------
11/01/95-03/31/96 0.57 3,320 0.76+ 6.06+ 73
- ------------------------------------- -------------- --------------- ----------- --------------- ---------------
11/30/94-10/31/95 (b) 15.92 3,163 0.76+ 6.22+ 41
- ------------------------------------- -------------- --------------- ----------- --------------- ---------------
Total Return Fund III
Institutional Class
09/30/98 (b) 7.54% $ 442,417 0.50%+ 5.96%+ 68%
- ------------------------------------- -------------- --------------- ----------- --------------- ---------------
03/31/98 12.62 365,249 0.51 5.99 183
- ------------------------------------- -------------- --------------- ----------- --------------- ---------------
03/31/97 6.76 193,297 0.51 6.21 90
- ------------------------------------- -------------- --------------- ----------- --------------- ---------------
03/31/96 10.06 142,223 0.50 6.82 177
- ------------------------------------- -------------- --------------- ----------- --------------- ---------------
03/31/95 4.92 99,497 0.50 6.95 146
- ------------------------------------- -------------- --------------- ----------- --------------- ---------------
03/31/94 5.64 97,522 0.50 6.00 95
- ------------------------------------- -------------- --------------- ----------- --------------- ---------------
Administrative Class
09/30/98 (b) 7.40 1,793 0.76+ 5.75+ 68
- ------------------------------------- -------------- --------------- ----------- --------------- ---------------
04/11/97-03/31/98 12.46 178 0.76+ 5.85+ 183
- ------------------------------------- -------------- --------------- ----------- --------------- ---------------
Total Return Mortgage Fund
Institutional Class
09/30/98 (b) 5.08% $ 3,770 0.51%+ 5.66%+ 102%
- ------------------------------------- -------------- --------------- ----------- --------------- ---------------
07/31/97-03/31/98 6.69 3,588 0.52+ 6.07+ 593
- ------------------------------------- -------------- --------------- ----------- --------------- ---------------
</TABLE>
1998 Semi-Annual Report See accompanying notes 27
<PAGE>
Financial Highlights (cont.)
<TABLE>
<CAPTION>
Net Asset Net Realized Total Dividends Dividends in
Value and Unrealized Income from from Net Excess of Net
Selected Per Share Data for Beginning Net Investment Gain (Loss) on Investment Investment Investment
the Year or Period Ended: of Period Income Investments Operations Income Income
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Moderate Duration Fund
Institutional Class
09/30/98 (b) $ 10.14 $ 0.30(a) $ 0.31(a) $ 0.61 $ (0.30) $ 0.00
- ---------------------------- ---------- ---------- ---------- ---------- ---------- ----------
03/31/98 9.83 0.38(a) 0.56(a) 0.94 (0.60) 0.00
- ---------------------------- ---------- ---------- ---------- ---------- ---------- ----------
12/31/96-03/31/97 10.00 0.15 (0.17) (0.02) (0.15) 0.00
- ---------------------------- ---------- ---------- ---------- ---------- ---------- ----------
Low Duration Fund
Institutional Class
09/30/98 (b) $ 10.18 $ 0.33(a) $ 0.11(a) $ 0.44 $ (0.33) $ 0.00
- ---------------------------- ---------- ---------- ---------- ---------- ---------- ----------
03/31/98 9.98 0.65(a) 0.23(a) 0.88 (0.63) (0.02)
- ---------------------------- ---------- ---------- ---------- ---------- ---------- ----------
03/31/97 9.95 0.64 0.03 0.67 (0.63) (0.01)
- ---------------------------- ---------- ---------- ---------- ---------- ---------- ----------
03/31/96 9.76 0.66 0.21 0.87 (0.68) 0.00
- ---------------------------- ---------- ---------- ---------- ---------- ---------- ----------
03/31/95 10.04 0.65 (0.30) 0.35 (0.54) 0.00
- ---------------------------- ---------- ---------- ---------- ---------- ---------- ----------
03/31/94 10.30 0.62 (0.16) 0.46 (0.64) (0.03)
- ---------------------------- ---------- ---------- ---------- ---------- ---------- ----------
Administrative Class
09/30/98 (b) 10.18 0.32(a) 0.11(a) 0.43 (0.32) 0.00
- ---------------------------- ---------- ---------- ---------- ---------- ---------- ----------
03/31/98 9.98 0.63(a) 0.22(a) 0.85 (0.60) (0.02)
- ---------------------------- ---------- ---------- ---------- ---------- ---------- ----------
03/31/97 9.95 0.62 0.03 0.65 (0.60) (0.02)
- ---------------------------- ---------- ---------- ---------- ---------- ---------- ----------
03/31/96 9.76 0.63 0.21 0.84 (0.65) 0.00
- ---------------------------- ---------- ---------- ---------- ---------- ---------- ----------
12/31/94-03/31/95 9.67 0.18 0.07 0.25 (0.14) 0.00
- ---------------------------- ---------- ---------- ---------- ---------- ---------- ----------
Low Duration Fund II
Institutional Class
09/30/98 (b) $ 10.00 $ 0.30(a) $ 0.16(a) $ 0.46 $ (0.30) $ 0.00
- ---------------------------- ---------- ---------- ---------- ---------- ---------- ----------
03/31/98 9.81 0.22(a) 0.59(a) 0.81 (0.56) (0.04)
- ---------------------------- ---------- ---------- ---------- ---------- ---------- ----------
03/31/97 9.82 0.62 (0.03) 0.59 (0.58) (0.02)
- ---------------------------- ---------- ---------- ---------- ---------- ---------- ----------
03/31/96 9.77 0.66 0.04 0.70 (0.60) (0.03)
- ---------------------------- ---------- ---------- ---------- ---------- ---------- ----------
03/31/95 9.94 0.62 (0.16) 0.46 (0.58) (0.03)
- ---------------------------- ---------- ---------- ---------- ---------- ---------- ----------
03/31/94 10.25 0.60 (0.28) 0.32 (0.58) 0.00
- ---------------------------- ---------- ---------- ---------- ---------- ---------- ----------
Administrative Class
09/30/98 (b) 10.00 0.29(a) 0.16(a) 0.45 (0.29) 0.00
- ---------------------------- ---------- ---------- ---------- ---------- ---------- ----------
02/02/98-03/31/98 10.03 0.14(a) (0.08)(a) 0.06 (0.08) (0.01)
- ---------------------------- ---------- ---------- ---------- ---------- ---------- ----------
Low Duration Fund III
Institutional Class
09/30/98 (b) $ 10.05 $ 0.30(a) $ 0.10(a) $ 0.40 $ (0.30) $ 0.00
- ---------------------------- ---------- ---------- ---------- ---------- ---------- ----------
03/31/98 9.91 0.53(a) 0.24(a) 0.77 (0.60) 0.00
- ---------------------------- ---------- ---------- ---------- ---------- ---------- ----------
12/31/96-03/31/97 10.00 0.15 (0.09) 0.06 (0.15) 0.00
- ---------------------------- ---------- ---------- ---------- ---------- ---------- ----------
Low Duration Mortgage Fund
Institutional Class
09/30/98 (b) $ 10.13 $ 0.33(a) $ 0.14(a) $ 0.47 $ (0.33) $ 0.00
- ---------------------------- ---------- ---------- ---------- ---------- ---------- ----------
07/31/97-03/31/98 10.00 0.43(a) 0.14(a) 0.57 (0.42) 0.00
- ---------------------------- ---------- ---------- ---------- ---------- ---------- ----------
</TABLE>
+ Annualized
(a) Per share amounts based on average number of shares outstanding during the
period.
(b) Unaudited
(c) Ratio of expenses to average net assets excluding interest expense on
reverse repurchase agreements is .50%.
(d) Ratio of expenses to average net assets excluding interest expense on
reverse repurchase agreements is .51%.
28 PIMCO Funds See accompanying notes
<PAGE>
<TABLE>
<CAPTION>
Distributions Distributions
from Net in Excess of Tax Basis Net Asset
Selected Per Share Data for Realized Net Realized Return of Total Value End
the Year or Period Ended: Capital Gains Capital Gains Capital Distributions of Period
--------------- -------------- ----------- --------------- -----------
<S> <C> <C> <C> <C> <C>
Moderate Duration Fund
Institutional Class
09/30/98 (b) $ 0.00 $ 0.00 $ 0.00 $ (0.30) $ 10.45
- ----------------------------------------------- --------------- -------------- ----------- --------------- -----------
03/31/98 (0.03) 0.00 0.00 (0.63) 10.14
- ----------------------------------------------- --------------- -------------- ----------- --------------- -----------
12/31/96-03/31/97 0.00 0.00 0.00 (0.15) 9.83
- ----------------------------------------------- --------------- -------------- ----------- --------------- -----------
Low Duration Fund
Institutional Class
09/30/98 (b) $ 0.00 $ 0.00 $ 0.00 $ (0.33) $ 10.29
- ----------------------------------------------- --------------- -------------- ----------- --------------- -----------
03/31/98 (0.03) 0.00 0.00 (0.68) 10.18
- ----------------------------------------------- --------------- -------------- ----------- --------------- -----------
03/31/97 0.00 0.00 0.00 (0.64) 9.98
- ----------------------------------------------- --------------- -------------- ----------- --------------- -----------
03/31/96 0.00 0.00 0.00 (0.68) 9.95
- ----------------------------------------------- --------------- -------------- ----------- --------------- -----------
03/31/95 0.00 0.00 (0.09) (0.63) 9.76
- ----------------------------------------------- --------------- -------------- ----------- --------------- -----------
03/31/94 (0.05) 0.00 0.00 (0.72) 10.04
- ----------------------------------------------- --------------- -------------- ----------- --------------- -----------
Administrative Class
09/30/98 (b) 0.00 0.00 0.00 (0.32) 10.29
- ----------------------------------------------- --------------- -------------- ----------- --------------- -----------
03/31/98 (0.03) 0.00 0.00 (0.65) 10.18
- ----------------------------------------------- --------------- -------------- ----------- --------------- -----------
03/31/97 0.00 0.00 0.00 (0.62) 9.98
- ----------------------------------------------- --------------- -------------- ----------- --------------- -----------
03/31/96 0.00 0.00 0.00 (0.65) 9.95
- ----------------------------------------------- --------------- -------------- ----------- --------------- -----------
12/31/94-03/31/95 0.00 0.00 (0.02) (0.16) 9.76
- ----------------------------------------------- --------------- -------------- ----------- --------------- -----------
Low Duration Fund II
Institutional Class
09/30/98 (b) $ 0.00 $ 0.00 $ 0.00 $ (0.30) $ 10.16
- ----------------------------------------------- --------------- -------------- ----------- --------------- -----------
03/31/98 (0.02) 0.00 0.00 (0.62) 10.00
- ----------------------------------------------- --------------- -------------- ----------- --------------- -----------
03/31/97 0.00 0.00 0.00 (0.60) 9.81
- ----------------------------------------------- --------------- -------------- ----------- --------------- -----------
03/31/96 0.00 0.00 (0.02) (0.65) 9.82
- ----------------------------------------------- --------------- -------------- ----------- --------------- -----------
03/31/95 0.00 0.00 (0.02) (0.63) 9.77
- ----------------------------------------------- --------------- -------------- ----------- --------------- -----------
03/31/94 (0.05) 0.00 0.00 (0.63) 9.94
- ----------------------------------------------- --------------- -------------- ----------- --------------- -----------
Administrative Class
09/30/98 (b) 0.00 0.00 0.00 (0.29) 10.16
- ----------------------------------------------- --------------- -------------- ----------- --------------- -----------
02/02/98-03/31/98 0.00 0.00 0.00 (0.09) 10.00
- ----------------------------------------------- --------------- -------------- ----------- --------------- -----------
Low Duration Fund III
Institutional Class
09/30/98 (b) $ 0.00 $ 0.00 $ 0.00 $ (0.30) $ 10.15
- ----------------------------------------------- --------------- -------------- ----------- --------------- -----------
03/31/98 (0.03) 0.00 0.00 (0.63) 10.05
- ----------------------------------------------- --------------- -------------- ----------- --------------- -----------
12/31/96-03/31/97 0.00 0.00 0.00 (0.15) 9.91
- ----------------------------------------------- --------------- -------------- ----------- --------------- -----------
Low Duration Mortgage Fund
Institutional Class
09/30/98 (b) $ 0.00 $ 0.00 $ 0.00 $ (0.33) $ 10.27
- ----------------------------------------------- --------------- -------------- ----------- --------------- -----------
07/31/97-03/31/98 (0.02) 0.00 0.00 (0.44) 10.13
- ----------------------------------------------- --------------- -------------- ----------- --------------- -----------
<CAPTION>
Ratio of Net
Ratio of Investment
Expenses to Income to
Selected Per Share Data for Net Assets End Average Net Average Net Portfolio
the Year or Period Ended: Total Return of Period (000s) Assets Assets Turnover Rate
-------------- ----------------- ------------- ------------- --------------
<S> <C> <C> <C> <C> <C>
Moderate Duration Fund
Institutional Class
09/30/98 (b) 6.13% $ 257,229 0.44%+ 5.80%+ 82%
- ---------------------------------------------- -------------- ----------------- ------------- ------------- --------------
03/31/98 9.80 239,152 0.45 3.75 96
- ---------------------------------------------- -------------- ----------------- ------------- ------------- --------------
12/31/96-03/31/97 (0.25) 13,458 0.44+ 6.01+ 49
- ---------------------------------------------- -------------- ----------------- ------------- ------------- --------------
Low Duration Fund
Institutional Class
09/30/98 (b) 4.42% $ 3,050,047 0.43%+ 6.52%+ 128%
- ---------------------------------------------- -------------- ----------------- ------------- ------------- --------------
03/31/98 9.00 2,759,531 0.43 6.39 309
- ---------------------------------------------- -------------- ----------------- ------------- ------------- --------------
03/31/97 6.97 2,797,001 0.43 6.46 240
- ---------------------------------------------- -------------- ----------------- ------------- ------------- --------------
03/31/96 9.13 2,677,574 0.42 6.88 209
- ---------------------------------------------- -------------- ----------------- ------------- ------------- --------------
03/31/95 3.60 2,332,032 0.41 6.46 77
- ---------------------------------------------- -------------- ----------------- ------------- ------------- --------------
03/31/94 4.56 2,298,255 0.43 6.05 43
- ---------------------------------------------- -------------- ----------------- ------------- ------------- --------------
Administrative Class
09/30/98 (b) 4.29 146,633 0.68+ 6.25+ 128
- ---------------------------------------------- -------------- ----------------- ------------- ------------- --------------
03/31/98 8.73 46,186 0.68 6.16 309
- ---------------------------------------------- -------------- ----------------- ------------- ------------- --------------
03/31/97 6.71 23,564 0.68 6.21 240
- ---------------------------------------------- -------------- ----------------- ------------- ------------- --------------
03/31/96 8.83 2,536 0.69 6.73 209
- ---------------------------------------------- -------------- ----------------- ------------- ------------- --------------
12/31/94-03/31/95 2.53 771 0.66+ 6.93+ 77
- ---------------------------------------------- -------------- ----------------- ------------- ------------- --------------
Low Duration Fund II
Institutional Class
09/30/98 (b) 4.65% $ 412,547 0.50%+ 5.93%+ 256%
- ---------------------------------------------- -------------- ----------------- ------------- ------------- --------------
03/31/98 8.29 401,204 0.50 5.98 335
- ---------------------------------------------- -------------- ----------------- ------------- ------------- --------------
03/31/97 6.33 339,375 0.51 6.31 237
- ---------------------------------------------- -------------- ----------------- ------------- ------------- --------------
03/31/96 7.30 253,299 0.48 6.61 225
- ---------------------------------------------- -------------- ----------------- ------------- ------------- --------------
03/31/95 4.80 170,866 0.47 6.35 102
- ---------------------------------------------- -------------- ----------------- ------------- ------------- --------------
03/31/94 3.15 141,411 0.50 5.73 54
- ---------------------------------------------- -------------- ----------------- ------------- ------------- --------------
Administrative Class
09/30/98 (b) 4.52 7,710 0.76+ 5.80+ 256
- ---------------------------------------------- -------------- ----------------- ------------- ------------- --------------
02/02/98-03/31/98 0.58 56 0.75+ 8.53+ 335
- ---------------------------------------------- -------------- ----------------- ------------- ------------- --------------
Low Duration Fund III
Institutional Class
09/30/98 (b) 4.09% $ 24,579 0.50%+ 5.97%+ 83%
- ---------------------------------------------- -------------- ----------------- ------------- ------------- --------------
03/31/98 7.93 23,896 0.50 5.98 307
- ---------------------------------------------- -------------- ----------------- ------------- ------------- --------------
12/31/96-03/31/97 0.58 10,056 0.49+ 6.00+ 155
- ---------------------------------------------- -------------- ----------------- ------------- ------------- --------------
Low Duration Mortgage Fund
Institutional Class
09/30/98 (b) 4.74% $ 3,914 2.76%+(d) 6.52%+ 34%
- ---------------------------------------------- -------------- ----------------- ------------- ------------- --------------
07/31/97-03/31/98 5.86 3,748 1.81+(c) 6.30+ 486
- ---------------------------------------------- -------------- ----------------- ------------- ------------- --------------
</TABLE>
1998 Semi-Annual Report See accompanying notes 29
<PAGE>
Financial Highlights (cont.)
<TABLE>
<CAPTION>
Net Asset Net Realized Total Dividends Dividends in
Value and Unrealized Income from from Net Excess of Net
Selected Per Share Data for Beginning Net Investment Gain (Loss) on Investment Investment Investment
the Year or Period Ended: of Period Income Investments Operations Income Income
------------- -------------- --------------- ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Short-Term Fund
Institutional Class
09/30/98 (b) $ 10.06 $ 0.29(a) $ (0.02)(a) $ 0.27 $ (0.29) $ 0.00
- ---------------------------------- ------------- -------------- --------------- ------------ ------------ -------------
03/31/98 10.00 0.62(a) 0.06(a) 0.68 (0.60) (0.01)
- ---------------------------------- ------------- -------------- --------------- ------------ ------------ -------------
03/31/97 9.92 0.61 0.08 0.69 (0.59) (0.02)
- ---------------------------------- ------------- -------------- --------------- ------------ ------------ -------------
03/31/96 9.79 0.69 0.12 0.81 (0.65) (0.03)
- ---------------------------------- ------------- -------------- --------------- ------------ ------------ -------------
03/31/95 9.92 0.56 (0.13) 0.43 (0.55) (0.01)
- ---------------------------------- ------------- -------------- --------------- ------------ ------------ -------------
03/31/94 10.03 0.48 (0.12) 0.36 (0.47) 0.00
- ---------------------------------- ------------- -------------- --------------- ------------ ------------ -------------
Administrative Class
09/30/98 (b) 10.06 0.28(a) (0.02)(a) 0.26 (0.28) 0.00
- ---------------------------------- ------------- -------------- --------------- ------------ ------------ -------------
03/31/98 10.00 0.59(a) 0.07(a) 0.66 (0.58) (0.01)
- ---------------------------------- ------------- -------------- --------------- ------------ ------------ -------------
03/31/97 9.92 0.58 0.08 0.66 (0.57) (0.01)
- ---------------------------------- ------------- -------------- --------------- ------------ ------------ -------------
02/01/96-03/31/96 9.98 0.11 (0.07) 0.04 (0.10) 0.00
- ---------------------------------- ------------- -------------- --------------- ------------ ------------ -------------
Long-Term U.S. Government Fund
Institutional Class
09/30/98 (b) $ 10.57 $ 0.36(a) $ 1.06(a) $ 1.42 $ (0.35) $ 0.00
- ---------------------------------- ------------- -------------- --------------- ------------ ------------ -------------
03/31/98 9.39 0.52(a) 1.34(a) 1.86 (0.62) 0.00
- ---------------------------------- ------------- -------------- --------------- ------------ ------------ -------------
03/31/97 9.96 0.79 (0.35) 0.44 (0.68) 0.00
- ---------------------------------- ------------- -------------- --------------- ------------ ------------ -------------
03/31/96 9.85 0.83 0.66 1.49 (0.68) (0.04)
- ---------------------------------- ------------- -------------- --------------- ------------ ------------ -------------
03/31/95 9.96 0.60 (0.09) 0.51 (0.60) (0.02)
- ---------------------------------- ------------- -------------- --------------- ------------ ------------ -------------
03/31/94 11.36 0.62 (0.06) 0.56 (1.05) (0.04)
- ---------------------------------- ------------- -------------- --------------- ------------ ------------ -------------
Administrative Class
09/30/98 (b) 10.57 0.34(a) 1.06(a) 1.40 (0.33) 0.00
- ---------------------------------- ------------- -------------- --------------- ------------ ------------ -------------
09/23/97-03/31/98 10.17 0.26(a) 0.51(a) 0.77 (0.31) 0.00
- ---------------------------------- ------------- -------------- --------------- ------------ ------------ -------------
Real Return Bond Fund
Institutional Class
09/30/98 (b) $ 9.77 $ 0.29(a) $ 0.15(a) $ 0.44 $ (0.29) $ 0.00
- ---------------------------------- ------------- -------------- --------------- ------------ ------------ -------------
03/31/98 9.93 0.44(a) 0.05(a) 0.49 (0.48) (0.03)
- ---------------------------------- ------------- -------------- --------------- ------------ ------------ -------------
01/29/97-03/31/97 9.92 0.11 (0.02) 0.09 (0.08) 0.00
- ---------------------------------- ------------- -------------- --------------- ------------ ------------ -------------
Foreign Bond Fund
Institutional Class
09/30/98 (b) $ 10.74 $ 0.32(a) $ 0.20(a) $ 0.52 $ (0.31) $ 0.00
- ---------------------------------- ------------- -------------- --------------- ------------ ------------ -------------
03/31/98 10.41 0.66(a) 0.61(a) 1.27 (0.63) 0.00
- ---------------------------------- ------------- -------------- --------------- ------------ ------------ -------------
03/31/97 10.50 0.80 1.00 1.80 (0.40) 0.00
- ---------------------------------- ------------- -------------- --------------- ------------ ------------ -------------
03/31/96 9.38 0.96 1.03 1.99 (0.34) (0.25)
- ---------------------------------- ------------- -------------- --------------- ------------ ------------ -------------
03/31/95 10.18 0.38 (0.57) (0.19) 0.00 0.00
- ---------------------------------- ------------- -------------- --------------- ------------ ------------ -------------
03/31/94 10.34 0.55 0.27 0.82 (0.55) 0.00
- ---------------------------------- ------------- -------------- --------------- ------------ ------------ -------------
Administrative Class
09/30/98 (b) 10.74 0.30(a) 0.20(a) 0.50 (0.29) 0.00
- ---------------------------------- ------------- -------------- --------------- ------------ ------------ -------------
03/31/98 10.41 0.63(a) 0.61(a) 1.24 (0.60) 0.00
- ---------------------------------- ------------- -------------- --------------- ------------ ------------ -------------
01/28/97-03/31/97 10.54 0.59 (0.67) (0.08) (0.05) 0.00
- ---------------------------------- ------------- -------------- --------------- ------------ ------------ -------------
</TABLE>
+ Annualized
(a) Per share amounts based on average number of shares outstanding during the
period.
(b) Unaudited
30 PIMCO Funds See accompanying notes
<PAGE>
<TABLE>
<CAPTION>
Distributions Distributions
from Net in Excess of Tax Basis Net Asset
Selected Per Share Data for Realized Net Realized Return of Total Value End
the Year or Period Ended: Capital Gains Capital Gains Capital Distributions of Period
-------------- -------------- -------------- ------------- --------------
<S> <C> <C> <C> <C> <C>
Short-Term Fund
Institutional Class
09/30/98 (b) $ 0.00 $ 0.00 $ 0.00 $ (0.29) $ 10.04
- --------------------------------------------- -------------- -------------- -------------- ------------- --------------
03/31/98 (0.01) 0.00 0.00 (0.62) 10.06
- --------------------------------------------- -------------- -------------- -------------- ------------- --------------
03/31/97 0.00 0.00 0.00 (0.61) 10.00
- --------------------------------------------- -------------- -------------- -------------- ------------- --------------
03/31/96 0.00 0.00 0.00 (0.68) 9.92
- --------------------------------------------- -------------- -------------- -------------- ------------- --------------
03/31/95 0.00 0.00 0.00 (0.56) 9.79
- --------------------------------------------- -------------- -------------- -------------- ------------- --------------
03/31/94 0.00 0.00 0.00 (0.47) 9.92
- --------------------------------------------- -------------- -------------- -------------- ------------- --------------
Administrative Class
09/30/98 (b) 0.00 0.00 0.00 (0.28) 10.04
- --------------------------------------------- -------------- -------------- -------------- ------------- --------------
03/31/98 (0.01) 0.00 0.00 (0.60) 10.06
- --------------------------------------------- -------------- -------------- -------------- ------------- --------------
03/31/97 0.00 0.00 0.00 (0.58) 10.00
- --------------------------------------------- -------------- -------------- -------------- ------------- --------------
02/01/96-03/31/96 0.00 0.00 0.00 (0.10) 9.92
- --------------------------------------------- -------------- -------------- -------------- ------------- --------------
Long-Term U.S. Government Fund
Institutional Class
09/30/98 (b) $ 0.00 $ 0.00 $ 0.00 $ (0.35) $ 11.64
- --------------------------------------------- -------------- -------------- -------------- ------------- --------------
03/31/98 (0.06) 0.00 0.00 (0.68) 10.57
- --------------------------------------------- -------------- -------------- -------------- ------------- --------------
03/31/97 0.00 (0.33) 0.00 (1.01) 9.39
- --------------------------------------------- -------------- -------------- -------------- ------------- --------------
03/31/96 (0.50) (0.16) 0.00 (1.38) 9.96
- --------------------------------------------- -------------- -------------- -------------- ------------- --------------
03/31/95 0.00 0.00 0.00 (0.62) 9.85
- --------------------------------------------- -------------- -------------- -------------- ------------- --------------
03/31/94 (0.70) (0.17) 0.00 (1.96) 9.96
- --------------------------------------------- -------------- -------------- -------------- ------------- --------------
Administrative Class
09/30/98 (b) 0.00 0.00 0.00 (0.33) 11.64
- --------------------------------------------- -------------- -------------- -------------- ------------- --------------
09/23/97-03/31/98 (0.06) 0.00 0.00 (0.37) 10.57
- --------------------------------------------- -------------- -------------- -------------- ------------- --------------
Real Return Bond Fund
Institutional Class
09/30/98 (b) $ 0.00 $ 0.00 $ 0.00 $ (0.29) $ 9.92
- --------------------------------------------- -------------- -------------- -------------- ------------- --------------
03/31/98 (0.14) 0.00 0.00 (0.65) 9.77
- --------------------------------------------- -------------- -------------- -------------- ------------- --------------
01/29/97-03/31/97 0.00 0.00 0.00 (0.08) 9.93
- --------------------------------------------- -------------- -------------- -------------- ------------- --------------
Foreign Bond Fund
Institutional Class
09/30/98 (b) $ 0.00 $ 0.00 $ 0.00 $ (0.31) $ 10.95
- --------------------------------------------- -------------- -------------- -------------- ------------- --------------
03/31/98 (0.31) 0.00 0.00 (0.94) 10.74
- --------------------------------------------- -------------- -------------- -------------- ------------- --------------
03/31/97 (1.49) 0.00 0.00 (1.89) 10.41
- --------------------------------------------- -------------- -------------- -------------- ------------- --------------
03/31/96 (0.25) (0.03) 0.00 (0.87) 10.50
- --------------------------------------------- -------------- -------------- -------------- ------------- --------------
03/31/95 0.00 0.00 (0.61) (0.61) 9.38
- --------------------------------------------- -------------- -------------- -------------- ------------- --------------
03/31/94 (0.06) (0.37) 0.00 (0.98) 10.18
- --------------------------------------------- -------------- -------------- -------------- ------------- --------------
Administrative Class
09/30/98 (b) 0.00 0.00 0.00 (0.29) 10.95
- --------------------------------------------- -------------- -------------- -------------- ------------- --------------
03/31/98 (0.31) 0.00 0.00 (0.91) 10.74
- --------------------------------------------- -------------- -------------- -------------- ------------- --------------
01/28/97-03/31/97 0.00 0.00 0.00 (0.05) 10.41
- --------------------------------------------- -------------- -------------- -------------- ------------- --------------
<CAPTION>
Ratio of Net
Ratio of Investment
Expenses to Income to
Selected Per Share Data for Net Assets End Average Net Average Net Portfolio
the Year or Period Ended: Total Return of Period (000s) Assets Assets Turnover Rate
- --------------------------------------------- -------------- --------------- -------------- ------------- --------------
Short-Term Fund
Institutional Class
<S> <C> <C> <C> <C> <C>
09/30/98 (b) 2.73% $ 334,079 0.45%+ 5.79%+ 49%
- --------------------------------------------- -------------- -------------- -------------- ------------- --------------
03/31/98 7.06 172,846 0.45 6.12 48
- --------------------------------------------- -------------- -------------- -------------- ------------- --------------
03/31/97 7.12 156,515 0.47 6.12 77
- --------------------------------------------- -------------- -------------- -------------- ------------- --------------
03/31/96 8.49 101,797 0.58 6.86 215
- --------------------------------------------- -------------- -------------- -------------- ------------- --------------
03/31/95 4.46 90,114 0.50 5.67 79
- --------------------------------------------- -------------- -------------- -------------- ------------- --------------
03/31/94 3.66 73,176 0.50 4.87 46
- --------------------------------------------- -------------- -------------- -------------- ------------- --------------
Administrative Class
09/30/98 (b) 2.61 1,774 0.69+ 5.50+ 49
- --------------------------------------------- -------------- -------------- -------------- ------------- --------------
03/31/98 6.80 5,147 0.70 5.86 48
- --------------------------------------------- -------------- -------------- -------------- ------------- --------------
03/31/97 6.86 4,513 0.72 5.87 77
- --------------------------------------------- -------------- -------------- -------------- ------------- --------------
02/01/96-03/31/96 0.41 3,999 0.52+ 4.44+ 215
- --------------------------------------------- -------------- -------------- -------------- ------------- --------------
Long-Term U.S. Government Fund
Institutional Class
09/30/98 (b) 13.66% $ 123,647 0.54%+ 6.56%+ 111%
- --------------------------------------------- -------------- -------------- -------------- ------------- --------------
03/31/98 20.23 48,547 0.51 4.88 177
- --------------------------------------------- -------------- -------------- -------------- ------------- --------------
03/31/97 4.48 19,995 0.63 7.63 402
- --------------------------------------------- -------------- -------------- -------------- ------------- --------------
03/31/96 14.83 32,511 0.56 6.80 238
- --------------------------------------------- -------------- -------------- -------------- ------------- --------------
03/31/95 5.50 32,349 0.50 6.62 89
- --------------------------------------------- -------------- -------------- -------------- ------------- --------------
03/31/94 4.13 25,978 0.50 5.37 98
- --------------------------------------------- -------------- -------------- -------------- ------------- --------------
Administrative Class
09/30/98 (b) 13.49 5,312 0.81+ 6.17+ 111
- --------------------------------------------- -------------- -------------- -------------- ------------- --------------
09/23/97-03/31/98 7.60 4,957 0.76+ 4.87+ 177
- --------------------------------------------- -------------- -------------- -------------- ------------- --------------
Real Return Bond Fund
Institutional Class
09/30/98 (b) 4.53% $ 5,790 0.54%+ 5.82%+ 445%
- --------------------------------------------- -------------- -------------- -------------- ------------- --------------
03/31/98 4.70 5,526 0.52 4.46 967
- --------------------------------------------- -------------- -------------- -------------- ------------- --------------
01/29/97-03/31/97 0.09 5,638 0.51+ 6.54+ 160
- --------------------------------------------- -------------- -------------- -------------- ------------- --------------
Foreign Bond Fund
Institutional Class
09/30/98 (b) 4.88% $ 491,207 0.50%+ 6.00%+ 161%
- --------------------------------------------- -------------- -------------- -------------- ------------- --------------
03/31/98 12.64 392,198 0.50 6.32 280
- --------------------------------------------- -------------- -------------- -------------- ------------- --------------
03/31/97 17.69 234,880 0.50 7.88 984
- --------------------------------------------- -------------- -------------- -------------- ------------- --------------
03/31/96 21.80 258,493 0.52 5.83 1,234
- --------------------------------------------- -------------- -------------- -------------- ------------- --------------
03/31/95 (1.85) 232,700 0.47 6.44 299
- --------------------------------------------- -------------- -------------- -------------- ------------- --------------
03/31/94 7.79 498,521 0.54 5.12 260
- --------------------------------------------- -------------- -------------- -------------- ------------- --------------
Administrative Class
09/30/98 (b) 4.75 1,547 0.75+ 5.74+ 161
- --------------------------------------------- -------------- -------------- -------------- ------------- --------------
03/31/98 12.34 315 0.75 6.07 280
- --------------------------------------------- -------------- -------------- -------------- ------------- --------------
01/28/97-03/31/97 (0.72) 30 0.79+ 7.63+ 984
- --------------------------------------------- -------------- -------------- -------------- ------------- --------------
</TABLE>
1998 Semi-Annual Report See accompanying notes 31
<PAGE>
Financial Highlights (cont.)
<TABLE>
<CAPTION>
Net Asset Net Realized Total Dividends Dividends in
Value and Unrealized Income from from Net Excess of Net
Selected Per Share Data for Beginning Net Investment Gain (Loss) on Investment Investment Investment
the Year or Period Ended: of Period Income Investments Operations Income Income
----------- --------------- ---------------- -------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Global Bond Fund
Institutional Class
09/30/98 (b) $ 9.70 $ 0.28(a) $ 0.45(a) $ 0.73 $ (0.28) $ 0.00
- -------------------------------- ----------- --------------- ---------------- -------------- ----------- -------------
03/31/98 9.86 0.66(a) (0.10)(a) 0.56 (0.53) 0.00
- -------------------------------- ----------- --------------- ---------------- -------------- ----------- -------------
03/31/97 10.05 0.70 (0.01) 0.69 (0.44) 0.00
- -------------------------------- ----------- --------------- ---------------- -------------- ----------- -------------
03/31/96 9.87 0.45 0.72 1.17 (0.61) 0.00
- -------------------------------- ----------- --------------- ---------------- -------------- ----------- -------------
03/31/95 9.85 0.69 (0.14) 0.55 (0.29) (0.24)
- -------------------------------- ----------- --------------- ---------------- -------------- ----------- -------------
11/23/93-03/31/94 10.00 0.16 (0.15) 0.01 (0.16) 0.00
- -------------------------------- ----------- --------------- ---------------- -------------- ----------- -------------
Administrative Class
09/30/98 (b) 9.70 0.28(a) 0.45(a) 0.73 (0.28) 0.00
- -------------------------------- ----------- --------------- ---------------- -------------- ----------- -------------
03/31/98 9.86 0.59(a) (0.05)(a) 0.54 (0.51) 0.00
- -------------------------------- ----------- --------------- ---------------- -------------- ----------- -------------
08/01/96-03/31/97 10.28 0.51 (0.23) 0.28 (0.26) 0.00
- -------------------------------- ----------- --------------- ---------------- -------------- ----------- -------------
Global Bond Fund II
Institutional Class
09/30/98 (b) $ 9.92 $ $ 0.29(a) $ 0.10(a) $ 0.39 $ (0.28) $ 0.00
- -------------------------------- ----------- --------------- ---------------- -------------- ----------- -------------
02/25/98-03/31/98 9.82 0.06(a) 0.09(a) 0.15 0.00 (0.05)
- -------------------------------- ----------- --------------- ---------------- -------------- ----------- -------------
Emerging Markets Bond Fund
Institutional Class
09/30/98 (b) $ 9.67 $ 0.40(a) $ (2.85)(a) $ (2.45) $ (0.40) $ 0.00
- -------------------------------- ----------- --------------- ---------------- -------------- ----------- -------------
07/31/97-03/31/98 10.00 0.46(a) (0.18)(a) 0.28 (0.46) 0.00
- -------------------------------- ----------- --------------- ---------------- -------------- ----------- -------------
High Yield Fund
Institutional Class
09/30/98 (b) $ 11.66 $ 0.48(a) $ (0.51)(a) $ (0.03) $ (0.48) $ 0.00
- -------------------------------- ----------- --------------- ---------------- -------------- ----------- -------------
03/31/98 11.10 0.98(a) 0.65(a) 1.63 (0.98) 0.00
- -------------------------------- ----------- --------------- ---------------- -------------- ----------- -------------
03/31/97 10.94 0.92 0.34 1.26 (0.97) 0.00
- -------------------------------- ----------- --------------- ---------------- -------------- ----------- -------------
03/31/96 10.42 1.04 0.54 1.58 (1.01) 0.00
- -------------------------------- ----------- --------------- ---------------- -------------- ----------- -------------
03/31/95 10.52 0.99 (0.12) 0.87 (0.93) (0.02)
- -------------------------------- ----------- --------------- ---------------- -------------- ----------- -------------
03/31/94 10.41 0.90 0.18 1.08 (0.90) 0.00
- -------------------------------- ----------- --------------- ---------------- -------------- ----------- -------------
Administrative Class
09/30/98 (b) 11.66 0.47(a) (0.51)(a) (0.04) (0.47) 0.00
- -------------------------------- ----------- --------------- ---------------- -------------- ----------- -------------
03/31/98 11.10 0.95(a) 0.65(a) 1.60 (0.95) 0.00
- -------------------------------- ----------- --------------- ---------------- -------------- ----------- -------------
03/31/97 10.94 0.85(a) 0.38(a) 1.23 (0.94) 0.00
- -------------------------------- ----------- --------------- ---------------- -------------- ----------- -------------
03/31/96 10.41 1.02(a) 0.54(a) 1.56 (0.98) 0.00
- -------------------------------- ----------- --------------- ---------------- -------------- ----------- -------------
01/16/95-03/31/95 10.14 0.23 0.25 0.48 (0.21) 0.00
- -------------------------------- ----------- --------------- ---------------- -------------- ----------- -------------
Municipal Bond Fund
Institutional Class
09/30/98 (b) $ 9.97 $ (0.22(a) $ 0.28(a) $ 0.50 $ (0.22) $ 0.00
- -------------------------------- ----------- --------------- ---------------- -------------- ----------- -------------
12/31/97-03/31/98 10.00 0.11 (0.03) 0.08 (0.11) 0.00
- -------------------------------- ----------- --------------- ---------------- -------------- ----------- -------------
Administrative Class
09/30/98 (b) (c) 10.25 0.00(a) 0.00(a) 0.00 0.00 0.00
- -------------------------------- ----------- --------------- ---------------- -------------- ----------- -------------
</TABLE>
+ Annualized
(a) Per share amounts based on average number of shares outstanding during the
period.
(b) Unaudited
(c) Commenced operations on September 30, 1998.
32 PIMCO Funds See accompanying notes
<PAGE>
<TABLE>
<CAPTION>
Distributions Distributions
from Net in Excess of Tax Basis Net Asset
Selected Per Share Data for Realized Net Realized Return of Total Value End
the Year or Period Ended: Capital Gains Capital Gains Capital Distributions of Period
--------------- --------------- ----------- -------------- -----------
<S> <C> <C> <C> <C> <C>
Global Bond Fund
Institutional Class
09/30/98 (b) $ 0.00 $ 0.00 $ 0.00 $ (0.28) $ 10.15
- -------------------------------------- --------------- --------------- ----------- -------------- -----------
03/31/98 0.00 (0.19) 0.00 (0.72) 9.70
- -------------------------------------- --------------- --------------- ----------- -------------- -----------
03/31/97 (0.44) 0.00 0.00 (0.88) 9.86
- -------------------------------------- --------------- --------------- ----------- -------------- -----------
03/31/96 (0.21) (0.17) 0.00 (0.99) 10.05
- -------------------------------------- --------------- --------------- ----------- -------------- -----------
03/31/95 0.00 0.00 0.00 (0.53) 9.87
- -------------------------------------- --------------- --------------- ----------- -------------- -----------
11/23/93-03/31/94 0.00 0.00 0.00 (0.16) 9.85
- -------------------------------------- --------------- --------------- ----------- -------------- -----------
Administrative Class
09/30/98 (b) 0.00 0.00 0.00 (0.28) 10.15
- -------------------------------------- --------------- --------------- ----------- -------------- -----------
03/31/98 0.00 (0.19) 0.00 (0.70) 9.70
- -------------------------------------- --------------- --------------- ----------- -------------- -----------
08/01/96-03/31/97 (0.44) 0.00 0.00 (0.70) 9.86
- -------------------------------------- --------------- --------------- ----------- -------------- -----------
Global Bond Fund II
Institutional Class
09/30/98 (b) $ 0.00 $ 0.00 $ 0.00 $ (0.28) $ 10.03
- -------------------------------------- --------------- --------------- ----------- -------------- -----------
02/25/98-03/31/98 0.00 0.00 0.00 (0.05) 9.92
- -------------------------------------- --------------- --------------- ----------- -------------- -----------
Emerging Markets Bond Fund
Institutional Class
09/30/98 (b) $ 0.00 $ 0.00 $ 0.00 $ (0.40) $ 6.82
- -------------------------------------- --------------- --------------- ----------- -------------- -----------
07/31/97-03/31/98 (0.15) 0.00 0.00 (0.61) 9.67
- -------------------------------------- --------------- --------------- ----------- -------------- -----------
High Yield Fund
Institutional Class
09/30/98 (b) $ 0.00 $ 0.00 $ 0.00 $ (0.48) $ 11.15
- -------------------------------------- --------------- --------------- ----------- -------------- -----------
03/31/98 0.00 (0.09) 0.00 (1.07) 11.66
- -------------------------------------- --------------- --------------- ----------- -------------- -----------
03/31/97 (0.13) 0.00 0.00 (1.10) 11.10
- -------------------------------------- --------------- --------------- ----------- -------------- -----------
03/31/96 (0.05) 0.00 0.00 (1.06) 10.94
- -------------------------------------- --------------- --------------- ----------- -------------- -----------
03/31/95 0.00 (0.02) 0.00 (0.97) 10.42
- -------------------------------------- --------------- --------------- ----------- -------------- -----------
03/31/94 (0.07) 0.00 0.00 (0.97) 10.52
- -------------------------------------- --------------- --------------- ----------- -------------- -----------
Administrative Class
09/30/98 (b) 0.00 0.00 0.00 (0.47) 11.15
- -------------------------------------- --------------- --------------- ----------- -------------- -----------
03/31/98 0.00 (0.09) 0.00 (1.04) 11.66
- -------------------------------------- --------------- --------------- ----------- -------------- -----------
03/31/97 (0.13) 0.00 0.00 (1.07) 11.10
- -------------------------------------- --------------- --------------- ----------- -------------- -----------
03/31/96 (0.05) 0.00 0.00 (1.03) 10.94
- -------------------------------------- --------------- --------------- ----------- -------------- -----------
01/16/95-03/31/95 0.00 0.00 0.00 (0.21) 10.41
- -------------------------------------- --------------- --------------- ----------- -------------- -----------
Municipal Bond Fund
Institutional Class
09/30/98 (b) $ 0.00 $ 0.00 $ 0.00 $ (0.22) $ 10.25
- -------------------------------------- --------------- --------------- ----------- -------------- -----------
12/31/97-03/31/98 0.00 0.00 0.00 (0.11) 9.97
- -------------------------------------- --------------- --------------- ----------- -------------- -----------
Administrative Class
09/30/98 (b) (c) 0.00 0.00 0.00 0.00 10.25
- -------------------------------------- --------------- --------------- ----------- -------------- -----------
<CAPTION>
Ratio of Net
Ratio of Investment
Expenses to Income to
Selected Per Share Data for Net Assets End Average Net Average Net Portfolio
the Year or Period Ended: Total Return of Period (000s) Assets Assets Turnover Rate
--------------- ----------------- -------------- ------------- ---------------
<S> <C> <C> <C> <C> <C>
Global Bond Fund
Institutional Class
09/30/98 (b) 7.61% $ 275,923 0.56%+ 5.75%+ 36%
- ---------------------------------------- --------------- ----------------- -------------- ------------- ---------------
03/31/98 5.85 256,274 0.55 6.64 389
- ---------------------------------------- --------------- ----------------- -------------- ------------- ---------------
03/31/97 6.78 215,631 0.56 7.51 911
- ---------------------------------------- --------------- ----------------- -------------- ------------- ---------------
03/31/96 12.04 133,833 0.58 5.88 1,083
- ---------------------------------------- --------------- ----------------- -------------- ------------- ---------------
03/31/95 10.35 76,476 0.64 5.59 461
- ---------------------------------------- --------------- ----------------- -------------- ------------- ---------------
11/23/93-03/31/94 0.08 40,485 0.50+ 4.55+ 132
- ---------------------------------------- --------------- ----------------- -------------- ------------- ---------------
Administrative Class
09/30/98 (b) 7.61 929 0.83+ 5.69+ 36
- ---------------------------------------- --------------- ----------------- -------------- ------------- ---------------
03/31/98 5.57 1,548 0.80 6.39 389
- ---------------------------------------- --------------- ----------------- -------------- ------------- ---------------
08/01/96-03/31/97 2.97 346 0.78+ 5.66+ 911
- ---------------------------------------- --------------- ----------------- -------------- ------------- ---------------
Global Bond Fund II
Institutional Class
09/30/98 (b) 4.02% $ 27,426 0.56%+ 5.76%+ 69%
- ---------------------------------------- --------------- ----------------- -------------- ------------- ---------------
02/25/98-03/31/98 1.02 24,517 0.55+ 6.24+ 369
- ---------------------------------------- --------------- ----------------- -------------- ------------- ---------------
Emerging Markets Bond Fund
Institutional Class
09/30/98 (b) (25.91)% $ 3,106 0.92%+ 9.43%+ 217%
- ---------------------------------------- --------------- ----------------- -------------- ------------- ---------------
07/31/97-03/31/98 3.10 3,676 0.86+ 7.21+ 695
- ---------------------------------------- --------------- ----------------- -------------- ------------- ---------------
High Yield Fund
Institutional Class
09/30/98 (b) (0.27)% $ 1,795,413 0.50%+ 8.36%+ 30%
- ---------------------------------------- --------------- ----------------- -------------- ------------- ---------------
03/31/98 15.26 1,628,930 0.50 8.52 37
- ---------------------------------------- --------------- ----------------- -------------- ------------- ---------------
03/31/97 12.04 744,498 0.50 8.77 67
- ---------------------------------------- --------------- ----------------- -------------- ------------- ---------------
03/31/96 15.70 536,983 0.47 9.28 66
- ---------------------------------------- --------------- ----------------- -------------- ------------- ---------------
03/31/95 8.81 336,310 0.48 9.37 78
- ---------------------------------------- --------------- ----------------- -------------- ------------- ---------------
03/31/94 10.65 219,976 0.50 8.40 112
- ---------------------------------------- --------------- ----------------- -------------- ------------- ---------------
Administrative Class
09/30/98 (b) (0.39) 118,773 0.75+ 8.14+ 30
- ---------------------------------------- --------------- ----------------- -------------- ------------- ---------------
03/31/98 14.98 69,937 0.75 8.21 37
- ---------------------------------------- --------------- ----------------- -------------- ------------- ---------------
03/31/97 11.76 10,428 0.76 8.48 67
- ---------------------------------------- --------------- ----------------- -------------- ------------- ---------------
03/31/96 15.54 1,007 0.80 9.16 66
- ---------------------------------------- --------------- ----------------- -------------- ------------- ---------------
01/16/95-03/31/95 4.66 41 0.73+ 10.12+ 78
- ---------------------------------------- --------------- ----------------- -------------- ------------- ---------------
Municipal Bond Fund
Institutional Class
09/30/98 (b) 5.04% $ 6,375 0.50%+ 4.32%+ 41%
- ---------------------------------------- --------------- ----------------- -------------- ------------- ---------------
12/31/97-03/31/98 0.78 3,023 0.50+ 4.46+ 60%
- ---------------------------------------- --------------- ----------------- -------------- ------------- ---------------
Administrative Class
09/30/98 (b) (c) 0.00 100 0.75+ 0.00+ 41
- ---------------------------------------- --------------- ----------------- -------------- ------------- ---------------
</TABLE>
1998 Semi-Annual Report See accompanying notes 33
<PAGE>
Financial Highlights (cont.)
<TABLE>
<CAPTION>
Net Asset Net Realized Total Dividends Dividends in
Value and Unrealized Income from from Net Excess of Net
Selected Per Share Data for Beginning Net Investment Gain (Loss) on Investment Investment Investment
the Year or Period Ended: of Period Income Investments Operations Income Income
-------------- -------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Money Market Fund
Institutional Class
09/30/98 (b) $ 1.00 $ 0.03(a) $ 0.00(a) $ 0.03 $ (0.03) $ 0.00
- ---------------------------------- -------------- -------------- -------------- -------------- -------------- --------------
03/31/98 1.00 0.05(a) 0.00(a) 0.05 (0.05) 0.00
- ---------------------------------- -------------- -------------- -------------- -------------- -------------- --------------
03/31/97 1.00 0.05 0.00 0.05 (0.05) 0.00
- ---------------------------------- -------------- -------------- -------------- -------------- -------------- --------------
11/01/95-03/31/96 1.00 0.02 0.00 0.02 (0.02) 0.00
- ---------------------------------- -------------- -------------- -------------- -------------- -------------- --------------
10/31/95 1.00 0.06 0.00 0.06 (0.06) 0.00
- ---------------------------------- -------------- -------------- -------------- -------------- -------------- --------------
10/31/94 1.00 0.03 0.00 0.03 (0.03) 0.00
- ---------------------------------- -------------- -------------- -------------- -------------- -------------- --------------
10/31/93 1.00 0.03 0.00 0.03 (0.03) 0.00
- ---------------------------------- -------------- -------------- -------------- -------------- -------------- --------------
Administrative Class
09/30/98 (b) 1.00 0.03(a) 0.00(a) 0.03 (0.03) 0.00
- ---------------------------------- -------------- -------------- -------------- -------------- -------------- --------------
03/31/98 1.00 0.05(a) 0.00(a) 0.05 (0.05) 0.00
- ---------------------------------- -------------- -------------- -------------- -------------- -------------- --------------
03/31/97 1.00 0.05 0.00 0.05 (0.05) 0.00
- ---------------------------------- -------------- -------------- -------------- -------------- -------------- --------------
11/01/95-03/31/96 1.00 0.02 0.00 0.02 (0.02) 0.00
- ---------------------------------- -------------- -------------- -------------- -------------- -------------- --------------
01/24/95-10/31/95 1.00 0.05 0.00 0.05 (0.05) 0.00
- ---------------------------------- -------------- -------------- -------------- -------------- -------------- --------------
StocksPLUS Fund
Institutional Class
09/30/98 (b) $ 14.09 $ 0.21(a) $ (1.18)(a) $ (0.97) $ (0.19) $ 0.00
- ---------------------------------- -------------- -------------- -------------- -------------- -------------- --------------
03/31/98 11.46 1.90(a) 3.23(a) 5.13 (1.41) 0.00
- ---------------------------------- -------------- -------------- -------------- -------------- -------------- --------------
03/31/97 11.16 1.27 0.82 2.09 (1.27) 0.00
- ---------------------------------- -------------- -------------- -------------- -------------- -------------- --------------
03/31/96 10.48 0.91 2.48 3.39 (1.05) 0.00
- ---------------------------------- -------------- -------------- -------------- -------------- -------------- --------------
03/31/95 9.52 1.03 0.69 1.72 (0.76) 0.00
- ---------------------------------- -------------- -------------- -------------- -------------- -------------- --------------
05/14/93-03/31/94 10.00 0.34 0.10 0.44 (0.34) (0.01)
- ---------------------------------- -------------- -------------- -------------- -------------- -------------- --------------
Administrative Class
09/30/98 (b) 14.06 0.16(a) (1.16)(a) (1.00) (0.18) 0.00
- ---------------------------------- -------------- -------------- -------------- -------------- -------------- --------------
03/31/98 11.46 1.89(a) 3.19(a) 5.08 (1.39) 0.00
- ---------------------------------- -------------- -------------- -------------- -------------- -------------- --------------
01/07/97-03/31/97 11.56 0.14 (0.09) 0.05 (0.15) 0.00
- ---------------------------------- -------------- -------------- -------------- -------------- -------------- --------------
Strategic Balanced Fund
Institutional Class
09/30/98 (b) $ 12.60 $ 0.16(a) $ (0.41)(a) $ (0.25) $ (0.15) $ 0.00
- ---------------------------------- -------------- -------------- -------------- -------------- -------------- --------------
03/31/98 10.32 1.30(a) 2.05(a) 3.35 (0.84) 0.00
- ---------------------------------- -------------- -------------- -------------- -------------- -------------- --------------
06/28/96-03/31/97 10.00 0.85 0.31 1.16 (0.63) 0.00
- ---------------------------------- -------------- -------------- -------------- -------------- -------------- --------------
</TABLE>
+ Annualized
(a) Per share amounts based on average number of shares outstanding during the
period.
(b) Unaudited
34 PIMCO Funds See accompanying notes
<PAGE>
<TABLE>
<CAPTION>
Distributions Distributions
from Net in Excess of Tax Basis Net Asset
Selected Per Share Data for Realized Net Realized Return of Total Value End
the Year or Period Ended: Capital Gains Capital Gains Capital Distributions of Period
--------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Money Market Fund
Institutional Class
09/30/98 (b) $ 0.00 $ 0.00 $ 0.00 $ (0.03) $ 1.00
- --------------------------------------- --------------- --------------- --------------- --------------- ---------------
03/31/98 0.00 0.00 0.00 (0.05) 1.00
- --------------------------------------- --------------- --------------- --------------- --------------- ---------------
03/31/97 0.00 0.00 0.00 (0.05) 1.00
- --------------------------------------- --------------- --------------- --------------- --------------- ---------------
11/01/95-03/31/96 0.00 0.00 0.00 (0.02) 1.00
- --------------------------------------- --------------- --------------- --------------- --------------- ---------------
10/31/95 0.00 0.00 0.00 (0.06) 1.00
- --------------------------------------- --------------- --------------- --------------- --------------- ---------------
10/31/94 0.00 0.00 0.00 (0.03) 1.00
- --------------------------------------- --------------- --------------- --------------- --------------- ---------------
10/31/93 0.00 0.00 0.00 (0.03) 1.00
- --------------------------------------- --------------- --------------- --------------- --------------- ---------------
Administrative Class
09/30/98 (b) 0.00 0.00 0.00 (0.03) 1.00
- --------------------------------------- --------------- --------------- --------------- --------------- ---------------
03/31/98 0.00 0.00 0.00 (0.05) 1.00
- --------------------------------------- --------------- --------------- --------------- --------------- ---------------
03/31/97 0.00 0.00 0.00 (0.05) 1.00
- --------------------------------------- --------------- --------------- --------------- --------------- ---------------
11/01/95-03/31/96 0.00 0.00 0.00 (0.02) 1.00
- --------------------------------------- --------------- --------------- --------------- --------------- ---------------
01/24/95-10/31/95 0.00 0.00 0.00 (0.05) 1.00
- --------------------------------------- --------------- --------------- --------------- --------------- ---------------
StocksPLUS Fund
Institutional Class
09/30/98 (b) $ 0.00 $ 0.00 $ 0.00 $ (0.19) $ 12.93
- --------------------------------------- --------------- --------------- --------------- --------------- ---------------
03/31/98 (1.09) 0.00 0.00 (2.50) 14.09
- --------------------------------------- --------------- --------------- --------------- --------------- ---------------
03/31/97 (0.52) 0.00 0.00 (1.79) 11.46
- --------------------------------------- --------------- --------------- --------------- --------------- ---------------
03/31/96 (1.62) (0.04) 0.00 (2.71) 11.16
- --------------------------------------- --------------- --------------- --------------- --------------- ---------------
03/31/95 0.00 0.00 0.00 (0.76) 10.48
- --------------------------------------- --------------- --------------- --------------- --------------- ---------------
05/14/93-03/31/94 (0.10) (0.47) 0.00 (0.92) 9.52
- --------------------------------------- --------------- --------------- --------------- --------------- ---------------
Administrative Class
09/30/98 (b) 0.00 0.00 0.00 (0.18) 12.88
- --------------------------------------- --------------- --------------- --------------- --------------- ---------------
03/31/98 (1.09) 0.00 0.00 (2.48) 14.06
- --------------------------------------- --------------- --------------- --------------- --------------- ---------------
01/07/97-03/31/97 0.00 0.00 0.00 (0.15) 11.46
- --------------------------------------- --------------- --------------- --------------- --------------- ---------------
Strategic Balanced Fund
Institutional Class
09/30/98 (b) $ 0.00 $ 0.00 $ 0.00 $ (0.15) $ 12.20
- --------------------------------------- --------------- --------------- --------------- --------------- ---------------
03/31/98 (0.23) 0.00 0.00 (1.07) 12.60
- --------------------------------------- --------------- --------------- --------------- --------------- ---------------
06/28/96-03/31/97 (0.21) 0.00 0.00 (0.84) 10.32
- --------------------------------------- --------------- --------------- --------------- --------------- ---------------
<CAPTION>
Ratio of Net
Ratio of Investment
Expenses to Income to
Selected Per Share Data for Net Assets End Average Net Average Net Portfolio
the Year or Period Ended: Total Return of Period (000s) Assets Assets Turnover Rate
--------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Money Market Fund
Institutional Class
09/30/98 (b) 2.66% $ 47,902 0.35%+ 5.27%+ N/A
- --------------------------------------- --------------- --------------- --------------- --------------- ---------------
03/31/98 5.40 55,335 0.35 5.29 N/A
- --------------------------------------- --------------- --------------- --------------- --------------- ---------------
03/31/97 5.19 23,497 0.40 5.08 N/A
- --------------------------------------- --------------- --------------- --------------- --------------- ---------------
11/01/95-03/31/96 2.58 25,935 0.33+ 5.44+ N/A
- --------------------------------------- --------------- --------------- --------------- --------------- ---------------
10/31/95 5.67 7,741 0.40 5.53 N/A
- --------------------------------------- --------------- --------------- --------------- --------------- ---------------
10/31/94 3.53 7,454 0.40 3.52 N/A
- --------------------------------------- --------------- --------------- --------------- --------------- ---------------
10/31/93 2.83 5,836 0.40 2.78 N/A
- --------------------------------------- --------------- --------------- --------------- --------------- ---------------
Administrative Class
09/30/98 (b) 2.57 2,428 0.60+ 4.98+ N/A
- --------------------------------------- --------------- --------------- --------------- --------------- ---------------
03/31/98 5.12 749 0.60 5.04 N/A
- --------------------------------------- --------------- --------------- --------------- --------------- ---------------
03/31/97 4.94 12 0.66 4.83 N/A
- --------------------------------------- --------------- --------------- --------------- --------------- ---------------
11/01/95-03/31/96 2.47 10 0.61+ 5.95+ N/A
- --------------------------------------- --------------- --------------- --------------- --------------- ---------------
01/24/95-10/31/95 4.21 10 0.68+ 5.94+ N/A
- --------------------------------------- --------------- --------------- --------------- --------------- ---------------
StocksPLUS Fund
Institutional Class
09/30/98 (b) (6.99)% $421,977 0.65%+ 3.01%+ 63%
- --------------------------------------- --------------- --------------- --------------- --------------- ---------------
03/31/98 47.75 416,600 0.65 13.74 30
- --------------------------------------- --------------- --------------- --------------- --------------- ---------------
03/31/97 19.44 235,829 0.65 11.78 47
- --------------------------------------- --------------- --------------- --------------- --------------- ---------------
03/31/96 34.07 151,869 0.70 15.23 102
- --------------------------------------- --------------- --------------- --------------- --------------- ---------------
03/31/95 18.64 46,498 0.50 11.89 177
- --------------------------------------- --------------- --------------- --------------- --------------- ---------------
05/14/93-03/31/94 1.55 14,330 0.50+ 4.00+ 33
- --------------------------------------- --------------- --------------- --------------- --------------- ---------------
Administrative Class
09/30/98 (b) (7.22) 3,889 0.90+ 2.25+ 63
- --------------------------------------- --------------- --------------- --------------- --------------- ---------------
03/31/98 47.19 2,143 0.90 13.49 30
- --------------------------------------- --------------- --------------- --------------- --------------- ---------------
01/07/97-03/31/97 0.34 682 0.95+ 4.83+ 47
- --------------------------------------- --------------- --------------- --------------- --------------- ---------------
Strategic Balanced Fund
Institutional Class
09/30/98 (b) (2.00)% $ 37,747 0.65%+ 2.52%+ 21%
- --------------------------------------- --------------- --------------- --------------- --------------- ---------------
03/31/98 33.40 38,806 0.65 10.84 56
- --------------------------------------- --------------- --------------- --------------- --------------- ---------------
06/28/96-03/31/97 11.83 10,360 0.90+ 9.72+ 95
- --------------------------------------- --------------- --------------- --------------- --------------- ---------------
</TABLE>
1998 Semi-Annual Report See accompanying notes 35
<PAGE>
Statement of Assets and Liabilities
September 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
Low
Amounts in thousands, Total Total Total Return Total Return Moderate Duration
except per share amounts Return Fund Return Fund II Fund III Mortgage Fund Duration Fund Fund
-------------- -------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Assets:
Investments, at value $ 27,642,164 $ 1,048,189 $ 530,544 $ 4,400 $ 307,065 $ 4,095,023
- ---------------------------------------- -------------- -------------- ------------- ------------- ------------- -------------
Cash and foreign currency 38,121 34,450 0 1 1,321 16,995
- ---------------------------------------- -------------- -------------- ------------- ------------- ------------- -------------
Receivable for investments and foreign
currency sold 41,842 868 874 2 60 13,661
- ---------------------------------------- -------------- -------------- ------------- ------------- ------------- -------------
Receivable for Fund shares sold 84,686 1,191 7 0 150 45,520
- ---------------------------------------- -------------- -------------- ------------- ------------- ------------- -------------
Variation margin receivable 66,083 2,910 1,771 0 642 2,434
- ---------------------------------------- -------------- -------------- ------------- ------------- ------------- -------------
Interest and dividends receivable 231,555 8,426 4,784 38 2,685 37,315
- ---------------------------------------- -------------- -------------- ------------- ------------- ------------- -------------
Other assets 0 699 0 2 26 4,259
- ---------------------------------------- -------------- -------------- ------------- ------------- ------------- -------------
28,104,451 1,096,733 537,980 4,443 311,949 4,215,207
======================================== ============== ============== ============= ============= ============= =============
Liabilities:
Payable for investments and foreign
currency purchased $ 5,368,211 $ 171,987 $ 91,179 $ 567 $ 54,617 $ 683,192
- ---------------------------------------- -------------- -------------- ------------- ------------- ------------- -------------
Notes payable 0 0 0 0 0 0
- ---------------------------------------- -------------- -------------- ------------- ------------- ------------- -------------
Written options outstanding 51,236 1,560 1,791 0 0 3,013
- ---------------------------------------- -------------- -------------- ------------- ------------- ------------- -------------
Payable for Fund shares redeemed 260,212 256 49 0 8 32,120
- ---------------------------------------- -------------- -------------- ------------- ------------- ------------- -------------
Dividends payable 23,550 342 213 0 1 3,101
- ---------------------------------------- -------------- -------------- ------------- ------------- ------------- -------------
Accrued investment advisor's fee 4,684 191 90 1 52 721
- ---------------------------------------- -------------- -------------- ------------- ------------- ------------- -------------
Accrued administrator's fee 3,668 191 90 1 42 570
- ---------------------------------------- -------------- -------------- ------------- ------------- ------------- -------------
Accrued distribution fee 729 11 0 0 0 80
- ---------------------------------------- -------------- -------------- ------------- ------------- ------------- -------------
Accrued servicing fee 336 0 0 0 0 58
- ---------------------------------------- -------------- -------------- ------------- ------------- ------------- -------------
Variation margin payable 0 0 0 0 0 0
- ---------------------------------------- -------------- -------------- ------------- ------------- ------------- -------------
Other liabilities 25,762 0 358 0 0 149
- ---------------------------------------- -------------- -------------- ------------- ------------- ------------- -------------
5,738,388 174,538 93,770 569 54,720 723,004
======================================== ============== ============== ============= ============= ============= =============
Net Assets $ 22,366,063 $ 922,195 $ 444,210 $ 3,874 $ 257,229 $ 3,492,203
======================================== ============== ============== ============= ============= ============= =============
Net Assets Consist of:
Paid in capital $ 21,160,678 $ 869,110 $ 421,411 $ 3,714 $ 248,199 $ 3,430,476
- ---------------------------------------- -------------- -------------- ------------- ------------- ------------- -------------
Undistributed (overdistributed) net
investment income 111,594 2,268 1,691 24 560 802
- ---------------------------------------- -------------- -------------- ------------- ------------- ------------- -------------
Accumulated undistributed net realized
gain (loss) 609,836 17,520 11,321 12 3,300 (535)
- ---------------------------------------- -------------- -------------- ------------- ------------- ------------- -------------
Net unrealized appreciation (depreciation) 483,955 33,297 9,787 124 5,170 61,460
- ---------------------------------------- -------------- -------------- ------------- ------------- ------------- -------------
$ 22,366,063 $ 922,195 $ 444,210 $ 3,874 $ 257,229 $ 3,492,203
======================================== ============== ============== ============= ============= ============= =============
Net Assets:
Institutional Class $ 19,607,819 $ 862,092 $ 442,417 $ 3,770 $ 257,229 $ 3,050,047
- ---------------------------------------- -------------- -------------- ------------- ------------- ------------- -------------
Administrative Class 1,107,029 60,103 1,793 0 0 146,633
- ---------------------------------------- -------------- -------------- ------------- ------------- ------------- -------------
Other Classes 1,651,215 0 0 104 0 295,523
- ---------------------------------------- -------------- -------------- ------------- ------------- ------------- -------------
Shares Issued and Outstanding:
Institutional Class 1,768,206 79,791 44,388 360 24,610 296,507
- ---------------------------------------- -------------- -------------- ------------- ------------- ------------- -------------
Administrative Class 99,831 5,563 180 0 0 14,255
- ---------------------------------------- -------------- -------------- ------------- ------------- ------------- -------------
Net Asset Value and Redemption
Price Per Share
(Net Assets Per Share Outstanding):
Institutional Class $ 11.09 $ 10.80 $ 9.97 $ 10.46 $ 10.45 $ 10.29
- ---------------------------------------- -------------- -------------- ------------- ------------- ------------- -------------
Administrative Class 11.09 10.80 9.97 0.00 0.00 10.29
- ---------------------------------------- -------------- -------------- ------------- ------------- ------------- -------------
Cost of Investments Owned $ 27,332,479 $ 1,025,824 $ 526,002 $ 4,278 $ 304,619 $ 4,054,100
======================================== ============== ============== ============= ============= ============= =============
Cost of Foreign Currency Held $ 37,146 $ 0 $ 246 $ 0 $ 1,235 $ 6,149
======================================== ============== ============== ============= ============= ============= =============
</TABLE>
36 PIMCO Funds See accompanying notes
<PAGE>
Statement of Assets and Liabilities
September 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
Amounts in thousands, Low Low Low Duration Long-Term
except per share amounts Duration Fund II Duration Fund III Mortgage Fund Short-Term Fund U.S. Gov't Fund
----------------- ------------------ -------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Assets:
Investments, at value $ 491,842 $ 26,874 $ 5,331 $ 414,245 $ 306,246
- ----------------------------------------- ----------------- ------------------ -------------- --------------- ---------------
Cash and foreign currency 0 1 0 0 2,970
- ----------------------------------------- ----------------- ------------------ -------------- --------------- ---------------
Receivable for investments and
foreign currency sold 5,575 77 0 2,777 59,539
- ----------------------------------------- ----------------- ------------------ -------------- --------------- ---------------
Receivable for Fund shares sold 3 149 0 4,703 2,319
- ----------------------------------------- ----------------- ------------------ -------------- --------------- ---------------
Variation margin receivable 270 35 0 7 0
- ----------------------------------------- ----------------- ------------------ -------------- --------------- ---------------
Interest and dividends receivable 3,625 180 29 3,512 3,158
- ----------------------------------------- ----------------- ------------------ -------------- --------------- ---------------
Other assets 498 0 1 251 0
- ----------------------------------------- ----------------- ------------------ -------------- --------------- ---------------
501,813 27,316 5,361 425,495 374,232
========================================= ================= ================== ============== =============== ===============
Liabilities:
Payable for investments and foreign
currency purchased $ 74,655 $ 2,727 $ 201 $ 22,739 $ 179,196
- ----------------------------------------- ----------------- ------------------ -------------- --------------- ---------------
Notes payable 6,494 0 1,242 0 28
- ----------------------------------------- ----------------- ------------------ -------------- --------------- ---------------
Written options outstanding 0 0 0 0 0
- ----------------------------------------- ----------------- ------------------ -------------- --------------- ---------------
Payable for Fund shares redeemed 40 0 1 522 366
- ----------------------------------------- ----------------- ------------------ -------------- --------------- ---------------
Dividends payable 138 0 0 241 164
- ----------------------------------------- ----------------- ------------------ -------------- --------------- ---------------
Accrued investment advisor's fee 88 5 1 102 38
- ----------------------------------------- ----------------- ------------------ -------------- --------------- ---------------
Accrued administrator's fee 88 5 1 90 45
- ----------------------------------------- ----------------- ------------------ -------------- --------------- ---------------
Accrued distribution fee 3 0 0 5 28
- ----------------------------------------- ----------------- ------------------ -------------- --------------- ---------------
Accrued servicing fee 0 0 0 14 12
- ----------------------------------------- ----------------- ------------------ -------------- --------------- ---------------
Variation margin payable 0 0 0 0 0
- ----------------------------------------- ----------------- ------------------ -------------- --------------- ---------------
Other liabilities 50 0 1 3 15
- ----------------------------------------- ----------------- ------------------ -------------- --------------- ---------------
81,556 2,737 1,447 23,716 179,892
- ----------------------------------------- ----------------- ------------------ -------------- --------------- ---------------
Net Assets $ 420,257 $ 24,579 $ 3,914 $ 401,779 $ 194,340
========================================= ================= ================== ============== =============== ===============
Net Assets Consist of:
Paid in capital $ 411,874 $ 24,284 $ 3,820 $ 401,406 $ 179,041
- ----------------------------------------- ----------------- ------------------ -------------- --------------- ---------------
Undistributed (overdistributed) net
investment income 48 22 15 696 613
- ----------------------------------------- ----------------- ------------------ -------------- --------------- ---------------
Accumulated undistributed net
realized gain (loss) 73 (133) (13) (325) 3,160
- ----------------------------------------- ----------------- ------------------ -------------- --------------- ---------------
Net unrealized appreciation
(depreciation) 8,262 406 92 2 11,526
- ----------------------------------------- ----------------- ------------------ -------------- --------------- ---------------
$ 420,257 $ 24,579 $ 3,914 $ 401,779 $ 194,340
========================================= ================= ================== ============== =============== ===============
Net Assets:
Institutional Class $ 412,547 $ 24,579 $ 3,914 $ 334,079 $ 123,647
- ----------------------------------------- ----------------- ------------------ -------------- --------------- ---------------
Administrative Class 7,710 0 0 1,774 5,312
- ----------------------------------------- ----------------- ------------------ -------------- --------------- ---------------
Other Classes 0 0 0 65,926 65,381
- ----------------------------------------- ----------------- ------------------ -------------- --------------- ---------------
Shares Issued and Outstanding:
Institutional Class 40,588 2,422 381 33,260 10,623
- ----------------------------------------- ----------------- ------------------ -------------- --------------- ---------------
Administrative Class 759 0 0 176 456
- ----------------------------------------- ----------------- ------------------ -------------- --------------- ---------------
Net Asset Value and Redemption
Price Per Share
(Net Assets Per Share Outstanding):
Institutional Class $ 10.16 $ 10.15 $ 10.27 $ 10.04 $ 11.64
- ----------------------------------------- ----------------- ------------------ -------------- --------------- ---------------
Administrative Class 10.16 0.00 0.00 10.04 11.64
- ----------------------------------------- ----------------- ------------------ -------------- --------------- ---------------
Cost of Investments Owned $ 485,932 $ 26,671 $ 5,239 $ 414,568 $ 294,760
========================================= ================= ================== ============== =============== ===============
Cost of Foreign Currency Held $ 0 $ 0 $ 0 $ 0 $ 0
========================================= ================= ================== ============== =============== ===============
<CAPTION>
Amounts in thousands, Real Return Foreign Global Global
except per share amounts Bond Fund Bond Fund Bond Fund Bond Fund II
--------------- ----------------- --------------- ---------------
<S> <C> <C> <C> <C>
Assets:
Investments, at value $ 18,908 $ 1,020,068 $ 451,358 $ 71,224
- -------------------------------------------------------- --------------- ----------------- --------------- ---------------
Cash and foreign currency 12 2,514 1,613 240
- -------------------------------------------------------- --------------- ----------------- --------------- ---------------
Receivable for investments and foreign currency sold 1,327 226,285 74,477 5,474
- -------------------------------------------------------- --------------- ----------------- --------------- ---------------
Receivable for Fund shares sold 47 1,412 64 1
- -------------------------------------------------------- --------------- ----------------- --------------- ---------------
Variation margin receivable 0 0 141 0
- -------------------------------------------------------- --------------- ----------------- --------------- ---------------
Interest and dividends receivable 127 21,098 11,294 1,118
- -------------------------------------------------------- --------------- ----------------- --------------- ---------------
Other assets 20 1,226 516 85
- -------------------------------------------------------- --------------- ----------------- --------------- ---------------
20,441 1,272,603 539,463 78,142
======================================================== =============== ================= =============== ===============
Liabilities:
Payable for investments and foreign currency purchased $ 9,386 $ 709,019 $ 262,079 $ 36,051
- -------------------------------------------------------- --------------- ----------------- --------------- ---------------
Notes payable 0 0 0 0
- -------------------------------------------------------- --------------- ----------------- --------------- ---------------
Written options outstanding 1 0 0 0
- -------------------------------------------------------- --------------- ----------------- --------------- ---------------
Payable for Fund shares redeemed 8 1,233 79 86
- -------------------------------------------------------- --------------- ----------------- --------------- ---------------
Dividends payable 10 606 330 13
- -------------------------------------------------------- --------------- ----------------- --------------- ---------------
Accrued investment advisor's fee 2 115 56 9
- -------------------------------------------------------- --------------- ----------------- --------------- ---------------
Accrued administrator's fee 3 127 67 13
- -------------------------------------------------------- --------------- ----------------- --------------- ---------------
Accrued distribution fee 3 26 0 7
- -------------------------------------------------------- --------------- ----------------- --------------- ---------------
Accrued servicing fee 1 14 0 3
- -------------------------------------------------------- --------------- ----------------- --------------- ---------------
Variation margin payable 0 0 0 0
- -------------------------------------------------------- --------------- ----------------- --------------- ---------------
Other liabilities 0 159 0 3
- -------------------------------------------------------- --------------- ----------------- --------------- ---------------
9,414 711,299 262,611 36,185
- -------------------------------------------------------- --------------- ----------------- --------------- ---------------
Net Assets $ 11,027 $ 561,304 $ 276,852 $ 41,957
======================================================== =============== ================= =============== ===============
Net Assets Consist of:
Paid in capital $ 10,998 $ 533,190 $ 275,595 $ 41,818
- -------------------------------------------------------- --------------- ----------------- --------------- ---------------
Undistributed (overdistributed) net investment income 0 21,778 (4,446) 158
- -------------------------------------------------------- --------------- ----------------- --------------- ---------------
Accumulated undistributed net realized gain (loss) (129) (2,617) (1,351) 150
- -------------------------------------------------------- --------------- ----------------- --------------- ---------------
Net unrealized appreciation (depreciation) 158 8,953 7,054 (169)
- -------------------------------------------------------- --------------- ----------------- --------------- ---------------
$ 11,027 $ 561,304 $ 276,852 $ 41,957
======================================================== =============== ================= =============== ===============
Net Assets:
Institutional Class $ 5,790 $ 491,207 $ 275,923 $ 27,426
- -------------------------------------------------------- --------------- ----------------- --------------- ---------------
Administrative Class 0 1,547 929 0
- -------------------------------------------------------- --------------- ----------------- --------------- ---------------
Other Classes 5,237 68,550 0 14,531
- -------------------------------------------------------- --------------- ----------------- --------------- ---------------
Shares Issued and Outstanding:
Institutional Class 584 44,837 27,200 2,736
- -------------------------------------------------------- --------------- ----------------- --------------- ---------------
Administrative Class 0 141 92 0
- -------------------------------------------------------- --------------- ----------------- --------------- ---------------
Net Asset Value and Redemption Price Per Share
(Net Assets Per Share Outstanding):
Institutional Class $ 9.92 $ 10.95 $ 10.15 $ 10.03
- -------------------------------------------------------- --------------- ----------------- --------------- ---------------
Administrative Class 0.00 10.95 10.15 0.00
- -------------------------------------------------------- --------------- ----------------- --------------- ---------------
Cost of Investments Owned $ 18,821 $ 997,628 $ 446,009 $ 70,816
======================================================== =============== ================= =============== ===============
Cost of Foreign Currency Held $ 0 $ 1,165 $ 1,593 $ 22
======================================================== =============== ================= =============== ===============
</TABLE>
1998 Semi-Annual Report See accompanying notes 37
<PAGE>
Statement of Assets and Liabilities (Cont.)
September 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
Emerging
Amounts in thousands, Markets Municipal Money StocksPLUS Strategic
except per share amounts Bond Fund High Yield Fund Bond Fund Market Fund Fund Balanced Fund
---------- ---------------- ---------- ------------ ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Assets:
Investments, at value $ 4,477 $ 2,460,519 $ 56,148 $ 268,728 $ 879,983 $ 41,219
- ------------------------------------------------ ---------- ---------------- ---------- ------------ ----------- -------------
Cash and foreign currency 507 661 58 216 0 26
- ------------------------------------------------ ---------- ---------------- ---------- ------------ ----------- -------------
Receivable for investments and foreign
currency sold 0 211 104 0 1,911 19
- ------------------------------------------------ ---------- ---------------- ---------- ------------ ----------- -------------
Receivable for Fund shares sold 0 9,767 311 18,788 3,021 0
- ------------------------------------------------ ---------- ---------------- ---------- ------------ ----------- -------------
Variation margin receivable 2 0 0 0 0 0
- ------------------------------------------------ ---------- ---------------- ---------- ------------ ----------- -------------
Interest and dividends receivable 108 48,317 787 29 11,804 689
- ------------------------------------------------ ---------- ---------------- ---------- ------------ ----------- -------------
Other assets 2 0 0 0 553 1
- ------------------------------------------------ ---------- ---------------- ---------- ------------ ----------- -------------
5,096 2,519,475 57,408 287,761 897,272 41,954
================================================ ========== ================ ========== ============ =========== =============
Liabilities:
Payable for investments and foreign currency
purchased $ 1,543 $ 43,306 $ 105 $ 0 $ 94,613 $ 3,618
- ------------------------------------------------ ---------- ---------------- ---------- ------------ ----------- -------------
Notes payable 0 0 0 0 0 0
- ------------------------------------------------ ---------- ---------------- ---------- ------------ ----------- -------------
Written options outstanding 0 0 0 0 0 0
- ------------------------------------------------ ---------- ---------------- ---------- ------------ ----------- -------------
Payable for Fund shares redeemed 0 1,589 28 13,003 812 0
- ------------------------------------------------ ---------- ---------------- ---------- ------------ ----------- -------------
Dividends payable 5 2,613 44 156 0 0
- ------------------------------------------------ ---------- ---------------- ---------- ------------ ----------- -------------
Accrued investment advisor's fee 1 508 12 31 260 13
- ------------------------------------------------ ---------- ---------------- ---------- ------------ ----------- -------------
Accrued administrator's fee 1 577 16 65 206 8
- ------------------------------------------------ ---------- ---------------- ---------- ------------ ----------- -------------
Accrued distribution fee 0 318 19 8 142 0
- ------------------------------------------------ ---------- ---------------- ---------- ------------ ----------- -------------
Accrued servicing fee 0 115 10 18 73 0
- ------------------------------------------------ ---------- ---------------- ---------- ------------ ----------- -------------
Variation margin payable 0 0 0 0 20,667 470
- ------------------------------------------------ ---------- ---------------- ---------- ------------ ----------- -------------
Other liabilities 4 316 14 55 43 0
- ------------------------------------------------ ---------- ---------------- ---------- ------------ ----------- -------------
1,554 49,342 248 13,336 116,816 4,109
================================================ ========== ================ ========== ============ =========== =============
Net Assets $ 3,542 $ 2,470,133 $ 57,160 $ 274,425 $ 780,456 $ 37,845
================================================ ========== ================ ========== ============ =========== =============
Net Assets Consist of:
Paid in capital $ 5,067 $ 2,565,118 $ 53,651 $ 274,406 $ 763,123 $ 35,038
- ------------------------------------------------ ---------- ---------------- ---------- ------------ ----------- -------------
Undistributed (overdistributed) net investment
income 27 (2,527) (1) 19 43,968 2,037
- ------------------------------------------------ ---------- ---------------- ---------- ------------ ----------- -------------
Accumulated undistributed net realized gain
(loss) (665) (45,696) 14 0 (29,410) (37)
- ------------------------------------------------ ---------- ---------------- ---------- ------------ ----------- -------------
Net unrealized appreciation (depreciation) (887) (46,762) 3,496 0 2,775 807
- ------------------------------------------------ ---------- ---------------- ---------- ------------ ----------- -------------
$ 3,542 $ 2,470,133 $ 57,160 $ 274,425 $ 780,456 $ 37,845
================================================ ========== ================ ========== ============ =========== =============
Net Assets:
Institutional Class $ 3,106 $ 1,795,413 $ 6,375 $ 47,902 $ 421,977 $ 37,747
- ------------------------------------------------ ---------- ---------------- ---------- ------------ ----------- -------------
Administrative Class 0 118,773 100 2,428 3,889 0
- ------------------------------------------------ ---------- ---------------- ---------- ------------ ----------- -------------
Other Classes 436 555,947 50,685 224,095 354,590 98
- ------------------------------------------------ ---------- ---------------- ---------- ------------ ----------- -------------
Shares Issued and Outstanding:
Institutional Class 455 161,087 622 47,902 32,654 3,093
- ------------------------------------------------ ---------- ---------------- ---------- ------------ ----------- -------------
Administrative Class 0 10,657 10 2,428 302 0
- ------------------------------------------------ ---------- ---------------- ---------- ------------ ----------- -------------
Net Asset Value and Redemption Price Per Share
(Net Assets Per Share Outstanding):
Institutional Class $ 6.82 $ 11.15 $ 10.25 $ 1.00 $ 12.93 $ 12.20
- ------------------------------------------------ ---------- ---------------- ---------- ------------ ----------- -------------
Administrative Class 0.00 11.15 10.25 1.00 12.88 0.00
- ------------------------------------------------ ---------- ---------------- ---------- ------------ ----------- -------------
Cost of Investments Owned $ 5,373 $ 2,507,419 $ 52,652 $ 268,728 $ 882,845 $ 40,914
================================================ ========== ================ ========== ============ =========== =============
Cost of Foreign Currency Held $ 0 $ 0 $ 0 $ 0 $ 1,867 $ 25
================================================ ========== ================ ========== ============ =========== =============
</TABLE>
38 PIMCO Funds See accompanying notes
<PAGE>
Statement of Operations
For the six months ended September 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
Total Total Total Total Return Moderate Low
Amounts in thousands Return Fund Return Fund II Return Fund III Mortgage Fund Duration Fund Duration Fund
------------ ---------------- ---------------- -------------- --------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Investment Income:
Interest $ 664,267 $ 22,890 $ 12,532 $ 116 $ 8,583 $ 111,564
- --------------------------------- ------------ ---------------- ---------------- -------------- --------------- --------------
Dividends 1,887 0 80 0 68 1,546
- --------------------------------- ------------ ---------------- ---------------- -------------- --------------- --------------
Total Income 666,154 22,890 12,612 116 8,651 113,110
================================= ============ ================ ================ ============== =============== ==============
Expenses:
Investment advisory fees 25,346 911 488 5 341 4,069
- --------------------------------- ------------ ---------------- ---------------- -------------- --------------- --------------
Administration fees 19,734 911 488 5 272 3,192
- --------------------------------- ------------ ---------------- ---------------- -------------- --------------- --------------
Distribution and/or servicing
fees - Administrative Class 899 42 1 0 0 124
- --------------------------------- ------------ ---------------- ---------------- -------------- --------------- --------------
Distribution and/or servicing
fees - Other Classes 4,279 0 0 0 0 588
- --------------------------------- ------------ ---------------- ---------------- -------------- --------------- --------------
Trustees' fees 77 3 1 0 1 12
- --------------------------------- ------------ ---------------- ---------------- -------------- --------------- --------------
Interest expense 0 0 0 0 0 0
- --------------------------------- ------------ ---------------- ---------------- -------------- --------------- --------------
Miscellaneous 24 4 1 0 0 6
- --------------------------------- ------------ ---------------- ---------------- -------------- --------------- --------------
Total Expenses 50,359 1,871 979 10 614 7,991
- --------------------------------- ------------ ---------------- ---------------- -------------- --------------- --------------
Net Investment Income 615,795 21,019 11,633 106 8,037 105,119
================================= ============ ================ ================ ============== =============== ==============
Net Realized and Unrealized Gain
(Loss):
Net realized gain (loss) on
investments 64,756 1,452 73 17 994 (8,258)
- --------------------------------- ------------ ---------------- ---------------- -------------- --------------- --------------
Net realized gain (loss) on
futures contracts and
written options 462,352 13,825 10,010 0 2,127 5,063
- --------------------------------- ------------ ---------------- ---------------- -------------- --------------- --------------
Net realized gain (loss) on
foreign currency transactions 42,579 0 572 0 377 2,676
- --------------------------------- ------------ ---------------- ---------------- -------------- --------------- --------------
Net change in unrealized
appreciation (depreciation)
on investments 166,622 15,813 1,019 63 1,061 20,497
- --------------------------------- ------------ ---------------- ---------------- -------------- --------------- --------------
Net change in unrealized
appreciation (depreciation)
on futures contracts and
written options 208,283 11,304 5,337 0 3,679 15,929
- --------------------------------- ------------ ---------------- ---------------- -------------- --------------- --------------
Net change in unrealized
appreciation (depreciation)
on translation of assets and
liabilities denominated
in foreign currencies (16,194) 0 373 0 (537) 93
- --------------------------------- ------------ ---------------- ---------------- -------------- --------------- --------------
Net Gain (Loss) 928,398 42,394 17,384 80 7,701 36,000
- --------------------------------- ------------ ---------------- ---------------- -------------- --------------- --------------
Net Increase in Assets
Resulting from Operations $ 1,544,193 $ 63,413 $ 29,017 $ 186 $ 15,738 $ 141,119
================================= ============ ================ ================ ============== =============== ==============
</TABLE>
1998 Semi-Annual Report See accompanying notes 39
<PAGE>
Statement of Operations (Cont.)
For the six months ended September 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
Low Duration Low Duration Low Duration Short-Term Long-Term U.S. Real Return
Amounts in thousands Fund II Fund III Mortgage Fund Fund Gov't Fund Bond Fund
------------ ------------ ------------- ---------- -------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Investment Income:
Interest $ 13,170 $ 783 $ 177 $ 13,399 $ 3,925 $ 345
- ------------------------------------------ ------------ ------------ ------------- ---------- -------------- -----------
Dividends 0 0 0 0 0 0
- ------------------------------------------ ------------ ------------ ------------- ---------- -------------- -----------
Total Income 13,170 783 177 13,399 3,925 345
========================================== ============ ============ ============= ========== ============== ===========
Expenses:
Investment advisory fees 509 30 5 538 139 14
- ------------------------------------------ ------------ ------------ ------------- ---------- -------------- -----------
Administration fees 509 30 5 465 165 17
- ------------------------------------------ ------------ ------------ ------------- ---------- -------------- -----------
Distribution and/or servicing fees -
Administrative Class 3 0 0 4 6 0
- ------------------------------------------ ------------ ------------ ------------- ---------- -------------- -----------
Distribution and/or servicing fees -
Other Classes 0 0 0 78 137 21
- ------------------------------------------ ------------ ------------ ------------- ---------- -------------- -----------
Trustees' fees 2 0 0 2 0 0
- ------------------------------------------ ------------ ------------ ------------- ---------- -------------- -----------
Interest expense 104 0 43 0 20 0
- ------------------------------------------ ------------ ------------ ------------- ---------- -------------- -----------
Miscellaneous 3 1 0 0 0 1
- ------------------------------------------ ------------ ------------ ------------- ---------- -------------- -----------
Total Expenses 1,130 61 53 1,087 467 53
- ------------------------------------------ ------------ ------------ ------------- ---------- -------------- -----------
Net Investment Income 12,040 722 124 12,312 3,458 292
========================================== ============ ============ ============= ========== ============== ===========
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on investments 149 (217) (13) (738) 2,354 (51)
- ------------------------------------------ ------------ ------------ ------------- ---------- -------------- -----------
Net realized gain (loss) on
futures contracts and written options 222 97 0 27 345 (3)
- ------------------------------------------ ------------ ------------ ------------- ---------- -------------- -----------
Net realized gain (loss) on
foreign currency transactions 0 0 0 471 0 (9)
- ------------------------------------------ ------------ ------------ ------------- ---------- -------------- -----------
Net change in unrealized appreciation
(depreciation) on investments 4,533 148 64 (454) 10,074 188
- ------------------------------------------ ------------ ------------ ------------- ---------- -------------- -----------
Net change in unrealized appreciation
(depreciation) on futures contracts
and written options 1,888 205 0 13 0 54
- ------------------------------------------ ------------ ------------ ------------- ---------- -------------- -----------
Net change in unrealized appreciation
(depreciation) on translation of
assets and liabilities denominated
in foreign currencies 0 0 0 (119) 0 (10)
- ------------------------------------------ ------------ ------------ ------------- ---------- -------------- -----------
Net Gain (Loss) 6,792 233 51 (800) 12,773 169
- ------------------------------------------ ------------ ------------ ------------- ---------- -------------- -----------
Net Increase (Decrease) in Assets
Resulting from Operations $ 18,832 $ 955 $ 175 $ 11,512 $ 16,231 $ 461
========================================== ============ ============ ============= ========== ============== ===========
</TABLE>
40 PIMCO Funds See accompanying notes
<PAGE>
<TABLE>
<CAPTION>
Emerging
Foreign Global Global Bond Markets High Yield
Amounts in thousands Bond Fund Bond Fund Fund II Bond Fund Fund
------------ ------------ ------------- ---------- --------------
<S> <C> <C> <C> <C> <C>
Investment Income:
Interest $ 16,223 $ 8,321 $ 1,369 $ 222 $ 105,276
- ------------------------------------------------------ ------------ ------------ ------------- ---------- --------------
Dividends 0 0 0 0 2,634
- ------------------------------------------------------ ------------ ------------ ------------- ---------- --------------
Total Income 16,223 8,321 1,369 222 107,910
====================================================== ============ ============ ============= ========== ==============
Expenses:
Investment advisory fees 621 330 54 10 3,040
- ------------------------------------------------------ ------------ ------------ ------------- ---------- --------------
Administration fees 673 396 78 9 3,449
- ------------------------------------------------------ ------------ ------------ ------------- ---------- --------------
Distribution and/or servicing fees - Administrative
Class 1 1 0 0 117
- ------------------------------------------------------ ------------ ------------ ------------- ---------- --------------
Distribution and/or servicing fees - Other Classes 195 1 62 2 2,439
- ------------------------------------------------------ ------------ ------------ ------------- ---------- --------------
Trustees' fees 2 1 0 0 9
- ------------------------------------------------------ ------------ ------------ ------------- ---------- --------------
Interest expense 0 0 0 0 0
- ------------------------------------------------------ ------------ ------------ ------------- ---------- --------------
Miscellaneous 7 7 0 2 0
- ------------------------------------------------------ ------------ ------------ ------------- ---------- --------------
Total Expenses 1,499 736 194 23 9,054
- ------------------------------------------------------ ------------ ------------ ------------- ---------- --------------
Net Investment Income 14,724 7,585 1,175 199 98,856
====================================================== ============ ============ ============= ========== ==============
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on investments 10,754 5,415 443 (478) 10,386
- ------------------------------------------------------ ------------ ------------ ------------- ---------- --------------
Net realized gain (loss) on
futures contracts and written options 2,452 2,161 845 7 0
- ------------------------------------------------------ ------------ ------------ ------------- ---------- --------------
Net realized gain (loss) on
foreign currency transactions (15,760) (8,941) (1,126) 1 0
- ------------------------------------------------------ ------------ ------------ ------------- ---------- --------------
Net change in unrealized appreciation
(depreciation) on investments 32,061 11,279 1,011 (983) (122,256)
- ------------------------------------------------------ ------------ ------------ ------------- ---------- --------------
Net change in unrealized appreciation (depreciation)
on futures contracts and written options (280) 899 (58) 8 0
- ------------------------------------------------------ ------------ ------------ ------------- ---------- --------------
Net change in unrealized appreciation (depreciation)
on translation of assets and liabilities
denominated in foreign currencies (19,860) 1,008 (705) (1) 0
- ------------------------------------------------------ ------------ ------------ ------------- ---------- --------------
Net Gain (Loss) 9,367 11,821 410 (1,446) (111,870)
- ------------------------------------------------------ ------------ ------------ ------------- ---------- --------------
Net Increase (Decrease) in Assets
Resulting from Operations $ 24,091 $ 19,406 $ 1,585 $ (1,247) $ (13,014)
====================================================== ============ ============ ============= ========== ==============
<CAPTION>
Strategic
Municipal Money StocksPLUS Balanced
Amounts in thousands Bond Fund Market Fund Fund Fund
------------ ------------ ------------- ----------
<S> <C> <C> <C> <C>
Investment Income:
Interest $ 722 $ 5,913 $ 13,025 $ 621
- ------------------------------------------------------ ------------ ------------ ------------- ----------
Dividends 0 0 0 0
- ------------------------------------------------------ ------------ ------------ ------------- ----------
Total Income 722 5,913 13,025 621
====================================================== ============ ============ ============= ==========
Expenses:
Investment advisory fees 37 155 1,492 78
- ------------------------------------------------------ ------------ ------------ ------------- ----------
Administration fees 49 325 1,170 50
- ------------------------------------------------------ ------------ ------------ ------------- ----------
Distribution and/or servicing fees - Administrative
Class 0 2 3 0
- ------------------------------------------------------ ------------ ------------ ------------- ----------
Distribution and/or servicing fees - Other Classes 88 104 1,159 0
- ------------------------------------------------------ ------------ ------------ ------------- ----------
Trustees' fees 1 1 3 0
- ------------------------------------------------------ ------------ ------------ ------------- ----------
Interest expense 0 0 0 0
- ------------------------------------------------------ ------------ ------------ ------------- ----------
Miscellaneous 0 1 0 0
- ------------------------------------------------------ ------------ ------------ ------------- ----------
Total Expenses 175 588 3,827 128
- ------------------------------------------------------ ------------ ------------ ------------- ----------
Net Investment Income 547 5,325 9,198 493
====================================================== ============ ============ ============= ==========
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on investments 14 0 (517) (29)
- ------------------------------------------------------ ------------ ------------ ------------- ----------
Net realized gain (loss) on
futures contracts and written options 0 0 (61,381) (1,606)
- ------------------------------------------------------ ------------ ------------ ------------- ----------
Net realized gain (loss) on
foreign currency transactions 0 0 905 5
- ------------------------------------------------------ ------------ ------------ ------------- ----------
Net change in unrealized appreciation
(depreciation) on investments 1,170 0 (2,511) 143
- ------------------------------------------------------ ------------ ------------ ------------- ----------
Net change in unrealized appreciation (depreciation)
on futures contracts and written options 0 0 (5,378) 238
- ------------------------------------------------------ ------------ ------------ ------------- ----------
Net change in unrealized appreciation (depreciation)
on translation of assets and liabilities
denominated in foreign currencies 0 0 (192) 1
- ------------------------------------------------------ ------------ ------------ ------------- ----------
Net Gain (Loss) 1,184 0 (69,074) (1,248)
- ------------------------------------------------------ ------------ ------------ ------------- ----------
Net Increase (Decrease) in Assets
Resulting from Operations $ 1,731 $ 5,325 $ (59,876) $ (755)
====================================================== ============ ============ ============= ==========
</TABLE>
1998 PIMCO Funds See accompanying notes 41
<PAGE>
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Amounts in thousands Total Return Fund Total Return Fund II
----------------------------------- ----------------------------------
Six Months Ended Year Ended Six Months Ended Year Ended
Increase (Decrease) in Net Assets from: September 30, 1998 March 31, 1998 September 30, 1998 March 31, 1998
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Operations:
Net investment income (loss) $ 615,795 $ 920,708 $ 21,019 $ 28,235
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Net realized gain (loss) 569,687 644,154 15,277 16,095
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Net change in unrealized appreciation (depreciation) 358,711 196,253 27,117 7,391
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Net increase (decrease) resulting from operations 1,544,193 1,761,115 63,413 51,721
====================================================== =================================== ==================================
Distributions to Shareholders:
From net investment income
Institutional Class (559,621) (843,692) (20,074) (26,226)
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Administrative Class (20,852) (15,470) (922) (506)
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Other Classes (35,488) (36,268) 0 0
- ------------------------------------------------------ ----------------------------------- ----------------------------------
In excess of net investment income
Institutional Class 0 (23,175) 0 (1,502)
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Administrative Class 0 (425) 0 (30)
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Other Classes 0 (996) 0 0
- ------------------------------------------------------ ----------------------------------- ----------------------------------
From net realized capital gains
Institutional Class 0 (375,236) 0 (5,211)
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Administrative Class 0 (8,344) 0 (104)
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Other Classes 0 (20,592) 0 0
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Total Distributions (615,961) (1,324,198) (20,996) (33,579)
====================================================== =================================== ==================================
Fund Share Transactions:
Receipts for shares sold
Institutional Class 4,273,055 6,060,910 275,819 347,509
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Administrative Class 684,843 420,992 49,066 10,297
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Other Classes 604,586 730,357 0 0
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Issued as reinvestment of distributions
Institutional Class 443,703 1,031,930 18,167 30,055
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Administrative Class 18,065 23,828 904 610
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Other Classes 28,601 46,126 0 0
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Cost of shares redeemed
Institutional Class (2,415,818) (3,556,685) (46,403) (299,345)
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Administrative Class (118,050) (117,585) (7,534) (1,264)
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Other Classes (172,865) (183,785) 0 0
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Net increase (decrease) resulting from Fund
share transactions 3,346,120 4,456,088 290,019 87,862
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Total Increase (Decrease) in Net Assets 4,274,352 4,893,005 332,436 106,004
====================================================== =================================== ==================================
Net Assets:
Beginning of period 18,091,711 13,198,706 589,759 483,755
- ------------------------------------------------------ ----------------------------------- ----------------------------------
End of period * $ 22,366,063 $ 18,091,711 $ 922,195 $ 589,759
- ------------------------------------------------------ ----------------------------------- ----------------------------------
*Including net undistributed (overdistributed)
investment income of: $ 111,594 $ 111,760 $ 2,268 $ 2,245
- ------------------------------------------------------ ----------------------------------- ----------------------------------
<CAPTION>
Total Return Fund III
--------------------------------------------
Six Months Ended Year Ended
Increase (Decrease) in Net Assets from: September 30, 1998 March 31, 1998
(Unaudited)
<S> <C> <C>
Operations:
Net investment income (loss) $ 11,633 $ 16,793
- ------------------------------------------------------ --------------------------------------------
Net realized gain (loss) 10,655 10,981
- ------------------------------------------------------ --------------------------------------------
Net change in unrealized appreciation (depreciation) 6,729 3,433
- ------------------------------------------------------ --------------------------------------------
Net increase (decrease) resulting from operations 29,017 31,207
====================================================== ============================================
Distributions to Shareholders:
From net investment income
Institutional Class (11,606) (15,906)
- ------------------------------------------------------ --------------------------------------------
Administrative Class (30) (7)
- ------------------------------------------------------ --------------------------------------------
Other Classes 0 0
- ------------------------------------------------------ --------------------------------------------
In excess of net investment income
Institutional Class 0 (857)
- ------------------------------------------------------ --------------------------------------------
Administrative Class 0 0
- ------------------------------------------------------ --------------------------------------------
Other Classes 0 0
- ------------------------------------------------------ --------------------------------------------
From net realized capital gains
Institutional Class 0 (5,401)
- ------------------------------------------------------ --------------------------------------------
Administrative Class 0 (2)
- ------------------------------------------------------ --------------------------------------------
Other Classes 0 0
- ------------------------------------------------------ --------------------------------------------
Total Distributions (11,636) (22,173)
====================================================== ============================================
Fund Share Transactions:
Receipts for shares sold
Institutional Class 53,780 160,414
- ------------------------------------------------------ --------------------------------------------
Administrative Class 1,522 211
- ------------------------------------------------------ --------------------------------------------
Other Classes 0 0
- ------------------------------------------------------ --------------------------------------------
Issued as reinvestment of distributions
Institutional Class 10,426 20,471
- ------------------------------------------------------ --------------------------------------------
Administrative Class 26 1
- ------------------------------------------------------ --------------------------------------------
Other Classes 0 0
- ------------------------------------------------------ --------------------------------------------
Cost of shares redeemed
Institutional Class (4,350) (17,962)
- ------------------------------------------------------ --------------------------------------------
Administrative Class (2) (39)
- ------------------------------------------------------ --------------------------------------------
Other Classes 0 0
- ------------------------------------------------------ --------------------------------------------
Net increase (decrease) resulting from Fund
share transactions 61,402 163,096
- ------------------------------------------------------ --------------------------------------------
Total Increase (Decrease) in Net Assets 78,783 172,130
====================================================== ============================================
Net Assets:
Beginning of period 365,427 193,297
- ------------------------------------------------------ --------------------------------------------
End of period * $ 444,210 $ 365,427
- ------------------------------------------------------ --------------------------------------------
*Including net undistributed (overdistributed)
investment income of: $ 1,691 $ 1,694
- ------------------------------------------------------ --------------------------------------------
</TABLE>
42 PIMCO Funds See accompanying notes
<PAGE>
<TABLE>
<CAPTION>
Amounts in thousands Total Return Mortgage Fund Moderate Duration Fund
-------------------------------------- -------------------------------------
Six Months Ended Period from Six Months Ended Year Ended
Increase (Decrease) in Net Assets from: September 30, 1998 July 31, 1997 to September 30, 1998 March 31, 1998
(Unaudited) March 31, 1998 (Unaudited)
<S> <C> <C> <C> <C>
Operations:
Net investment income (loss) $ 106 $ 140 $ 8,037 $ 7,090
- --------------------------------------------------- -------------------------------------- -------------------------------------
Net realized gain (loss) 17 22 3,498 928
- --------------------------------------------------- -------------------------------------- -------------------------------------
Net change in unrealized appreciation (depreciation) 63 61 4,203 1,131
- --------------------------------------------------- -------------------------------------- -------------------------------------
Net increase (decrease) resulting from operations 186 223 15,738 9,149
=================================================== ====================================== =====================================
Distributions to Shareholders:
From net investment income
Institutional Class (104) (140) (8,037) (7,093)
- --------------------------------------------------- -------------------------------------- -------------------------------------
Administrative Class 0 0 0 0
- --------------------------------------------------- -------------------------------------- -------------------------------------
Other Classes (3) 0 0 0
- --------------------------------------------------- -------------------------------------- -------------------------------------
In excess of net investment income
Institutional Class 0 0 0 (1)
- --------------------------------------------------- -------------------------------------- -------------------------------------
Administrative Class 0 0 0 0
- --------------------------------------------------- -------------------------------------- -------------------------------------
Other Classes 0 0 0 0
- --------------------------------------------------- -------------------------------------- -------------------------------------
From net realized capital gains
Institutional Class 0 (2) 0 (565)
- --------------------------------------------------- -------------------------------------- -------------------------------------
Administrative Class 0 0 0 0
- --------------------------------------------------- -------------------------------------- -------------------------------------
Other Classes 0 0 0 0
- --------------------------------------------------- -------------------------------------- -------------------------------------
Total Distributions (107) (142) (8,037) (7,659)
=================================================== ====================================== =====================================
Fund Share Transactions:
Receipts for shares sold
Institutional Class 0 3,365 96,596 226,998
- --------------------------------------------------- -------------------------------------- -------------------------------------
Administrative Class 0 0 0 0
- --------------------------------------------------- -------------------------------------- -------------------------------------
Other Classes 100 0 0 0
- --------------------------------------------------- -------------------------------------- -------------------------------------
Issued as reinvestment of distributions
Institutional Class 104 142 6,332 6,096
- --------------------------------------------------- -------------------------------------- -------------------------------------
Administrative Class 0 0 0 0
- --------------------------------------------------- -------------------------------------- -------------------------------------
Other Classes 3 0 0 0
- --------------------------------------------------- -------------------------------------- -------------------------------------
Cost of shares redeemed
Institutional Class 0 0 (92,552) (8,890)
- --------------------------------------------------- -------------------------------------- -------------------------------------
Administrative Class 0 0 0 0
- --------------------------------------------------- -------------------------------------- -------------------------------------
Other Classes 0 0 0 0
- --------------------------------------------------- -------------------------------------- -------------------------------------
Net increase (decrease) resulting from Fund
share transactions 207 3,507 10,376 224,204
- --------------------------------------------------- -------------------------------------- -------------------------------------
Total Increase (Decrease) in Net Assets 286 3,588 18,077 225,694
- --------------------------------------------------- -------------------------------------- -------------------------------------
Net Assets:
Beginning of period 3,588 0 239,152 13,458
- --------------------------------------------------- -------------------------------------- -------------------------------------
End of period * $ 3,874 $ 3,588 $ 257,229 $ 239,152
- --------------------------------------------------- -------------------------------------- -------------------------------------
*Including net undistributed (overdistributed)
investment income of: $ 25 $ 25 $ 560 $ 560
=================================================== ====================================== =====================================
<CAPTION>
Amounts in thousands Low Duration Fund Low Duration Fund II
-------------------------------------- -------------------------------------
Six Months Ended Year Ended Six Months Ended Year Ended
Increase (Decrease) in Net Assets from: September 30, 1998 March 31, 1998 September 30, 1998 March 31, 1998
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Operations:
Net investment income (loss) $ 105,119 $ 188,536 $ 12,040 $ 20,920
- --------------------------------------------------- -------------------------------------- -------------------------------------
Net realized gain (loss) (519) 25,424 371 2,785
- --------------------------------------------------- -------------------------------------- -------------------------------------
Net change in unrealized appreciation (depreciation) 36,519 38,823 6,421 3,943
- --------------------------------------------------- -------------------------------------- -------------------------------------
Net increase (decrease) resulting from operations 141,119 252,783 18,832 27,648
=================================================== ====================================== =====================================
Distributions to Shareholders:
From net investment income
Institutional Class (95,034) (171,675) (11,969) (19,648)
- --------------------------------------------------- -------------------------------------- -------------------------------------
Administrative Class (3,096) (1,723) (71) (1)
- --------------------------------------------------- -------------------------------------- -------------------------------------
Other Classes (6,923) (8,106) 0 0
- --------------------------------------------------- -------------------------------------- -------------------------------------
In excess of net investment income
Institutional Class 0 (6,016) 0 (1,272)
- --------------------------------------------------- -------------------------------------- -------------------------------------
Administrative Class 0 (61) 0 0
- --------------------------------------------------- -------------------------------------- -------------------------------------
Other Classes 0 (283) 0 0
- --------------------------------------------------- -------------------------------------- -------------------------------------
From net realized capital gains
Institutional Class 0 (7,885) 0 (575)
- --------------------------------------------------- -------------------------------------- -------------------------------------
Administrative Class 0 (78) 0 0
- --------------------------------------------------- -------------------------------------- -------------------------------------
Other Classes 0 (496) 0 0
- --------------------------------------------------- -------------------------------------- -------------------------------------
Total Distributions (105,053) (196,323) (12,040) (21,496)
=================================================== ====================================== =====================================
Fund Share Transactions:
Receipts for shares sold
Institutional Class 988,280 1,467,244 18,196 177,099
- --------------------------------------------------- -------------------------------------- -------------------------------------
Administrative Class 112,009 33,741 7,525 72
- --------------------------------------------------- -------------------------------------- -------------------------------------
Other Classes 380,433 427,414 0 0
- --------------------------------------------------- -------------------------------------- -------------------------------------
Issued as reinvestment of distributions
Institutional Class 79,405 155,141 11,068 20,086
- --------------------------------------------------- -------------------------------------- -------------------------------------
Administrative Class 3,096 1,852 74 0
- --------------------------------------------------- -------------------------------------- -------------------------------------
Other Classes 5,822 7,702 0 0
- --------------------------------------------------- -------------------------------------- -------------------------------------
Cost of shares redeemed
Institutional Class (808,877) (1,713,570) (24,588) (141,508)
- --------------------------------------------------- -------------------------------------- -------------------------------------
Administrative Class (16,065) (13,425) (70) (16)
- --------------------------------------------------- -------------------------------------- -------------------------------------
Other Classes (289,604) (369,736) 0 0
- --------------------------------------------------- -------------------------------------- -------------------------------------
Net increase (decrease) resulting from Fund
share transactions 454,499 (3,637) 12,205 55,733
- --------------------------------------------------- -------------------------------------- -------------------------------------
Total Increase (Decrease) in Net Assets 490,565 52,823 18,997 61,885
=================================================== ====================================== =====================================
Net Assets:
Beginning of period 3,001,638 2,948,815 401,260 339,375
- --------------------------------------------------- -------------------------------------- -------------------------------------
End of period * $ 3,492,203 $ 3,001,638 $ 420,257 $ 401,260
- --------------------------------------------------- -------------------------------------- -------------------------------------
*Including net undistributed (overdistributed)
investment income of: $ 802 $ 736 $ 48 $ 48
- --------------------------------------------------- -------------------------------------- -------------------------------------
</TABLE>
1998 Semi-Annual Report See accompanying notes 43
<PAGE>
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Amounts in thousands Low Duration Fund III Low Duration Mortgage Fund
------------------------------------- -------------------------------------
Six Months Ended Year Ended Six Months Ended Year Ended
Increase (Decrease) in Net Assets from: September 30, 1998 March 31, 1998 September 30, 1998 March 31, 1998
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Operation:
Net investment income (loss) $ 722 $ 783 $ 124 $ 150
- ------------------------------------------------------ ------------------------------------- -------------------------------------
Net realized gain (loss) (120) 74 (13) 25
- ------------------------------------------------------ ------------------------------------- -------------------------------------
Net change in unrealized appreciation (depreciation) 353 114 64 27
- ------------------------------------------------------ ------------------------------------- -------------------------------------
Net increase (decrease) resulting from operations 955 971 175 202
====================================================== ===================================== =====================================
Distributions to Shareholders:
From net investment income
Institutional Class (722) (778) (124) (150)
- ------------------------------------------------------ ------------------------------------- -------------------------------------
Administrative Class 0 0 0 0
- ------------------------------------------------------ ------------------------------------- -------------------------------------
Other Classes 0 0 0 0
- ------------------------------------------------------ ------------------------------------- -------------------------------------
In excess of net investment income
Institutional Class 0 (5) 0 0
- ------------------------------------------------------ ------------------------------------- -------------------------------------
Administrative Class 0 0 0 0
- ------------------------------------------------------ ------------------------------------- -------------------------------------
Other Classes 0 0 0 0
- ------------------------------------------------------ ------------------------------------- -------------------------------------
From net realized capital gains
Institutional Class 0 (33) 0 (9)
- ------------------------------------------------------ ------------------------------------- -------------------------------------
Administrative Class 0 0 0 0
- ------------------------------------------------------ ------------------------------------- -------------------------------------
Other Classes 0 0 0 0
- ------------------------------------------------------ ------------------------------------- -------------------------------------
In excess of net realized capital gains
Institutional Class 0 0 0 0
- ------------------------------------------------------ ------------------------------------- -------------------------------------
Administrative Class 0 0 0 0
- ------------------------------------------------------ ------------------------------------- -------------------------------------
Other Classes 0 0 0 0
- ------------------------------------------------------ ------------------------------------- -------------------------------------
Total Distributions (722) (816) (124) (159)
====================================================== ===================================== =====================================
Fund Share Transactions:
Receipts for shares sold
Institutional Class 1,073 12,870 0 3,553
- ------------------------------------------------------ ------------------------------------- -------------------------------------
Administrative Class 0 0 0 0
- ------------------------------------------------------ ------------------------------------- -------------------------------------
Other Classes 0 0 0 0
- ------------------------------------------------------ ------------------------------------- -------------------------------------
Issued as reinvestment of distributions
Institutional Class 722 816 124 159
- ------------------------------------------------------ ------------------------------------- -------------------------------------
Administrative Class 0 0 0 0
- ------------------------------------------------------ ------------------------------------- -------------------------------------
Other Classes 0 0 0 0
- ------------------------------------------------------ ------------------------------------- -------------------------------------
Cost of shares redeemed
Institutional Class (1,345) (1) (9) (7)
- ------------------------------------------------------ ------------------------------------- -------------------------------------
Administrative Class 0 0 0 0
- ------------------------------------------------------ ------------------------------------- -------------------------------------
Other Classes 0 0 0 0
- ------------------------------------------------------ ------------------------------------- -------------------------------------
Net increase (decrease) resulting from Fund
share transactions 450 13,685 115 3,705
- ------------------------------------------------------ ------------------------------------- -------------------------------------
Total Increase (Decrease) in Net Assets 683 13,840 166 3,748
====================================================== ===================================== =====================================
Net Assets:
Beginning of period 23,896 10,056 3,748 0
- ------------------------------------------------------ ------------------------------------- -------------------------------------
End of period * $ 24,579 $ 23,896 $ 3,914 $ 3,748
- ------------------------------------------------------ ------------------------------------- -------------------------------------
*Including net undistributed (overdistributed)
investment income of: $ 22 $ 22 $ 15 $ 15
- ------------------------------------------------------ ------------------------------------- -------------------------------------
<CAPTION>
Amounts in thousands Short-Term Fund
-------------------------------------
Six Months Ended Year Ended
Increase (Decrease) in Net Assets from: September 30, 1998 March 31, 1998
(Unaudited)
<S> <C>
Operation:
Net investment income (loss) $ 12,312 $ 11,861
- ------------------------------------------------------ -------------------------------------
Net realized gain (loss) (240) 922
- ------------------------------------------------------ -------------------------------------
Net change in unrealized appreciation (depreciation) (560) 455
- ------------------------------------------------------ -------------------------------------
Net increase (decrease) resulting from operations 11,512 13,238
====================================================== =====================================
Distributions to Shareholders:
From net investment income
Institutional Class (11,022) (10,663)
- ------------------------------------------------------ -------------------------------------
Administrative Class (86) (239)
- ------------------------------------------------------ -------------------------------------
Other Classes (1,249) (751)
- ------------------------------------------------------ -------------------------------------
In excess of net investment income
Institutional Class 0 (192)
- ------------------------------------------------------ -------------------------------------
Administrative Class 0 (4)
- ------------------------------------------------------ -------------------------------------
Other Classes 0 (13)
- ------------------------------------------------------ -------------------------------------
From net realized capital gains
Institutional Class 0 (251)
- ------------------------------------------------------ -------------------------------------
Administrative Class 0 (7)
- ------------------------------------------------------ -------------------------------------
Other Classes 0 (25)
- ------------------------------------------------------ -------------------------------------
In excess of net realized capital gains
Institutional Class 0 0
- ------------------------------------------------------ -------------------------------------
Administrative Class 0 0
- ------------------------------------------------------ -------------------------------------
Other Classes 0 0
- ------------------------------------------------------ -------------------------------------
Total Distributions (12,357) (12,145)
====================================================== =====================================
Fund Share Transactions:
Receipts for shares sold
Institutional Class 525,596 311,342
- ------------------------------------------------------ -------------------------------------
Administrative Class 1,031 4,605
- ------------------------------------------------------ -------------------------------------
Other Classes 67,629 54,585
- ------------------------------------------------------ -------------------------------------
Issued as reinvestment of distributions
Institutional Class 6,314 9,089
- ------------------------------------------------------ -------------------------------------
Administrative Class 40 35
- ------------------------------------------------------ -------------------------------------
Other Classes 1,077 681
- ------------------------------------------------------ -------------------------------------
Cost of shares redeemed
Institutional Class (369,919) (305,111)
- ------------------------------------------------------ -------------------------------------
Administrative Class (4,439) (4,023)
- ------------------------------------------------------ -------------------------------------
Other Classes (34,901) (27,134)
- ------------------------------------------------------ -------------------------------------
Net increase (decrease) resulting from Fund
share transactions 192,428 44,069
- ------------------------------------------------------ -------------------------------------
Total Increase (Decrease) in Net Assets 191,583 45,162
====================================================== =====================================
Net Assets:
Beginning of period 210,196 165,034
- ------------------------------------------------------ -------------------------------------
End of period * $ 401,779 $ 210,196
- ------------------------------------------------------ -------------------------------------
*Including net undistributed (overdistributed)
investment income of: $ 696 $ 741
- ------------------------------------------------------ -------------------------------------
</TABLE>
44 PIMCO Funds See accompanying notes
<PAGE>
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Amounts in thousands Long-Term U.S. Gov't Fund Real Return Bond Fund
------------------------------------- -------------------------------------
Six Months Ended Year Ended Six Months Ended Year Ended
Increase (Decrease) in Net Assets from: September 30, 1998 March 31, 1998 September 30, 1998 March 31, 1998
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Operation:
Net investment income (loss) $ 3,458 $ 2,312 $ 292 $ 317
- ------------------------------------------------------ ------------------------------------- -------------------------------------
Net realized gain (loss) 2,699 3,273 (63) 52
- ------------------------------------------------------ ------------------------------------- -------------------------------------
Net change in unrealized appreciation (depreciation) 10,074 1,860 232 (21)
- ------------------------------------------------------ ------------------------------------- -------------------------------------
Net increase (decrease) resulting from operations 16,231 7,445 461 348
====================================================== ===================================== =====================================
Distributions to Shareholders:
From net investment income
Institutional Class (2,305) (2,186) (169) (248)
- ------------------------------------------------------ ------------------------------------- -------------------------------------
Administrative Class (127) (122) 0 0
- ------------------------------------------------------ ------------------------------------- -------------------------------------
Other Classes (901) (443) (123) (71)
- ------------------------------------------------------ ------------------------------------- -------------------------------------
In excess of net investment income
Institutional Class 0 (1) 0 (18)
- ------------------------------------------------------ ------------------------------------- -------------------------------------
Administrative Class 0 0 0 0
- ------------------------------------------------------ ------------------------------------- -------------------------------------
Other Classes 0 0 0 (5)
- ------------------------------------------------------ ------------------------------------- -------------------------------------
From net realized capital gains
Institutional Class 0 (218) 0 (68)
- ------------------------------------------------------ ------------------------------------- -------------------------------------
Administrative Class 0 (21) 0 0
- ------------------------------------------------------ ------------------------------------- -------------------------------------
Other Classes 0 (78) 0 (31)
- ------------------------------------------------------ ------------------------------------- -------------------------------------
In excess of net realized capital gains
Institutional Class 0 0 0 0
- ------------------------------------------------------ ------------------------------------- -------------------------------------
Administrative Class 0 0 0 0
- ------------------------------------------------------ ------------------------------------- -------------------------------------
Other Classes 0 0 0 0
- ------------------------------------------------------ ------------------------------------- -------------------------------------
Total Distributions (3,333) (3,069) (292) (441)
====================================================== ===================================== =====================================
Fund Share Transactions:
Receipts for shares sold
Institutional Class 84,506 48,113 612 4,626
- ------------------------------------------------------ ------------------------------------- -------------------------------------
Administrative Class 1,686 4,924 0 0
- ------------------------------------------------------ ------------------------------------- -------------------------------------
Other Classes 51,544 22,677 4,373 3,598
- ------------------------------------------------------ ------------------------------------- -------------------------------------
Issued as reinvestment of distributions
Institutional Class 1,770 1,998 167 333
- ------------------------------------------------------ ------------------------------------- -------------------------------------
Administrative Class 122 97 0 0
- ------------------------------------------------------ ------------------------------------- -------------------------------------
Other Classes 666 353 68 91
- ------------------------------------------------------ ------------------------------------- -------------------------------------
Cost of shares redeemed
Institutional Class (19,422) (25,182) (604) (5,016)
- ------------------------------------------------------ ------------------------------------- -------------------------------------
Administrative Class (1,899) (191) 0 0
- ------------------------------------------------------ ------------------------------------- -------------------------------------
Other Classes (11,970) (4,654) (1,640) (1,953)
- ------------------------------------------------------ ------------------------------------- -------------------------------------
Net increase (decrease) resulting from Fund
share transactions 107,003 48,135 2,976 1,679
- ------------------------------------------------------ ------------------------------------- -------------------------------------
Total Increase (Decrease) in Net Assets 119,901 52,511 3,145 1,586
====================================================== ===================================== =====================================
Net Assets:
Beginning of period 74,439 21,928 7,882 6,296
- ------------------------------------------------------ ------------------------------------- -------------------------------------
End of period * $ 194,340 $ 74,439 $ 11,027 $ 7,882
- ------------------------------------------------------ ------------------------------------- -------------------------------------
*Including net undistributed (overdistributed)
investment income of: $ 613 $ 488 $ 0 $ (25)
- ------------------------------------------------------ ------------------------------------- -------------------------------------
<CAPTION>
Statement of Changes in Net Assets
Amounts in thousands Foreign Bond Fund Global Bond Fund
------------------------------------- -------------------------------------
Six Months Ended Year Ended Six Months Ended Year Ended
Increase (Decrease) in Net Assets from: September 30, 1998 March 31, 1998 September 30, 1998 March 31, 1998
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Operation:
Net investment income (loss) $ 14,724 $ 20,326 $ 7,585 $ 17,040
- ------------------------------------------------------ ------------------------------------- -------------------------------------
Net realized gain (loss) (2,554) 20,051 (1,365) (576)
- ------------------------------------------------------ ------------------------------------- -------------------------------------
Net change in unrealized appreciation (depreciation) 11,921 (2,005) 13,186 (2,734)
- ------------------------------------------------------ ------------------------------------- -------------------------------------
Net increase (decrease) resulting from operations 24,091 38,372 19,406 13,730
====================================================== ===================================== =====================================
Distributions to Shareholders:
From net investment income
Institutional Class (12,619) (18,748) (7,361) (13,779)
- ------------------------------------------------------ ------------------------------------- -------------------------------------
Administrative Class (25) (13) (33) (167)
- ------------------------------------------------------ ------------------------------------- -------------------------------------
Other Classes (1,246) (1,045) 0 0
- ------------------------------------------------------ ------------------------------------- -------------------------------------
In excess of net investment income
Institutional Class 0 0 0 0
- ------------------------------------------------------ ------------------------------------- -------------------------------------
Administrative Class 0 0 0 0
- ------------------------------------------------------ ------------------------------------- -------------------------------------
Other Classes 0 0 0 0
- ------------------------------------------------------ ------------------------------------- -------------------------------------
From net realized capital gains
Institutional Class 0 (9,705) 0 0
- ------------------------------------------------------ ------------------------------------- -------------------------------------
Administrative Class 0 (7) 0 0
- ------------------------------------------------------ ------------------------------------- -------------------------------------
Other Classes 0 (761) 0 0
- ------------------------------------------------------ ------------------------------------- -------------------------------------
In excess of net realized capital gains
Institutional Class 0 0 0 (5,218)
- ------------------------------------------------------ ------------------------------------- -------------------------------------
Administrative Class 0 0 0 (11)
- ------------------------------------------------------ ------------------------------------- -------------------------------------
Other Classes 0 0 0 0
- ------------------------------------------------------ ------------------------------------- -------------------------------------
Total Distributions (13,890) (30,279) (7,394) (19,175)
====================================================== ===================================== =====================================
Fund Share Transactions:
Receipts for shares sold
Institutional Class 137,189 230,125 26,036 97,041
- ------------------------------------------------------ ------------------------------------- -------------------------------------
Administrative Class 1,240 298 264 18,488
- ------------------------------------------------------ ------------------------------------- -------------------------------------
Other Classes 34,321 34,319 0 0
- ------------------------------------------------------ ------------------------------------- -------------------------------------
Issued as reinvestment of distributions
Institutional Class 9,184 21,425 5,373 15,183
- ------------------------------------------------------ ------------------------------------- -------------------------------------
Administrative Class 25 21 33 163
- ------------------------------------------------------ ------------------------------------- -------------------------------------
Other Classes 1,025 1,599 0 0
- ------------------------------------------------------ ------------------------------------- -------------------------------------
Cost of shares redeemed
Institutional Class (56,405) (102,060) (23,728) (66,343)
- ------------------------------------------------------ ------------------------------------- -------------------------------------
Administrative Class (55) (38) (959) (17,243)
- ------------------------------------------------------ ------------------------------------- -------------------------------------
Other Classes (5,227) (2,599) 0 0
- ------------------------------------------------------ ------------------------------------- -------------------------------------
Net increase (decrease) resulting from Fund
share transactions 121,297 183,090 7,019 47,289
- ------------------------------------------------------ ------------------------------------- -------------------------------------
Total Increase (Decrease) in Net Assets 131,498 191,183 19,031 41,844
====================================================== ===================================== =====================================
Net Assets:
Beginning of period 429,806 238,623 257,821 215,977
- ------------------------------------------------------ ------------------------------------- -------------------------------------
End of period * $ 561,304 $ 429,806 $ 276,852 $ 257,821
- ------------------------------------------------------ ------------------------------------- -------------------------------------
*Including net undistributed (overdistributed)
investment income of: $ 21,778 $ 20,944 $ (4,446) $ (4,637)
- ------------------------------------------------------ ------------------------------------- -------------------------------------
</TABLE>
1998 Semi-Annual Report See accompanying notes 45
<PAGE>
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Amounts in thousands Global Bond Fund II Emerging Markets Bond Fund
----------------------------------- ------------------------------------
Six Months Ended Year Ended Six Months Ended Period from
Increase (Decrease) in Net Assets from: September 30, 1998 March 31, 1998 September 30, 1998 July 31, 1997 to
(Unaudited) (Unaudited) March 31, 1998
<S> <C> <C> <C> <C>
Operations:
Net investment income (loss) $ 1,175 $ 1,124 $ 199 $ 183
- -------------------------------------------------- ----------------------------------- ------------------------------------
Net realized gain (loss) 162 1,252 (470) (108)
- -------------------------------------------------- ----------------------------------- ------------------------------------
Net change in unrealized appreciation (depreciation) 248 (178) (976) 89
- -------------------------------------------------- ----------------------------------- ------------------------------------
Net increase (decrease) resulting from operations 1,585 2,198 (1,247) 164
================================================== =================================== ====================================
Distributions to Shareholders:
From net investment income
Institutional Class (744) (100) (169) (165)
- -------------------------------------------------- ----------------------------------- ------------------------------------
Administrative Class 0 0 0 0
- -------------------------------------------------- ----------------------------------- ------------------------------------
Other Classes (414) (833) (30) (19)
- -------------------------------------------------- ----------------------------------- ------------------------------------
In excess of net investment income
Institutional Class 0 0 0 0
- -------------------------------------------------- ----------------------------------- ------------------------------------
Administrative Class 0 0 0 0
- -------------------------------------------------- ----------------------------------- ------------------------------------
Other Classes 0 0 0 0
- -------------------------------------------------- ----------------------------------- ------------------------------------
From net realized capital gains
Institutional Class 0 0 0 0
- -------------------------------------------------- ----------------------------------- ------------------------------------
Administrative Class 0 0 0 0
- -------------------------------------------------- ----------------------------------- ------------------------------------
Other Classes 0 (2,237) 0 0
- -------------------------------------------------- ----------------------------------- ------------------------------------
In excess of net realized capital gains
Institutional Class 0 0 0 (51)
- -------------------------------------------------- ----------------------------------- ------------------------------------
Administrative Class 0 0 0 0
- -------------------------------------------------- ----------------------------------- ------------------------------------
Other Classes 0 0 0 (9)
- -------------------------------------------------- ----------------------------------- ------------------------------------
Total Distributions (1,158) (3,170) (199) (244)
================================================== =================================== ====================================
Fund Share Transactions:
Receipts for shares sold
Institutional Class 1,896 24,247 506 3,907
- -------------------------------------------------- ----------------------------------- ------------------------------------
Administrative Class 0 0 0 0
- -------------------------------------------------- ----------------------------------- ------------------------------------
Other Classes 1,935 8,381 562 779
- -------------------------------------------------- ----------------------------------- ------------------------------------
Issued in reorganization
Other Classes 0 0 0 0
- -------------------------------------------------- ----------------------------------- ------------------------------------
Issued as reinvestment of distributions
Institutional Class 715 100 133 212
- -------------------------------------------------- ----------------------------------- ------------------------------------
Administrative Class 0 0 0 0
- -------------------------------------------------- ----------------------------------- ------------------------------------
Other Classes 345 2,575 46 22
- -------------------------------------------------- ----------------------------------- ------------------------------------
Cost of shares redeemed
Institutional Class 0 0 (22) (350)
- -------------------------------------------------- ----------------------------------- ------------------------------------
Administrative Class 0 0 0 0
- -------------------------------------------------- ----------------------------------- ------------------------------------
Other Classes (5,263) (9,329) (670) (57)
- -------------------------------------------------- ----------------------------------- ------------------------------------
Net increase (decrease) resulting from Fund
share transactions (372) 25,974 555 4,513
- -------------------------------------------------- ----------------------------------- ------------------------------------
Total Increase (Decrease) in Net Assets 55 25,002 (891) 4,433
================================================== =================================== ====================================
Net Assets:
Beginning of period 41,902 16,900 4,433 0
- -------------------------------------------------- ----------------------------------- ------------------------------------
End of period * $ 41,957 $ 41,902 $ 3,542 $ 4,433
- -------------------------------------------------- ----------------------------------- ------------------------------------
*Including net undistributed (overdistributed)
investment income of: $ 158 $ 141 $ 27 $ 27
- -------------------------------------------------- ----------------------------------- ------------------------------------
<CAPTION>
Amounts in thousands High Yield Fund
------------------------------------------
Six Months Ended Year Ended
Increase (Decrease) in Net Assets from: September 30, 1998 March 31, 1998
(Unaudited)
<S> <C> <C>
Operations:
Net investment income (loss) $ 98,856 $ 120,838
- -------------------------------------------------- ------------------------------------------
Net realized gain (loss) 10,386 17,622
- -------------------------------------------------- ------------------------------------------
Net change in unrealized appreciation (depreciation) (122,256) 53,329
- -------------------------------------------------- ------------------------------------------
Net increase (decrease) resulting from operations (13,014) 191,789
================================================== ==========================================
Distributions to Shareholders:
From net investment income
Institutional Class (75,108) (90,115)
- -------------------------------------------------- ------------------------------------------
Administrative Class (3,807) (1,993)
- -------------------------------------------------- ------------------------------------------
Other Classes (19,939) (29,187)
- -------------------------------------------------- ------------------------------------------
In excess of net investment income
Institutional Class 0 0
- -------------------------------------------------- ------------------------------------------
Administrative Class 0 0
- -------------------------------------------------- ------------------------------------------
Other Classes 0 0
- -------------------------------------------------- ------------------------------------------
From net realized capital gains
Institutional Class 0 0
- -------------------------------------------------- ------------------------------------------
Administrative Class 0 0
- -------------------------------------------------- ------------------------------------------
Other Classes 0 0
- -------------------------------------------------- ------------------------------------------
In excess of net realized capital gains
Institutional Class 0 (8,670)
- -------------------------------------------------- ------------------------------------------
Administrative Class 0 (190)
- -------------------------------------------------- ------------------------------------------
Other Classes 0 (3,379)
- -------------------------------------------------- ------------------------------------------
Total Distributions (98,854) (133,534)
=================================================- ==========================================
Fund Share Transactions:
Receipts for shares sold
Institutional Class 419,057 991,624
- -------------------------------------------------- ------------------------------------------
Administrative Class 66,588 63,673
- -------------------------------------------------- ------------------------------------------
Other Classes 214,148 298,068
- -------------------------------------------------- ------------------------------------------
Issued in reorganization
Other Classes 0 0
- -------------------------------------------------- ------------------------------------------
Issued as reinvestment of distributions
Institutional Class 68,460 90,586
- -------------------------------------------------- ------------------------------------------
Administrative Class 3,310 1,429
- -------------------------------------------------- ------------------------------------------
Other Classes 11,764 19,420
- -------------------------------------------------- ------------------------------------------
Cost of shares redeemed
Institutional Class (239,214) (238,595)
- -------------------------------------------------- ------------------------------------------
Administrative Class (16,262) (6,334)
- -------------------------------------------------- ------------------------------------------
Other Classes (156,510) (116,831)
- -------------------------------------------------- ------------------------------------------
Net increase (decrease) resulting from Fund
share transactions 371,341 1,103,040
- -------------------------------------------------- ------------------------------------------
Total Increase (Decrease) in Net Assets 259,473 1,161,295
================================================== ==========================================
Net Assets:
Beginning of period 2,210,660 1,049,365
- -------------------------------------------------- ------------------------------------------
End of period * $ 2,470,133 $ 2,210,660
- -------------------------------------------------- ------------------------------------------
*Including net undistributed (overdistributed)
investment income of: $ (2,527) $ (2,529)
- -------------------------------------------------- ------------------------------------------
</TABLE>
46 PIMCO Funds See accompanying notes
<PAGE>
<TABLE>
<CAPTION>
Amounts in thousands Municipal Bond Fund Money Market Fund
------------------------------------------ -----------------------------------
Six Months Ended Period from Six Months Ended Year Ended
Increase (Decrease) in Net Assets from: September 30, 1998 January 2, 1998 September 30, 1998 March 31, 1998
(Unaudited) to March 31, 1998 (Unaudited)
<S> <C> <C> <C> <C>
Operations:
Net investment income (loss) $ 547 $ 33 $ 5,325 $ 7,052
- --------------------------------------------------- ------------------------------------------ -----------------------------------
Net realized gain (loss) 14 (1) 0 0
- --------------------------------------------------- ------------------------------------------ -----------------------------------
Net change in unrealized appreciation (depreciation) 1,170 (9) 0 0
- --------------------------------------------------- ------------------------------------------ -----------------------------------
Net increase (decrease) resulting from operations 1,731 23 5,325 7,052
=================================================== ========================================== ===================================
Distributions to Shareholders:
From net investment income
Institutional Class (83) (33) (1,255) (1,932)
- --------------------------------------------------- ------------------------------------------ -----------------------------------
Administrative Class 0 0 (38) (15)
- --------------------------------------------------- ------------------------------------------ -----------------------------------
Other Classes (464) 0 (4,033) (5,105)
- --------------------------------------------------- ------------------------------------------ -----------------------------------
In excess of net investment income
Institutional Class 0 0 0 (1)
- --------------------------------------------------- ------------------------------------------ -----------------------------------
Administrative Class 0 0 0 0
- --------------------------------------------------- ------------------------------------------ -----------------------------------
Other Classes 0 0 0 (2)
- --------------------------------------------------- ------------------------------------------ -----------------------------------
From net realized capital gains
Institutional Class 0 0 0 0
- --------------------------------------------------- ------------------------------------------ -----------------------------------
Administrative Class 0 0 0 0
- --------------------------------------------------- ------------------------------------------ -----------------------------------
Other Classes 0 0 0 0
- --------------------------------------------------- ------------------------------------------ -----------------------------------
In excess of net realized capital gains
Institutional Class 0 0 0 0
- --------------------------------------------------- ------------------------------------------ -----------------------------------
Administrative Class 0 0 0 0
- --------------------------------------------------- ------------------------------------------ -----------------------------------
Other Classes 0 0 0 0
- --------------------------------------------------- ------------------------------------------ -----------------------------------
Total Distributions (547) (33) (5,326) (7,055)
=================================================== ========================================== ===================================
Fund Share Transactions:
Receipts for shares sold
Institutional Class 3,215 3,000 72,781 126,866
- --------------------------------------------------- ------------------------------------------ -----------------------------------
Administrative Class 100 0 9,841 1,317
- --------------------------------------------------- ------------------------------------------ -----------------------------------
Other Classes 5,361 0 2,868,281 3,188,249
- --------------------------------------------------- ------------------------------------------ -----------------------------------
Issued in reorganization
Other Classes 47,296 0 0 0
- --------------------------------------------------- ------------------------------------------ -----------------------------------
Issued as reinvestment of distributions
Institutional Class 83 33 756 1,408
- --------------------------------------------------- ------------------------------------------ -----------------------------------
Administrative Class 0 0 36 15
- --------------------------------------------------- ------------------------------------------ -----------------------------------
Other Classes 321 0 2,680 3,634
- --------------------------------------------------- ------------------------------------------ -----------------------------------
Cost of shares redeemed
Institutional Class (76) 0 (80,970) (96,437)
- --------------------------------------------------- ------------------------------------------ -----------------------------------
Administrative Class 0 0 (8,198) (594)
- --------------------------------------------------- ------------------------------------------ -----------------------------------
Other Classes (3,347) 0 (2,746,873) (3,224,002)
- --------------------------------------------------- ------------------------------------------ -----------------------------------
Net increase (decrease) resulting from Fund
share transactions 52,953 3,033 118,333 456
- --------------------------------------------------- ------------------------------------------ -----------------------------------
Total Increase (Decrease) in Net Assets 54,137 3,023 118,333 453
=================================================== ========================================== ===================================
Net Assets:
Beginning of period 3,023 0 156,092 155,639
- --------------------------------------------------- ------------------------------------------ -----------------------------------
End of period * $ 57,160 $ 3,023 $ 274,425 $ 156,092
- --------------------------------------------------- ------------------------------------------ -----------------------------------
*Including net undistributed (overdistributed)
investment income of: $ (1) $ 0 $ 19 $ 20
- --------------------------------------------------- ------------------------------------------ -----------------------------------
<CAPTION>
Amounts in thousands StocksPLUS Fund Strategic Balanced Fund
------------------------------------------ -----------------------------------
Six Months Ended Year Ended Six Months Ended Year Ended
Increase (Decrease) in Net Assets from: September 30, 1998 March 31, 1998 September 30, 1998 March 31, 1998
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Operations:
Net investment income (loss) $ 9,198 $ 64,898 $ 493 $ 3,200
- --------------------------------------------------- ------------------------------------------ -----------------------------------
Net realized gain (loss) (60,993) 85,623 (1,630) 3,171
- --------------------------------------------------- ------------------------------------------ -----------------------------------
Net change in unrealized appreciation (depreciation) (8,081) 21,299 382 630
- --------------------------------------------------- ------------------------------------------ -----------------------------------
Net increase (decrease) resulting from operations (59,876) 171,820 (755) 7,001
=================================================== ========================================== ===================================
Distributions to Shareholders:
From net investment income
Institutional Class (5,802) (35,277) (474) (2,495)
- --------------------------------------------------- ------------------------------------------ -----------------------------------
Administrative Class (37) (126) 0 0
- --------------------------------------------------- ------------------------------------------ -----------------------------------
Other Classes (3,199) (15,120) (1) 0
- --------------------------------------------------- ------------------------------------------ -----------------------------------
In excess of net investment income
Institutional Class 0 0 0 0
- --------------------------------------------------- ------------------------------------------ -----------------------------------
Administrative Class 0 0 0 0
- --------------------------------------------------- ------------------------------------------ -----------------------------------
Other Classes 0 0 0 0
- --------------------------------------------------- ------------------------------------------ -----------------------------------
From net realized capital gains
Institutional Class 0 (25,683) 0 (811)
- --------------------------------------------------- ------------------------------------------ -----------------------------------
Administrative Class 0 (96) 0 0
- --------------------------------------------------- ------------------------------------------ -----------------------------------
Other Classes 0 (12,860) 0 0
- --------------------------------------------------- ------------------------------------------ -----------------------------------
In excess of net realized capital gains
Institutional Class 0 0 0 0
- --------------------------------------------------- ------------------------------------------ -----------------------------------
Administrative Class 0 0 0 0
- --------------------------------------------------- ------------------------------------------ -----------------------------------
Other Classes 0 0 0 0
- --------------------------------------------------- ------------------------------------------ -----------------------------------
Total Distributions (9,038) (89,162) (475) (3,306)
=================================================== ========================================== ===================================
Fund Share Transactions:
Receipts for shares sold
Institutional Class 104,321 225,911 173 29,336
- --------------------------------------------------- ------------------------------------------ -----------------------------------
Administrative Class 2,249 1,303 0 0
- --------------------------------------------------- ------------------------------------------ -----------------------------------
Other Classes 177,908 233,963 100 0
- --------------------------------------------------- ------------------------------------------ -----------------------------------
Issued in reorganization
Other Classes 0 0 0 0
- --------------------------------------------------- ------------------------------------------ -----------------------------------
Issued as reinvestment of distributions
Institutional Class 5,090 54,317 9 617
- --------------------------------------------------- ------------------------------------------ -----------------------------------
Administrative Class 35 211 0 0
- --------------------------------------------------- ------------------------------------------ -----------------------------------
Other Classes 2,998 26,317 1 0
- --------------------------------------------------- ------------------------------------------ -----------------------------------
Cost of shares redeemed
Institutional Class (67,354) (165,345) (14) (5,202)
- --------------------------------------------------- ------------------------------------------ -----------------------------------
Administrative Class (267) (291) 0 0
- --------------------------------------------------- ------------------------------------------ -----------------------------------
Other Classes (53,322) (43,168) 0 0
- --------------------------------------------------- ------------------------------------------ -----------------------------------
Net increase (decrease) resulting from Fund
share transactions 171,658 333,218 269 24,751
- --------------------------------------------------- ------------------------------------------ -----------------------------------
Total Increase (Decrease) in Net Assets 102,744 415,876 (961) 28,446
=================================================== ========================================== ===================================
Net Assets:
Beginning of period 677,712 261,836 38,806 10,360
- --------------------------------------------------- ------------------------------------------ -----------------------------------
End of period * $ 780,456 $ 677,712 $ 37,845 $ 38,806
- --------------------------------------------------- ------------------------------------------ -----------------------------------
*Including net undistributed (overdistributed)
investment income of: $ 43,968 $ 43,808 $ 2,037 $ 2,019
- --------------------------------------------------- ------------------------------------------ -----------------------------------
</TABLE>
1998 Semi-Annual Report See accompanying notes 47
<PAGE>
Statement of Cash Flows
For the year or period ended September 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
Low Duration Long-Term Real Return Foreign Global Global Bond
Amounts in thousands Mortgage Fund U.S. Gov't Fund Bond Fund Bond Fund Bond Fund Fund II
-------------- ---------------- ------------ ------------ ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Increase (Decrease) in Cash and Foreign Currency from:
Financing Activities
Sales of Fund shares $ 0 $ 135,767 $ 4,939 $ 175,047 $ 27,158 $ 3,833
- ------------------------------------------ -------------- ---------------- ------------ ------------ ------------ -----------
Redemptions of Fund shares (10) (33,155) (2,239) (61,045) (25,218) (5,208)
- ------------------------------------------ -------------- ---------------- ------------ ------------ ------------ -----------
Cash distributions paid 0 (660) (48) (3,463) (2,027) (95)
- ------------------------------------------ -------------- ---------------- ------------ ------------ ------------ -----------
Proceeds from financing transactions (114) 75,911 9,564 222,438 95,085 2,496
- ------------------------------------------ -------------- ---------------- ------------ ------------ ------------ -----------
Net increase (decrease) from financing
activities (124) 177,863 12,216 332,977 94,998 1,026
========================================== ============== ================ ============ ============ ============ ===========
Operating Activities
Purchases of long-term securities and
foreign currency (3,412) (421,051) (77,457) (1,049,494) (540,784) (85,824)
- ------------------------------------------ -------------- ---------------- ------------ ------------ ------------ -----------
Proceeds from sales of long-term
securities and foreign currency 3,366 243,048 67,426 708,493 415,463 71,097
- ------------------------------------------ -------------- ---------------- ------------ ------------ ------------ -----------
Purchases of short-term securities (net) 49 1,403 (2,387) 7,182 30,629 13,114
- ------------------------------------------ -------------- ---------------- ------------ ------------ ------------ -----------
Net investment income 124 3,458 292 14,724 7,585 1,175
- ------------------------------------------ -------------- ---------------- ------------ ------------ ------------ -----------
Change in other receivables/payables (net) (4) (1,774) (80) (13,235) (6,692) (572)
- ------------------------------------------ -------------- ---------------- ------------ ------------ ------------ -----------
Net increase (decrease) from operating
activities 123 (174,916) (12,206) (332,330) (93,799) (1,010)
========================================== ============== ================ ============ ============ ============ ===========
Net Increase in Cash and Foreign Currency (1) 2,947 10 647 1,199 16
========================================== ============== ================ ============ ============ ============ ===========
Cash and Foreign Currency
Beginning of period 1 23 2 1,867 414 224
- ------------------------------------------ -------------- ---------------- ------------ ------------ ------------ -----------
End of period $ 0 $ 2,970 $ 12 $ 2,514 $ 1,613 $ 240
========================================== ============== ================ ============ ============ ============ ===========
</TABLE>
48 PIMCO Funds See accompanying notes
<PAGE>
Schedule of Investments
Total Return Fund
September 30, 1998 (Unaudited)
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
CORPORATE BONDS & NOTES 39.7%
- --------------------------------------------------------------------------------
Banking & Finance 27.1%
Abbey National PLC
6.700% due 06/29/49 $ 5,000 $ 5,168
Abbey National Treasury Service
6.625% due 05/23/01 240 251
ABN-AMRO Bank NV
7.250% due 05/31/05 150 161
Aetna, Inc.
7.250% due 08/15/23 50 50
Ahmanson (H.F.) & Co.
7.650% due 04/15/00 175 181
Allstate Corp.
6.750% due 05/15/18 280 285
6.900% due 05/15/38 60,400 61,328
American Express Credit
8.500% due 08/15/01 350 381
6.800% due 12/15/03 1,500 1,565
American General Finance
7.250% due 04/15/00 500 514
5.875% due 07/01/00 75 76
6.250% due 12/18/02 1,080 1,114
AON Capital Trust `A'
8.205% due 01/01/27 725 805
Associates Corp. of North America
7.250% due 09/01/99 285 290
6.750% due 10/15/99 90 91
7.850% due 10/20/99 500 513
8.250% due 12/01/99 200 207
7.250% due 12/17/99 660 676
7.470% due 03/27/00 1,000 1,034
6.000% due 06/15/00 2,634 2,666
6.310% due 06/16/00 500 510
6.250% due 09/15/00 200 204
6.625% due 05/15/01 300 310
7.000% due 07/23/01 500 522
5.788% due 08/27/01(d) 2,000 2,005
6.450% due 10/15/01 23,600 24,441
7.500% due 04/15/02 185 198
6.500% due 07/15/02 750 782
6.000% due 07/15/05 60,365 62,231
AT&T Capital Corp.
6.020% due 12/04/98 20,200 20,212
6.250% due 12/08/98(d) 4,700 4,705
5.936% due 01/15/99(d) 14,500 14,527
6.390% due 01/22/99 9,600 9,625
5.610% due 02/01/99 11,000 11,003
5.950% due 02/16/99 140,850 141,068
6.120% due 02/26/99 20,000 20,045
6.061% due 04/01/99(d) 175,500 175,509
6.410% due 08/13/99 4,000 4,026
6.580% due 09/03/99 500 505
5.982% due 09/20/99(d) 9,000 9,002
6.160% due 12/03/99 1,000 1,006
6.060% due 03/21/00(d) 31,100 31,108
AVCO Financial Services
6.350% due 09/15/00 100 102
7.375% due 08/15/01 300 318
Banco Latino Americano SA
6.310% due 10/18/99 850 860
Banco Nacional de Comercio Exterior
8.000% due 04/14/00 4,600 4,145
Banco Nacional de Obra y Servicios
6.875% due 10/01/98 5,000 5,000
Banesto Delaware
8.250% due 07/28/02 28,900 31,984
BankAmerica Corp.
6.119% due 11/01/99(d) 3,000 3,014
5.708% due 03/05/01(d) 36,000 36,117
5.758% due 02/20/02(d) 35,180 35,114
7.750% due 07/15/02 60 65
7.200% due 09/15/02 400 426
7.500% due 10/15/02 1,000 1,077
6.850% due 03/01/03 50 53
6.875% due 06/01/03 100 106
8.375% due 05/01/07 3 3
Bankers Trust
6.750% due 10/03/01 500 517
8.125% due 05/15/02 300 325
5.769% due 07/03/02(d) 10,000 9,980
7.125% due 07/31/02 150 158
5.788% due 05/11/03(d) 82,800 82,946
8.625% due 04/01/18 100 102
Banponce Corp.
6.164% due 12/15/99 5,000 5,038
Bear Stearns
5.600% due 01/14/99(d) 5,000 5,001
5.410% due 03/09/99(d) 13,000 13,018
5.856% due 09/10/99(d) 25,000 25,037
7.625% due 09/15/99 300 306
5.600% due 06/12/00(d) 8,700 8,699
5.830% due 06/20/00(d) 7,700 7,696
6.750% due 08/15/00 50 51
5.350% due 08/25/00(d) 1,400 1,399
5.630% due 08/29/00(d) 39,800 39,819
5.841% due 02/16/01(d) 2,000 1,998
5.856% due 03/02/01(d) 7,500 7,491
5.875% due 01/28/02(d) 11,250 11,202
6.750% due 04/15/03 105 109
5.906% due 07/22/03(d) 19,000 19,031
8.750% due 03/15/04 75 85
6.062% due 03/18/05(d) 31,000 31,131
6.250% due 07/15/05 25,000 25,401
Beneficial Corp.
9.600% due 10/16/98 250 250
5.950% due 07/25/00 5,000 5,045
5.798% due 11/27/00(d) 90,000 90,040
5.830% due 01/09/01(d) 9,000 9,016
5.806% due 01/09/02(d) 500 501
5.858% due 01/23/02(d) 5,000 4,998
5.878% due 03/01/02(d) 40,000 40,104
BT Securities Corp.
5.989% due 08/16/99(d) 10,000 9,990
Capital One Bank
6.830% due 08/16/99 275 277
Caterpillar Financial
6.350% due 12/01/98 125 125
5.738% due 06/08/00(d) 500 500
5.741% due 05/29/01(d) 10,000 9,988
Central Hispano Financial Services
6.187% due 04/29/05 (d) 5,000 5,012
Chase Manhattan Bank
5.875% due 08/04/99 400 401
Chase Manhattan Corp.
8.500% due 02/15/02 200 219
Chemical Banking Corp.
6.125% due 11/01/08 400 407
Chrysler Financial Corp.
8.420% due 02/01/99 695 701
5.650% due 02/04/99(d) 9,000 9,008
6.350% due 06/22/99 8,000 8,046
8.460% due 01/19/00 700 730
6.250% due 03/06/00 14,735 14,973
5.630% due 07/28/00(d) 100 100
6.625% due 08/15/00 300 308
5.860% due 01/16/01 500 505
5.686% due 06/11/01(d) 6,000 6,001
5.777% due 07/17/02(d) 20,000 20,015
5.792% due 08/08/02(d) 34,000 34,046
5.836% due 02/03/03(d) 15,000 15,021
5.822% due 03/06/03(d) 5,000 5,011
5.702% due 06/18/03(d) 35,000 35,027
Chubb Capital Corp.
8.750% due 11/15/99 80 82
6.875% due 02/01/03 100 107
Cincinnati Financial Corp.
6.900% due 05/15/28 34,125 36,727
1998 Semi-Annual Report See accompanying notes 49
<PAGE>
Schedule of Investments (Cont.)
Total Return Fund
September 30, 1998 (Unaudited)
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
CIT Group, Inc.
6.200% due 10/20/00 $ 830 $ 844
6.750% due 05/14/01 30,000 31,026
Citicorp
9.750% due 08/01/99 2,200 2,275
6.088% due 10/20/99 (d) 10,000 10,037
6.088% due 10/25/99 (d) 11,000 11,043
5.918% due 05/23/00 (d) 25,000 25,098
5.918% due 06/01/00 (d) 5,000 5,020
5.941% due 11/28/00 (d) 5,000 5,022
5.999% due 02/01/01 (d) 10,000 10,047
5.813% due 05/24/01 (d) 69,000 69,071
5.768% due 11/13/01 (d) 10,000 10,005
5.738% due 06/27/02 (d) 11,450 11,434
5.781% due 08/15/02 (d) 11,500 11,522
5.813% due 11/12/02 (d) 30,000 29,994
8.000% due 02/01/03 250 273
7.125% due 09/01/05 100 107
Comerica, Inc.
7.250% due 06/15/07 200 221
Commercial Credit Co.
6.750% due 05/15/00 100 102
6.000% due 06/15/00 300 304
5.550% due 02/15/01 300 303
8.250% due 11/01/01 2,500 2,718
7.750% due 03/01/05 50 56
Dean Witter Discover
5.592% due 03/02/99 (d) 100 100
6.750% due 08/15/00 100 103
Deutsche Bank Financial
7.500% due 04/25/09 3,000 3,406
Donaldson, Lufkin & Jenrette
5.938% due 09/18/02 (d) 13,600 13,621
6.170% due 07/15/03 20,000 20,234
Dow Capital BV
7.125% due 01/15/03 100 107
Edison Funding
6.400% due 12/17/98 27,000 27,216
6.000% due 12/20/99 5,000 5,061
Exxon Capital Corp.
7.450% due 12/15/01 250 268
First Chicago
5.918% due 02/10/00 (d) 20,000 20,066
5.768% due 03/11/02 (d) 10,000 10,056
First Chicago Corp.
5.828% due 02/18/03 (d) 10,000 9,931
5.813% due 07/28/03 (d) 50 50
First Interstate Bancorp
8.875% due 01/01/09 (j) 192 203
First Union Corp.
6.375% due 01/15/09 500 521
Fleet Financial Group
9.900% due 06/15/01 200 223
Ford Holdings, Inc.
9.250% due 03/01/00 9,190 9,686
Ford Motor Credit Corp.
5.480% due 11/09/98 (d) 17,580 17,583
8.000% due 01/15/99 500 504
5.330% due 03/23/99 (d) 4,600 4,597
5.340% due 03/30/99 (d) 18,000 17,982
5.293% due 04/05/99 (d) 5,000 4,987
8.875% due 06/15/99 100 102
7.750% due 10/01/99 35 36
8.375% due 01/15/00 195 202
6.950% due 05/15/00 8,450 8,700
5.400% due 08/14/00 (d) 75,800 75,943
6.850% due 08/15/00 1,500 1,541
7.020% due 10/10/00 70,000 72,661
6.250% due 11/08/00 750 765
5.907% due 03/05/01 (d) 5,000 5,020
5.803% due 04/10/01 (d) 10,850 10,851
7.020% due 06/07/01 1,000 1,047
5.690% due 07/13/01 (d) 34,000 34,202
5.788% due 08/27/01 (d) 17,000 16,989
5.828% due 09/03/01 (d) 11,000 11,019
7.000% due 09/25/01 1,125 1,179
5.776% due 10/15/01 (d) 10,000 10,013
5.813% due 01/17/02 (d) 53,945 53,720
8.200% due 02/15/02 11,600 12,613
6.500% due 02/28/02 1,560 1,615
5.847% due 04/29/02 (d) 42,000 42,012
7.320% due 05/23/02 14,000 14,158
5.838% due 06/04/02 (d) 2,000 2,006
5.838% due 10/15/02 (d) 4,000 4,004
7.750% due 11/15/02 5,000 5,436
5.828% due 02/03/03 (d) 30,000 30,058
5.788% due 02/13/03 (d) 100,000 100,181
5.813% due 02/13/03 (d) 190,985 191,316
6.125% due 04/28/03 580 598
6.625% due 06/30/03 575 605
5.888% due 06/02/04 (d) 1,500 1,504
8.250% due 02/23/05 2,500 2,872
5.875% due 04/28/05 (d) 50,000 49,972
6.125% due 01/09/06 25 26
7.700% due 05/15/97 450 519
Fuji Bank
9.870% due 12/31/49 (d) 10,000 4,445
General Electric Capital Corp.
5.980% due 03/19/99 1,500 1,505
8.375% due 03/01/01 665 716
5.500% due 11/01/01 50 50
8.300% due 09/20/09 150 184
7.100% due 08/13/12 35 41
General Motors Acceptance Corp.
5.330% due 03/16/99 (d) 13,000 13,029
8.625% due 06/15/99 650 664
6.625% due 07/07/99 10,000 10,083
7.375% due 09/09/99 1,000 1,016
6.150% due 09/20/99 20,300 20,480
8.000% due 10/01/99 28,850 29,565
6.050% due 10/04/99 2,550 2,572
6.375% due 10/12/99 2,000 2,016
8.400% due 10/15/99 360 371
6.250% due 10/18/99 1,000 1,007
8.170% due 01/02/00 1,244 1,282
8.625% due 01/10/00 5,000 5,191
6.500% due 01/17/00 46,110 46,612
7.000% due 03/01/00 100 102
7.875% due 03/15/00 5,650 5,841
6.650% due 05/05/00 6,500 6,624
6.875% due 06/01/00 10,250 10,493
7.500% due 06/09/00 1,000 1,040
5.500% due 01/16/01 15,000 15,069
8.625% due 01/18/01 15,000 16,066
8.500% due 01/19/01 3,675 3,946
5.800% due 04/09/01 8,340 8,440
6.800% due 04/17/01 4,800 4,993
5.950% due 04/20/01 22,150 22,496
6.700% due 04/30/01 3,000 3,101
7.125% due 05/01/01 44,095 46,020
6.750% due 06/05/01 880 912
5.708% due 10/22/01 (d) 25,000 24,971
9.625% due 12/15/01 300 338
5.772% due 01/08/02 (d) 3,000 3,000
6.625% due 01/10/02 500 522
6.750% due 02/07/02 1,590 1,660
5.813% due 04/29/02 (d) 168,184 168,204
7.000% due 09/15/02 250 265
6.625% due 10/01/02 5,000 5,262
5.788% due 11/12/02 (d) 10,200 10,188
5.875% due 01/22/03 30,500 31,110
6.750% due 03/15/03 40,125 42,477
7.125% due 05/01/03 36,000 38,577
5.788% due 08/18/03 (d) 31,990 31,997
5.550% due 09/15/03 32,000 32,243
6.625% due 10/20/03 2,000 2,109
8.950% due 07/02/09 21,500 24,258
50 PIMCO Funds See accompanying notes
<PAGE>
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
Goldman Sachs & Co.
5.748% due 07/31/00 (d) $ 26,000 $ 26,016
5.845% due 11/21/00 (d) 10,000 9,979
5.909% due 11/24/00 (d) 108,000 108,304
6.200% due 12/15/00 6,500 6,686
5.791% due 12/22/00 (d) 17,000 17,085
5.844% due 01/09/01 (d) 105,000 104,789
5.867% due 01/25/01 (d) 77,000 77,048
5.994% due 04/16/01 (d) 18,000 18,020
5.958% due 12/07/01 (d) 25,000 25,071
Goldman Sachs Mortgage Corp.
6.000% due 12/31/07 (j) 10,361 10,425
Great Western Bank
8.625% due 12/01/98 6,000 6,029
Hartford Life
7.650% due 06/15/27 15,000 16,310
Heller Financial, Inc.
6.250% due 01/15/99 200,000 200,414
5.769% due 02/05/99 (d) 50,000 50,050
5.749% due 02/26/99 (d) 10,000 10,013
5.796% due 04/01/99 (d) 19,000 19,027
5.938% due 04/27/99 (d) 20,000 20,047
5.763% due 09/03/99 (d) 4,000 4,008
6.405% due 10/15/99 10,000 10,130
5.808% due 12/01/99 (d) 25,000 25,106
6.520% due 12/06/99 8,750 8,915
5.625% due 03/15/00 200 200
6.500% due 05/15/00 12,000 12,218
5.907% due 07/07/00 (d) 60,000 60,035
5.829% due 08/25/00 (d) 7,600 7,633
5.830% due 09/25/00 (d) 13,500 13,517
Hitachi Credit America
5.813% due 05/15/00 25,000 25,048
5.969% due 07/07/00 (d) 40,000 40,071
Household Bank
5.847% due 09/26/01 (d) 9,000 9,011
5.875% due 10/22/03 (d) 15,000 14,908
Household Capital Trust
6.038% due 06/26/04 (d) 3,075 3,064
Household Finance Corp.
6.580% due 05/17/99 165 166
5.869% due 11/01/01 (d) 5,000 5,001
5.816% due 05/07/02 (d) 40,850 40,493
5.938% due 06/24/03 (d) 35,000 35,072
5.948% due 06/24/03 (d) 31,000 31,063
Inter-American Development Bank
8.875% due 06/01/09 200 259
International Lease Finance
5.750% due 12/15/99 50 50
7.000% due 05/15/00 500 513
6.420% due 09/11/00 500 513
5.930% due 07/15/03 14,000 14,365
J.P. Morgan & Co.
6.250% due 12/15/05 200 203
Kimco Realty Corp.
6.500% due 10/01/03 200 207
Korea Development Bank
5.875% due 12/01/98 60 60
6.750% due 12/01/05 55 38
7.250% due 05/15/06 50 38
Korean Export-Import Bank
6.500% due 10/06/99 7,000 6,622
LB Rheinland - PFALZ
5.000% due 02/23/28 (d) 3,400 3,555
Lehman Brothers, Inc.
5.750% due 11/15/98 2,000 1,998
5.570% due 01/12/99 (d) 600 600
7.410% due 05/25/99 500 503
5.040% due 09/01/99 (d) 10,000 10,000
7.140% due 09/24/99 11,900 11,938
7.110% due 09/27/99 20 20
6.710% due 10/12/99 3,000 2,997
5.894% due 01/18/00 (d) 55,000 54,610
6.150% due 03/15/00 7,700 7,635
6.007% due 04/03/00 (d) 30,000 30,023
6.525% due 07/27/00 (d) 8,000 7,949
5.540% due 08/11/00 (d) 30,000 29,264
6.106% due 09/26/00 (d) 5,000 5,011
6.066% due 11/06/00 (d) 18,610 18,641
6.277% due 12/01/00 (d) 500 503
5.877% due 02/27/01 (d) 49,000 47,371
5.893% due 06/01/01 (d) 100,000 96,035
6.461% due 08/28/02 (d) 6,500 6,486
5.987% due 09/03/02 (d) 14,000 14,028
Marine Midland Bank
5.813% due 12/20/00 (d) 3,700 3,739
MBNA Corp.
6.088% due 12/01/99 (d) 66,900 67,034
Mellon Bank Corp.
6.500% due 08/01/05 75 79
Merrill Lynch & Co.
6.375% due 03/30/99 400 402
8.250% due 11/15/99 250 258
5.758% due 04/17/00 (d) 5,000 4,999
6.620% due 06/06/00 500 510
6.450% due 06/20/00 350 357
6.019% due 08/03/00 (d) 5,000 5,020
5.738% due 09/25/00 (d) 5,000 4,986
5.757% due 10/03/00 (d) 20,000 19,988
5.800% due 12/05/00 (d) 89,000 89,127
6.500% due 04/01/01 400 412
5.798% due 05/08/01 54,900 54,755
5.888% due 05/30/01 (d) 3,800 3,810
5.758% due 06/04/01 (d) 30,000 30,053
5.758% due 11/01/01 (d) 30,000 30,021
5.768% due 11/09/01 (d) 10,000 9,967
5.756% due 01/15/02 (d) 17,000 16,932
8.300% due 11/01/02 200 222
6.875% due 03/01/03 140 149
5.838% due 06/24/03 (d) 22,000 22,066
5.849% due 10/01/03 (d) 5,000 5,008
7.000% due 03/15/06 1,500 1,617
7.000% due 04/27/08 100 109
MIC Financing Trust
8.375% due 02/01/27 36,000 39,101
Morgan Stanley Group, Inc.
6.375% due 12/15/03 150 157
Morgan Stanley, Dean Witter, Discover and Co.
5.983% due 04/16/01 (d) 25,000 25,029
5.838% due 12/19/01 (d) 14,700 14,723
5.875% due 03/11/03 (d) 10,000 10,004
Nacional Financiera
8.000% due 06/19/00 4,500 4,230
NationsBank Corp.
6.750% due 02/26/01 500 518
7.000% due 09/15/01 1,500 1,568
5.838% due 06/17/02 (d) 10,000 9,961
NCNB Corp.
7.750% due 08/01/02 796 797
Norwest Corp.
5.750% due 11/16/98 300 300
5.625% due 02/05/01 400 404
Norwest Financial, Inc.
8.375% due 01/15/00 125 126
7.000% due 01/15/03 300 320
6.000% due 02/01/04 50 52
Okobank
6.049% due 05/23/06 (d) 10,000 9,954
Paccar Financial Corp.
6.740% due 09/15/00 250 258
PaineWebber
5.987% due 10/04/99 (d) 4,000 4,008
6.950% due 03/31/00 120 123
7.000% due 03/01/00 200 204
6.538% due 05/09/00 (d) 5,000 5,027
5.938% due 02/18/02 (d) 5,000 5,007
6.058% due 05/20/02 (d) 1,000 1,002
Pitney Bowes Credit Corp.
6.540% due 07/15/99 400 404
1998 Semi-Annual Report See accompanying notes 51
<PAGE>
Schedule of Investments (Cont.)
Total Return Fund
September 30, 1998 (Unaudited)
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
PNC Bank Corp.
5.606% due 06/01/00 (d) $ 217,000 $ 217,014
5.694% due 01/24/02 (d) 49,000 48,933
5.719% due 08/15/02 (d) 5,000 5,005
PNC Funding Corp.
6.875% due 03/01/03 100 106
Popular, Inc.
6.715% due 06/06/00 20,000 20,391
Prudential Insurance Co.
6.375% due 07/23/06 15,000 15,585
Reliance Group Holdings
9.000% due 11/15/00 19,000 19,595
9.750% due 11/15/03 10,000 10,350
Residential Reinsurance
9.848% due 06/01/99 (d) 34,500 34,338
Salomon, Inc.
5.250% due 10/15/98 400 400
5.975% due 11/19/98 (d) 3,000 3,003
6.220% due 11/19/98 37,455 37,481
6.554% due 02/12/99 (d) 1,000 1,002
8.690% due 03/01/99 2,270 2,299
5.582% due 04/05/99 (d) 5,500 5,503
7.000% due 05/15/99 26,090 26,386
5.540% due 06/24/99 (d) 9,000 8,974
7.590% due 01/28/00 150 154
6.500% due 03/01/00 18,350 18,633
6.625% due 11/30/00 235 242
6.650% due 07/15/01 600 621
7.000% due 03/04/02 5,000 5,270
6.025% due 05/16/02 (d) 19,000 19,042
Salomon, Smith Barney Holdings
7.980% due 03/01/00 12,000 12,382
5.875% due 02/01/01 4,000 4,032
3.650% due 02/14/02 (h) 17,492 17,000
Sears Roebuck Acceptance
6.000% due 03/20/03 130,000 133,446
Security Pacific Corp.
6.000% due 05/01/00 600 606
11.500% due 11/15/00 4,000 4,482
Signet Bank Corp.
9.625% due 06/01/99 6,500 6,669
Smith Barney Holdings
6.625% due 06/01/00 95 97
Societe Generale
7.400% due 06/01/06 1,500 1,613
Sparbanken Sverige AB
7.531% due 10/29/49 (d) 12,670 12,738
Sumitomo
9.400% due 12/29/49 (d) 18,250 15,357
Swedbank
7.664% due 10/29/49 (d) 12,000 12,161
Textron Financial Corp.
5.788% due 11/24/99 (d) 10,000 10,011
Tokai Capital Corp.
9.980% due 12/29/49 (d) 20,250 15,263
Toyota Motor Credit Corp.
5.388% due 02/15/02 (h) 40,000 38,954
Transamerica Financial
5.234% due 04/20/99 (d) 500 500
7.400% due 07/29/99 2,000 2,035
Trinet Corp. Realty Trust
6.750% due 03/01/03 45 46
Trizec Finance Limited
10.875% due 10/15/05 2,489 2,651
U.S. Bancorp
5.782% due 01/16/02 (d) 49,000 48,998
Wachovia Bank
6.700% due 04/14/99 500 503
Wachovia Corp.
7.000% due 12/15/99 100 102
Wells Fargo & Co.
8.750% due 05/01/02 100 111
Westdeutsche
6.750% due 06/15/05 4,000 4,363
World Savings & Loan
9.900% due 07/01/00 250 255
Xerox Corp.
7.010% due 04/30/99 120 121
--------------
6,051,497
==============
Industrials 8.5%
Albertson's, Inc.
6.375% due 06/01/00 150 153
American Home Products Corp.
7.700% due 02/15/00 300 311
Amerigas Partners LP
10.125% due 04/15/07 1,730 1,702
AMR Corp.
8.050% due 03/05/99 4,000 4,042
9.750% due 03/15/00 10,760 11,442
10.610% due 01/11/01 4,000 4,460
10.570% due 01/15/01 3,000 3,330
10.590% due 01/31/01 3,000 3,337
10.000% due 02/01/01 2,000 2,190
9.400% due 05/08/01 3,000 3,304
9.500% due 05/15/01 2,250 2,489
9.130% due 10/25/01 2,000 2,200
8.470% due 02/20/02 2,000 2,200
8.500% due 02/26/02 1,000 1,101
10.210% due 01/01/10 6,500 8,323
Baxter International
9.500% due 06/15/08 200 258
Bellat Racers
5.969% due 04/01/03 (d) 20,000 20,000
BOC Group PLC
5.875% due 01/29/01 250 255
Boeing Co.
8.375% due 02/15/01 150 161
6.350% due 06/15/03 500 529
Boise Cascade Co.
9.900% due 03/15/00 275 287
Building Materials Corp.
0.000% due 07/01/04 (i) 20,320 20,218
Canadian Pacific Limited
9.450% due 08/01/21 2,750 3,680
Casino Magic Financial
11.500% due 10/15/01 9,260 9,376
CBS, Inc.
7.625% due 01/01/02 100 104
Cemex SA
10.750% due 11/05/99 1,000 977
10.750% due 07/15/00 5,000 4,806
8.500% due 08/31/00 10,000 9,486
Centerior Fuel Corp.
9.540% due 08/02/99 (j) 10,000 10,416
9.750% due 08/02/00 (j) 8,000 8,665
Century Communications Corp.
9.500% due 08/15/00 6,000 6,240
0.000% due 03/15/03 10,515 7,453
CF Cable TV, Inc.
9.125% due 07/15/07 1,600 1,801
Circus Circus Enterprises
6.750% due 07/15/03 4,500 4,264
Coca-Cola Co.
6.375% due 08/01/01 200 206
7.875% due 02/01/02 600 650
Coltec Industries Rights
7.500% due 04/15/08 4,400 4,186
Columbia HCA Healthcare
8.020% due 08/05/02 3,880 3,921
8.130% due 08/04/03 7,000 7,158
Continental Cablevision
11.000% due 06/01/07 4,536 4,925
CSC Holdings, Inc
7.625% due 07/15/18 20,000 19,463
Cumberland Farms
10.500% due 10/01/03 3,000 2,955
Dayton Hudson Corp.
10.000% due 12/01/00 1,000 1,098
52 PIMCO Funds See accompanying notes
<PAGE>
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
Delta Air Lines
10.140% due 08/14/12 $ 1,000 $ 1,331
Disney (Walt) Co.
6.375% due 03/30/01 250 260
6.750% due 03/30/06 100 110
E.I. Du Pont de Nemours
9.150% due 04/15/00 100 106
6.000% due 12/01/01 200 200
Eli Lilly & Co.
8.125% due 02/07/00 387 402
Enron Corp.
5.849% due 11/18/99 (d) 35,000 35,036
Federal-Mogul Corp.
7.880% due 12/31/05 3,886 3,878
7.940% due 12/31/05 1,139 1,137
Ford Motor Co.
9.000% due 09/15/01 880 975
6.625% due 10/01/28 108,000 107,460
Fortune Brands
8.500% due 10/01/03 500 578
Fred Meyer, Inc.
7.150% due 03/01/03 6,000 6,002
7.375% due 03/01/05 39,325 41,586
General Motors Acceptance Corp.
9.625% due 12/01/00 225 246
7.100% due 03/15/06 250 275
Gillette Co.
5.750% due 10/15/05 1,500 1,549
Gulf Canada Resources
9.250% due 01/15/04 7,250 7,408
9.625% due 07/01/05 2,000 2,025
H.J. Heinz Co.
7.500% due 04/26/00 150 156
Harris Chemical
10.250% due 07/15/01 22,975 23,521
10.750% due 10/15/03 42,420 44,117
Hollinger International Publishing
9.250% due 02/01/06 3,000 3,098
IBM Corp.
5.732% due 11/01/99 (d) 35,000 34,956
7.250% due 11/01/02 100 109
7.125% due 12/01/96 2,500 2,826
Imperial Chemical
5.750% due 12/05/98 (d) 118,000 118,006
5.750% due 03/05/99 (d) 98,700 98,896
INDSPEC Chemical Corp.
0.000% due 12/01/03 (i) 5,500 5,693
Ingersoll-Rand Co.
6.255% due 02/15/01 295 303
Intermedia Communications, Inc.
0.000% due 05/15/06 (i) 2,500 2,075
ISP Holdings, Inc.
9.750% due 02/15/02 4,500 4,770
9.000% due 10/15/03 5,000 5,213
ITT Corp.
6.250% due 11/15/00 70 69
K-III Communications Co.
8.500% due 02/01/06 4,000 4,060
Kellogg
5.750% due 02/02/01 74,850 76,144
Langdell
9.978% due 07/30/99 (d) 9,800 9,751
Lenfest Communications
8.375% due 11/01/05 5,000 5,263
Loyola University of Chicago
6.030% due 06/15/00 (d) 16,100 16,489
Mallinckrodt, Inc.
6.300% due 03/15/11 (d) 10,000 10,244
Mazda Manufacturing Corp.
10.500% due 07/01/08 (j) 1,980 2,648
Mobil Corp.
8.375% due 02/12/01 40 43
Nabisco, Inc.
6.800% due 09/01/01 3,000 3,060
6.125% due 02/01/33 15,000 15,211
New York Times Co.
7.625% due 03/15/05 1,000 1,136
News America Holdings Corp.
8.625% due 02/01/03 750 833
News Corp Limited
0.000% due 06/15/99 (i) 900 845
Nike, Inc.
6.510% due 06/16/00 1,000 1,031
Noranda, Inc.
7.000% due 07/15/05 1,800 1,874
Owens Corning
7.000% due 05/15/00 200 205
Pennzoil Co.
9.625% due 11/15/98 5,000 5,193
Pepsico, Inc.
7.750% due 10/01/98 800 800
7.625% due 11/01/98 1,500 1,502
Petroleos Mexicanos
11.157% due 07/15/05 (d) 16,000 13,960
Philip Morris Cos., Inc.
7.375% due 02/15/99 115 116
8.625% due 03/01/99 200 203
6.150% due 03/15/00 20,000 20,269
7.250% due 09/15/01 70 74
7.500% due 01/15/02 50 53
6.800% due 12/01/03 48,345 51,321
7.000% due 07/15/05 1,125 1,205
7.200% due 02/01/07 32,000 35,050
Procter & Gamble Co.
5.250% due 09/15/03 35,000 35,610
Racers
6.156% due 01/11/99 (d) 79,000 78,951
7.709% due 04/28/03 (d) 30,000 25,350
RJR Nabisco
8.000% due 01/15/00 6,777 6,810
7.625% due 09/01/00 6,000 6,246
8.000% due 07/15/01 35,630 36,426
8.625% due 12/01/02 4,370 4,574
7.625% due 09/15/03 9,000 8,938
8.750% due 04/15/04 23,800 24,495
8.250% due 07/01/04 2,000 1,917
8.750% due 07/15/07 25,000 25,476
Rogers Cablesystems, Inc.
10.000% due 12/01/07 5,000 5,525
Rogers Cantel Mobile
9.375% due 06/01/08 2,750 2,805
Saferco
9.460% due 05/31/99 (j) 1,000 1,027
9.630% due 05/31/00 (j) 6,500 6,983
9.590% due 05/31/01 (j) 3,000 3,353
Sara Lee Corp.
6.300% due 11/07/05 500 535
Sears Roebuck & Co.
7.960% due 02/18/99 500 504
5.820% due 02/22/99 125 125
6.800% due 05/07/01 500 517
6.790% due 05/21/01 500 520
9.400% due 08/02/01 (j) 250 277
Sears Roebuck Acceptance
5.856% due 06/27/00 (d) 5,000 5,006
7.110% due 06/19/01 1,000 1,044
6.120% due 12/13/01 260 267
6.950% due 05/15/02 300 315
7.140% due 05/02/03 5,000 5,348
6.560% due 11/20/03 1,178 1,237
6.700% due 11/15/06 500 530
Shell Oil Co.
7.250% due 02/15/02 50 50
Smithfield Foods
7.625% due 02/15/08 2,000 1,970
1998 Semi-Annual Report See accompanying notes 53
<PAGE>
Schedule of Investments (Cont.)
Total Return Fund
September 30, 1998 (Unaudited)
Principal
Amount Value
(000s) (000s)
================================================================================
Smithkline Beecham
7.375% due 04/15/05 $ 150 $ 169
Stone Container Corp.
11.875% due 12/01/98 4,074 4,074
SUPERVALU, Inc.
6.500% due 10/06/00 140 145
TCI Communications, Inc.
7.250% due 06/15/99(d) 1,100 1,116
6.375% due 09/15/99 39,175 39,501
6.090% due 02/02/00(d) 50,000 50,051
5.945% due 09/11/00(d) 47,000 46,924
6.656% due 12/20/00(d) 10,000 10,026
6.375% due 05/01/03 3,200 3,343
Telecommunications, Inc.
7.375% due 02/15/00 12,000 12,343
8.250% due 01/15/03 43,125 48,008
Telewest Communications
9.625% due 10/01/06 5,000 5,050
Tenet Healthcare Corp.
7.625% due 06/01/08 27,000 28,013
Time Warner, Inc.
6.100% due 12/30/01 1,375 1,410
7.975% due 08/15/04 31,803 35,654
8.110% due 08/15/06 80,929 93,201
8.180% due 08/15/07 2,400 2,810
7.250% due 09/01/08 125 139
Transamerica Corp.
6.750% due 11/15/06 500 534
Union Pacific Corp.
5.945% due 05/22/00(d) 60,000 59,963
United Airlines
9.000% due 12/15/03 1,000 1,156
USA Waste Services, Inc.
6.125% due 07/15/01 22,000 22,507
USX Corp.
9.800% due 07/01/01 300 334
Wal-Mart Stores, Inc.
9.100% due 07/15/00 100 107
8.625% due 04/01/01 1,050 1,144
Westvaco Corp.
9.650% due 03/01/02 150 172
Williams Co.
5.909% due 01/30/00(d) 23,000 23,051
WMX Technologies
6.000% due 11/02/98 19,800 19,808
6.700% due 05/01/01 10,000 10,323
7.000% due 10/15/06 500 543
World Color Press, Inc.
9.125% due 03/15/03 5,000 5,025
WorldCom, Inc.
9.375% due 01/15/04 37,132 43,462
Xerox Corp.
7.040% due 04/30/99 770 777
6.500% due 06/29/00 280 287
5.750% due 07/21/00 500 508
7.410% due 05/15/01 1,000 1,054
-----------
1,902,540
-----------
Utilities 4.1%
AES Corp.
10.250% due 07/15/06 4,500 4,680
Appalachian Power Co.
6.350% due 03/01/00 500 509
AT&T Corp.
7.125% due 01/15/02 75 80
7.000% due 05/15/05 200 220
Baltimore Gas & Electric
6.125% due 07/01/03 150 156
Beaver Valley Funding Corp.
8.250% due 06/01/03 825 859
BellSouth Telecommunications, Inc.
7.500% due 06/15/33 185 206
Bridas Corp.
10.250% due 12/07/98 430 433
California Energy
9.875% due 06/30/03 14,000 15,474
10.250% due 01/15/04 39,985 42,484
9.500% due 09/15/06 10,040 11,144
Calpine Corp.
9.250% due 02/01/04 4,150 4,171
7.875% due 04/01/08 2,500 2,413
Central Maine Power Co.
6.250% due 11/01/98 1,000 1,000
6.350% due 09/20/99 30,000 30,116
Chesapeake & Potomac Telephone
8.000% due 10/15/29 1,125 1,420
Cleveland Electric Illuminating Co.
8.150% due 11/30/98 7,500 7,527
7.850% due 11/01/99 6,000 6,132
9.500% due 05/15/05 13,000 14,365
Cleveland Electric/Toledo Edison
7.190% due 07/01/00 20,400 20,897
CMS Energy
7.375% due 11/15/00 57,535 58,024
7.000% due 01/15/05 18,000 18,130
Coastal Corp.
8.750% due 05/15/99 4,300 4,377
Commonwealth Edison
6.500% due 04/15/00 6,185 6,298
5.560% due 06/15/02(d) 1,000 1,001
8.000% due 10/15/03 7,550 7,654
8.125% due 01/15/07 10,000 10,225
9.875% due 06/15/20 11,700 14,234
Connecticut Light & Power
7.250% due 07/01/99 4,485 4,486
5.750% due 07/01/00 2,000 2,000
7.750% due 06/01/02 5,000 5,248
8.590% due 06/05/03 22,000 23,272
Consolidated Edison
7.600% due 01/15/00 100 103
5.788% due 12/15/01(d) 10,000 9,993
Consolidated Natural Gas Co.
5.875% due 10/01/98 500 500
Detroit Edison Co.
6.450% due 04/01/99 10,500 10,509
Duke Energy Corp.
8.000% due 11/01/99 40 41
7.000% due 06/01/00 700 722
6.750% due 08/01/25 25 25
Eastern Edison Co.
7.780% due 07/30/02 9,000 9,784
El Paso Electric Co.
7.250% due 02/01/99 10,956 11,001
First PV Funding
10.150% due 01/15/16 2,773 2,931
Gulf States Utilities
7.250% due 03/01/99 6,200 6,226
Illinois Power
6.500% due 09/01/99 12,050 12,162
Korea Electric Power
6.375% due 12/01/03 170 121
Long Island Lighting Co.
7.300% due 07/15/99 76,085 77,221
6.250% due 07/15/01 13,645 14,089
8.900% due 07/15/19 46,000 48,804
9.000% due 11/01/22 15,000 17,633
Louisiana Power & Light Co.
7.740% due 07/01/02 1,900 1,940
MCI Communications Corp.
6.250% due 03/23/99 600 602
6.125% due 04/15/02 1,250 1,293
National Power Corp.
9.625% due 05/15/28 16,000 10,272
National Rural Utilities Cooperative
6.250% due 04/15/03 50,000 51,748
New Jersey Bell Telephone
7.850% due 11/15/29 70 88
54 PIMCO Funds See accompanying notes
<PAGE>
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
New York Telephone Co.
6.250% due 02/15/04 $ 150 $ 158
Niagara Mohawk Power
7.000% due 10/01/00 25,000 25,307
7.125% due 07/01/01 27,250 27,688
7.250% due 10/01/02 10,000 10,199
7.375% due 07/01/03 31,000 32,151
7.750% due 10/01/08 25,200 26,925
North Atlantic Energy
9.050% due 06/01/02 4,542 4,813
Northern Illinois Gas Co.
6.450% due 08/01/01 1,450 1,487
Ohio Edison
6.875% due 09/15/99 5,750 5,813
Pacific Gas & Electric Co.
7.670% due 12/15/98 208 209
6.750% due 12/01/00 709 709
Pacific Northwest Bell
4.375% due 09/01/02 50 49
Pennsylvania Power & Light
6.000% due 06/01/00 500 507
Philadelphia Electric
7.500% due 01/15/99 5,000 5,028
5.625% due 11/01/01 17,000 17,262
Public Service Electric & Gas
8.750% due 07/01/99 90 92
7.625% due 02/01/00 150 154
6.500% due 06/01/00 500 510
6.125% due 08/01/02 1,000 1,040
Queststar Pipeline
9.375% due 06/01/21 200 238
Southwestern Bell Telephone Co.
6.125% due 03/01/00 50 51
Sprint Corp.
8.125% due 07/15/02 10,378 11,509
System Energy Resources
7.380% due 10/01/00 5,000 5,165
7.710% due 08/01/01 14,850 15,708
Tennessee Valley Authority
0.000% due 04/15/42(i) 855 373
Texas Utilities Co.
6.250% due 01/31/00 6,000 6,073
6.270% due 02/01/00 11,000 11,164
5.958% due 04/24/00(d) 44,000 44,024
Texas-New Mexico Power
10.750% due 09/15/03 4,950 5,395
Toledo Edison Co.
8.180% due 07/30/02 1,400 1,519
8.700% due 09/01/02 10,000 10,927
7.850% due 03/31/03 7,000 7,582
7.875% due 08/01/04 500 543
Tuscon Electric Power
8.500% due 10/01/09 1,000 1,032
U.S. West Communications, Inc.
6.625% due 09/15/05 300 322
6.125% due 11/15/05 400 418
United Air Lines
10.670% due 05/01/04 2,050 2,558
Western Massachusetts Electric
6.875% due 01/01/00 700 708
7.375% due 07/01/01 7,000 7,219
Western Resources, Inc.
6.250% due 08/15/03 8,500 8,786
Wilmington Trust Co.-Tucson Electric
10.732% due 01/01/13(j) 991 1,149
WorldCom, Inc.
6.400% due 08/15/05 1,000 1,051
------------
910,658
------------
Total Corporate Bonds & Notes 8,864,695
(Cost $8,801,014) ============
- --------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCIES 4.2%
- --------------------------------------------------------------------------------
A.I.D. Housing Guarantee-Peru
9.980% due 08/01/08 1,155 1,264
Federal Farm Credit Bank
5.600% due 05/03/99 500 502
Federal Home Loan Bank
5.540% due 07/15/99 295 297
5.010% due 09/21/00 970 977
5.755% due 03/25/03 50 52
6.500% due 11/29/05 100 109
Federal Home Loan Mortgage Corp.
6.565% due 11/04/02 2,000 2,003
6.170% due 12/11/02 2,000 2,005
7.050% due 06/08/05 200 208
6.780% due 12/07/05 100 100
6.600% due 02/02/06 250 251
Federal National Mortgage Assn.
4.875% due 10/15/98 100 100
5.360% due 02/16/01 1,500 1,524
5.780% due 09/17/03 100 100
6.625% due 03/21/06 200 221
7.040% due 03/27/07 1,000 1,031
New York City
6.008% due 08/01/02(d) 19,813 19,813
6.023% due 08/01/02(d) 15,674 15,634
Resolution Funding
0.000% due 01/15/07(i) 800 544
Student Loan Marketing Assn.
4.847% due 02/20/00(d) 134,700 133,595
5.684% due 06/30/00(d) 38,700 38,720
5.877% due 01/25/03(d) 45,333 45,371
5.702% due 04/25/04(d) 25,952 25,952
5.617% due 10/25/04(d) 31,806 31,710
5.637% due 10/25/04(d) 59,434 59,296
5.533% due 10/25/05(d) 13,340 13,277
5.727% due 10/25/05(d) 42,545 42,349
5.650% due 04/25/06(d) 131,696 131,222
5.760% due 01/25/07(d) 133,128 133,278
5.823% due 04/25/07(d) 227,480 227,424
------------
Total U.S. Government Agencies 928,929
(Cost $929,121) ============
- --------------------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS 8.3%
- --------------------------------------------------------------------------------
Treasury Inflation Protected Securities
3.625% due 07/15/02(h) 666,887 670,013
3.375% due 01/15/07(h) 690 680
3.625% due 04/15/28(h) 116,205 115,914
U.S. Treasury Bonds
11.125% due 08/15/03 800 1,033
11.875% due 11/15/03 18,000 24,086
12.375% due 05/15/04 1,000 1,393
11.625% due 11/15/04 270,000 373,360
12.000% due 08/15/13 8,845 13,873
13.250% due 05/15/14 5,000 8,505
11.750% due 11/15/14 40 64
9.250% due 02/15/16 75 111
8.875% due 02/15/19 51,000 74,603
8.500% due 02/15/20 7,142 10,180
8.125% due 05/15/21 225,000 312,117
8.125% due 08/15/21 1,890 2,625
8.000% due 11/15/21 75,555 103,888
6.750% due 08/15/26 510 626
U.S. Treasury Notes
5.000% due 02/15/99 2,000 2,003
5.875% due 03/31/99 2,000 2,013
6.375% due 07/15/99 500 507
5.625% due 10/31/99 170 172
5.875% due 11/15/99 2,000 2,028
7.875% due 11/15/99 125 129
7.750% due 11/30/99 2,000 2,071
7.750% due 01/31/00 2,000 2,083
1998 Semi-Annual Report See accompanying notes 55
<PAGE>
Schedule of Investments (Cont.)
Total Return Fund
September 30, 1998 (Unaudited)
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
5.500% due 04/15/00 $ 2,000 $ 2,030
6.250% due 05/31/00 245 252
6.250% due 08/31/00 340 352
6.125% due 09/30/00 2,640 2,728
5.750% due 10/31/00 2,000 2,054
5.625% due 11/30/00 4,500 4,615
5.250% due 01/31/01 4,000 4,078
5.375% due 02/15/01 1,295 1,325
6.500% due 08/31/01 1,300 1,374
6.375% due 09/30/01 2,720 2,870
6.625% due 03/31/02 2,000 2,144
5.750% due 10/31/02 1,750 1,839
5.750% due 11/30/02 100 105
5.625% due 12/31/02 105,100 110,224
6.500% due 05/15/05 950 1,067
6.500% due 08/15/05 685 772
6.875% due 05/15/06 815 942
6.125% due 08/15/07 575 644
U.S. Treasury Strips
0.000% due 05/15/01 390 348
0.000% due 11/15/08 1,630 1,010
0.000% due 05/15/17 1,530 567
0.000% due 08/15/17 650 237
0.000% due 05/15/18 1,310 458
----------------
Total U.S. Treasury Obligations 1,866,112
(Cost $1,837,645) ================
- --------------------------------------------------------------------------------
MORTGAGE-BACKED SECURITIES 56.4%
- --------------------------------------------------------------------------------
Collateralized Mortgage Obligations 14.9%
American Southwest Financial
0.000% due 06/04/13 (i) 64,050 70,896
12.250% due 11/01/14 63 71
12.500% due 04/01/15 559 622
12.000% due 05/01/15 1,031 1,150
11.400% due 09/01/15 773 808
Bear Stearns
6.438% due 10/25/23 (d) 6,273 6,279
10.000% due 08/25/24 12,256 13,167
7.000% due 03/25/27 7,000 7,205
Capstead Mortgage Corp.
8.750% due 07/25/21 10,000 10,049
Centex Acceptance Corp.
11.000% due 11/01/15 223 223
Chase Mortgage Financial Corp.
8.250% due 10/25/10 2,032 2,029
9.500% due 04/25/24 26 26
Citicorp Mortgage Securities, Inc.
9.500% due 09/25/19 250 249
6.000% due 08/25/21 52 51
7.374% due 10/25/22 (d) 17,147 17,672
7.250% due 02/25/27 227 229
CMC Securities Corp.
6.930% due 09/25/23 (d) 9,025 9,256
7.753% due 04/25/25 (d) 297 298
Collateralized Mortgage Obligation Trust
10.200% due 02/01/16 535 571
8.000% due 01/01/17 215 216
8.000% due 09/20/21 8,431 8,742
Collateralized Mortgage Securities Corp.
11.880% due 04/01/15 1,527 1,554
11.450% due 09/01/15 46 47
11.450% due 11/01/15 (d) 251 285
8.750% due 04/20/19 816 859
Countrywide
6.500% due 07/25/13 5,676 5,843
7.933% due 07/25/24 (d) 12,406 12,584
6.750% due 11/25/25 25,567 25,703
Donaldson, Lufkin & Jenrette
7.413% due 08/01/21 (d) 6,242 6,318
8.006% due 12/25/22 (d) 3,465 3,595
8.207% due 03/25/24 (d) 1,032 1,075
6.500% due 04/25/24 10 10
7.978% due 05/25/24 (d) 253 257
Drexel Mortgage Funding
9.500% due 11/20/17 1,439 1,497
8.600% due 03/01/18 492 495
Federal Home Loan Mortgage Corp.
7.000% due 05/15/99 44 44
6.500% due 03/15/00 1,003 1,012
7.000% due 10/15/03 5,432 5,608
7.500% due 11/01/03 12,698 13,027
5.500% due 11/15/04 2,188 2,187
6.000% due 06/15/05 13,709 13,817
6.500% due 07/25/05 24,593 24,627
6.500% due 07/15/06 1,075 1,109
6.500% due 08/15/06 710 732
6.500% due 05/15/08 1,000 1,031
4.500% due 08/15/08 456 454
6.400% due 10/15/08 183 16
6.000% due 03/15/09 265 274
8.500% due 08/15/13 2,000 2,110
8.500% due 09/15/13 5,941 6,268
7.000% due 04/25/15 119 118
11.000% due 11/30/15 11,347 13,389
6.900% due 03/15/16 211 211
5.400% due 05/25/16 70,422 71,193
7.000% due 06/15/16 139 139
7.000% due 11/15/16 13,044 13,214
6.210% due 08/15/17 274 275
6.350% due 03/25/18 200 204
5.250% due 05/15/18 847 846
6.500% due 12/15/18 5,610 5,674
6.500% due 05/15/19 615 627
5.000% due 08/15/19 178 176
7.000% due 02/15/20 151 151
9.125% due 06/15/20 1,120 1,133
5.250% due 07/15/20 770 767
8.500% due 09/15/20 1,527 1,529
5.500% due 10/15/20 200 200
8.750% due 10/15/20 60 60
9.500% due 11/15/20 7,714 8,465
6.000% due 12/15/20 345 348
8.750% due 12/15/20 1,265 1,377
9.000% due 12/15/20 5,283 5,592
6.500% due 05/15/21 189 192
6.500% due 05/17/21 120 119
8.500% due 06/15/21 46,339 48,746
6.950% due 07/15/21 700 723
8.000% due 07/15/21 10,036 10,447
9.000% due 07/15/21 3,012 3,226
9.500% due 07/15/21 3,981 4,123
6.200% due 08/15/21 1,500 1,528
6.950% due 08/15/21 185 196
7.000% due 08/15/21 299 304
8.000% due 08/15/21 23,472 24,275
6.500% due 09/15/21 1,966 1,996
7.000% due 09/15/21 251 258
8.000% due 09/15/21 73 74
7.000% due 10/15/21 25 26
8.000% due 12/15/21 15,692 16,873
6.850% due 01/15/22 700 734
8.250% due 06/15/22 5,000 5,307
7.000% due 07/15/22 8,008 8,320
7.000% due 07/15/22 229 233
8.500% due 10/15/22 13,946 14,610
6.500% due 07/15/23 363 363
7.000% due 07/15/23 235 247
7.250% due 07/15/23 25 25
7.500% due 01/20/24 403 411
5.000% due 02/15/24 116 113
6.500% due 02/15/24 32 32
7.250% due 08/15/24 190 194
56 PIMCO Funds See accompanying notes
<PAGE>
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
8.000% due 09/15/24 $ 16,250 $ 17,633
7.000% due 11/17/25 40 41
7.599% due 10/01/26(d) 4,954 5,141
7.500% due 01/15/27 21,685 22,964
7.500% due 03/17/27 20,000 21,600
7.500% due 06/20/27 16,746 18,509
7.500% due 07/15/27 160 161
6.500% due 08/15/27 10,522 10,636
6.500% due 10/15/27 32,300 32,848
6.500% due 01/25/28 8,691 9,276
6.500% due 04/15/28 154,931 157,384
6.500% due 05/15/28 48,000 48,598
6.500% due 06/15/28 47,542 48,539
6.500% due 06/20/28 20,547 20,567
6.500% due 07/15/28 24,471 24,793
6.500% due 08/15/28 222,614 225,680
7.000% due 11/15/28 9,000 9,523
6.337% due 08/15/32(d) 39,807 39,958
Federal Housing Administration
7.430% due 01/01/24 1,058 1,098
Federal National Mortgage Assn.
9.100% due 02/25/02 4,158 4,273
7.500% due 05/25/05 6,700 7,036
7.000% due 11/25/05 9 9
7.500% due 02/25/06 375 389
6.500% due 05/01/06 347 353
6.500% due 07/25/06 75 77
8.000% due 11/25/06 30 31
6.000% due 07/25/07 300 308
7.652% due 08/25/07(d) 105 105
7.000% due 10/25/07 200 210
7.000% due 02/25/08 469 468
10.500% due 08/25/08 7,146 8,521
6.750% due 11/25/10 1,300 1,328
7.000% due 01/25/11 500 510
7.500% due 01/20/12 38 38
7.500% due 02/17/12 34 34
6.400% due 09/25/14 46 46
10.000% due 12/25/14 377 379
9.670% due 01/25/17 281 286
9.200% due 12/25/17 482 486
7.000% due 01/25/18 145 145
9.300% due 05/25/18 1,384 1,474
6.238% due 06/25/18(d) 6 6
6.500% due 06/25/18 8,775 8,790
9.500% due 06/25/18 713 763
5.500% due 07/25/18 178 178
7.750% due 10/25/18 20 20
9.500% due 11/25/18 14,680 15,744
6.000% due 12/25/18 75 76
6.500% due 03/25/19 885 904
6.250% due 04/18/19 18,764 18,819
9.500% due 06/25/19 2,803 3,043
5.650% due 07/25/19 4,659 4,671
6.350% due 08/25/19 435 438
8.000% due 10/25/19 12,929 13,190
7.500% due 12/25/19 147 156
9.000% due 12/25/19 12,076 13,004
7.500% due 05/25/20 6,519 6,731
6.000% due 06/25/20 9,593 9,617
8.000% due 07/25/20 36 36
7.000% due 09/25/20 25,000 25,566
9.000% due 09/25/20 7,343 7,876
8.000% due 12/25/20 22,579 24,230
8.750% due 01/25/21 6,200 6,687
7.500% due 02/17/21 210 212
7.500% due 02/25/21 3,268 3,267
7.500% due 03/25/21 20,919 21,297
9.000% due 03/25/21 983 1,068
7.000% due 05/25/21 300 312
6.500% due 06/25/21 5,184 5,342
7.500% due 06/25/21 320 323
8.000% due 07/25/21 21,183 22,341
8.500% due 09/25/21 11,029 11,715
7.000% due 10/25/21 8,056 8,412
8.000% due 10/25/21 22,430 23,593
6.500% due 11/25/21 31 31
6.000% due 12/25/21 129 130
8.000% due 01/25/22 21,700 22,577
8.000% due 03/25/22 292 300
7.000% due 04/25/22 17,091 17,823
10.000% due 05/01/22 272 297
7.000% due 06/25/22 2,307 2,364
8.000% due 06/25/22 3,292 3,677
7.000% due 07/25/22 10,175 10,475
8.000% due 07/25/22 51,814 56,696
6.500% due 10/25/22 313 32
6.500% due 10/25/22 3,556 3,631
7.800% due 10/25/22 5,882 6,173
6.500% due 12/25/22 747 747
7.000% due 03/25/23 25,273 25,617
6.900% due 05/25/23 138 145
7.000% due 06/25/23 4,303 4,272
6.000% due 08/25/23 4,003 4,049
6.500% due 08/25/23 81 82
1.000% due 09/25/23 350 317
6.750% due 10/25/23 519 566
7.500% due 10/25/23 132 134
6.500% due 11/25/23 170 168
7.250% due 02/25/24 50 51
7.500% due 06/20/24 120 124
7.000% due 02/18/25 140 142
7.000% due 05/25/25 520 522
7.500% due 12/25/25 120 123
7.000% due 02/15/26 180 183
7.000% due 07/18/26 210 212
7.000% due 12/18/26 14,066 14,604
6.000% due 05/17/27 5,470 5,295
7.500% due 08/18/27 2,619 2,626
6.500% due 03/01/28 674 685
6.500% due 07/18/28 67,412 69,287
First Commonwealth Savings & Loan
10.375% due 04/01/05 20 21
First Union Residential Securitization, Inc.
6.750% due 08/25/28 9,048 9,204
General Electric Capital Mortgage
6.750% due 12/25/12 6,256 6,353
6.500% due 09/25/23 1,175 1,170
6.500% due 02/25/24 13 13
6.500% due 03/25/24 13,262 13,417
6.500% due 04/25/24 58,591 60,145
7.500% due 04/25/27 213 214
7.000% due 11/25/27 15,000 15,492
6.550% due 06/25/28 23,450 23,858
6.500% due 10/25/28 19,500 19,680
General Motors Acceptance Corp.
6.700% due 03/15/08 1,000 1,062
Government National Mortgage Assn.
7.500% due 07/20/20 356 359
7.000% due 01/15/24 554 574
8.000% due 05/16/24 120 123
7.000% due 08/20/26 161 164
7.500% due 02/16/27 131 134
7.500% due 07/16/27 25,603 26,685
6.500% due 06/20/28 10,000 10,050
6.500% due 07/20/28 34,369 35,517
6.500% due 09/20/28 25,000 24,563
Greenwich
7.176% due 04/25/22(d) 1,497 1,516
7.079% due 07/25/22(d) 7,607 7,692
7.127% due 10/25/22(d) 195 198
7.259% due 04/25/23(d) 2,561 2,595
7.846% due 04/25/24(d) 3,351 3,413
8.147% due 06/25/24(d) 3,740 3,834
8.861% due 08/25/24(d) 5,526 5,821
8.719% due 11/25/24(d) 1,636 1,720
1998 Semi-Annual Report See accompanying notes 57
<PAGE>
Schedule of Investments (Cont.)
Total Return Fund
September 30, 1998 (Unaudited)
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
Headlands Mortgage Securities, Inc.
7.250% due 11/25/12 $ 5,442 $ 5,509
6.750% due 03/25/28 57,000 58,425
Imperial CMB Trust
5.992% due 09/25/26(d) 15,997 16,127
Independent National Mortgage Corp.
6.650% due 10/25/24 2,723 2,770
7.800% due 11/25/24(d) 6,505 6,671
7.319% due 07/25/25(d) 19,853 20,364
7.918% due 07/25/25(d) 17,994 18,365
International Mortgage Acceptance Corp.
12.250% due 03/01/14 540 613
J.P. Morgan & Co.
9.000% due 10/20/20 14,735 15,224
Kidder Peabody Acceptance Corp.
8.390% due 05/20/18 375 379
8.193% due 03/25/24(d) 4,962 4,955
8.145% due 09/25/24(d) 20,000 20,156
Marine Midland
8.000% due 10/25/23 350 352
Mellon Residential Funding Corp.
6.350% due 06/25/28 22,000 22,223
Merrill Lynch Mortgage
7.307% due 06/15/21(d) 7,804 8,170
7.794% due 06/15/21(d) 7,325 7,636
8.161% due 06/25/22(d) 5,322 5,345
Morgan Stanley Mortgage Trust
8.250% due 07/01/18 7,841 8,051
Mortgage Capital Trust
8.875% due 04/01/18 131 134
NationsBank Corp.
6.125% due 10/20/13 18,000 18,017
Nomura Asset Securities Corp.
8.001% due 05/25/24(d) 9,505 9,779
Norwest Mortgage
12.500% due 02/01/14 1,104 1,179
12.250% due 04/01/14 78 80
PaineWebber Mortgage
6.000% due 04/25/09 11,951 12,023
PNC Mortgage Securities Corp.
7.000% due 05/25/28 13,078 13,416
6.750% due 09/25/28 4,000 4,103
Prudential Bache
6.153% due 09/01/18(d) 418 412
8.400% due 03/20/21 3,756 3,957
Prudential Home
8.000% due 06/25/22 20,791 21,070
6.950% due 11/25/22 222 227
6.750% due 10/25/23 8,353 8,627
7.970% due 11/25/23(d) 165 167
8.150% due 11/25/23(d) 6,144 6,340
5.900% due 12/25/23 18,403 18,422
6.050% due 04/25/24 6,668 6,678
6.000% due 05/25/24 18 18
PSB Financial Corp.
11.050% due 12/01/15 883 960
Residential Asset Securities Corp.
7.000% due 03/25/27(d) 150 151
7.250% due 05/25/27(d) 345 348
Residential Funding
7.000% due 08/25/08 15,939 16,191
6.500% due 09/25/08 7,000 7,169
6.250% due 10/25/08 4,419 4,433
6.450% due 10/25/12 8,000 8,053
6.500% due 01/25/13 195,330 198,698
8.500% due 05/25/17 89 93
8.000% due 01/25/23 8,677 8,913
7.750% due 07/25/24 2 2
8.000% due 10/25/24(d) 10,662 11,138
7.400% due 09/25/25 85 86
7.500% due 09/25/25 18,183 18,766
5.948% due 10/25/27(d) 8,188 8,227
7.250% due 10/25/27 24,000 24,142
6.750% due 05/25/28 60,741 61,809
6.750% due 09/25/28 61,993 61,916
6.500% due 10/25/28 52,100 52,426
Resolution Trust Corp.
7.647% due 02/25/20(d) 157 158
7.063% due 09/25/20(d) 12,418 1,863
6.073% due 01/25/21(d) 934 931
8.229% due 06/25/21(d) 1,832 1,848
8.701% due 08/25/21(d) 38 38
8.704% due 08/25/21 8,000 8,205
8.704% due 08/25/21(d) 13,329 13,524
7.250% due 09/25/21(d) 2,784 2,787
5.686% due 10/25/21(d) 186 186
6.688% due 10/25/21(d) 588 591
8.139% due 10/25/21(d) 242 243
8.625% due 10/25/21 267 267
7.371% due 01/25/22(d) 2,463 2,457
7.736% due 03/25/22(d) 6,691 6,752
8.551% due 05/25/22(d) 2,429 2,528
7.437% due 08/25/23(d) 2,001 2,005
9.450% due 05/25/24 19,693 19,660
10.561% due 05/25/24(d) 594 593
7.100% due 12/25/24 1,500 1,595
7.750% due 03/25/25 1,285 1,310
7.302% due 07/25/28(d) 14,001 14,128
7.198% due 10/25/28(d) 23,712 24,251
7.412% due 10/25/28(d) 11,178 11,541
7.179% due 05/25/29(d) 4,551 4,630
7.544% due 05/25/29(d) 5,676 5,838
Rural Housing Trust
3.330% due 10/01/28 259 243
Ryan Mortgage Acceptance Corp.
9.450% due 10/01/16 149 159
Ryland Acceptance Corp.
9.000% due 12/01/16 701 724
11.500% due 12/25/16 159 159
8.200% due 09/25/22 97 98
14.000% due 11/25/31 1,495 1,664
Ryland Mortgage Securities Corp.
7.805% due 08/25/22(d) 3,012 3,054
7.500% due 08/25/24 38 38
7.221% due 08/25/29(d) 6,184 6,358
6.926% due 10/25/31(d) 11,610 11,701
Salomon Brothers Mortgage Securities
7.605% due 11/25/22(d) 1,219 1,244
8.068% due 07/01/24(d) 11,024 11,420
5.928% due 06/25/27(d) 3,749 3,746
Santa Barbara Savings
9.500% due 11/20/18 3,773 3,785
Saxon Mortgage
7.910% due 08/25/23(d) 29,961 30,756
8.312% due 09/25/24(d) 11,470 11,879
Sears Mortgage
6.712% due 09/25/22(d) 2,297 2,355
Securitized Asset Sales, Inc.
7.697% due 10/25/23(d) 3,989 4,100
7.652% due 12/26/23(d) 4,108 4,244
5.944% due 02/25/28 9,608 9,629
Security Pacific National Bank
6.279% due 03/01/18(d) 126 126
Southern Pacific Secured Assets Corp.
5.818% due 06/25/28(d) 94,856 94,407
Structured Asset Mortgage Investments, Inc.
6.921% due 06/25/28(d) 49,976 51,210
6.250% due 08/25/28(d) 10,695 10,700
Union Planters Mortgage Finance Corp.
6.750% due 01/25/28 4,000 4,306
6.800% due 01/25/28 15,000 15,736
Vendee Mortgage
7.000% due 02/15/00 3,789 3,830
7.750% due 03/15/16 600 616
7.750% due 05/15/18 550 574
Western Federal Savings & Loan
6.985% due 06/25/21(d) 7,978 8,137
---------------
3,335,688
===============
58 PIMCO Funds See accompanying notes
<PAGE>
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
Federal Home Loan Mortgage Corporation 14.7%
5.250% due 12/01/98-04/15/16(g) $ 3,001 $ 2,998
5.500% due 04/01/01-03/01/10(g) 395 394
5.750% due 08/15/20 300 303
6.000% due 12/01/98-10/14/28(g) 1,635,865 1,641,558
6.145% due 12/01/26(d) 9,262 9,376
6.250% due 03/15/28 38,700 39,104
6.500% due 06/01/03-10/14/28(g) 1,288,633 1,312,645
6.750% due 04/01/17-01/17/25(g) 25,008 25,201
6.775% due 11/01/03 70 70
7.000% due 01/01/00-03/01/26(g) 21,632 22,078
7.210% due 10/25/23(d) 24,562 25,485
7.327% due 05/01/27(d) 2,810 2,918
7.428% due 07/01/22(d) 1,604 1,672
7.479% due 09/01/23(d) 3,277 3,352
7.500% due 05/01/99-10/14/28(g) 17,133 17,672
7.510% due 07/01/23(d) 1,002 1,025
7.520% due 07/01/23(d) 3,129 3,203
7.557% due 08/01/23(d) 1,967 2,008
7.568% due 09/01/23(d) 19,718 20,072
7.569% due 08/01/23(d) 10,890 11,108
7.589% due 05/01/23(d) 6,119 6,335
7.609% due 04/01/23-08/01/24(d)(g) 1,330 1,380
7.625% due 01/01/19(d) 18 18
7.635% due 09/01/23(d) 4,860 5,028
7.642% due 08/01/23(d) 18 19
7.666% due 08/01/23-07/01/24(d)(g) 4,375 4,531
7.687% due 09/01/23(d) 3,854 3,990
7.705% due 06/01/24(d) 2,066 2,109
7.734% due 10/01/23(d) 3,132 3,262
7.737% due 10/01/23(d) 3,797 3,925
7.738% due 10/01/23(d) 2,265 2,340
7.750% due 04/01/07 46 46
7.756% due 04/01/24(d) 13,405 13,924
7.766% due 11/01/23(d) 1,328 1,345
7.820% due 04/01/29(d) 2,933 3,056
7.822% due 11/01/23(d) 797 816
7.825% due 10/01/23(d) 1,206 1,245
7.840% due 01/01/24(d) 813 841
7.857% due 10/01/23(d) 1,591 1,621
7.974% due 11/01/23(d) 851 876
7.982% due 01/01/24(d) 843 859
8.000% due 10/01/07-06/01/26(g) 5,742 5,959
8.250% due 08/01/07-12/01/09(g) 177 182
8.500% due 09/01/01-01/01/28(g) 48,524 50,558
8.750% due 02/01/01-12/10/10(g) 289 298
8.900% due 11/15/20 24,735 26,341
9.000% due 01/01/02-09/15/20(g) 1,079 1,129
9.250% due 06/01/09-08/01/09(g) 80 85
9.500% due 08/01/01-06/01/21(g) 2,554 2,714
9.750% due 11/01/04-05/01/09(g) 74 77
10.000% due 06/01/04-11/15/19(g) 1,354 1,440
10.250% due 03/15/09-05/01/09(g) 1,875 2,033
11.000% due 12/01/99-07/01/19(g) 983 1,078
11.250% due 10/01/09-09/01/15(g) 189 210
11.500% due 03/01/00-05/01/00(g) 16 17
12.500% due 07/01/99 1 1
13.250% due 10/01/13 83 95
14.000% due 04/01/16 29 33
15.500% due 08/01/11-11/01/11(g) 18 20
16.250% due 05/01/11 6 7
--------------
3,292,085
==============
Federal Housing Administration 0.8%
6.155% due 12/01/21 12,056 12,617
7.125% due 03/01/34 4,475 4,862
7.211% due 12/01/21 2,852 2,925
7.316% due 05/01/19 5,049 5,408
7.375% due 03/01/19-01/01/24(g) 17,429 18,775
7.400% due 02/01/21 2,607 2,711
7.430% due 12/01/16-05/01/25(g) 90,557 95,721
7.465% due 11/01/19 45,345 47,357
7.650% due 11/01/18 166 175
--------------
190,551
==============
Federal National Mortgage Association 7.8%
5.500% due 11/12/28 2,000 1,940
5.650% due 04/25/05 200 200
6.000% due 12/01/00-12/10/28(g) 493,426 493,337
6.125% due 04/01/19(d) 999 1,010
6.130% due 07/01/17(d) 105 106
6.131% due 02/01/18-05/01/36(d)(g) 93,809 94,913
6.132% due 08/01/29-05/01/36(d)(g) 69,261 70,095
6.136% due 05/01/29(d) 1,504 1,521
6.138% due 05/01/36(d) 72,224 73,245
6.142% due 08/01/29(d) 9,197 9,304
6.143% due 05/01/36(d) 71,840 72,858
6.148% due 04/01/19(d) 161 163
6.153% due 03/01/33(d) 51,651 52,262
6.156% due 11/01/28(d) 2,359 2,386
6.167% due 09/01/24-10/26/28(d)(g) 122,367 123,780
6.175% due 07/01/24(d) 804 813
6.231% due 04/01/27(d) 239 243
6.250% due 07/25/07 100 102
6.390% due 05/25/36 5,027 4,926
6.500% due 11/01/03-10/14/28(g) 452,742 460,462
6.600% due 09/25/18 6,500 6,595
6.750% due 08/01/03-09/25/22(g) 746 755
6.834% due 07/01/03 68 72
6.900% due 07/25/99 1,272 1,279
6.950% due 03/25/26 300 305
7.000% due 05/25/99-12/20/27(g) 71,702 73,904
7.062% due 09/01/22(d) 2,332 2,390
7.132% due 09/01/22(d) 2,293 2,356
7.223% due 11/01/25(d) 9,062 9,273
7.250% due 05/01/02-01/01/23(g) 11,391 11,672
7.266% due 09/01/25(d) 4,030 4,133
7.373% due 09/01/24(d) 2,601 2,707
7.455% due 07/01/24(d) 12,928 13,187
7.500% due 08/01/03-07/01/28(g) 83,837 86,614
7.502% due 11/01/25(d) 2,690 2,799
7.585% due 03/01/25(d) 6,018 6,212
7.595% due 11/01/25(d) 4,135 4,270
7.673% due 05/01/26(d) 1,544 1,613
7.690% due 01/01/24(d) 1,491 1,551
7.691% due 01/01/26(d) 2,365 2,460
7.724% due 01/01/24(d) 735 762
7.727% due 12/01/23(d) 1,372 1,388
7.735% due 11/01/23-05/01/24(d)(g) 5,411 5,569
7.736% due 09/01/23(d) 5,249 5,416
7.750% due 06/01/09 215 225
7.756% due 02/01/26(d) 1,049 1,091
7.775% due 01/01/24(d) 4,205 4,362
7.813% due 10/01/23(d) 612 637
7.825% due 11/01/23(d) 280 290
7.860% due 12/01/23(d) 1,969 2,048
7.897% due 03/01/26(d) 7,482 7,820
7.914% due 01/01/24(d) 286 299
8.000% due 09/01/01-12/01/26(g) 8,787 9,129
8.250% due 10/01/08-02/01/17(g) 768 800
8.500% due 07/01/99-05/01/27(g) 4,587 4,771
9.000% due 01/01/99-04/01/17(g) 1,659 1,756
9.500% due 12/01/06-07/01/22(g) 133 143
9.750% due 11/01/08 86 93
10.000% due 09/01/03-05/01/22(g) 906 988
10.500% due 12/01/16-04/01/22(g) 843 949
12.000% due 05/01/16 17 20
13.000% due 09/01/13 48 57
13.250% due 09/01/11 19 21
14.500% due 11/01/11-01/01/13(g) 71 87
14.750% due 08/01/12-11/01/12(g) 244 277
15.500% due 10/01/12-12/01/12(g) 31 39
15.750% due 12/01/11-08/01/12(g) 158 187
16.000% due 09/01/12 171 214
--------------
1,747,251
==============
1998 Semi-Annual Report See accompanying notes 59
<PAGE>
Schedule of Investments (Cont.)
Total Return Fund
September 30, 1998 (Unaudited)
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
Government National Mortgage Association 17.4%
4.500% due 01/20/24-05/20/28 (d)(g) $ 52,646 $ 53,586
5.000% due 04/20/28-08/20/28 (d)(g) 66,673 66,981
5.650% due 10/15/12 13 13
6.000% due 10/15/08-08/20/27 (d)(g) 439,045 444,106
6.500% due 10/15/08-10/21/28 (d)(g) 1,495,067 1,527,567
6.750% due 06/20/28 19,322 20,629
6.875% due 06/20/21-06/20/27 (d)(g) 739,649 755,700
7.000% due 07/15/08-03/15/28 (d)(g) 915,392 933,130
7.375% due 04/20/23 (d) 533 548
7.500% due 08/15/05-02/15/28 (g) 40,830 42,415
8.000% due 05/15/01-10/15/25 (g) 2,990 3,135
8.250% due 08/15/04-05/15/22 (g) 701 742
8.500% due 06/15/01-01/20/27 (g) 15,694 16,478
8.750% due 01/15/99-07/15/07 (g) 140 147
9.000% due 06/15/01-07/20/22 (g) 7,181 7,704
9.250% due 10/15/01-05/20/21 (g) 406 429
9.500% due 04/15/01-08/15/23 (g) 6,485 7,034
9.750% due 09/15/02-01/15/21 (g) 224 238
10.000% due 04/15/01-02/15/25 (g) 5,551 6,116
10.250% due 10/15/98-02/20/19 (g) 47 51
10.500% due 06/15/04 125 135
11.000% due 05/15/04-03/15/19 (g) 142 157
11.250% due 03/15/01-12/20/15 (g) 60 66
11.500% due 04/15/13-05/15/13 (g) 8 9
12.000% due 03/20/99-03/15/15 (g) 85 95
12.500% due 01/15/11 1 2
13.000% due 12/15/12-10/15/14 (g) 40 46
13.250% due 10/20/14 20 23
13.500% due 11/15/12-12/15/12 (g) 7 8
15.000% due 09/15/12-10/15/12 (g) 18 21
16.000% due 01/15/12-04/15/12 (g) 9 11
17.000% due 11/15/11-12/15/11 (g) 102 122
--------------
3,887,444
==============
Other Mortgage-Backed Securities 0.7%
Aames Mortgage Trust
7.275% due 05/15/20 270 274
Bank of America
9.000% due 03/01/08 74 73
Citibank, N.A.
8.000% due 07/25/18 82 84
DBL Mortgage Funding
9.500% due 08/01/19 23 24
First Interstate Bancorp
9.125% due 01/01/09 12 12
General Electric Capital Mortgage
7.250% due 07/25/11 13,000 13,144
General Electric Credit Corp.
8.000% due 03/01/02 (j) 78 80
German American Capital Corp.
8.360% due 09/30/02 3,364 3,552
6.581% due 07/01/18 (d) 9,330 9,295
Great Western Savings & Loan
5.980% due 08/01/17 (d) 179 176
Guardian
6.976% due 12/25/18 (d) 285 249
Home Savings of America
8.464% due 08/01/06 90 93
5.838% due 05/25/27 (d) 3,383 3,325
6.438% due 08/20/29 (d) 13,187 13,256
Imperial Savings & Loan
10.000% due 09/01/16 (j) 195 205
8.238% due 01/25/17 (d) 99 99
8.844% due 07/25/17 (d) 353 352
LTC Commercial Corp.
8.059% due 11/28/12 3,883 4,021
MDC Mortgage Funding
8.696% due 01/25/25 (d) 659 683
Merrill Lynch Mortgage
9.250% due 12/15/09 15 15
8.153% due 06/15/21 (d) 1,635 1,704
Mid-State Trust
8.330% due 04/01/30 74,786 84,371
Morgan Stanley Mortgage
8.150% due 07/20/21 11 11
Resolution Trust Corp.
7.107% due 05/25/29 (d) 5,459 5,545
Salomon Brothers Mortgage Securities
11.500% due 09/01/15 1,435 1,561
Sears Mortgage
12.000% due 02/25/14 1,030 1,036
6.738% due 06/25/22 (d) 667 675
7.416% due 10/25/22 (d) 4,138 4,184
Structured Asset Securities Corp.
5.794% due 01/25/00 (d) 2,605 2,607
Western Federal Savings & Loan
6.631% due 11/25/18 (d) 184 185
6.682% due 03/25/19 (d) 1,468 1,472
--------------
152,363
==============
Stripped Mortgage-Backed Securities 0.1%
Federal Home Loan Mortgage Corp. (IO)
10.038% due 09/15/05 15 1
6.500% due 11/15/06 1,964 112
6.500% due 03/15/07 2,737 167
5.750% due 09/15/07 (d) 10,107 610
5.428% due 02/15/08 (d) 855 52
11.651% due 01/15/16 22 1
6.500% due 08/15/16 2,756 128
7.000% due 04/15/18 2,714 112
9.993% due 11/15/18 (d) 100 5
8.845% due 01/15/21 385 66
9.000% due 05/15/22 192 21
Federal Home Loan Mortgage Corp. (PO)
0.000% due 06/15/21 1,476 1,455
Federal National Mortgage Assn. (IO)
6.750% due 09/25/04 55 2
7.000% due 06/25/05 15 1
10.458% due 07/25/05 (d) 514 22
6.500% due 07/25/06 4,507 197
7.272% due 09/25/06 4 57
6.500% due 02/25/07 3,513 306
6.500% due 07/25/07 1,622 99
6.500% due 09/25/07 4,474 365
6.500% due 10/25/07 1,797 128
0.950% due 03/25/09 (d) 44,031 713
7.000% due 08/25/15 2,613 85
7.000% due 08/25/16 709 28
6.500% due 08/25/20 2,666 373
10.070% due 01/25/21 108 13
9.032% due 08/25/21 1,439 233
0.950% due 11/25/21 (d) 43,780 742
6.500% due 01/25/23 4,042 562
Federal National Mortgage Assn. (PO)
0.000% due 09/01/07 1,107 992
0.000% due 02/25/21 3,700 3,685
0.000% due 06/25/22 2,277 2,153
0.000% due 08/25/23 407 349
PaineWebber (IO)
13.595% due 08/01/19 239 75
Vendee Mortgage (IO)
0.542% due 06/15/23 (d) 202,805 3,987
17,897
--------------
Total Mortgage-Backed Securities 12,623,279
(Cost $12,375,186) ==============
60 PIMCO Funds See accompanying notes
<PAGE>
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
ASSET-BACKED SECURITIES 7.7%
- --------------------------------------------------------------------------------
AFC Home Equity Loan Trust
7.294% due 10/25/26 (d) $ 6,974 $ 7,105
Americredit Automobile Receivable Trust
6.540% due 05/12/01 500 509
Arcadia Automobile Receivables Trust
6.300% due 07/16/01 9,000 9,061
Aspetuck Trust
5.781% due 02/01/99 (d) 80,000 79,400
5.816% due 09/01/99 (d) 100,000 100,000
Asset-Backed Securities Investment Trust
6.790% due 08/17/03 26,606 26,722
Associates Manufactured Housing
7.000% due 03/15/27 900 929
Auto Receivables Trust
6.500% due 04/16/03 23,021 23,021
California Infrastructure
5.940% due 09/25/00 3,676 3,680
5.970% due 12/26/00 4,340 4,370
5.980% due 12/26/00 20,584 20,681
6.010% due 06/25/01 73,864 74,234
6.150% due 06/25/02 19,500 19,827
Capital Equipment Receivables Trust
6.030% due 02/15/00 5,000 5,035
Case Equipment Loan Trust
6.150% due 09/15/02 1,515 1,520
Chase Manhattan Auto Owner Trust
5.750% due 10/15/01 500 505
Chase Manhattan Grantor Trust
6.000% due 09/17/01 2,133 2,144
5.900% due 11/15/01 6,142 6,167
6.610% due 09/15/02 3,948 4,003
Chase Mortgage Financial Corp.
6.750% due 10/25/28 30,000 29,850
Citicorp Mortgage Securities, Inc.
6.750% due 04/25/28 16,297 16,750
Community Program Loan Trust
4.500% due 10/01/18 26,867 26,136
4.500% due 04/01/29 26,000 23,122
Conti Mortgage Home Equity Loan Trust
5.811% due 10/15/12 (d) 31,024 31,167
6.990% due 03/15/21 350 368
5.730% due 06/15/28 (d) 7,427 7,427
Copelco Capital Funding Corp.
6.340% due 07/20/04 49 50
CS First Boston Mortgage Securities Corp.
6.750% due 09/25/28 6,960 7,369
CSXT Trade Receivables
5.050% due 09/25/99 500 500
Daimler-Benz Vehicle Trust
5.850% due 07/20/03 15,298 15,317
6.050% due 03/20/05 9,313 9,407
Delta Air Lines Equipment Trust
9.230% due 07/02/02 (j) 10,099 10,930
10.500% due 01/02/07 (j) 7,412 8,988
10.570% due 01/02/07 (j) 15,881 20,186
9.550% due 01/02/08 (j) 7,773 9,104
10.000% due 06/05/13 10,828 14,362
Discover Card Trust
5.800% due 09/16/03 500 509
6.031% due 10/16/13 (d) 400 405
EQCC Home Equity Loan Trust
6.710% due 07/15/11 330 339
Equivantage Home Equity Loan Trust
6.550% due 04/01/27 158 163
Federal-Mogul Corp.
7.880% due 12/31/05 (d) 23,636 23,591
7.940% due 12/31/05 1,340 1,337
First Omni Bank
6.650% due 09/15/03 (d) 1,500 1,558
First Security Auto Grantor Trust
6.100% due 04/15/03 2,744 2,772
First Union Master Credit Card Trust
5.760% due 09/15/03 88,750 88,949
Flag Limited
7.588% due 12/15/04 94 94
7.650% due 12/15/04 (d) 13,073 12,778
7.588% due 01/30/05 3,778 3,693
Ford Credit Grantor Trust
6.750% due 09/15/00 1,250 1,266
5.900% due 10/15/00 7,350 7,383
Ford Motor Credit Corp.
5.500% due 02/15/03 5,300 5,357
Fred Meyer, Inc.
6.688% due 03/19/03 (d) 84,519 83,781
6.750% due 03/19/03 30,481 30,214
General Motors Acceptance Corp.
6.500% due 04/15/02 30,194 30,430
Green Tree Financial Group
7.150% due 07/15/27 1,025 1,054
IMC Home Equity Loan Trust
5.796% due 05/21/12 (d) 29,401 29,429
7.482% due 07/25/26 (d) 1,143 1,163
Independent National Mortgage Corp.
8.750% due 12/25/24 30 32
8.000% due 06/25/25 100 101
Integrated Health Services
7.687% due 09/16/04 (d) 15,000 15,260
Korea National Housing
9.062% due 05/23/01 60,000 49,200
Lyondell Petroleum
7.687% due 06/17/99 (d) 20,000 19,900
7.687% due 06/17/00 (d) 27,000 26,865
7.687% due 06/17/03 (d) 20,000 19,900
MBNA Master Credit Card Trust
5.572% due 01/15/02 73,635 73,814
6.050% due 11/15/02 245 250
Metlife Capital Equipment Loan Trust
6.850% due 05/20/08 (d) 320 339
Money Store Home Equity Trust
6.815% due 07/15/06 73 74
6.520% due 08/15/09 31,273 31,436
6.205% due 03/15/12 25,000 25,114
7.550% due 02/15/20 500 520
Morgan Stanley Capital
5.886% due 07/25/27 (d) 3,501 3,503
National Medical Care
7.250% due 09/30/03 (d) 51,250 50,930
NationsBanc Montgomery Funding Corp.
6.500% due 10/25/28 9,000 9,068
NationsBank Auto Owner Trust
6.375% due 07/15/00 911 916
NationsBank Corp.
5.850% due 06/15/02 224 225
Newcourt Receivable Asset Trust
6.240% due 12/20/04 24 24
Norwest Asset Securities Corp
6.500% due 04/25/13 22,079 22,792
6.500% due 06/25/13 11,438 11,805
6.250% due 10/25/13 50,000 50,305
7.500% due 03/25/27 26,622 27,636
6.750% due 05/25/28 27,707 28,410
6.750% due 07/25/28 12,657 12,980
6.200% due 09/25/28 19,077 19,184
6.500% due 10/25/28 20,000 20,138
Olympic Automobile Receivables Trust
5.650% due 01/15/01 520 520
OSCC Home Equity
6.950% due 05/15/07 75 75
Premiere Auto Trust
6.575% due 10/06/00 1,975 1,998
Residential Asset Securities Corp.
6.750% due 03/25/28 40,000 41,016
Saxon Asset Securities Trust
6.475% due 11/25/20 274 276
1998 Semi-Annual Report See accompanying notes 61
<PAGE>
Schedule of Investments (Cont.)
Total Return Fund
September 30, 1998 (Unaudited)
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
Sears Credit Account Master Trust
6.050% due 01/16/08 $ 500 $ 520
7.000% due 07/15/08 500 541
Total Renal Care Holdings
7.437% due 03/31/08(d) 48,000 47,940
UCFC Home Equity Loan
6.381% due 07/15/10 104 104
United Air Lines Equipment Trust
9.200% due 03/22/08 4,309 5,073
10.360% due 11/13/12 7,000 9,241
10.020% due 03/22/14 5,825 7,105
10.850% due 07/05/14 34,111 45,640
10.125% due 03/22/15 14,300 18,602
9.060% due 06/17/15 5,000 5,875
9.210% due 01/21/17 2,000 2,442
USAA Auto Loan Grantor Trust
5.800% due 01/15/05 9,311 9,391
WFS Financial Owner Trust
6.650% due 08/20/00 1,713 1,722
6.050% due 07/20/01 1,966 1,972
6.500% due 09/20/01 10,777 10,907
Ziff-Davis, Inc.
7.469% due 03/31/06 40,000 40,025
------------
Total Asset-Backed Securities 1,717,917
(Cost $1,693,486) ============
- --------------------------------------------------------------------------------
SOVEREIGN ISSUES 3.2%
- --------------------------------------------------------------------------------
Banco Nacional de Obra y Servicios
6.875% due 10/01/98 19,500 19,500
Central Bank Philippines
6.000% due 06/01/08(d) 12,240 8,690
City of Buenos Aires
11.250% due 04/11/07 5,000 3,917
Government of Brazil
6.625% due 04/15/06(d) 25,026 14,265
6.688% due 04/15/12(d) 81,700 40,850
8.000% due 04/15/14 13,342 7,923
Hydro Quebec
5.656% due 04/15/99(d) 10,000 9,993
7.375% due 02/01/03 150 163
9.400% due 02/01/21 500 669
8.500% due 12/01/29 5,085 6,384
9.375% due 04/15/30 600 822
9.500% due 11/15/30 2,370 3,289
Kingdom of Sweden
10.250% due 11/01/15 500 727
Nacional Financiera
9.000% due 01/25/99 13,260 13,161
Providence of Newfoundland
9.000% due 06/01/19 500 654
Province of Nova Scotia
9.375% due 07/15/02 1,000 1,130
Province of Ontario
6.125% due 06/28/00 50 51
7.750% due 06/04/02 200 219
7.625% due 06/22/04 1,000 1,125
7.000% due 08/04/05 1,000 1,102
5.500% due 10/01/08 10,000 10,050
Province of Quebec
6.090% due 06/21/99(d) 50,000 50,129
7.500% due 07/15/02 6,000 6,466
8.800% due 04/15/03 100 114
5.838% due 06/11/04(d) 15,500 15,461
7.125% due 02/09/24 710 765
Republic of Argentina
8.399% due 08/15/99(d) 17,500 16,395
5.688% due 04/01/00(d) 16,965 13,379
5.635% due 04/01/01(d) 45,690 38,164
6.625% due 03/31/05(d) 341,220 269,564
8.726% due 04/10/05(d) 43,650 37,648
Republic of Columbia
8.750% due 10/06/99 500 490
Republic of Korea
8.281% due 04/08/00(d) 64,044 58,761
Republic of Philipines
6.500% due 12/01/17 4,216 3,041
Republic of Philippines
6.563% due 01/05/05(d) 11,879 9,394
Republic of Poland
4.000% due 10/27/14 25,000 21,408
State of Israel
6.200% due 06/15/03 25 26
United Mexican States
7.002% due 06/27/02(d) 44,000 40,525
------------
Total Sovereign Issues 726,414
(Cost $760,430) ============
- --------------------------------------------------------------------------------
FOREIGN CURRENCY-DENOMINATED ISSUES (c)(f) 2.1%
- --------------------------------------------------------------------------------
City of Montreal
11.500% due 09/20/00 C$ 7,000 5,107
Commonwealth of Australia
8.750% due 01/15/01 A$ 4,235 2,742
9.750% due 03/15/02 3,665 2,528
10.000% due 10/15/02 6,940 4,919
10.000% due 02/15/06 1,600 1,240
10.000% due 10/15/07 23,000 18,512
Commonwealth of Canada
6.500% due 06/01/04 C$ 1,000 706
4.250% due 12/01/26(h) 121,800 82,163
Commonwealth of New Zealand
6.500% due 02/15/00 N$ 160,000 81,010
8.000% due 02/15/01 8,890 4,682
10.000% due 03/15/02 107,500 61,027
8.000% due 04/15/04 7,000 3,888
4.500% due 02/15/16(h) 23,000 12,103
Federal National Mortgage Assn.
6.875% due 06/07/02 BP 15,000 26,351
Petroleos Mexicanos
7.750% due 09/30/98 FF 5,000 893
Province of Saskatchewan
9.125% due 02/15/21 C$ 3,000 4,099
Republic of Argentina
3.044% due 04/01/01(d) AP 7,392 5,668
Reynolds, R.J.
6.875% due 11/22/00 DM 9,500 5,804
United Kingdom Gilt
7.400% due 01/08/99 BP 27,022 45,910
7.000% due 06/07/02 50,000 89,752
------------
Total Foreign Currency-Denominated Issues 459,104
(Cost $510,546) ============
- --------------------------------------------------------------------------------
PURCHASED CALL OPTIONS 0.3%
- --------------------------------------------------------------------------------
U.S. Treasury Note (OTC)
5.375% due 07/31/00
Strike @ 99.96 Exp. 02/19/99 $ 127,000 2,176
5.375% due 07/31/00
Strike @ 100.00 Exp. 02/19/99 30,000 503
5.375% due 07/31/00
Strike @ 99.99 Exp. 02/26/99 250,000 4,200
6.625% due 06/30/01
Strike @ 96.46 Exp. 11/12/98 135,200 11,519
5.750% due 11/30/02
Strike @ 93.89 Exp. 10/29/98 75,000 8,399
5.500% due 02/28/03
Strike @ 94.39 Exp. 12/02/98 2,000 213
5.500% due 02/28/03
Strike @ 92.99 Exp. 11/23/98 125,000 14,354
62 PIMCO Funds See accompanying notes
<PAGE>
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
5.250% due 08/15/03
Strike @ 92.16 Exp. 08/20/99 $ 1,500,000 $ 2
5.250% due 08/15/03
Strike @ 99.29 Exp. 08/20/99 127,000 6,438
5.250% due 08/15/03
Strike @ 100.00 Exp. 08/20/99 250,000 11,078
5.250% due 08/15/03
Strike @ 99.47 Exp. 08/27/99 380,000 18,624
------------
Total Purchased Call Options 77,506
(Cost $36,605) ============
- --------------------------------------------------------------------------------
PURCHASED PUT OPTIONS 0.0%
- --------------------------------------------------------------------------------
U.S. Treasury 5 Year Note December Futures (CBOT)
5.375% due 07/31/00
Strike @ 106.00 Exp. 11/21/98 3,001,200 125
------------
Total Purchased Put Options 125
(Cost $293) ============
- --------------------------------------------------------------------------------
PREFERRED STOCK 0.2%
- --------------------------------------------------------------------------------
Shares
Banco Bilbao Vizcaya International
2.438% due 01/01/00 266,217 7,221
Barclays Bank
2.875% due 01/01/00 215,500 5,899
CSC Holdings, Inc.
11.932% due 01/01/00 21,127 2,324
Home Ownership Funding
0.133% due 01/01/00 1,125 1,128
Sanwa International
0.000% due 01/01/00 3,006,000,000 13,409
TCI Communications, Inc.
2.430% due 01/01/00 622,553 16,965
2.500% due 01/01/00 49,000 1,338
Unocal Capital Trust
3.125% due 01/01/00 402 21
------------
Total Preferred Stock 48,305
(Cost $58,536) ============
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 1.5%
- --------------------------------------------------------------------------------
Principal
Amount
(000s)
Certificates of Deposit 0.2%
Bank of Tokyo
5.890% due 10/05/98 $ 17,000 17,000
5.940% due 01/19/99 15,000 15,000
------------
32,000
============
Commercial Paper 0.1%
Federal Home Loan Mortgage Corp.
5.240% due 10/16/98 300 299
Federal Housing Administration
5.888% due 10/29/98 18,900 18,900
New Center Asset Trust
5.220% due 12/17/98 1,300 1,285
Pfizer, Inc.
5.270% due 10/30/98 100 100
Procter & Gamble Co.
5.140% due 12/29/98 1,500 1,480
------------
22,064
============
Repurchase Agreements 0.7%
State Street Bank
4.750% due 10/01/98 24,945 24,945
(Dated 09/30/98. Collateralized by U.S. Treasury
Note 6.375% 03/31/01 valued at $25,446,625.
Repurchase proceeds are $24,948,291.)
First Boston
5.150% due 10/01/98 134,400 134,400
(Dated 09/30/98. Collateralized by U.S. Treasury
Note 4.500% 09/30/00 valued at $137,759,040.
Repurchase proceeds are $134,419,227.)
------------
159,345
============
U.S. Treasury Bills (b)(g) 0.5%
4.959% due 12/03/98-08/19/99 117,076 116,369
------------
Total Short-Term Instruments 329,778
(Cost $329,617) ============
Total Investments (a) 123.6% $27,642,164
(Cost $27,332,479)
Written Options (e) (0.2%) (51,236)
(Premiums $15,248)
Other Assets and Liabilities (Net) (23.4%) (5,224,865)
------------
Net Assets 100.0% $22,366,063
============
Notes to Schedule of Investments (amounts in thousands):
(a) At September 30, 1998, the net unrealized 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 of value over
tax cost. $ 498,202
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (188,517)
------------
Unrealized appreciation-net $ 309,685
============
(b) Securities with an aggregate market value of $116,369
have been segregated with the custodian to cover margin
requirements for the following open futures contracts at
September 30, 1998:
Unrealized
Type Contracts Appreciation
- --------------------------------------------------------------------------------
Eurodollar March Futures (03/01) 50 $ 122
Eurodollar March Futures (03/02) 2,682 4,735
Eurodollar June Futures (06/01) 50 116
Eurodollar June Futures (06/02) 1,075 1,627
Eurodollar September Futures (09/00) 1,050 2,780
Eurodollar September Futures (09/01) 1,707 3,557
Eurodollar December Futures (12/00) 1,050 2,546
Eurodollar December Futures (12/01) 1,607 2,810
U.S. Treasury 5 Year Note (12/98) 11,754 43,403
U.S. Treasury 10 Year Note (12/98) 33,667 122,508
U.S. Treasury 10 Year Note (03/99) 37 174
U.S. Treasury 30 Year Bond (12/98) 16,553 52,066
U.S. Treasury 30 Year Bond (12/99) 500 2,051
United Kingdom 90 Day LIBOR (12/98) 4,472 1,404
United Kingdom 90 Day LIBOR (03/99) 1,000 403
United Kingdom 90 Day LIBOR (12/99) 562 1,306
------------
$ 241,608
============
(c) Foreign forward currency contracts outstanding at September 30, 1998:
Principal
Amount Unrealized
Covered by Expiration Appreciation/
Type Contract Month (Depreciation)
- --------------------------------------------------------------------------------
Sell BP 19,798 10/98 $ (1,327)
Sell C$ 137,761 10/98 339
Sell DM 8,475 11/98 (352)
Sell N$ 19,132 12/98 (190)
------------
$ (1,530)
============
1998 Semi-Annual Report See accompanying notes 63
<PAGE>
Schedule of Investments (Cont.)
Total Return Fund
September 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
(d) Variable rate security. The rate listed is as of September 30, 1998.
(e) Premiums received on written options:
Type Par Premium Value
- --------------------------------------------------------------------------------
Call - CBOT U.S. Treasury Bond December Futures
Strike @ 128.00 Exp. 11/21/98 $ 3,365 $ 1,634 $ 13,512
Put - CBOT U.S. Treasury Bond December Futures
Strike @ 112.00 Exp. 11/21/98 1,000 510 16
Call - CBOT U.S. Treasury Bond December Futures
Strike @ 130.00 Exp. 11/21/98 3,000 828 7,922
Put - CBOT U.S. Treasury Bond December Futures
Strike @ 114.00 Exp. 11/21/98 1,500 578 23
Call - OTC U.S. Treasury Note
5.375% due 07/00
Strike @ 100.51 Exp. 02/19/99 1,270 139 1,543
Put - OTC U.S. Treasury Note
5.375% due 07/00
Strike @ 99.62 Exp. 02/19/98 2,540 278 13
Call - OTC U.S. Treasury Note
5.375% due 07/00
Strike @ 100.79 Exp. 02/19/98 300 40 294
Put - OTC U.S. Treasury Note
5.375% due 07/00
Strike @ 99.96 Exp. 02/19/99 600 61 7
Call - CBOT U.S. Treasury Bond March Futures
Strike @ 138.00 Exp. 02/20/99 1,500 660 1,219
Call - OTC Sanwa Communications
Strike @ 1,270.00 Exp. 02/26/99 465 1,137 17
Call - OTC U.S. Treasury Note
5.375% due 07/00
Strike @ 100.53 Exp. 02/26/99 2,500 313 2,982
Put - OTC U.S. Treasury Note
5.375% due 07/00
Strike @ 99.66 Exp. 02/26/99 5,000 547 30
Call - OTC U.S. Treasury Note
5.250% due 08/03
Strike @ 101.25 Exp. 08/20/99 1,270 466 4,279
Put - OTC U.S. Treasury Note
5.250% due 08/03
Strike @ 97.97 Exp. 08/20/99 2,540 1,012 41
Put - OTC U.S. Treasury Note
5.250% due 08/03
Strike @ 98.59 Exp. 08/20/99 5,000 1,719 135
Call - OTC U.S. Treasury Note
5.250% due 08/03
Strike @ 101.79 Exp. 08/20/99 2,500 1,172 7,347
Call - OTC U.S. Treasury Note
5.250% due 08/03
Strike @ 101.60 Exp. 08/27/99 2,500 858 7,720
Call - OTC U.S. Treasury Note
5.250% due 08/03
Strike @ 101.60 Exp. 08/27/99 1,300 446 4,014
Put - OTC U.S. Treasury Note
5.250% due 08/03
Strike @ 97.94 Exp. 08/27/99 7,600 2,850 122
-------------------------
$15,248 $ 51,236
=========================
(f) Principal amount denoted in indicated currency:
A$ - Australian Dollar
AP - Argentine Peso
BP - British Pound
C$ - Canadian Dollar
DM - German Mark
FF - French Franc
JY - Japanese Yen
N$ - New Zealand Dollar
(g) Securities are grouped by coupon and represent a range of maturities.
(h) Principal amount of the security is adjusted for inflation.
(i) Security becomes interest bearing at a future date.
(j) Restricted security.
(k) Swap agreements outstanding at September 30, 1998:
Contract Notional Unrealized
Type Spread Lock Amount Appreciation
- --------------------------------------------------------------------------------
Receive the 10-year Swap Spread and pay a fixed rate.
The 10-year Swap Spread is the difference between
the 10-year Swap Rate and the 10-year Treasury Rate.
Broker: Merrill Lynch
Exp. 05/02/02 0.3700 $ 120,000 $ 1,967
Unrealized
Notional Appreciation/
Type Amount (Depreciation)
- --------------------------------------------------------------------------------
Receive fixed rate equal to 6.405% and
pay floating rate based on 6 month A$-LIBOR.
Broker: Deutsche Bank AG New York
Exp. 10/08/07 A$ 137,000 $ 3,979
Receive floating rate based on 6 month
JY-LIBOR and pay fixed rate equal to 2.340%
Broker: Deutsche Bank AG New York
Exp. 10/08/07 JY 24,500,000 (17,133)
Receive floating rate based on 6 month
JY-LIBOR and pay fixed rate equal to 2.295%.
Broker: Deutsche Bank AG New York
Exp. 04/14/08 JY 11,635,000 (7,840)
Receive floating rate based on 6 month
JY-LIBOR and pay fixed rate equal to 2.305%.
Broker: Deutsche Bank AG New York
Exp. 04/15/08 JY 7,563,000 (5,146)
Receive floating rate based on 6 month
JY-LIBOR and pay fixed rate equal to 1.495%.
Broker: Deutsche Bank AG New York
Exp. 09/16/08 JY 7,000,000 837
--------------
$ (25,303)
==============
64 PIMCO Funds See accompanying notes
<PAGE>
Schedule of Investments
Total Return Fund II
September 30, 1998 (Unaudited)
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
CORPORATE BONDS & NOTES 44.1%
- --------------------------------------------------------------------------------
Banking & Finance 35.5%
Allstate Corp.
6.750% due 06/15/03 $ 9,300 $ 9,871
American General Finance
8.500% due 06/15/99 125 128
Associates Corp. of North America
6.750% due 07/15/01 24,000 24,978
AT&T Capital Corp.
5.936% due 01/15/99 (c) 20,000 20,037
Bank of Hawaii
6.875% due 06/01/03 7,750 8,214
Bank of New York
6.625% due 06/15/03 5,000 5,245
BankAmerica Corp.
5.708% due 03/05/01 (c) 15,000 15,049
Beneficial Corp.
9.720% due 01/19/99 200 202
Chase Manhattan Corp
7.625% due 01/15/03 5,000 5,417
Citicorp
7.125% due 06/01/03 4,000 4,253
Commercial Credit Co.
5.550% due 02/15/01 30 30
First Chicago Corp.
6.875% due 06/15/03 4,000 4,251
Ford Motor Credit Corp.
5.828% due 02/03/03 (c) 10,000 10,019
5.968% due 03/21/01 (c) 10,000 10,057
8.000% due 06/15/02 5,000 5,443
6.375% due 09/15/99 35 35
General Motors Acceptance Corp.
6.500% due 01/17/00 17,230 17,418
5.788% due 08/18/03 (c) 1,700 1,700
8.400% due 10/15/99 225 232
Goldman Sachs & Co.
5.900% due 01/15/03 2,000 2,060
5.867% due 01/25/01 (c) 15,000 15,009
5.906% due 03/19/03 (c) 5,000 5,003
5.994% due 04/16/01 (c) 10,000 10,011
7.800% due 07/15/02 6,000 6,349
Heller Financial, Inc.
5.738% due 07/06/99 (c) 10,000 10,001
5.838% due 10/08/99 (c) 10,000 10,015
Household Finance Corp.
5.948% due 06/24/03 (c) 20,000 20,041
Lehman Brothers, Inc.
5.894% due 01/18/00 (c) 20,000 19,858
8.875% due 11/01/98 500 501
Merrill Lynch & Co.
6.475% due 03/01/00 300 306
5.765% due 06/10/99 10,000 10,034
5.838% due 06/24/03 (c) 20,000 20,060
5.758% due 11/01/01 (c) 20,000 20,014
NationsBank Corp.
6.200% due 08/15/03 10,800 11,284
8.625% due 11/15/03 1,550 1,773
PNC Funding Corp.
6.125% due 09/01/03 1,400 1,442
Salomon, Inc.
5.728% due 10/20/98 (c) 10,000 10,004
Textron Financial Corp.
5.788% due 11/24/99 (c) 10,000 10,011
Transamerica Financial Corp.
6.480% due 03/15/01 1,000 1,028
---------
327,383
=========
Industrials 4.2%
AMR Corp.
8.900% due 02/26/07 6,450 7,637
9.430% due 05/10/01 1,000 1,102
Dow Chemical Co.
8.040% due 07/02/05 4,800 5,301
Philip Morris Cos., Inc.
6.000% due 07/15/01 1,000 1,019
Time Warner, Inc.
7.975% due 08/15/04 3,345 3,750
8.110% due 08/15/06 6,690 7,705
8.180% due 08/15/07 6,690 7,832
Union Pacific Co.
6.250% due 03/15/99 4,095 4,106
---------
38,452
=========
Utilities 4.4%
Commonwealth Edison
6.625% due 07/15/03 288 306
Long Island Lighting Co.
9.000% due 11/01/22 7,250 8,523
Metropolitan Edison Co.
7.220% due 01/30/03 2,000 2,154
6.400% due 02/09/06 2,412 2,551
Pacificorp
7.200% due 08/15/02 11,000 11,672
Philadelphia Electric
8.000% due 04/01/02 1,008 1,098
6.500% due 05/01/03 1,840 1,938
7.125% due 09/02/02 90 96
Texas Utilities Co.
6.750% due 03/01/03 5,000 5,309
7.375% due 08/01/01 1,900 2,005
United Telecom
9.750% due 04/01/00 5,000 5,316
---------
40,968
---------
Total Corporate Bonds & Notes 406,803
(Cost $397,102) =========
- --------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCIES 4.1%
- --------------------------------------------------------------------------------
Federal National Mortgage Assn.
8.500% due 02/01/05 500 523
Student Loan Marketing Assn.
5.702% due 04/25/04 (c) 11,284 11,284
5.823% due 04/25/07 (c) 26,000 25,994
---------
Total U.S. Government Agencies 37,801
(Cost $37,773) =========
- --------------------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS 1.5%
- --------------------------------------------------------------------------------
U.S. Treasury Notes
6.375% due 01/15/00 3,025 3,093
6.500% due 08/31/01 3,000 3,172
5.750% due 10/31/02 5,200 5,465
5.500% due 02/28/03 2,000 2,093
---------
13,823
=========
U.S. Treasury Strips
0.000% due 05/15/08 200 128
---------
Total U.S. Treasury Obligations 13,951
(Cost $13,682) =========
- --------------------------------------------------------------------------------
MORTGAGE-BACKED SECURITIES 51.7%
- --------------------------------------------------------------------------------
Collateralized Mortgage Obligations 11.3%
Dime Savings
7.119% due 11/01/18 (c) 134 124
Donaldson, Lufkin & Jenrette
11.000% due 08/01/19 249 278
Federal Home Loan Mortgage Corp.
7.000% due 04/25/15 9 9
5.950% due 07/15/03 130 132
7.000% due 07/15/22 14,790 15,358
6.500% due 07/15/28 30,000 31,070
9.250% due 11/15/19 51 54
8.800% due 12/01/15 225 266
9.000% due 12/15/20 2,206 2,324
1998 Semi-Annual Report See accompanying notes 65
<PAGE>
Schedule of Investments (Cont.)
Total Return Fund II
September 30, 1998 (Unaudited)
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
Federal National Mortgage Assn.
6.000% due 06/25/01 $ 73 $ 74
9.000% due 06/25/18 31 33
9.250% due 07/25/19 3,999 4,365
6.000% due 09/25/18 76 77
9.000% due 09/25/18 272 274
7.000% due 09/25/20 94 96
Guaranteed Mortgage Corp.
9.300% due 07/20/19 763 823
Independent National Mortgage Corp.
7.800% due 11/25/24 (c) 2,760 2,831
8.195% due 11/25/24 (c) 2,005 2,080
Norwest Mortgage
12.375% due 01/01/14 286 294
Residential Funding
6.750% due 06/25/28 25,600 25,632
6.500% due 08/25/13 5,482 5,643
7.100% due 09/25/27 12,027 12,126
----------
103,963
==========
Federal Home Loan Mortgage Corporation 9.4%
5.750% due 11/15/17 2,750 2,762
6.000% due 04/01/28-07/01/28 (e) 12,771 12,780
6.500% due 10/14/28-11/13/26 (e) 59,750 60,818
7.000% due 03/01/07 34 34
7.250% due 03/01/06 267 271
7.500% due 08/01/09 20 20
7.632% due 02/01/23 (c) 977 1,004
7.650% due 12/01/22 (c) 8,774 9,124
8.250% due 03/01/08-05/01/08 (e) 162 167
8.500% due 12/01/01 3 3
9.500% due 02/01/11 77 82
10.000% due 06/01/11 17 18
10.500% due 04/01/01 46 47
15.500% due 06/01/11 2 2
----------
87,132
==========
Federal Housing Administration 1.9%
5.596% due 10/01/19 372 376
6.650% due 07/20/38 15,500 16,527
8.829% due 05/01/19 448 476
----------
17,379
==========
Federal National Mortgage Association 4.1%
6.150% due 09/25/16 4,710 4,745
7.000% due 08/01/09 286 291
7.075% due 02/01/23 (c) 3,371 3,412
7.363% due 07/01/20 (c) 1,261 1,318
7.500% due 04/01/24 12,042 12,442
7.750% due 10/01/07 329 340
7.775% due 01/01/24 (c) 2,102 2,181
7.811% due 12/01/23 (c) 819 848
7.814% due 04/01/24 (c) 2,102 2,158
8.000% due 10/01/05 352 366
8.500% due 12/01/01-01/01/05 (e) 2,882 2,992
9.000% due 12/01/01-06/01/10 (e) 956 1,006
11.000% due 09/01/10 277 308
13.750% due 01/01/13-12/01/14 (e) 109 129
14.500% due 03/01/13 5 7
14.750% due 10/01/12-11/01/12 (e) 23 27
6.500% due 10/14/28 5,000 5,085
----------
37,655
==========
Government National Mortgage Association 24.9%
6.500% due 01/15/24-12/15/25 (c)(e) 103,637 105,897
6.875% due 01/20/24-06/20/27 (c)(e) 47,769 48,781
7.000% due 09/20/24-07/20/27 (c)(e) 39,669 40,276
7.500% due 03/15/24 288 299
8.000% due 06/15/24-12/15/26 (c)(e) 33,071 34,635
12.000% due 01/15/13-12/15/14 (c)(e) 36 42
----------
229,930
==========
Other Mortgage-Backed Securities 0.1%
Bank of America
9.000% due 03/01/08 61 61
Federal Home Loan Mortgage Corp.
11.875% due 06/15/13 199 221
Security Pacific National Bank
8.500% due 03/01/17 66 69
Western Federal Savings & Loan
6.682% due 03/25/19 (c) 317 318
----------
669
----------
Total Mortgage-Backed Securities 476,728
(Cost $467,817) ==========
- --------------------------------------------------------------------------------
ASSET-BACKED SECURITIES 6.8%
- --------------------------------------------------------------------------------
AFC Home Equity Loan Trust
7.294% due 10/25/26 (c) 1,744 1,776
Banc One Auto Grantor Trust
6.270% due 11/20/03 11,305 11,463
Conti Mortgage Home Equity Loan Trust
6.190% due 10/15/11 (c) 276 276
Nationsbanc Montgomery Funding Corp.
6.750% due 08/25/28 19,449 19,060
Norwest Asset Securities Corp.
7.500% due 03/25/27 17,000 17,697
6.250% due 10/25/13 4,300 4,326
United Air Lines Equipment Trust
9.190% due 12/24/13 7,213 8,421
----------
Total Asset-Backed Securities 63,019
(Cost $61,925) ==========
- --------------------------------------------------------------------------------
PURCHASED CALL OPTIONS 0.7%
- --------------------------------------------------------------------------------
U.S. Treasury Note (OTC)
6.625% due 06/30/01
Strike @ 96.46 Exp. 11/12/98 40,000 3,408
U.S. Treasury Note (OTC)
5.250% due 08/15/03
Strike @ 99.47 Exp. 08/27/99 50,000 2,451
----------
Total Purchased Call Options 5,859
(Cost $3,502) ==========
- --------------------------------------------------------------------------------
PURCHASED PUT OPTIONS 0.0%
- --------------------------------------------------------------------------------
U.S. Treasury 5 Year Note December Futures (CBOT)
5.375% due 07/31/00
Strike @ 106.00 Exp. 11/21/98 320 5
----------
Total Purchased Put Options 5
(Cost $7) ==========
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 4.8%
- --------------------------------------------------------------------------------
Commercial Paper 3.0%
E.I. Du Pont de Nemours
5.510% due 10/07/98 500 499
5.380% due 12/04/98 1,000 990
5.460% due 12/04/98 1,200 1,189
Federal Home Loan Mortgage Corp.
5.460% due 10/16/98 5,000 4,989
Ford Motor Credit Corp.
5.500% due 10/06/98 1,000 999
5.390% due 01/08/99 3,000 2,957
General Electric Capital Corp.
5.460% due 11/13/98 5,200 5,166
5.500% due 11/18/98 600 596
5.470% due 12/16/98 400 395
Motorola, Inc.
5.510% due 10/13/98 400 399
National Rural Utilities Cooperative
5.450% due 11/13/98 5,600 5,564
Pfizer, Inc.
5.500% due 10/20/98 2,700 2,692
Procter & Gamble Co.
5.310% due 12/28/98 700 691
----------
27,126
==========
66 PIMCO Funds See accompanying notes
<PAGE>
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
Repurchase Agreement 1.4%
State Street Bank
4.750% due 10/01/98 $ 13,223 $ 13,223
(Dated 09/30/98. Collateralized by ------------
U.S. Treasury Note 5.875% 07/31/99
valued at $13,488,250. Repurchase
proceeds are $13,224,745.)
U.S. Treasury Bills (b)(e) 0.4%
4.994% due 10/15/98-12/03/98 3,674
------------
Total Short-Term Instruments 44,023
(Cost $44,016) ============
Total Investments (a) 113.7% $ 1,048,189
(Cost $1,025,824)
Written Options (d) (0.2%) (1,560)
(Premiums $547)
Other Assets and Liabilities (Net) (13.5%) (124,434)
(Cost $44,016) ------------
Net Assets 100.0% $ 922,195
============
Notes to Schedule of Investments (amounts in thousands):
(a) At September 30, 1998, the net unrealized 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 of value over
tax cost. $ 22,760
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (395)
------------
Unrealized appreciation-net $ 22,365
============
(b) Securities with an aggregate market value of $3,674
have been segregated with the custodian to cover margin
requirements for the following open futures contracts at
September 30, 1998:
Unrealized
Type Contracts Appreciation
- --------------------------------------------------------------------------------
Eurodollar March Futures (03/01) 21 $ 51
Eurodollar March Futures (03/02) 64 121
Eurodollar June Futures (06/01) 21 48
Eurodollar June Futures (06/02) 64 115
Eurodollar September Futures (09/00) 21 57
Eurodollar September Futures (09/01) 64 136
Eurodollar December Futures (12/00) 21 53
Eurodollar December Futures (12/01) 64 125
U.S. Treasury 5 Year Note (12/98) 1,356 5,264
U.S. Treasury 10 Year Note (12/98) 1,250 3,796
U.S. Treasury 30 Year Bond (12/98) 547 1,480
------------
$ 11,246
============
(c) Variable rate security. The rate listed is as of September 30, 1998.
(d) Premiums received on written options:
Type Par Premium Value
- --------------------------------------------------------------------------------
Call - OTC U.S. Treasury Note
5.250% due 08/03
Strike @ 101.60 Exp. 08/27/99 $ 500 $ 172 $ 1,544
Put - OTC U.S. Treasury Note
5.250% due 08/03
Strike @ 97.94 Exp. 08/27/99 1,000 375 16
---------------------------
$ 547 $ 1,560
===========================
(e) Securities are grouped by coupon and represent a range of maturities.
1998 Semi-Annual Report See accompanying notes 67
<PAGE>
Schedule of Investments
Total Return Fund III
September 30, 1998 (Unaudited)
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
CORPORATE BONDS & NOTES 30.5%
- --------------------------------------------------------------------------------
Banking & Finance 16.6%
AT&T Capital Corp.
5.936% due 01/15/99 (d) $ 10,000 $ 10,018
Bear Stearns
5.350% due 08/25/00 (d) 10,000 9,995
Ford Motor Credit Corp.
5.828% due 02/03/03 (d) 10,000 10,019
Goldman Sachs & Co.
5.867% due 01/25/01 (d) 10,000 10,006
Household Finance Corp.
5.816% due 05/07/02 (d) 5,000 4,956
Lehman Brothers, Inc.
5.894% due 01/18/00 (d) 10,000 9,929
Merrill Lynch & Co.
6.019% due 08/03/00 (d) 3,000 3,012
Salomon, Inc.
5.728% due 10/20/98 (d) 5,000 5,002
Spieker Properties
6.950% due 12/15/02 2,000 2,062
Textron Financial Corp.
5.788% due 11/24/99 (d) 5,000 5,005
Tokai Capital Corp.
9.980% due 12/29/49 (d) 5,000 3,769
------------
73,773
============
Industrials 7.3%
Fleet Financial Group
6.000% due 10/26/98 2,300 2,301
Langdell
9.978% due 07/30/99 (d) 5,000 4,975
Petroleos Mexicanos
11.157% due 07/15/05 (d) 5,000 4,363
TCI Communications, Inc.
6.375% due 09/15/99 5,000 5,042
5.945% due 09/11/00 (d) 5,000 4,992
Westpoint Stevens, Inc.
7.875% due 06/15/05 5,000 5,094
WMX Technologies
6.700% due 05/01/01 5,500 5,678
------------
32,445
============
Utilities 6.6%
California Energy
10.250% due 01/15/04 4,000 4,250
Connecticut Light & Power
7.250% due 07/01/99 740 740
Long Island Lighting Co.
7.300% due 07/15/99 5,000 5,075
8.900% due 07/15/19 3,000 3,183
Niagara Mohawk Power
7.250% due 10/01/02 15,000 15,299
North Atlantic Energy
9.050% due 06/01/02 543 575
------------
29,122
------------
Total Corporate Bonds & Notes 135,340
(Cost $136,103) ============
- --------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCIES 3.3%
- --------------------------------------------------------------------------------
Federal Home Loan Bank
6.550% due 09/19/03 162 162
Federal Home Loan Mortgage Corp.
7.500% due 07/01/11 634 655
8.000% due 01/01/12 327 338
8.000% due 09/01/25 1,369 1,416
Federal National Mortgage Assn.
5.870% due 10/15/03 50 50
7.930% due 09/20/06 1,250 1,285
Student Loan Marketing Assn.
5.702% due 04/25/04 (d) 3,761 3,761
5.533% due 10/25/05 (d) 7,211 7,177
------------
Total U.S. Government Agencies 14,844
(Cost $14,817) ============
- --------------------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS 2.7%
- --------------------------------------------------------------------------------
U.S. Treasury Bonds
10.375% due 11/15/09 200 262
9.250% due 02/15/16 4,400 6,487
8.875% due 02/15/19 3,700 5,412
------------
Total U.S. Treasury Obligations 12,161
(Cost $11,947) ============
- --------------------------------------------------------------------------------
MORTGAGE-BACKED SECURITIES 62.0%
- --------------------------------------------------------------------------------
Collateralized Mortgage Obligations 17.4%
Chase Mortgage Financial Corp.
9.500% due 04/25/24 3 3
CMC Securities Corp.
7.753% due 04/25/25 (d) 1,483 1,488
Collateralized Mortgage Obligation Trust
8.000% due 01/01/17 3,485 3,489
Federal Home Loan Mortgage Corp.
8.000% due 05/15/00 86 87
8.000% due 02/15/15 781 789
7.000% due 02/15/27 12,172 12,558
6.337% due 08/15/32 (d) 8,673 8,706
Federal National Mortgage Assn.
6.500% due 12/18/04 4,942 5,079
7.750% due 07/25/19 123 125
7.000% due 09/25/21 5,660 5,899
General Electric Capital Mortgage
6.750% due 12/25/12 7,360 7,475
7.500% due 03/25/27 15,000 15,593
Greenwich
8.719% due 11/25/24 (d) 227 238
PNC Mortgage Securities Corp.
6.500% due 10/25/28 6,576 6,619
Prudential Home
8.150% due 11/25/23 (d) 707 729
Residential Accredit Loans, Inc.
7.050% due 01/25/26 2,000 2,021
7.250% due 01/25/26 3,000 3,064
Resolution Trust Corp.
8.835% due 12/25/23 2,500 2,758
------------
76,720
============
Federal Home Loan Mortgage Corporation 3.3%
6.500% due 11/13/26-10/14/28 (g) 12,830 13,059
7.650% due 12/01/22 (d) 1,413 1,469
8.000% due 02/01/06 225 233
------------
14,761
============
Federal Housing Administration 4.4%
7.430% due 11/25/19-01/25/23 (g) 18,361 19,738
------------
Federal National Mortgage Association 14.1%
6.000% due 08/25/16 10,792 10,833
6.127% due 08/01/18 (d) 144 145
6.130% due 11/01/35 (d) 11,202 11,335
6.131% due 02/01/31 (d) 92 93
6.138% due 05/01/36 (d) 6,425 6,516
6.142% due 08/01/29 (d) 2,009 2,032
6.153% due 03/01/33 (d) 1,769 1,790
6.200% due 04/25/05 8,791 8,846
6.500% due 10/14/28 8,500 8,645
7.500% due 04/01/24-02/01/27 (g) 7,711 7,966
8.000% due 07/01/23-07/01/26 (g) 3,683 3,830
8.250% due 07/01/17 107 111
8.500% due 02/01/07 444 459
9.000% due 07/01/05 33 35
------------
62,636
============
Government National Mortgage Association 22.2%
6.500% due 09/15/23-10/21/28 (g) 64,933 66,456
6.875% due 06/20/22-01/20/26 (d)(g) 11,251 11,519
7.000% due 09/20/23-12/20/26 (d)(g) 19,589 19,938
10.250% due 02/15/17 641 702
12.750% due 02/20/15-03/20/15 (g) 5 6
------------
98,621
============
68 PIMCO Funds See accompanying notes
<PAGE>
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
Other Mortgage-Backed Securities 0.4%
Resolution Trust Corp.
7.107% due 05/25/29 (d) $ 1,831 $ 1,860
Stripped Mortgage-Backed Securities 0.2%
Federal Home Loan Mortgage Corp. (IO)
6.500% due 04/15/22 3,890 346
Resolution Trust Corp. (PO)
0.000% due 09/25/00 519 520
----------
866
----------
Total Mortgage-Backed Securities 275,202
(Cost $270,053) ==========
- --------------------------------------------------------------------------------
ASSET-BACKED SECURITIES 2.1%
- --------------------------------------------------------------------------------
ABN-AMRO Mortgage Corp.
6.750% due 10/25/28 9,386 9,443
----------
Total Asset-Backed Securities 9,443
(Cost $9,411) ==========
- --------------------------------------------------------------------------------
SOVEREIGN ISSUES 2.8%
- --------------------------------------------------------------------------------
Central Bank Philippines
6.000% due 06/01/08 (d) 5,000 3,550
Government of Brazil
6.750% due 01/01/01 (d) 425 358
6.625% due 04/15/06 (d) 4,850 2,765
Province of Quebec
8.800% due 04/15/03 1,000 1,138
Republic of Argentina
6.625% due 03/31/05 (d) 5,640 4,456
----------
Total Sovereign Issues 12,267
(Cost $12,852) ==========
- --------------------------------------------------------------------------------
FOREIGN CURRENCY-DENOMINATED ISSUES (c)(f) 2.1%
- --------------------------------------------------------------------------------
Commonwealth of Australia
10.000% due 10/15/07 A$ 8,000 6,439
Commonwealth of Canada
8.500% due 04/01/02 C$ 2,000 1,459
Province of Saskatchewan
11.000% due 01/09/01 2,000 1,473
----------
Total Foreign Currency-Denominated Issues 9,371
(Cost $9,897) ==========
- --------------------------------------------------------------------------------
PURCHASED CALL OPTIONS 0.6%
- --------------------------------------------------------------------------------
U.S. Treasury Note (OTC)
5.375% due 07/31/00
Strike @ 99.96 Exp. 02/19/99 $ 10,000 171
5.750% due 11/30/02
Strike @ 94.39 Exp. 12/02/98 20,000 2,130
5.250% due 08/15/03
Strike @ 99.29 Exp. 08/20/99 10,000 507
----------
Total Purchased Call Options 2,808
(Cost $1,729) ==========
- --------------------------------------------------------------------------------
PURCHASED PUT OPTIONS 0.0%
- --------------------------------------------------------------------------------
Eurodollar September Futures (CME)
Strike @ 91.75 Exp. 09/13/99 250 0
U.S. Treasury Note 5 Year December Futures (CBOT)
5.375% due 07/31/00
Strike @ 106.00 Exp. 11/21/98 1,050 16
----------
Total Purchased Put Options 16
(Cost $28) ==========
- --------------------------------------------------------------------------------
PREFERRED STOCK 0.8%
- --------------------------------------------------------------------------------
Shares
TCI Communications, Inc.
2.430% due 01/01/00 132,000 3,597
----------
Total Preferred Stock 3,597
(Cost $3,676) ==========
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 12.5%
- --------------------------------------------------------------------------------
Commercial Paper 8.0%
Coca-Cola Co.
5.440% due 11/12/98 400 397
E.I. Du Pont de Nemours
5.270% due 10/29/98 900 896
5.440% due 11/20/98 1,300 1,290
Ford Motor Credit Corp.
5.540% due 10/09/98 900 899
5.420% due 01/08/99 1,400 1,380
General Electric Capital Corp.
5.530% due 10/07/98 8,000 7,993
5.530% due 11/13/98 1,600 1,589
5.500% due 11/17/98 1,000 993
5.470% due 12/16/98 1,200 1,187
General Motors Acceptance Corp.
5.200% due 11/16/98 3,500 3,477
IBM Credit Corp.
5.500% due 10/21/98 700 698
Motorola, Inc.
5.440% due 12/03/98 2,200 2,180
National Rural Utilities Cooperative
5.470% due 10/16/98 3,700 3,691
5.500% due 11/06/98 3,100 3,083
5.320% due 12/03/98 1,200 1,189
New Center Asset Trust
5.480% due 12/16/98 600 593
5.490% due 12/17/98 2,500 2,472
Shell Oil Co.
5.490% due 10/13/98 1,200 1,198
----------
35,205
==========
Repurchase Agreements 3.7%
State Street Bank
4.750% due 10/01/98 6,575 6,575
(Dated 09/30/98. Collateralized by U.S. Treasury
Note 6.250% 02/28/02 valued at $6,706,625.
Repurchase proceeds are $6,575,868.)
First Boston
5.150% due 10/01/98 10,000 10,000
(Dated 09/30/98. Collateralized by U.S. Treasury
Note 4.500% 09/30/00 valued at $10,250,449.
Repurchase proceeds are $10,001,430.)
----------
16,575
==========
U.S. Treasury Bills (b)(g) 0.8%
4.895% due 10/15/98-02/04/99 3,735 3,715
----------
Total Short-Term Instruments 55,495
(Cost $55,489) ==========
Total Investments (a) 119.4% $ 530,544
(Cost $526,002)
Written Options (e) (0.4%) (1,791)
(Premiums $496)
Other Assets and Liabilities (Net) (19.0%) (84,543)
----------
Net Assets 100.0% $ 444,210
==========
1998 Semi-Annual Report See accompanying notes 69
<PAGE>
Schedule of Investments (Cont.)
Total Return Fund III
September 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
Notes to Schedule of Investments (amounts in thousands):
(a) At September 30, 1998, the net unrealized 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 of value over
tax cost. $ 8,238
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (3,696)
------------
Unrealized appreciation-net $ 4,542
============
(b) Securities with an aggregate market value of $3,715
have been segregated with the custodian to cover margin
requirements for the following open future contracts at
September 30, 1998:
Unrealized
Appreciation/
Type Contracts (Depreciation)
- --------------------------------------------------------------------------------
Eurodollar March Futures (03/01) 10 $ 24
Eurodollar March Futures (03/02) 29 54
Eurodollar June Futures (06/01) 10 23
Eurodollar June Futures (06/02) 29 52
Eurodollar September Futures (09/00) 10 27
Eurodollar September Futures (09/01) 29 61
Eurodollar December Futures (12/00) 10 25
Eurodollar December Futures (12/01) 29 57
Government of Japan 10 Year Note (12/98) 6 (13)
U.S. Treasury 5 Year Note (12/98) 620 2,676
U.S. Treasury 10 Year Note (12/98) 624 2,318
U.S. Treasury 30 Year Bond (12/98) 532 1,514
-----------
$ 6,818
===========
(c) Foreign forward currency contracts outstanding at September 30, 1998:
Principal
Amount Unrealized
Covered by Expiration Appreciation/
Type Contract Month (Depreciation)
- --------------------------------------------------------------------------------
Sell C$ 4,325 10/98 11
(d) Variable rate security. The rate listed is as of September 30, 1998.
(e) Premiums received on written options:
Market
Type Par Premiums Value
- --------------------------------------------------------------------------------
Call - CBOT U.S. Treasury Bond December Futures
Strike @ 130.00 Exp. 11/21/98 $ 500 $ 224 $ 1,320
Put - CBOT U.S. Treasury Bond December Futures
Strike @ 114.00 Exp. 11/21/98 500 122 8
Call - OTC U.S. Treasury Note
5.375% due (07/00)
Strike @ 100.51 Exp. 02/19/99 100 11 122
Put - OTC U.S. Treasury Note
5.375% due (07/00)
Strike @ 99.62 Exp. 02/19/98 200 22 1
Call - OTC U.S. Treasury Note
5.250% due (08/03)
Strike @ 101.25 Exp. 08/20/99 100 37 337
Put - OTC U.S. Treasury Note
5.250% due (08/03)
Strike @ 97.97 Exp. 08/20/99 200 80 3
-----------------------
$ 496 $ 1,791
=======================
(f) Principal amount denoted in indicated currency:
A$ - Australian Dollar
C$ - Canadian Dollar
JY - Japanese Yen
(g) Securities are grouped by coupon and represent a range of maturities.
(h) Swap agreements outstanding at September 30, 1998:
Notional Unrealized
Amount (Depreciation)
- --------------------------------------------------------------------------------
Receive floating rate based on 6 month JY-LIBOR
and pay fixed rate equal to 2.295%.
Broker: Deutsche Bank AG New York
Exp. 04/14/08 JY 580,000 $ (391)
Receive floating rate based on 6 month JY-LIBOR
and pay fixed rate equal to 2.305%.
Broker: Deutsche Bank AG New York
Exp. 04/15/08 JY 377,000 (256)
----------
$ (647)
==========
70 PIMCO Funds See accompanying notes
<PAGE>
Schedule of Investments
Total Return Mortgage Fund
September 30, 1998 (Unaudited)
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS 25.5%
- --------------------------------------------------------------------------------
U.S. Treasury Notes
6.750% due 04/30/00 $ 700 $ 724
6.250% due 08/31/02 250 267
---------
Total U.S. Treasury Obligations 991
(Cost $974) =========
- --------------------------------------------------------------------------------
MORTGAGE-BACKED SECURITIES 81.0%
- --------------------------------------------------------------------------------
Collateralized Mortgage Obligations 33.4%
Countrywide Home Loans
6.750% due 11/25/27 70 71
Donaldson, Lufkin & Jenrette
6.500% due 04/25/24 13 13
Federal Home Loan Mortgage Corp.
5.500% due 06/15/13 30 30
6.153% due 02/01/18 (b) 231 232
4.500% due 03/15/21 105 103
3.500% due 12/15/22 22 21
6.500% due 05/15/23 99 103
6.500% due 03/15/24 94 98
8.000% due 06/15/26 60 65
Federal National Mortgage Assn.
5.600% due 11/25/16 208 208
5.000% due 04/25/20 71 70
7.500% due 11/25/20 48 48
7.500% due 03/25/23 82 92
6.656% due 04/25/23 (b) 25 25
6.500% due 09/25/23 32 32
6.750% due 09/25/23 46 46
Vendee Mortgage
7.750% due 05/15/22 32 37
---------
1,294
=========
Federal Home Loan Mortgage Corporation 16.4%
6.000% due 06/01/28-10/14/28 (c) 442 443
7.000% due 02/01/27 187 192
---------
635
=========
Federal National Mortgage Association 2.6%
6.618% due 11/01/18 (b) 72 74
7.000% due 11/25/19 26 26
---------
100
=========
Government National Mortgage Association 28.3%
6.875% due 03/20/16-03/20/27 (b)(c) 198 203
6.880% due 02/20/18 (b) 75 77
7.000% due 12/20/21-11/20/26 (b)(c) 260 265
7.500% due 05/15/27-08/15/27 (c) 533 552
---------
1,097
=========
Stripped Mortgage-Backed Securities 0.3%
Federal National Mortgage Assn. (IO)
7.000% due 12/25/16 299 11
---------
Total Mortgage-Backed Securities 3,137
(Cost $3,032) =========
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 7.0%
- --------------------------------------------------------------------------------
Commercial Paper 2.6%
Federal Home Loan Bank
5.180% due 10/23/98 100 100
Repurchase Agreement 4.4% ---------
State Street Bank
4.750% due 10/01/98 172 172
(Dated 09/30/98. Collateralized by U.S. Treasury ---------
Note 5.750% 10/31/02 valued at $176,550.
Repurchase proceeds are $172,023.)
Total Short-Term Instruments 272
(Cost $272) =========
Total Investments (a) 113.5% $ 4,400
(Cost $4,278)
Other Assets and Liabilities (Net) (13.5%) (526)
---------
Net Assets 100.0% $ 3,874
=========
Notes to Schedule of Investments (amounts in thousands):
(a) At September 30, 1998, the net unrealized 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 of value over
tax cost. $ 127
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (5)
---------
Unrealized appreciation-net $ 122
=========
(b) Variable rate security. The rate listed is as of September 30, 1998.
(c) Securities are grouped by coupon and represent a range of maturities.
1998 Semi-Annual Report See accompanying notes 71
<PAGE>
Schedule of Investments
Moderate Duration Fund
September 30, 1998 (Unaudited)
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
CORPORATE BONDS & NOTES 26.4%
- --------------------------------------------------------------------------------
Banking & Finance 11.7%
CIT Group, Inc.
6.200% due 10/20/00 $ 5,000 $ 5,083
Citicorp
6.650% due 05/15/00 (d) 2,000 2,036
Ford Motor Credit Corp.
5.813% due 01/17/02 (d) 5,000 4,979
Korean Export-Import Bank
6.500% due 10/06/99 1,580 1,495
NationsBank Corp.
6.056% due 04/15/03 (d) 5,000 5,055
Okobank
7.312% due 09/27/49 (d) 1,150 1,160
PNC Bank Corp.
5.606% due 06/01/00 (d) 8,000 8,001
PSE&G Capital Corp.
6.740% due 10/23/01 1,100 1,158
Salomon, Inc.
6.008% due 07/23/01 (d) 1,000 1,001
-----------
29,968
===========
Industrials 11.7%
Amerco, Inc.
6.890% due 10/15/00 2,400 2,459
7.230% due 01/21/27 500 559
Building Materials Corp.
0.000% due 07/01/04 (e) 250 249
Harris Chemical
10.250% due 07/15/01 5,000 5,119
Langdell
9.978% due 07/30/99 (d) 5,000 4,975
News America Holdings Corp.
7.450% due 06/01/00 3,000 3,087
Occidental Petroleum
6.400% due 04/01/03 2,600 2,704
Racers
6.156% due 01/11/99 (d) 3,300 3,298
RJR Nabisco
8.625% due 12/01/02 480 502
Sears Roebuck Acceptance
6.720% due 10/23/02 3,000 3,167
TCI Communications, Inc.
5.945% due 09/11/00 (d) 2,000 1,997
6.140% due 04/03/02 (d) 250 253
7.550% due 09/02/03 500 548
6.690% due 03/31/06 1,200 1,293
-----------
30,210
===========
Utilities 3.0%
Beaver Valley Funding Corp.
8.250% due 06/01/03 378 393
8.625% due 06/01/07 690 761
Central Maine Power Co.
6.106% due 05/04/99 (d) 2,500 2,500
CMS Energy
8.125% due 05/15/02 750 777
System Energy Resources
7.710% due 08/01/01 2,900 3,068
Texas-New Mexico Power
12.500% due 01/15/99 200 204
-----------
7,703
-----------
Total Corporate Bonds & Notes 67,881
(Cost $67,871) ===========
- --------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCIES 1.3%
- --------------------------------------------------------------------------------
Student Loan Marketing Assn.
5.684% due 06/30/00 (d) 3,400 3,402
-----------
Total U.S. Government Agencies 3,402
(Cost $3,397) ===========
- --------------------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS 5.5%
- --------------------------------------------------------------------------------
Treasury Inflation Protected Securities
3.625% due 07/15/02 (f) 3,057 3,071
3.375% due 01/15/07 (f) 2,060 2,029
-----------
5,100
===========
U.S. Treasury Bonds
11.125% due 08/15/03 5,300 6,844
-----------
U.S. Treasury Notes
5.625% due 12/31/02 2,200 2,307
-----------
Total U.S. Treasury Obligations 14,251
(Cost $14,084) ===========
- --------------------------------------------------------------------------------
MORTGAGE-BACKED SECURITIES 54.1%
- --------------------------------------------------------------------------------
Collateralized Mortgage Obligations 13.9%
Federal Home Loan Mortgage Corp.
7.000% due 05/15/04 1,000 1,051
6.000% due 12/15/08 5,759 5,870
5.500% due 02/15/14 58 57
5.500% due 11/15/15 461 461
6.500% due 10/15/23 1,245 1,232
8.500% due 04/15/25 1,989 2,235
8.000% due 02/15/27 395 425
Federal National Mortgage Assn.
7.000% due 12/25/99 295 296
6.000% due 03/25/09 1,309 1,321
6.500% due 05/18/13 1,078 1,082
6.700% due 09/25/15 1,304 1,302
6.500% due 01/18/19 4,300 4,360
7.000% due 09/25/21 2,786 2,904
6.500% due 03/25/23 2,000 2,039
General Electric Capital Mortgage
6.000% due 02/25/24 449 449
Government National Mortgage Assn.
7.500% due 04/20/27 2,223 2,460
PNC Mortgage Securities Corp.
6.500% due 10/25/28 5,000 4,897
Prudential Home
7.000% due 05/25/23 591 594
Residential Funding
7.500% due 06/25/27 250 250
7.000% due 08/25/27 1,655 1,667
Resolution Trust Corp.
9.400% due 05/25/24 542 541
Securitized Asset Sales, Inc.
7.410% due 09/25/24 240 242
-----------
35,735
===========
Federal Home Loan Mortgage Corporation 10.5%
6.500% due 10/14/28 25,000 25,453
7.500% due 10/14/28 1,500 1,545
-----------
26,998
===========
Federal Housing Administration 4.6%
7.430% due 04/01/22-06/01/23(c) 11,436 11,934
-----------
Federal National Mortgage Association 19.7%
6.130% due 09/01/17-08/01/18 (c)(d) 2,131 2,153
6.131% due 06/01/18-08/01/29 (c)(d) 3,145 3,183
6.132% due 03/01/29-05/01/36 (c)(d) 2,538 2,572
6.143% due 05/01/36 (d) 5,341 5,417
6.153% due 03/01/33 (d) 916 927
6.500% due 08/25/21 28,509 28,793
7.500% due 08/01/17-01/01/27(c) 3,412 3,539
8.000% due 09/01/26-10/01/26(c) 3,954 4,113
-----------
50,697
===========
Government National Mortgage Association 4.7%
7.000% due 11/20/17-11/20/25 (c)(d) 1,143 1,168
8.000% due 08/15/25-05/15/27 (c) 8,554 8,956
9.000% due 06/15/09 1,749 1,882
-----------
12,006
===========
72 PIMCO Funds See accompanying notes
<PAGE>
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
Other Mortgage-Backed Securities 0.7%
Paine Webber Mortgage
7.500% due 07/25/23 $ 1,714 $ 1,730
-----------
Total Mortgage-Backed Securities 139,100
(Cost $140,006) ===========
- --------------------------------------------------------------------------------
ASSET-BACKED SECURITIES 3.2%
- --------------------------------------------------------------------------------
Caterpillar Financial Asset Trust
6.450% due 05/25/03 2,500 2,521
Chase Manhattan Corp
7.000% due 04/25/25 1,000 1,018
EQCC Home Equity Loan Trust
6.700% due 09/15/08 546 552
IMC Home Equity Loan Trust
5.836% due 03/25/27 (d) 213 212
LIBOR-Index Certificates
7.188% due 12/16/01 (d) 800 800
Norwest Asset Securities Corp
6.250% due 10/25/13 3,000 3,018
-----------
Total Asset-Backed Securities 8,121
(Cost $8,091) ===========
- --------------------------------------------------------------------------------
SOVEREIGN ISSUES 9.4%
- --------------------------------------------------------------------------------
Commonwealth of Canada
6.500% due 05/30/00 2,500 2,571
Hydro Quebec
7.620% due 04/02/01 1,000 1,058
5.813% due 09/29/49 (d) 5,000 4,250
Republic of Argentina
6.625% due 03/31/05 (d) 5,734 4,530
8.726% due 04/10/05 (d) 3,000 2,588
United Mexican States
7.002% due 06/27/02 (d) 10,000 9,210
-----------
Total Sovereign Issues 24,207
(Cost $26,059) ===========
- --------------------------------------------------------------------------------
FOREIGN CURRENCY-DENOMINATED ISSUES (g)(h) 7.9%
- --------------------------------------------------------------------------------
Commonwealth of New Zealand
4.500% due 02/15/16 (f) N$ 800 421
United Kingdom Gilt
7.000% due 06/07/02 BP 11,100 19,925
-----------
Total Foreign Currency-Denominated Issues 20,346
(Cost $19,386) ===========
- --------------------------------------------------------------------------------
PREFERRED STOCK 0.5%
- --------------------------------------------------------------------------------
Shares
El Paso Electric Co.
12.341% due 01/01/00 11,507 1,249
-----------
Total Preferred Stock 1,249
(Cost $1,300) ===========
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 11.1%
- --------------------------------------------------------------------------------
Principal
Amount
(000s)
Commercial Paper 10.1%
BellSouth Telecommunications, Inc.
5.520% due 10/06/98 $ 1,200 1,199
Canadian Wheat Board
5.530% due 12/16/98 200 198
E.I. Du Pont de Nemours
5.430% due 11/03/98 8,000 7,960
5.460% due 12/04/98 600 594
Federal Home Loan Mortgage Corporation
5.450% due 10/09/98 100 100
5.460% due 10/16/98 3,400 3,392
Ford Motor Credit Corp.
5.490% due 11/19/98 1,000 993
5.390 due 01/08/99 200 197
General Electric Capital Corp.
5.470% due 11/06/98 300 298
5.510% due 11/13/98 200 199
5.520% due 11/13/98 400 397
National Rural Utilities Cooperative
5.500% due 10/19/98 3,000 2,992
New Center Asset Trust
5.530% due 10/26/98 600 598
5.510% due 11/19/98 300 298
5.480% due 12/16/98 800 791
5.490% due 12/17/98 500 494
Oesterreich Kontrollbank
5.220% due 11/30/98 2,800 2,775
Pfizer, Inc.
5.270% due 10/30/98 1,500 1,494
Procter & Gamble Co.
5.310% due 12/28/98 300 296
Wisconsin Electric Power & Light
5.290% due 10/21/98 600 598
-----------
25,863
===========
Repurchase Agreement 0.7%
State Street Bank
4.750% due 10/01/98 1,883 1,883
(Dated 09/30/98. Collateralized by U.S. Treasury -----------
Note 5.750% 11/15/00 valued at $1,925,387.
Repurchase proceeds are $1,883,248.)
U.S. Treasury Bills 0.3% (b)(c)
4.963% due 10/15/98-12/03/98 765 762
-----------
Total Short-Term Instruments 28,508
(Cost $24,419) ===========
Total Investments (a) 119.4% $ 307,065
(Cost $304,619)
Other Assets and Liabilities (Net) (19.4%) (49,836)
-----------
Net Assets 100.0% $ 257,229
===========
Notes to Schedule of Investments (amounts in thousands):
(a) At September 30, 1998, the net unrealized 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 of value over
tax cost. $ 4,797
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (2,351)
-----------
Unrealized appreciation-net $ 2,446
===========
(b) Securities with an aggregate market value of $762
have been segregated with the custodian to cover margin
requirements for the following open futures contracts at
September 30, 1998:
Unrealized
Type Contracts Appreciation
- --------------------------------------------------------------------------------
U.S. Treasury 5 Year Note (12/98) 250 $ 1,012
U.S. Treasury 10 Year Note (12/98) 426 2,018
U.S. Treasury 30 Year Bond (12/98) 63 272
Eurodollar September Futures (09/00) 8 22
Eurodollar December Futures (12/00) 8 20
Eurodollar March Futures (03/01) 8 19
Eurodollar June Futures (06/01) 8 18
United Kingdom 90 Day LIBOR Future (12/98) 200 55
-----------
$ 3,436
===========
1998 Semi-Annual Report See accompanying notes 73
<PAGE>
Schedule of Investments (Cont.)
Moderate Duration Fund
September 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
(c) Securities are grouped by coupon and represent a range of maturities.
(d) Variable rate security. The rate listed is as of September 30, 1998.
(e) Security becomes interest bearing at a future date.
(f) Principal amount of the security is adjusted for inflation.
(g) Principal amount denoted in indicated currency:
BP - British Pound
N$ - New Zealand Dollar
(h) Foreign forward currency contracts outstanding at September 30, 1998:
Principal
Amount
Covered by Expiration Unrealized
Type Contract Month Appreciation
- --------------------------------------------------------------------------------
Sell N$ 763 12/98 $ 3
74 PIMCO Funds See accompanying notes
<PAGE>
Schedule of Investments
Low Duration Fund
September 30, 1998 (Unaudited)
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
CORPORATE BONDS & NOTES 26.1%
- --------------------------------------------------------------------------------
Banking & Finance 11.6%
Associates Corp. of North America
5.788% due 08/27/01 (d) $ 1,000 $ 1,003
6.875% due 06/20/02 20,000 21,258
6.950% due 08/01/02 1,000 1,056
AT&T Capital Corp.
5.950% due 02/16/99 50,000 50,077
6.490% due 05/17/99 10,000 10,055
Banc One Corp.
7.250% due 08/01/02 500 532
BankAmerica Corp.
7.200% due 09/15/02 100 106
7.875% due 12/01/02 100 109
Beneficial Corp.
6.650% due 09/12/02 5,000 5,218
6.575% due 12/16/02 5,440 5,673
CIT Group, Inc.
6.200% due 10/20/00 50,000 50,825
5.875% due 06/18/01 10,000 10,136
Citicorp
9.750% due 08/01/99 100 103
Ford Motor Credit Corp.
5.293% due 04/05/99 (d) 1,000 997
7.500% due 11/15/99 100 102
5.968% due 03/21/01 (d) 3,000 3,017
6.520% due 08/12/02 13,000 13,551
General Motors Acceptance Corp.
7.125% due 05/01/01 15,000 15,655
5.520% due 09/19/01 (d) 5,000 4,973
5.694% due 12/10/01 (d) 5,300 5,303
5.813% due 04/29/02 (d) 2,000 2,000
5.788% due 11/12/02 (d) 17,400 17,380
5.875% due 01/22/03 500 510
Great Western Financial
8.600% due 02/01/02 4,000 4,395
Hitachi Credit America
6.100% due 04/24/01 25,000 25,472
Household Finance Corp.
6.490% due 04/09/01 20,000 20,498
6.125% due 07/15/02 10,000 10,222
7.625% due 01/15/03 10,849 11,723
Kemper Corp.
8.800% due 11/01/98 100 100
Lehman Brothers, Inc.
6.120% due 05/14/99 (d) 5,000 5,005
7.625% due 07/15/99 (d) 50 50
7.110% due 09/27/99 45 45
Merrill Lynch & Co.
6.130% due 04/07/03 7,770 7,999
New England Educational Loan Marketing
5.788% due 11/30/99 20,000 20,021
Okobank
7.028% due 10/29/49 (d) 750 756
PaineWebber
7.000% due 03/01/00 50 51
Rothmans Holdings
6.500% due 05/06/03 14,000 14,457
Salomon, Inc.
6.700% due 12/01/98 1,250 1,252
7.125% due 08/01/99 1,050 1,062
7.750% due 05/15/00 19,000 19,621
7.500% due 02/01/03 3,000 3,211
Salomon, Smith Barney Holdings
7.875% due 10/01/99 100 102
SGE Associates
8.070% due 07/20/00 (k) 12,258 12,671
Toyota Motor Credit Corp.
5.388% due 02/15/02 (h) 11,600 11,297
Travelers Group, Inc.
7.300% due 05/15/02 15,000 15,833
---------
405,482
=========
Industrials 8.7%
American Home Products Corp.
7.700% due 02/15/00 100 104
AMR Corp.
8.100% due 11/01/98 2,000 2,004
8.730% due 11/02/98 3,000 3,006
9.750% due 03/15/00 5,000 5,317
9.910% due 03/01/01 2,500 2,751
9.440% due 05/15/01 5,000 5,480
9.125% due 10/24/01 1,000 1,100
Century Communications Corp.
0.000% due 03/15/03 (i) 5,250 3,721
Delta Air Lines
7.790% due 12/01/98 4,449 4,463
9.800% due 12/16/00 250 271
10.430% due 01/02/11 850 1,115
Federal-Mogul Corp.
7.500% due 07/01/04 28,600 29,270
Ford Motor Co.
9.000% due 09/15/01 500 554
Fred Meyer, Inc.
7.150% due 03/01/03 10,500 10,504
Hertz Corp.
6.625% due 07/15/00 100 102
IBM Corp.
6.375% due 06/15/00 100 103
INDSPEC Chemical Corp.
0.000% due 12/01/03 (i) 4,625 4,787
ISP Holdings, Inc.
9.750% due 02/15/02 3,000 3,180
Langdell
9.978% due 07/30/99 (d)(k) 5,000 4,975
Minnesota Mining & Manufacturing Co.
6.250% due 03/29/99 200 201
Noranda, Inc.
6.563% due 08/18/00 (d) 1,000 1,010
Occidental Petroleum
6.400% due 04/01/03 15,945 16,586
Petroleos Mexicanos
11.157% due 07/15/05 (d) 5,000 4,363
Philip Morris Cos., Inc.
9.000% due 01/01/01 7,000 7,529
7.500% due 01/15/02 200 213
Racers
6.156% due 01/11/99 (d) 10,400 10,394
RJR Nabisco
8.625% due 12/01/02 4,000 4,186
Stater Brothers Holdings
11.000% due 03/01/01 3,875 4,011
TCI Communications, Inc.
6.200% due 03/11/03 (d) 3,000 3,039
Tenet Healthcare Corp.
7.875% due 01/15/03 4,300 4,429
8.625% due 12/01/03 1,700 1,804
Time Warner, Inc.
7.975% due 08/15/04 21,247 23,820
8.110% due 08/15/06 42,495 48,939
8.180% due 08/15/07 42,495 49,750
Yorkshire Power
6.154% due 02/25/03 40,000 40,508
---------
303,589
=========
Utilities 5.8%
Alabama Power
7.250% due 08/01/07 100 104
California Energy
9.875% due 06/30/03 3,750 4,145
10.250% due 01/15/04 850 903
Central Maine Power Co.
6.380% due 02/24/00 10,000 10,202
Cleveland Electric Illuminating Co.
8.330% due 10/30/98 1,500 1,503
8.170% due 11/30/98 2,000 2,007
9.300% due 07/26/99 1,500 1,543
1998 Semi-Annual Report See accompanying notes 75
<PAGE>
Schedule of Investments (Cont.)
Low Duration Fund
September 30, 1998 (Unaudited)
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
CMS Energy
7.375% due 11/15/00 $ 10,000 $ 10,085
7.625% due 11/15/04 14,500 14,914
Connecticut Light & Power
7.750% due 06/01/02 11,700 12,280
8.590% due 06/05/03 (k) 10,000 10,578
Consolidated Natural Gas Co.
8.750% due 06/01/99 400 409
El Paso Electric Co.
7.250% due 02/01/99 1,000 1,004
Flag Limited
8.250% due 01/30/08 2,000 1,915
Illinois Power Co.
6.250% due 07/15/02 10,000 10,309
6.000% due 09/15/03 12,500 12,794
Long Island Lighting Co.
7.300% due 07/15/99 4,500 4,567
6.250% due 07/15/01 4,775 4,930
Louisiana Power & Light Co.
7.740% due 07/01/02 10,500 10,719
New Orleans Public Service
8.000% due 03/01/06 400 421
Niagara Mohawk Power
7.000% due 10/01/00 22,000 22,270
7.125% due 07/01/01 2,000 2,032
7.250% due 10/01/02 10,000 10,199
9.500% due 03/01/21 1,725 1,835
North Atlantic Energy
9.050% due 06/01/02 4,930 5,225
Texas Utilities Co.
6.750% due 04/01/03 3,875 4,123
WorldCom, Inc.
6.125% due 08/15/01 40,000 41,091
----------
202,107
----------
Total Corporate Bonds & Notes 911,178
(Cost $883,874) ==========
- --------------------------------------------------------------------------------
MUNICIPAL BONDS & NOTES 0.4%
- --------------------------------------------------------------------------------
New York City Refunding Bonds, Series 1998 B
5.900% due 08/01/00 13,000 13,152
----------
Total Municipal Bonds & Notes 13,152
(Cost $12,995) ==========
- --------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCIES 3.1%
- --------------------------------------------------------------------------------
Federal Home Loan Bank
4.350% due 04/19/99 (d) 3,000 2,988
Federal National Mortgage Assn.
5.720% due 01/29/01 2,000 2,003
Small Business Administration
7.750% due 01/25/13 (d) 1,012 1,044
7.250% due 02/25/14 (d) 1,234 1,282
Student Loan Marketing Assn.
5.684% due 06/30/00 (d) 46,000 46,024
5.650% due 04/25/06 (d) 4,952 4,934
5.823% due 04/25/07 (d) 50,000 49,988
Tennessee Valley Authority
0.000% due 10/15/98 1,000 998
----------
Total U.S. Government Agencies 109,261
(Cost $109,111) ==========
- --------------------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS 2.7%
- --------------------------------------------------------------------------------
Treasury Inflation Protected Securities
3.625% due 07/15/02 (h) 94,764 95,209
----------
Total U.S. Treasury Obligations 95,209
(Cost $93,871) ==========
- --------------------------------------------------------------------------------
MORTGAGE-BACKED SECURITIES 67.4%
- --------------------------------------------------------------------------------
Collateralized Mortgage Obligations 8.7%
American Southwest Financial
5.500% due 06/02/99 6,906 7,020
Capstead Mortgage Corp.
7.500% due 02/25/23 726 728
Chase Mortgage Financial Corp.
10.000% due 11/25/09 713 736
Citicorp Mortgage Securities, Inc.
9.500% due 10/25/15 355 356
Collateralized Mortgage Obligation Trust
6.187% due 01/20/03 (d) 17 17
7.985% due 05/01/17 12,743 12,770
9.500% due 06/25/20 503 523
Countrywide
6.250% due 07/25/09 1,400 1,420
6.750% due 06/25/28 15,103 15,210
6.250% due 01/25/35 (d) 9,260 9,284
Dime Savings
7.119% due 11/01/18 (d) 2,659 2,452
Donaldson, Lufkin & Jenrette
11.000% due 08/01/19 1,347 1,501
7.978% due 05/25/24 (d) 2,504 2,541
Federal Home Loan Mortgage Corp.
10.000% due 09/15/09 14 15
12.500% due 09/30/13 1,139 1,274
6.250% due 07/15/14 4,431 4,447
7.000% due 04/25/15 125 124
11.000% due 11/30/15 7,092 8,368
10.000% due 07/15/19 439 487
5.650% due 11/15/19 295 295
9.000% due 11/15/19 1,812 1,854
7.500% due 04/15/20 2,900 2,970
8.000% due 04/15/20 1,746 1,767
10.000% due 05/15/20 330 358
7.500% due 12/15/20 2,000 2,040
9.000% due 12/15/20 6,284 6,616
9.500% due 01/15/21 2,065 2,234
8.000% due 04/15/21 2,321 2,415
9.000% due 05/15/21 398 426
Federal National Mortgage Assn.
8.950% due 05/25/03 75 78
9.000% due 07/25/03 567 587
9.400% due 07/25/03 124 131
5.750% due 02/25/05 2,027 2,024
6.875% due 06/25/09 2,881 2,920
5.750% due 04/25/16 1,765 1,761
8.750% due 05/25/19 98 102
9.300% due 05/25/19 23 24
9.000% due 07/25/19 350 358
9.500% due 03/25/20 3,038 3,667
9.500% due 05/25/20 1,450 1,668
8.000% due 07/25/20 1,540 1,543
9.000% due 03/25/21 6,246 6,780
9.000% due 04/25/21 218 236
8.000% due 03/25/22 117 120
5.000% due 01/25/24 311 310
8.500% due 04/01/25 6,343 6,624
8.500% due 03/18/27 3,406 3,444
6.488% due 02/01/28 (d) 12,510 12,902
Fleet Mortgage
7.200% due 10/25/23 539 547
General Electric Capital Mortgage
6.750% due 12/25/12 6,996 7,110
6.350% due 03/25/17 3,705 3,699
6.500% due 07/25/18 38 38
Glendale Federal Savings & Loan
7.308% due 03/25/30 (d) 2,063 2,090
Greenwich
8.719% due 11/25/24 (d) 1,269 1,334
Homestead Mortgage Acceptance Corp.
11.450% due 09/01/15 1,137 1,213
76 PIMCO Funds See accompanying notes
<PAGE>
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
Independent National Mortgage Corp.
8.195% due 11/25/24 (d) $ 2,673 $ 2,773
Mellon Residential Funding Corp.
6.400% due 05/25/28 2,661 2,691
NationsBank Corp.
6.125% due 10/20/13 40,000 40,038
Nomura Asset Securities Corp.
6.625% due 01/25/09 2,830 2,856
Norwest Mortgage
12.375% due 01/01/14 190 196
12.500% due 02/01/14 561 600
12.250% due 04/01/14 310 318
PNC Mortgage Securities Corp.
6.500% due 02/25/28 11,969 12,121
Prudential Bache
6.153% due 09/01/18 (d) 40 40
8.400% due 03/20/21 6,260 6,595
Prudential Home
6.500% due 02/25/00 7 7
7.500% due 09/25/07 878 912
7.000% due 11/25/07 815 817
7.000% due 01/25/08 10,000 10,294
7.000% due 06/25/23 3,014 3,099
6.050% due 04/25/24 376 376
Prudential Securities
8.000% due 12/25/20 315 318
Residential Funding
6.500% due 06/25/08 3,000 3,024
6.500% due 04/25/09 94 95
5.899% due 07/01/19 (d) 1,158 1,136
7.033% due 09/01/19 (d) 181 179
Resolution Trust Corp.
6.817% due 09/25/19 (d) 1,855 1,853
6.073% due 01/25/21 (d) 187 186
6.518% due 09/25/21 (d) 843 841
6.979% due 10/25/21 (d) 171 172
6.999% due 10/25/21 (d) 1,003 1,000
8.625% due 10/25/21 21,382 21,357
7.088% due 03/25/22 (d) 2,259 2,251
10.000% due 05/25/22 90 91
6.900% due 02/25/27 5,539 5,406
6.113% due 09/27/27 (d) 2,219 2,187
9.000% due 09/25/28 227 232
7.647% due 10/25/28 (d) 133 137
Ryland Acceptance Corp.
9.450% due 10/01/16 167 166
8.000% due 03/01/18 2,453 2,545
Salomon Brothers Mortgage Securities
7.096% due 12/25/17 (d) 2,391 2,394
9.549% due 10/25/18 (d) 3,530 3,817
8.245% due 03/25/24 (d) 2,537 2,601
Sears Mortgage
7.882% due 08/25/23 (d) 524 536
Securitized Asset Sales, Inc.
6.750% due 08/25/25 7,622 7,672
Shearson Lehman
9.600% due 03/25/21 826 824
Union Planters Mortgage Finance Corp.
6.450% due 01/25/28 6,000 6,097
-----------
302,408
===========
Federal Home Loan Mortgage Corporation 22.5%
4.750% due 06/01/01 10 10
5.500% due 04/01/07 3 3
5.750% due 01/15/08 7,820 7,915
6.000% due 03/01/11-10/14/28 (f) 270,846 270,932
6.130% due 01/01/17-06/01/17 (d)(f) 661 669
6.131% due 11/01/14-06/01/30 (d)(f) 7,547 7,632
6.143% due 05/01/17 (d) 195 197
6.153% due 01/01/30-12/01/30 (d)(f) 3,841 3,888
6.159% due 02/01/16 (d) 127 128
6.166% due 10/01/30 (d) 391 396
6.250% due 01/01/20 (d) 254 257
6.500% due 04/01/00-10/14/28 (f) 265,683 270,383
6.750% due 03/01/17 (d) 306 312
7.000% due 01/01/17 (d) 65 66
7.250% due 07/01/07 1 1
7.277% due 02/01/20 (d) 3,550 3,626
7.496% due 07/01/18 (d) 566 592
7.500% due 09/01/06 121 122
7.650% due 12/01/22 (d) 1,413 1,469
7.697% due 09/01/23 (d) 522 544
7.705% due 06/01/24 (d) 1,291 1,318
7.719% due 11/01/22 (d) 2,617 2,682
7.737% due 10/01/23 (d) 2,475 2,558
7.744% due 11/01/23 (d) 1,462 1,511
7.832% due 03/01/24 (d) 193 202
7.840% due 01/01/24 (d) 3,265 3,378
7.982% due 01/01/24 (d) 1,682 1,715
8.000% due 07/01/06-06/01/27 (f) 165,192 170,857
8.250% due 10/01/07-11/01/07 (f) 45 47
8.500% due 07/01/01-11/01/25 (f) 28,225 29,422
8.750% due 02/01/01-04/01/02 (f) 60 63
9.000% due 05/01/02-07/01/04 (f) 62 64
9.250% due 07/01/01 5 5
9.500% due 03/01/01-12/01/04 (f) 105 112
9.750% due 03/01/01-11/01/08 (f) 1,064 1,137
10.000% due 04/01/01-04/01/15 (f) 18 19
10.500% due 07/01/00-02/01/16 (f) 86 93
10.750% due 10/01/00-08/01/11 (f) 527 574
11.500% due 10/01/15 2 2
11.750% due 11/01/10-08/01/15 (f) 18 20
14.000% due 09/01/12-04/01/16 (f) 15 16
14.500% due 12/01/10 6 7
15.000% due 08/01/11-12/01/11 (f) 5 5
15.500% due 11/01/11 1 1
-----------
784,950
===========
Federal Housing Administration 0.4%
6.950% due 04/01/14 2,257 2,362
7.400% due 03/15/19 130 134
7.421% due 11/01/19 709 729
7.430% due 10/01/19-12/01/21 (f) 11,763 12,286
-----------
15,511
===========
Federal National Mortgage Association 13.7%
6.000% due 05/01/11-12/25/20 (f) 855 859
6.130% due 06/01/14-07/01/17 (d)(f) 7,341 7,420
6.131% due 07/01/14-05/01/31 (d)(f) 27,654 27,963
6.133% due 07/01/24 (d) 1,473 1,490
6.134% due 07/01/20 (d) 1,003 1,014
6.135% due 02/01/24 (d) 1,059 1,071
6.142% due 08/01/29 (d) 893 903
6.143% due 05/01/36 (d) 1,536 1,558
6.150% due 04/01/18 (d) 8,010 8,093
6.153% due 08/01/20 (d) 1,053 1,065
6.164% due 06/01/24 (d) 62 63
6.175% due 08/01/23 (d) 1,136 1,149
6.288% due 04/25/22 (d) 357 360
6.500% due 06/01/08-10/14/28 (f) 39,918 39,280
6.774% due 01/01/21 (d) 706 715
6.956% due 11/01/17 (d) 483 494
7.000% due 10/01/01-09/01/07 (f) 234 239
7.176% due 11/01/18 (d) 256 264
7.245% due 07/01/17 (d) 826 853
7.500% due 04/01/24-05/01/24 (f) 15,051 15,550
7.683% due 04/01/24 (d) 3,692 3,835
7.898% due 01/01/24 (d) 4,522 4,713
7.914% due 01/01/24 (d) 71 75
7.960% due 07/01/23 (d) 3,019 3,138
7.998% due 10/01/24 (d) 8,491 8,748
8.000% due 03/01/04-12/01/25 (f) 11,621 12,089
8.500% due 03/01/08-08/01/26 (f) 317,932 331,961
10.000% due 02/01/04-06/01/19 (f) 2,154 2,330
10.500% due 06/01/05-11/01/05 (f) 312 336
11.000% due 10/01/98-09/01/00 (f) 11 11
11.250% due 12/01/10-10/01/15 (f) 256 287
11.750% due 01/01/14-01/01/16 (f) 40 48
12.000% due 01/01/15-10/01/15 (f) 10 11
12.750% due 02/01/14-11/01/14 (f) 87 102
13.000% due 07/01/15 9 10
13.250% due 09/01/11 20 23
13.500% due 04/01/14 9 11
1998 Semi-Annual Report See accompanying notes 77
<PAGE>
Schedule of Investments (Cont.)
Low Duration Fund
September 30, 1998 (Unaudited)
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
14.500% due 08/01/14 $ 42 $ 51
15.500% due 10/01/12-12/01/12 (f) 77 96
15.750% due 12/01/11 41 49
16.000% due 09/01/12-12/01/12 (f) 22 28
-----------
478,355
===========
Government National Mortgage Association 20.2%
6.000% due 08/20/26 (d) 824 839
6.500% due 05/15/23-10/21/28 (d)(f) 277,079 283,153
6.550% due 11/15/13 22 22
6.875% due 04/20/16-06/20/27 (d)(f) 78,898 80,529
7.000% due 03/15/11-09/20/26 (d)(f) 159,933 163,234
7.500% due 02/15/22-01/15/27 (f) 121,603 126,413
8.000% due 07/15/04-12/15/25 (f) 44,924 47,478
8.500% due 04/15/22 17 18
9.750% due 07/15/13-02/15/20 (f) 1,117 1,222
11.250% due 10/15/00 4 5
11.750% due 07/15/13-08/15/15 (f) 129 145
12.000% due 06/20/15 18 20
12.250% due 01/15/14-03/15/14 (f) 279 325
13.000% due 10/15/13 15 17
13.500% due 05/15/11-11/15/12 (f) 29 34
16.000% due 12/15/11-04/15/12 (f) 71 86
-----------
703,540
===========
Other Mortgage-Backed Securities 1.2%
First Boston Mortgage Securities Corp.
8.300% due 08/20/09 216 218
Glendale Federal Savings & Loan
11.000% due 03/01/10 20 21
Goldman Sachs Mortgage Securities
7.750% due 05/19/27 14,412 15,196
Great Western Savings & Loan
6.180% due 12/01/17 (d) 462 460
Home Savings of America
5.838% due 05/25/27 (d) 1,863 1,831
5.901% due 09/25/28 (d) 1,310 1,296
Imperial Savings & Loan
8.844% due 07/25/17 (d) 48 48
9.900% due 02/25/18 53 588
MDC Mortgage Funding
8.696% due 01/25/25 (d) 691 715
Resolution Trust Corp.
7.290% due 05/25/19 (d) 5,277 5,254
7.300% due 08/25/19 (d) 4,945 4,946
10.334% due 08/25/21 (d) 822 857
9.500% due 05/25/24 196 195
6.259% due 10/25/28 (d) 2,741 2,806
7.307% due 05/25/29 (d) 2,972 3,063
Salomon Brothers Mortgage Securities
11.500% due 09/01/15 678 737
8.046% due 12/25/17 (d) 305 299
Sears Mortgage
12.000% due 02/25/14 109 109
7.416% due 10/25/22 (d) 3,691 3,733
Western Federal Savings & Loan
6.514% due 06/25/18 (d) 16 16
6.631% due 11/25/18 (d) 147 148
10.069% due 02/01/20 (d)(k) 53 55
-----------
42,591
===========
Stripped Mortgage-Backed Securities 0.7%
Federal Home Loan Mortgage Corp. (IO)
7.000% due 07/15/04 314 4
6.250% due 09/15/04 2,416 64
6.000% due 02/15/06 3,388 116
9.982% due 07/15/06 49 434
10.195% due 08/15/06 13 154
11.944% due 12/15/06 27 411
6.000% due 10/15/07 1,868 129
6.000% due 02/15/08 5,649 405
6.500% due 02/25/13 418
6.500% due 08/25/13 2,578 45
7.000% due 08/15/18 7,321 521
7.500% due 12/15/18 4,308 89
7.000% due 04/15/19 3,255 144
6.500% due 05/15/19 10,341 794
6.500% due 06/15/19 9,341 544
10.496% due 04/15/21 22 407
6.500% due 04/15/22 6,446 574
7.000% due 05/15/23 637 70
4.000% due 01/15/24 20,919 5,274
Federal National Mortgage Assn. (IO)
6.000% due 07/25/05 1,476 60
7.272% due 09/25/06 57 728
6.000% due 02/25/08 7,233 544
56.000% due 11/01/08 39 148
0.100% due 03/25/09 (d) 29,501 478
6.500% due 03/25/09 10,898 1,263
8.815% due 06/25/16 48 263
9.987% due 12/25/18 10 51
7.500% due 03/25/19 5,928 265
6.500% due 05/25/19 10,000 1,133
6.500% due 04/25/20 19,608 1,477
7.000% due 05/25/21 10,630 798
8.598% due 02/25/22 43 622
6.500% due 03/25/23 6,986 748
4.875% due 03/25/24 (d) 12,336 1,048
Federal National Mortgage Assn. (PO)
0.000% due 07/25/22 2,770 2,700
0.000% due 09/25/22 60 55
Prudential Home (IO)
0.300% due 04/25/09 (d) 78,078 486
Resolution Trust Corp. (PO)
0.000% due 09/25/00 555 557
-----------
23,603
-----------
Total Mortgage-Backed Securities 2,350,958
(Cost $54,546) ===========
- --------------------------------------------------------------------------------
ASSET-BACKED SECURITIES 1.1%
- --------------------------------------------------------------------------------
Citicorp Mortgage Securities, Inc.
6.750% due 05/25/28 6,266 6,433
CMC Securities Corp.
7.250% due 11/25/27 8,927 9,250
Delta Air Lines Equipment Trust
10.430% due 01/02/11 960 1,259
Norwest Asset Securities Corp
6.250% due 10/25/13 20,000 20,122
SCFC Boat Loan Trust
7.050% due 04/15/07 39 39
United Air Lines Equipment Trust
10.850% due 02/19/15 1,500 2,081
-----------
Asset-Backed Securities 39,184
(Cost $54,546) ===========
- --------------------------------------------------------------------------------
SOVEREIGN ISSUES 4.7%
- --------------------------------------------------------------------------------
Banco Nacional de Obra y Servicios
6.875% due 10/01/98 10,000 10,000
Government of Brazil
6.625% due 04/15/06 (d) 2,425 1,382
6.688% due 04/15/12 (d) 18,500 9,250
8.000% due 04/15/14 6,961 4,133
Hydro Quebec
9.000% due 03/07/01 7,000 7,619
Nacional Financiera
6.250% due 12/03/98 (d) 1,500 1,500
10.625% due 11/22/01 7,500 6,769
Province of Quebec
5.563% due 10/26/01 (d) 250 247
Republic of Argentina
8.750% due 12/13/98 15,000 14,700
5.688% due 04/01/00 (d) 848 669
6.625% due 03/31/05 (d) 67,774 53,541
Republic of Korea
8.031% due 04/07/99 (d) 40,000 38,350
United Mexican States
5.820% due 06/28/01 10,000 8,955
6.780% due 06/27/02 (d) 9,000 7,853
-----------
Total Sovereign Issues 164,968
(Cost $175,381) ===========
78 PIMCO Funds See accompanying notes
<PAGE>
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
FOREIGN CURRENCY-DENOMINATED ISSUES (c)(g) 1.0%
- --------------------------------------------------------------------------------
Commonwealth of Canada
8.750% due 12/01/05 C$ 1,150 $ 924
4.250% due 12/01/26 (h) 52,051 35,112
--------------
Total Foreign Currency-Denominated Issues 36,036
(Cost $41,249) ==============
- --------------------------------------------------------------------------------
PURCHASED CALL OPTIONS 0.2%
- --------------------------------------------------------------------------------
U.S. Treasury Note (OTC)
5.375% due 07/31/00
Strike @ 99.99 Exp. 02/26/99 $ 250,000 4,200
6.625% due 06/30/01
Strike @ 96.46 Exp. 11/12/98 30,000 2,556
Total Purchased Call Options --------------
(Cost $3,075) 6,756
==============
- --------------------------------------------------------------------------------
PURCHASED PUT OPTIONS 0.0%
- --------------------------------------------------------------------------------
U.S. Treasury 5 Year Note December Futures (CBOT)
Strike @ 106.00 Exp. 11/21/98 2,000 31
--------------
Total Purchased Put Options 31
(Cost $73) ==============
- --------------------------------------------------------------------------------
PREFERRED STOCK 1.8%
- --------------------------------------------------------------------------------
Shares
Home Ownership Funding
0.133% due 01/01/00 3,000 3,008
Rhone-Poulenc SA
2.031% due 01/01/00 13,000 326
SI Financing Trust
2.375% due 01/01/00 806,600 21,577
TCI Communications, Inc.
2.180% due 01/01/00 1,000,000 25,438
2.430% due 01/01/00 200,000 5,450
2.500% due 01/01/00 300,000 8,194
--------------
Total Preferred Stock 63,993
(Cost $64,818) ==============
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 8.7%
- --------------------------------------------------------------------------------
Principal
Amount
(000s)
Commercial Paper 6.1%
E.I. Du Pont de Nemours
5.460% due 11/03/98 $ 20,000 19,900
5.460% due 12/04/98 18,400 18,227
Emerson Electric Co.
5.520% due 10/21/98 10,000 9,969
Ford Motor Credit Corp.
5.500% due 10/06/98 10,000 9,993
5.520% due 10/16/98 1,300 1,298
5.480% due 11/18/98 2,700 2,675
5.480% due 12/02/98 12,000 11,891
5.390% due 01/08/99 2,000 1,971
5.420% due 01/08/99 1,300 1,281
General Electric Capital Corp.
5.500% due 11/17/98 6,000 5,957
5.490% due 11/19/98 11,900 11,811
5.520% due 11/19/98 4,700 4,665
General Motors Acceptance Corp.
5.510% due 11/16/98 6,000 5,958
KFW International Finance, Inc.
5.930% due 10/28/98 7,000 6,972
Motorola, Inc.
5.480% due 12/03/98 26,000 25,760
National Rural Utilities Cooperative
5.510% due 10/14/98 8,600 8,583
5.540% due 10/20/98 4,000 3,988
5.500% due 10/22/98 9,200 9,170
5.470% due 11/09/98 6,000 5,965
New Center Asset Trust
5.530% due 10/26/98 16,800 16,736
5.510% due 11/19/98 3,900 3,871
5.480% due 12/16/98 3,500 3,460
Pfizer, Inc.
5.500% due 10/20/98 10,000 9,971
Procter & Gamble Co.
5.240% due 11/09/98 8,500 8,452
5.400% due 12/29/98 5,100 5,034
Shell Oil Co.
5.490% due 10/13/98 110 110
--------------
$ 213,668
==============
Repurchase Agreements 2.4%
State Street Bank
4.750% due 10/01/98 21,333 21,333
(Dated 09/30/98. Collateralized by U.S.
Treasury Note 5.750% 08/15/03 valued at
$21,764,290. Repurchase proceeds are
$21,335,815.)
First Boston
5.150% due 10/01/98 64,000 64,000
(Dated 09/30/98. Collateralized by U.S.
Treasury Note 4.500% 09/30/00 valued at
$65,599,256. Repurchase proceeds are
$64,009,156.) --------------
85,333
==============
U.S. Treasury Bills (b)(f) 0.2%
4.984% due 10/15/98-12/03/98 5,315 5,296
--------------
Total Short-Term Instruments 304,297
(Cost $304,271) ==============
Total Investments (a) 117.2% $ 4,095,023
(Cost $4,054,100)
Written Options (e) (0.0%) (3,013)
(Premiums $859)
Other Assets and Liabilities (Net) (17.2%) (599,807)
--------------
Net Assets 100.0% $ 3,492,203
==============
Notes to Schedule of Investments (amounts in thousands):
(a) At September 30, 1998, the net unrealized 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 of value over
tax cost. $ 68,350
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (27,427)
--------------
Unrealized appreciation-net $ 40,923
==============
1998 Semi-Annual Report See accompanying notes 79
<PAGE>
Schedule of Investments (Cont.)
Low Duration Fund
September 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
(b) Securities with an aggregate market value of $5,296 have been segregated
with the custodian to cover margin requirements for the following open futures
contracts at September 30, 1998:
Unrealized
Type Contracts Appreciation
- --------------------------------------------------------------------------------
Eurodollar September Futures (09/00) 950 $ 2,491
Eurodollar December Futures (12/00) 1,380 3,508
Eurodollar March Futures (03/01) 1,380 3,381
Eurodollar June Futures (06/01) 1,880 4,268
Eurodollar September Futures (09/01) 440 913
Eurodollar December Futures (12/01) 440 847
Eurodollar March Futures (03/02) 440 814
Eurodollar June Futures (06/02) 440 770
United Kingdom 90 Day LIBOR (03/99) 500 174
United Kingdom 90 Day LIBOR (06/99) 12,500 382
--------------
$ 17,548
==============
(c) Foreign forward currency contracts outstanding at September 30, 1998:
Principal
Amount
Covered by Expiration Unrealized
Type Contract Month Appreciation
- --------------------------------------------------------------------------------
Sell C$ 53,696 10/98 $ 132
(d) Variable rate security. The rate listed is as of September 30, 1998.
(e) Premiums received on written options:
Type Par Premium Value
- --------------------------------------------------------------------------------
Put - OTC U.S. Treasury Note
5.375% due 07/00
Strike @ 99.66 Exp. 02/19/98 $ 5,000 $ 546 $ 30
Call - OTC U.S. Treasury Note
5.375% due 07/00
Strike @ 100.53 Exp. 02/26/99 2,500 313 2,983
---------------------------
$ 859 $ 3,013
===========================
(f) Securities are grouped by coupon and represent a range of maturities.
(g) Principal amount denoted in indicated currency:
C$ - Canadian Dollar
(h) Principal amount of the security is adjusted for inflation.
(i) Security becomes interest bearing at a future date.
(j) Swap agreements outstanding at September 30, 1998:
<TABLE>
<CAPTION>
Fixed Notional Unrealized
Type Rate (%) Amount Appreciation
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Receive the 10-year Swap Spread
and pay a fixed rate. The 10-year Swap
Spread is the difference between the
10-year Swap Rate and the 10-year
Treasury Rate.
Broker: Merrill Lynch
Exp. 05/02/02 0.3700 $ 24,000 $ 393
</TABLE>
(k) Restricted security.
80 PIMCO Funds See accompanying notes
<PAGE>
Schedule of Investments
Low Duration Fund II
September 30, 1998 (Unaudited)
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
CORPORATE BONDS & NOTES 32.4%
- --------------------------------------------------------------------------------
Banking & Finance 25.0%
Associates Corp. of North America
6.750% due 07/15/01 $ 20,000 $ 20,815
Banponce Corp.
6.880% due 06/16/00 2,390 2,455
Bear Stearns
5.350% due 08/25/00 (c) 10,000 9,995
CIT Group, Inc.
6.200% due 10/20/00 15,000 15,248
General Motors Acceptance Corp.
6.625% due 01/10/02 4,000 4,175
5.875% due 01/22/03 4,000 4,080
7.125% due 05/01/01 4,000 4,175
7.625% due 05/05/03 1,100 1,200
Goldman Sachs & Co.
5.867% due 01/25/01 (c) 10,000 10,006
Hitachi Credit America
6.100% due 04/24/01 20,000 20,377
Household Finance Corp.
6.700% due 06/15/02 2,525 2,635
Lehman Brothers, Inc.
5.894% due 01/18/00 (c) 10,000 9,929
--------------
105,090
==============
Industrials 6.1%
Philip Morris Cos., Inc.
9.000% due 01/01/01 4,316 4,642
Sears Roebuck Acceptance
6.720% due 10/23/02 20,000 21,116
--------------
25,758
==============
Utilities 1.3%
Pennsylvania Electric Co.
7.430% due 07/15/02 5,000 5,386
--------------
Total Corporate Bonds & Notes 136,234
(Cost $133,937) ==============
- --------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCIES 2.6%
- --------------------------------------------------------------------------------
Federal National Mortgage Assn.
7.500% due 02/11/02 175 190
6.150% due 12/14/01 475 476
Student Loan Marketing Assn.
5.823% due 04/25/07 (c) 10,000 9,998
--------------
Total U.S. Government Agencies 10,664
(Cost $10,655) ==============
- --------------------------------------------------------------------------------
MORTGAGE-BACKED SECURITIES 66.6%
- --------------------------------------------------------------------------------
Collateralized Mortgage Obligations 10.9%
American Southwest Financial
7.500% due 10/01/18 930 953
Capstead Mortgage Corp.
7.500% due 02/25/23 701 704
Citicorp Mortgage Securities, Inc.
9.500% due 10/25/15 266 267
CMC Securities Corp.
7.753% due 04/25/25 (c) 2,967 2,977
Collateralized Mortgage Securities Corp.
11.880% due 04/01/15 210 214
Donaldson, Lufkin & Jenrette
7.978% due 05/25/24 (c) 1,171 1,188
Federal Home Loan Mortgage Corp.
12.900% due 05/01/14 272 298
9.250%due10/25/18 122 129
7.000%due08/25/22 90 90
Federal National Mortgage Assn.
8.000% due 11/25/23 7,588 7,805
General Electric Capital Mortgage
6.750% due 12/25/12 7,360 7,475
Kidder Peabody Acceptance Corp.
7.150% due 04/25/25 832 840
Lomas & Nettleton
12.000% due 03/17/14 140 148
Residential Asset Securitization Trust
9.000% due 07/25/26 1,013 1,017
Residential Funding
7.500% due 10/25/22 1,451 1,537
Resolution Trust Corp.
6.999% due 10/25/21 (c) 251 250
7.647% due 10/25/28 (c) 4,265 4,393
Ryland Acceptance Corp.
14.000% due 11/25/31 132 146
Salomon Brothers Mortgage Securities
7.605% due 11/25/22 (c) 1,951 1,991
Union Planters Mortgage Finance Corp.
6.600% due 01/25/28 13,000 13,435
--------------
45,857
==============
Federal Home Loan Mortgage Corporation 14.5%
6.000% due 05/15/22-10/14/28 (d) 14,870 14,921
6.500% due 07/15/17-10/14/28 (d) 31,252 31,818
7.655% due 07/01/23 (c) 1,223 1,255
8.000% due 03/01/25-12/01/25 (d) 11,501 11,892
8.500% due 06/01/09-10/01/10 (d) 856 889
10.500% due 09/01/15-12/01/18 (d) 66 73
--------------
60,848
==============
Federal Housing Administration 0.5%
7.200% due 05/01/09 1,990 2,063
--------------
Federal National Mortgage Association 17.8%
6.130% due 01/01/17-07/01/17 (c)(d) 3,684 3,723
6.131% due 01/01/27-12/01/27 (c)(d) 25,098 25,389
6.132% due 05/01/36 (c) 1,943 1,971
6.138% due 05/01/36 (c) 4,857 4,926
6.142% due 08/01/29 (c) 2,260 2,286
6.143% due 05/01/36 (c) 6,289 6,378
6.150% due 09/25/16-01/01/17 (c)(d) 10,361 10,442
6.153% due 08/01/20 (c) 2,520 2,547
6.381% due 12/01/28 (c) 928 944
7.618% due 01/01/24 (c) 1,398 1,425
8.500% due 01/01/26-10/01/25 (c) 13,020 13,596
10.500% due 05/01/12 1,141 1,259
--------------
74,886
==============
Government National Mortgage Association 22.2%
6.500% due 08/15/23-10/21/28 (d) 24,150 24,693
6.875% due 04/20/22-06/20/25 (c)(d) 26,664 27,221
7.000% due 07/20/23-10/20/25 (c)(d) 30,140 30,660
7.500% due 02/15/22-12/15/22 (d) 7,701 8,011
8.000% due 03/15/23-10/15/26 (d) 1,856 1,945
9.000% due 07/20/16-12/20/17 (d) 855 915
--------------
93,445
==============
Other Mortgage-Backed Securities 0.7%
Guardian
7.765% due 07/25/19 (c) 124 122
Resolution Trust Corp.
7.290% due 05/25/19 (c) 1,147 1,142
Sears Mortgage
6.500% due 03/25/17 67 66
7.416% due 10/25/22 (c) 1,538 1,555
--------------
2,885
--------------
Total Mortgage-Backed Securities 279,984
(Cost $276,892) ==============
- --------------------------------------------------------------------------------
ASSET-BACKED SECURITIES 5.6%
- --------------------------------------------------------------------------------
Conti Mortgage Home Equity Loan Trust
6.190% due 10/15/11 (c) 276 276
Countrywide Home Loans
7.500% due 09/25/27 20,000 20,745
Norwest Asset Securities Corp.
6.250% due 10/25/13 2,700 2,716
--------------
Total Asset-Backed Securities 23,737
(Cost $23,340) ==============
1998 Semi-Annual Report See accompanying notes 81
<PAGE>
Schedule of Investments (Cont.)
Low Duration Fund II
September 30, 1998 (Unaudited)
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
PURCHASED CALL OPTIONS 0.2%
- --------------------------------------------------------------------------------
U.S. Treasury Note (OTC)
6.625% due 06/30/01
Strike @ 96.46 Exp. 11/12/98 $ 10,000 $ 852
---------------
Total Purchased Call Options 852
(Cost $739) ===============
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 9.6%
- --------------------------------------------------------------------------------
Commercial Paper 8.3%
E.I. Du Pont de Nemours
5.270% due 10/29/98 3,000 2,988
Federal Home Loan Mortgage Corp.
5.460% due 10/16/98 3,000 2,993
Florida Power Corp.
5.230% due 11/03/98 4,300 4,279
Ford Motor Credit Corp.
5.490% due 11/18/98 4,900 4,864
5.490% due 11/19/98 2,000 1,985
General Electric Capital Corp.
5.470% due 11/06/98 800 796
5.470% due 12/16/98 2,500 2,472
IBM Credit Corp.
5.220% due 11/18/98 700 695
National Rural Utilities Cooperative
5.540% due 10/20/98 5,800 5,783
5.480% due 11/19/98 2,800 2,779
New Center Asset Trust
5.530% due 10/26/98 2,000 1,992
5.470% due 11/02/98 100 100
5.510% due 11/19/98 1,300 1,290
5.520% due 11/19/98 400 397
5.490% due 12/17/98 1,500 1,483
---------------
34,896
===============
Repurchase Agreement 1.2%
State Street Bank
4.740% due 10/01/98 4,898 4,898
(Dated 09/30/98. Collateralized by U.S. Treasury ---------------
Note 6.250% 02/28/02 valued at $4,999,484.
Repurchase proceeds are $4,898,646.)
U.S. Treasury Bills (b)(d) 0.1%
4.978% due 10/15/98-12/03/98 580 577
---------------
Total Short-Term Instruments 40,371
(Cost $40,369) ===============
Total Investments (a) 117.0% $ 491,842
(Cost $485,932)
Other Assets and Liabilities (Net) (17.0%) (71,585)
---------------
Net Assets 100.0% $ 420,257
===============
Notes to Schedule of Investments (amounts in thousands):
(a) At September 30, 1998, the net unrealized 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 of value
over tax cost. $ 6,191
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax
cost over value. (281)
---------------
Unrealized appreciation-net $ 5,910
===============
(b) Securities with an aggregate market value of $577
have been segregated with the custodian to cover margin
requirements for the following open futures contracts at
September 30, 1998:
Unrealized
Type Contracts Appreciation
- --------------------------------------------------------------------------------
U.S. Treasury 5 Year Note (12/98) 218 $ 747
Eurodollar March Futures (03/01) 110 272
Eurodollar June Futures (06/01) 110 259
Eurodollar September Futures (09/00) 110 297
Eurodollar December Futures (12/00) 110 279
---------------
$ 1,854
===============
(c) Variable rate security. The rate listed is as of September 30, 1998.
(d) Securities are grouped by coupon and represent a range of maturities.
82 PIMCO Funds See accompanying notes
<PAGE>
Schedule of Investments
Low Duration Fund III
September 30, 1998 (Unaudited)
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
CORPORATE BONDS & NOTES 20.8%
- --------------------------------------------------------------------------------
Banking & Finance 14.6%
BankAmerica Corp.
8.125% due 02/01/02 $ 1,000 $ 1,083
General Motors Acceptance Corp.
5.772% due 01/08/02(c) 1,000 1,000
Goldman Sachs & Co.
5.662% due 01/27/00(c) 665 665
6.200% due 12/15/00 500 514
Salomon, Inc.
7.750% due 05/15/00 325 336
--------------
3,598
==============
Utilities 6.2%
Commonwealth Edison
5.560% due 06/15/02(c) 500 500
Niagara Mohawk Power
7.125% due 07/01/01 1,000 1,016
--------------
1,516
--------------
Total Corporate Bonds & Notes 5,114
(Cost $5,071) ==============
- --------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCIES 3.1%
- --------------------------------------------------------------------------------
Student Loan Marketing Assn.
5.727% due 10/25/05(c) 760 756
--------------
Total U.S. Government Agencies 756
(Cost $757) ==============
- --------------------------------------------------------------------------------
MORTGAGE-BACKED SECURITIES 60.8%
- --------------------------------------------------------------------------------
Federal Home Loan Mortgage Corporation 1.0%
8.750% due 10/01/01 244 250
Federal National Mortgage Association 24.0%
6.130% due 12/01/23-01/01/24(c)(d) 2,862 2,894
6.131% due 08/01/20-02/01/21(c)(d) 229 231
6.150% due 11/01/16-06/01/17(c)(d) 1,057 1,067
6.175% due 01/01/23(c) 152 154
8.500% due 03/01/25-05/01/25(c)(d) 1,495 1,561
--------------
5,907
==============
Government National Mortgage Association 35.8%
6.500% due 10/21/28 2,700 2,760
6.875% due 06/20/27(c) 1,519 1,550
8.500% due 10/20/26-06/20/27(d) 4,273 4,490
--------------
8,800
--------------
Total Mortgage-Backed Securities 14,957
(Cost $14,820) ==============
- --------------------------------------------------------------------------------
SOVEREIGN ISSUES 5.8%
- --------------------------------------------------------------------------------
Government of Brazil
6.625% due 04/15/06(c) 970 553
United Mexican States
6.780% due 06/27/02(c) 1,000 873
--------------
Total Sovereign Issues 1,426
(Cost $1,456) ==============
- --------------------------------------------------------------------------------
PURCHASED CALL OPTIONS 0.9%
- --------------------------------------------------------------------------------
U.S. Treasury Note (OTC)
5.750% due 11/30/02
Strike @ 94.39 Exp. 12/02/98 2,000 213
--------------
Total Purchased Call Options 213
(Cost $159) ==============
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 17.9%
- --------------------------------------------------------------------------------
Commercial Paper 16.6%
Coca-Cola Co.
5.420% due 11/06/98 500 497
E.I. Du Pont de Nemours
5.530% due 10/20/98 1,000 997
Federal Home Loan Mortgage Corp.
5.460% due 10/02/98 200 200
5.460% due 10/16/98 600 599
5.400% due 11/06/98 100 99
General Electric Capital Corp.
5.460% due 11/13/98 800 795
5.470% due 12/17/98 200 198
Motorola, Inc.
5.540% due 10/22/98 200 199
Oesterreich Kontrollbank
5.220% due 11/30/98 300 297
Shell Oil Co.
5.490% due 10/13/98 200 200
--------------
4,081
==============
Repurchase Agreement 1.2%
State Street Bank
4.750% due 10/01/98 287 287
(Dated 09/30/98. Collateralized by U.S. Treasury --------------
Bond 8.125% 08/1521 valued at $297,842
Repurchase proceeds are $287,038.)
U.S. Treasury Bills (b)(d) 0.1%
4.936% due 10/15/98-12/03/98 40 40
--------------
Total Short-Term Instruments 4,408
(Cost $4,408) ==============
Total Investments (a) 109.3% $ 26,874
(Cost $26,671)
Other Assets and Liabilities (Net) (9.3%) (2,295)
--------------
Net Assets 100.0% $ 24,579
==============
Notes to Schedule of Investments (amounts in thousands):
(a) At September 30, 1998, the net unrealized 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 of value over
tax cost $ 314
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value (111)
--------------
Unrealized appreciation-net $ 203
==============
(b) Securities with an aggregate market value of $40
have been segregated with the custodian to cover margin
requirements for the following open future contracts at
September 30, 1998:
Unrealized
Type Contracts Appreciation
- --------------------------------------------------------------------------------
U.S. Treasury 5 Year Note (12/98) 20 $ 79
U.S. Treasury 10 Year Note (12/98) 24 112
--------------
$ 191
==============
(c) Variable rate security. The rate listed is as of September 30, 1998.
(d) Securities are grouped by coupon and represent a range of maturities.
1998 Semi-Annual Report See accompanying notes 83
<PAGE>
Schedule of Investments
Low Duration Mortgage Fund
September 30, 1998 (Unaudited)
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
CORPORATE BONDS & NOTES 2.6%
- --------------------------------------------------------------------------------
Banking & Finance 2.6%
Heller Financial, Inc.
5.830% due 09/25/00(b) $ 100 $ 100
--------------
Total Corporate Bonds & Notes 100
(Cost $100) ==============
- --------------------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS 2.6%
- --------------------------------------------------------------------------------
Treasury Inflation Protected Securities
3.625% due 07/15/02(d) 102 102
--------------
Total U.S. Treasury Obligations 102
(Cost $101) ==============
- --------------------------------------------------------------------------------
MORTGAGE-BACKED SECURITIES 117.2%
- --------------------------------------------------------------------------------
Collateralized Mortgage Obligations 38.7%
Federal Home Loan Mortgage Corp.
8.000% due 11/15/26 231 254
Federal National Mortgage Assn.
4.000% due 01/25/22 388 368
8.000% due 07/25/22 597 648
6.500% due 09/25/23 249 245
--------------
1,515
==============
Federal Housing Administration 4.5%
7.430% due 03/01/22 171 177
--------------
Federal National Mortgage Association 5.7%
6.142% due 08/01/29(b) 218 221
--------------
Government National Mortgage Association 68.3%
6.875% due 02/20/18-06/20/25(b)(c)(e) 1,132 1,159
7.000% due 12/20/17-07/20/18(b)(c)(e) 1,235 1,259
7.375% due 05/20/16(b) 116 119
11.250% due 07/20/15 124 138
--------------
2,674
--------------
Total Mortgage-Backed Securities 4,588
(Cost $4,499) ==============
- --------------------------------------------------------------------------------
ASSET-BACKED SECURITIES 7.7%
- --------------------------------------------------------------------------------
Money Store Home Equity Trust
6.345% due 11/15/21 100 101
Norwest Asset Securities Corp
6.250% due 10/25/13 200 201
--------------
Total Asset-Backed Securities 302
(Cost $300) ==============
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 6.1%
- --------------------------------------------------------------------------------
Commercial Paper 2.6%
Federal Home Loan Mortgage Corp.
5.440% due 10/06/98 100 100
--------------
Repurchase Agreement 3.5%
State Street Bank
4.750% due 10/01/98 139 139
(Dated 09/30/98. Collateralized by U.S. Treasury --------------
Note 6.750% 04/30/00 valued at $143,176.
Repurchase proceeds are $139,018.)
Total Short-Term Instruments 239
(Cost $239) ==============
Total Investments (a) 136.2% $ 5,331
(Cost $5,239)
Other Assets and Liabilities (Net) (36.2%) (1,417)
--------------
Net Assets 100.0% $ 3,914
==============
Notes to Schedule of Investments (amounts in thousands):
(a) At September 30, 1998, the net unrealized 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 of value over
tax cost. $ 95
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (3)
--------------
Unrealized appreciation-net $ 92
==============
(b) Variable rate security. The rate listed is as of September 30, 1998.
(c) Securities are grouped by coupon and represent a range of maturities.
(d) Principal amount of the security is adjusted for inflation.
(e) Reverse repurchase agreements were entered into
September 24, 1998 for maturity November 23, 1998
paying interest at 5.47%. The following securities were
segregated with collateral for reverse repurchase agreements:
Type Maturity Value
- -------------------------------------------------------------------------------
Government National Mortgage Assn. 6.875% 05/20/25 $ 487
Government National Mortgage Assn. 7.000% 07/20/25 437
Government National Mortgage Assn. 7.000% 08/20/25 369
--------------
$ 1,293
==============
84 PIMCO Funds See accompanying notes
<PAGE>
Schedule of Investments
Short-Term Fund
September 30, 1998 (Unaudited)
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
CORPORATE BONDS & NOTES 23.5%
- --------------------------------------------------------------------------------
Banking & Finance 16.7%
AT&T Capital Corp.
5.850% due 01/05/99 $ 3,585 $ 3,588
Bankers Trust
5.788% due 05/11/03 (d) 11,000 11,019
Capital One Bank
6.740% due 05/31/99 875 880
Caterpillar Financial
5.400% due 04/01/99 (d) 2,000 2,002
Chrysler Financial Corp.
5.625% due 01/15/99 570 570
Dean Witter Discover
5.938% due 02/13/01 (d) 5,000 5,009
Donaldson, Lufkin & Jenrette
6.438% due 01/05/99 (d) 613 614
Ford Motor Credit Corp.
5.480% due 11/09/98 (d) 2,600 2,600
5.330% due 03/23/99 (d) 1,000 999
5.293% due 04/05/99 (d) 1,500 1,496
7.750% due 10/01/99 1,795 1,835
General Motors Acceptance Corp.
8.400% due 10/15/99 2,450 2,525
5.772% due 01/08/02 (d) 1,000 999
5.788% due 08/18/03 (d) 1,575 1,575
Goldman Sachs & Co.
5.748% due 07/31/00 (d) 8,000 8,005
Heller Financial, Inc.
5.738% due 07/06/99 (d) 15,000 15,002
Lehman Brothers, Inc.
5.040% due 09/01/99 (d) 3,000 3,000
Residential Funding
7.546% due 12/01/18 (d) 1,810 1,846
Salomon, Inc.
6.030% due 02/11/99 500 501
Salomon, Smith Barney Holdings
3.650% due 02/14/02 (g) 3,087 3,000
--------
67,065
========
Industrials 3.3%
Air Canada
6.425% due 07/31/05 (d) 2,000 1,658
Amerco, Inc.
6.890% due 10/15/00 5,000 5,123
COFIRI International, Inc.
5.987% due 10/27/00 (d) 2,000 1,995
Maytag Corp.
8.875% due 07/15/99 500 514
Occidental Petroleum
5.900% due 11/09/98 1,100 1,099
Sears Roebuck & Co.
5.492% due 03/10/99 (d) 3,000 3,000
--------
13,389
========
Utilities 3.5%
Bridas Corp.
10.250% due 12/07/98 9,950 10,025
Niagara Mohawk Power
9.990% due 05/11/04 1,500 1,518
System Energy Resources
7.625% due 04/01/99 2,500 2,523
--------
14,066
--------
Total Corporate Bonds & Notes 94,520
(Cost $94,498) ========
- --------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCIES 4.7%
- --------------------------------------------------------------------------------
Student Loan Marketing Assn.
5.702% due 04/25/04 (d) 3,761 3,761
5.823% due 04/25/07 (d) 15,000 14,996
--------
Total U.S. Government Agencies 18,757
(Cost $18,756) ========
- -------------------------------------------------------------------------------
MORTGAGE-BACKED SECURITIES 56.0%
- -------------------------------------------------------------------------------
Collateralized Mortgage Obligations 34.0%
Dime Savings
7.119% due 11/01/18 (d) $ 415 $ 382
Donaldson, Lufkin & Jenrette
6.460% due 10/17/20 (d) 1,029 1,060
7.795% due 09/01/21 (d) 59 60
7.040% due 06/25/22 (d) 367 369
7.447% due 05/25/23 (d) 391 395
Federal Home Loan Mortgage Corp.
6.210% due 02/25/00 5,000 5,000
6.000% due 03/15/05 2,978 3,000
6.000% due 02/15/07 1,375 1,387
5.750% due 10/15/16 204 205
Federal National Mortgage Assn.
6.500% due 10/18/06 1,600 1,613
6.000% due 02/25/08 2,350 2,377
5.661% due 07/25/08 (d) 2,397 2,388
5.800% due 08/25/15 1,390 1,397
6.000% due 08/18/16 47,726 48,217
5.875% due 03/25/18 288 289
7.000% due 05/25/18 12,500 12,633
5.850% due 05/25/19 3,638 3,700
6.000% due 06/25/20 959 962
5.000% due 02/25/22 324 324
First Plus Home Loan Trust
6.060% due 11/10/11 5,000 5,046
General Electric Capital Mortgage
6.750% due 12/25/12 14,719 14,949
Greenwich
7.661% due 04/25/22 (d) 167 170
7.127% due 10/25/22 (d) 112 113
Housing Securities, Inc.
6.000% due 02/25/08 4,534 4,557
NationsBank Corp.
6.125% due 10/20/13 20,000 20,019
Prudential Bache
6.153% due 09/01/18 (d) 40 40
Prudential Home
6.950% due 11/25/22 233 238
Resolution Trust Corp.
6.941% due 06/25/24 (d) 458 457
Structured Asset Securities Corp.
7.000% due 01/20/21 5,271 5,330
Structured Mortgage Asset Residential Trust
6.500% due 08/25/21 461 464
--------
137,141
========
Federal Home Loan Mortgage Corporation 0.8%
6.250% due 10/15/16 3,000 3,020
--------
Federal National Mortgage Association 9.1%
6.000% due 12/18/14 11,994 12,056
6.150% due 09/25/16 14,131 14,236
8.500% due 01/01/26 3,300 3,446
8.000% due 06/01/27 6,552 6,810
6.143% due 05/01/36 (d) 18 18
--------
36,566
========
Government National Mortgage Association 11.4%
7.000% due 08/20/25-11/20/26 (d)(f) 773 31,581
8.500% due 06/20/27 13,417 14,062
--------
45,643
========
Other Mortgage-Backed Securities 0.3%
Federal National Mortgage Assn.
1.000% due 06/25/23 129 127
First Nationwide Trust
6.722% due 10/25/18 (d) 30 30
Resolution Trust Corp.
6.756% due 05/25/29 (d) 938 954
--------
1,111
========
1998 Semi-Annual Report See accompanying notes 85
<PAGE>
Schedule of Investments (Cont.)
Short-Term Fund
September 30, 1998 (Unaudited)
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
Stripped Mortgage-Backed Securities 0.4%
Federal Home Loan Mortgage Corp. (IO)
7.000% due 06/15/19 $ 8,000 $ 565
Federal National Mortgage Assn. (IO)
7.000% due 07/25/06 2,346 234
6.500% due 12/25/06 5,810 412
6.500% due 06/25/17 3,028 189
6.500% due 10/25/23 2,379 272
--------
1,672
--------
Total Mortgage-Backed Securities 225,153
(Cost $224,204) ========
- --------------------------------------------------------------------------------
ASSET-BACKED SECURITIES 5.8%
- --------------------------------------------------------------------------------
Bear Asset Trust Securities
6.686% due 06/15/03 (d) 8,046 8,101
Columbia HCA Healthcare
6.475% due 06/16/99 8,231 8,209
Community Trust Bancorp, Inc.
6.500% due 09/15/03 2,833 2,853
Green Tree Financial Group
6.420% due 04/15/28 3,907 3,926
Nafin Finance Trust II
8.356% due 03/31/99 (d) 26 25
--------
Total Asset-Backed Securities 23,114
(Cost $23,043) ========
- --------------------------------------------------------------------------------
SOVEREIGN ISSUES 3.7%
- --------------------------------------------------------------------------------
Government of Brazil
6.750% due 01/01/01 (d) 544 458
6.625% due 04/15/06 (d) 5,820 3,317
Republic of Argentina
6.625% due 03/31/05 (d) 6,110 4,827
United Mexican States
7.002% due 06/27/02 (d) 7,000 6,447
--------
Total Sovereign Issues 15,049
(Cost $15,569) ========
- --------------------------------------------------------------------------------
FOREIGN CURRENCY-DENOMINATED ISSUES (c)(e) 1.1%
- --------------------------------------------------------------------------------
Commonwealth of Canada
4.250% due 12/01/26 (g) C$ 2,290 1,545
Commonwealth of New Zealand
4.500% due 02/15/16 (g) N$ 5,400 2,842
--------
Total Foreign Currency-Denominated Issues 4,387
(Cost $5,233) ========
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 8.3%
- --------------------------------------------------------------------------------
Commercial Paper 0.2%
Pfizer, Inc.
5.270% due 10/30/98 $ 700 697
--------
Repurchase Agreements 8.1%
State Street Bank
4.750% due 10/1/98 10,558 10,558
(Dated 09/30/98. Collateralized by U.S. Treasury
Note 6.625% 03/31/02 valued at $10,770,467.
Repurchase proceeds are $10,559,393.)
First Boston
5.150% due 10/1/98 22,000 22,000
(Dated 09/30/98. Collateralized by U.S. Treasury
Note 4.500% 09/30/00 valued at $22,550,184.
Repurchase proceeds are $22,003,147.)
--------
32,558
========
U.S. Treasury Bills (b) 0.0%
4.925% due 12/03/98 10 10
--------
Total Short-Term Instruments 33,265
(Cost $33,265) ========
Total Investments (a) 103.1% $414,245
(Cost $414,568)
Other Assets and Liabilities (Net)(3.1%) (12,466)
--------
Net Assets 100.0% $401,779
========
Notes to Schedule of Investments (amounts in thousands):
(a) At September 30, 1998, the net unrealized 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 of value over
tax cost. $ 2,634
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (2,957)
-------
Unrealized depreciation-net $ (323)
=======
(b) Securities with an aggregate market value of $10
have been segregated with the custodian to cover margin
requirements for the following open futures contracts at
September 30, 1998:
Unrealized
Type Contracts Appreciation
- --------------------------------------------------------------------------------
U.S. Treasury 2 Year Note (12/98) 11 $ 10
(c) Foreign forward currency contracts outstanding at September 30, 1998:
Principal
Amount Unrealized
Covered by Expiration Appreciation/
Type Contract Month (Depreciation)
- --------------------------------------------------------------------------------
Sell C$ 2,390 10/98 $ 6
Sell N$ 5,404 12/98 (48)
-------
$ (42)
=======
(d) Variable rate security. The rate listed is as of September 30, 1998.
(e) Principal amount denoted in indicated currency:
C$ - Canadian Dollar
N$ - New Zealand Dollar
(f) Securities are grouped by coupon and represent a range of maturities.
(g) Principal amount of the security is adjusted for inflation.
86 PIMCO Funds See accompanying notes
<PAGE>
Schedule of Investments
Long-Term U.S. Government Fund
September 30, 1998 (Unaudited)
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
CORPORATE BONDS & NOTES 3.1%
- --------------------------------------------------------------------------------
Banking & Finance 3.1%
Caterpillar Financial
5.718% due 10/12/00 (d) $ 1,000 $ 1,001
Ford Motor Credit Corp.
5.788% due 08/27/01 (d) 1,000 999
Household Finance Corp.
5.744% due 08/01/01 (d) 1,000 1,001
Merrill Lynch & Co.
5.758% due 03/10/00 (d) 3,000 3,007
-------
Total Corporate Bonds & Notes 6,008
(Cost $5,997) =======
- --------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCIES 7.0%
- --------------------------------------------------------------------------------
Student Loan Marketing Assn.
5.684% due 06/30/00 (d) 1,000 1,001
5.607% due 07/25/04 (d) 2,142 2,132
5.727% due 10/25/05 (d) 7,142 7,109
5.650% due 04/25/06 (d) 2,349 2,340
5.760% due 01/25/07 (d) 952 953
-------
Total U.S. Government Agencies 13,535
(Cost $13,539) =======
- --------------------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS 56.0%
- --------------------------------------------------------------------------------
Treasury Inflation Protected Securities
3.625% due 07/15/02 (b) 6,623 6,654
U.S. Treasury Bonds
12.000% due 08/15/13 6,800 10,665
8.750% due 05/15/17 2,500 3,573
8.875% due 08/15/17 2,300 3,327
9.125% due 05/15/18 9,100 13,522
8.875% due 02/15/19 12,000 17,554
8.125% due 08/15/19 18,600 25,534
7.500% due 11/15/24 1,300 1,727
6.875% due 08/15/25 8,150 10,126
6.000% due 02/15/26 700 784
6.500% due 11/15/26 5,600 6,678
6.625% due 02/15/27 750 911
U.S. Treasury Strips
0.000% due 02/15/19 23,500 7,762
-------
Total U.S. Treasury Obligations 108,817
(Cost $102,988) =======
- --------------------------------------------------------------------------------
MORTGAGE-BACKED SECURITIES 77.9%
- --------------------------------------------------------------------------------
Collateralized Mortgage Obligations 53.6%
Bear Stearns
7.100% due 06/25/24 385 401
California Federal Bank
6.603% due 08/25/30 (d) 1,156 1,160
Countrywide
6.750% due 11/25/25 2,000 2,011
Federal Home Loan Mortgage Corp.
7.000% due 07/01/02 3,252 3,314
7.500% due 06/01/04 130 134
7.500% due 07/01/04 1,363 1,397
7.500% due 08/01/04 180 184
7.500% due 09/01/04 393 403
6.100% due 12/15/04 6,838 6,886
9.500% due 01/15/05 78 81
6.750% due 07/15/05 451 453
6.000% due 03/15/07 144 145
5.500% due 05/15/07 97 97
8.000% due 02/15/15 285 305
7.000% due 03/25/15 690 690
7.000% due 07/15/22 964 1,001
6.500% due 05/15/23 216 226
7.000% due 05/15/23 1,137 1,203
7.000% due 08/15/23 292 306
7.000% due 09/15/23 709 761
6.500% due 11/15/23 508 504
6.500% due 11/25/23 150 156
6.500% due 12/15/23 826 840
7.000% due 01/15/24 55 59
6.500% due 02/15/24 105 108
6.500% due 03/15/24 529 550
8.000% due 12/15/24 1,000 1,027
6.500% due 08/15/28 2,011 2,077
Federal Housing Administration
7.430% due 11/01/23 1,540 1,610
7.430% due 01/01/24 405 420
Federal National Mortgage Assn.
7.500% due 04/25/99 673 676
7.500% due 02/01/04 561 576
7.500% due 03/01/04 567 582
7.500% due 04/01/04 1,098 1,126
7.500% due 05/01/04 1,026 1,053
7.500% due 06/01/04 1,299 1,333
7.500% due 07/01/04 652 670
7.500% due 08/01/04 2,685 2,758
7.500% due 09/01/04 436 448
7.500% due 10/01/04 421 432
5.750% due 06/25/06 472 472
5.600% due 07/25/06 400 401
6.190% due 09/01/08 1,698 1,798
7.000% due 03/25/13 569 572
6.250% due 12/25/13 70 71
5.500% due 04/25/14 33 33
5.750% due 12/25/16 214 214
8.750% due 08/25/20 134 137
8.000% due 03/25/22 29 30
7.000% due 04/25/22 764 806
7.000% due 06/25/22 368 391
7.000% due 10/25/22 1,040 1,102
7.800% due 10/25/22 792 831
6.900% due 05/25/23 277 292
7.000% due 05/25/23 1,071 1,181
7.000% due 06/25/23 462 509
4.500% due 10/25/23 180 126
6.500% due 12/25/23 177 185
7.000% due 12/25/23 1,393 1,426
6.500% due 01/25/24 185 195
6.000% due 05/17/27 2,500 2,420
7.000% due 05/18/27 1,384 1,504
8.500% due 06/01/27 2,057 2,147
9.000% due 06/01/27 2,692 2,846
6.488% due 02/01/28 (d) 933 963
First Boston Mortgage Securities Corp.
7.300% due 07/25/23 1,284 1,354
First Plus Home Loan Trust
5.970% due 11/10/10 2,000 2,007
6.000% due 08/10/28 1,200 133
General Electric Capital Mortgage
7.500% due 07/25/26 4,812 5,004
6.750% due 05/25/28 1,934 1,977
6.750% due 06/25/28 2,500 2,568
Headlands Mortgage Securities, Inc.
6.500% due 10/25/28 4,250 4,032
Independent National Mortgage Corp.
8.351% due 01/25/25 (d) 212 216
Merrill Lynch Mortgage Investors, Inc.
6.050% due 10/15/08 3,595 3,650
PNC Mortgage Securities Corp.
6.750% due 12/25/27 3,000 3,045
7.000% due 02/25/28 1,492 1,541
6.750% due 04/25/28 3,000 3,066
Prudential Home
6.950% due 09/25/23 61 63
6.500% due 01/25/24 1,263 1,245
1998 Semi-Annual Report See accompanying notes 87
<PAGE>
Schedule of Investments (Cont.)
Long-Term U.S. Government Fund
September 30, 1998 (Unaudited)
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
Residential Funding
5.000% due 06/25/00 $ 6,000 $ 469
6.200% due 08/25/23 6,051 6,066
8.196% due 03/25/25 (d) 175 180
7.500% due 04/25/27 1,973 2,040
6.750% due 02/25/28 3,500 3,482
Vendee Mortgage
7.750% due 03/01/05 1,076 1,075
6.500% due 06/15/24 1,976 2,104
---------
104,132
=========
Federal Home Loan Mortgage Corporation 5.8%
6.250% due 12/15/23 203 201
7.000% due 11/12/28 500 513
7.300% due 10/26/28 2,000 2,023
7.500% due 10/14/28 8,000 8,242
7.517% due 06/01/22 (d) 110 112
7.566% due 05/01/22 (d) 123 127
---------
11,218
=========
Federal Housing Administration 8.1%
7.421% due 11/01/19 161 166
7.430% due 08/01/19-06/01/24 (c) 12,871 13,516
7.450% due 03/25/22 2,000 2,114
---------
15,796
=========
Federal National Mortgage Association 4.0%
6.390% due 05/25/36 1,500 1,470
6.590% due 03/01/26 (d) 2,163 2,207
7.000% due 07/25/23 49 52
7.397% due 08/01/27 (d) 877 904
7.877% due 10/01/24 (d) 213 218
8.500% due 09/01/27 2,855 2,981
---------
7,832
=========
Government National Mortgage Association 5.1%
6.875% due 06/20/23-06/20/26 (c)(d) 2,188 2,238
7.000% due 08/20/25-11/20/26 (c)(d) 7,561 7,693
---------
9,931
=========
Other Mortgage-Backed Securities 1.1%
Norwest Asset Securities Corp.
6.500% due 02/25/12 893 895
Resolution Trust Corp.
6.756% due 05/25/29 (d) 1,231 1,252
---------
2,147
=========
Stripped Mortgage-Backed Securities 0.2%
Federal Home Loan Mortgage Corp. (IO)
7.000% due 09/15/99 93 3
7.000% due 03/15/03 1,568 140
7.000% due 07/15/04 94 1
6.500% due 08/15/06 190 10
6.500% due 10/15/06 307 14
6.500% due 11/15/06 393 22
6.000% due 10/15/07 354 21
7.000% due 02/15/26 166 7
Federal National Mortgage Assn. (IO)
6.500% due 02/25/07 202 18
6.500% due 08/25/20 670 46
6.500% due 09/25/21 776 73
7.000% due 12/25/21 466 36
---------
391
---------
Total Mortgage-Backed Securities 151,447
(Cost $147,257) =========
- --------------------------------------------------------------------------------
ASSET-BACKED SECURITIES 8.7%
- --------------------------------------------------------------------------------
Asset-Backed Securities Investment Trust
6.790% due 08/17/03 1,064 1,069
Bear Asset Trust Securities
6.686% due 06/15/03 710 715
Bear Stearns
6.350% due 08/25/24 4,500 4,526
Chase Manhattan Corp
6.750% due 08/25/28 1,850 1,825
Conti Mortgage Home Equity Loan Trust
6.190% due 10/15/11 (d) 55 55
5.845% due 10/15/12 (d) 779 780
Discover Card Trust
6.792% due 04/16/10 1,325 1,373
Money Store Home Equity Trust
5.798% due 08/15/29 (d) 2,469 2,469
Norwest Asset Securities Corp
6.750% due 07/25/28 3,000 3,077
Residential Asset Securities Corp.
6.500% due 10/25/28 1,000 999
---------
Total Asset-Backed Securities 16,888
(Cost $16,656) =========
- --------------------------------------------------------------------------------
PURCHASED CALL OPTIONS 2.6%
- --------------------------------------------------------------------------------
U.S. Treasury Note (OTC)
7.000% due 07/15/06
Strike @ 101.25 Exp. 10/02/98 2,200 304
6.500% due 10/15/06
Strike @ 98.28 Exp. 10/02/98 8,800 1,228
U.S. Treasury Bond (OTC)
8.875% due 02/15/19
Strike @ 123.47 Exp.12/15/98 15,500 3,439
---------
Total Purchased Call Options 4,971
(Cost $3,743) =========
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 2.3%
- --------------------------------------------------------------------------------
Repurchase Agreement 2.3%
State Street Bank
4.750% due 10/01/98 4,545 4,545
(Dated 09/30/98. Collateralized by U.S. Treasury ---------
Note 6.250% 02/28/02 valued at $4,638,970.
Repurchase proceeds are $4,545,600.)
U.S. Treasury Bills 0.0%
4.960% due 12/03/98 35 35
---------
Total Short-Term Instruments 4,580
(Cost $4,580) =========
Total Investments (a) 157.6% $ 306,246
(Cost $294,760)
Other Assets and Liabilities (Net) (57.6%) (111,906)
---------
Net Assets 100.0% $ 194,340
=========
Notes to Schedule of Investments (amounts in thousands):
(a) At September 30, 1998, the net unrealized 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 of value over
tax cost. $ 11,763
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (277)
---------
Unrealized appreciation-net $ 11,486
=========
(b) Principal amount of the security is adjusted for inflation.
(c) Securities are grouped by coupon and represent a range of maturities.
(d) Variable rate security. The rate listed is as of September 30, 1998.
88 PIMCO Funds See accompanying notes
<PAGE>
Schedule of Investments
Real Return Bond Fund
September 30, 1998 (Unaudited)
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
CORPORATE BONDS & NOTES 19.9%
- --------------------------------------------------------------------------------
Banking & Finance 16.1%
Ford Motor Credit Corp.
5.813% due 02/13/03 (c) $ 350 $ 351
HRPT Properties Trust
6.288% due 07/09/99 (c) 250 250
J.P. Morgan & Co.
6.189% due 02/15/12 (f) 350 334
Residential Reinsurance
9.848% due 06/01/99 (c) 357 355
Salomon, Smith Barney Holdings
3.650% due 02/14/02 (f) 103 100
Toyota Motor Credit Corp.
5.388% due 02/15/02 (f) 400 390
-------
1,780
=======
Industrials 3.8%
Langdell
9.978% due 07/30/99 (c) 200 199
Petroleos Mexicanos
11.157% due 07/15/05 (c) 250 218
-------
417
-------
Total Corporate Bonds & Notes 2,197
(Cost $2,242) =======
- --------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCIES 37.0%
- --------------------------------------------------------------------------------
Federal Home Loan Bank
5.388% due 02/15/02 (c) 1,350 1,324
Federal National Mortgage Assn.
5.328% due 03/13/02 (c) 2,000 1,964
New York City
6.023% due 08/01/02 (c) 196 196
Student Loan Marketing Assn.
4.847% due 02/20/00 (c) 250 248
5.607% due 07/25/04 (c) 153 152
5.637% due 10/25/04 (c) 193 193
-------
Total U.S. Government Agencies 4,077
(Cost $4,034) =======
- --------------------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS 73.3%
- --------------------------------------------------------------------------------
Treasury Inflation Protected Securities
3.375% due 01/15/07 (f) 4,120 4,057
3.625% due 04/15/28 (f) 4,036 4,026
-------
Total U.S. Treasury Obligations 8,083
(Cost $7,949) =======
- --------------------------------------------------------------------------------
MORTGAGE-BACKED SECURITIES 6.0%
- --------------------------------------------------------------------------------
Collateralized Mortgage Obligations 1.0%
Federal Home Loan Mortgage Corp.
6.500% due 01/25/28 100 107
Federal Housing Administration 3.0%
7.430% due 12/01/20 311 330
Federal National Mortgage Association 2.0%
6.500% due 06/25/09 223 223
-------
Total Mortgage-Backed Securities 660
(Cost $642) =======
- --------------------------------------------------------------------------------
ASSET-BACKED SECURITIES 7.6%
- --------------------------------------------------------------------------------
Capital Equipment Receivables Trust
6.030% due 02/15/00 248 249
First Plus Home Loan Trust
5.765% due 10/10/06 (c) 94 94
IMC Home Equity Loan Trust
5.796% due 05/21/12 (c) 163 164
NationsBank Auto Owner Trust
6.375% due 07/15/00 115 115
Pacific Southwest Bank
6.060% due 06/15/02 73 73
Premiere Auto Trust
6.150% due 03/06/00 139 139
-------
Total Asset-Backed Securities 834
(Cost $832) =======
- --------------------------------------------------------------------------------
FOREIGN CURRENCY-DENOMINATED ISSUES (b)(e) 2.0%
- --------------------------------------------------------------------------------
Commonwealth of Canada
4.250% due 12/01/26 (f) C$ 99 67
Commonwealth of New Zealand
4.500% due 02/15/16 (f) N$ 300 158
-------
Total Foreign Currency-Denominated Issues 225
(Cost $223) =======
- --------------------------------------------------------------------------------
PURCHASED CALL OPTIONS 0.0%
- --------------------------------------------------------------------------------
Sanwa Communications (OTC)
Strike @ 1,270.00 Exp. 02/26/99 JY 35 1
-------
Total Purchased Call Options 1
(Cost $47) =======
- --------------------------------------------------------------------------------
PREFERRED STOCK 0.6%
- --------------------------------------------------------------------------------
Shares
Sanwa International
0.000% due 01/01/00 15,000,000 67
-------
Total Preferred Stock 67
(Cost $88) =======
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 25.1%
- --------------------------------------------------------------------------------
Principal
Amount
(000s)
Commercial Paper 23.6%
Federal Home Loan Mortgage Corp.
5.240% due 10/16/98 $ 100 100
Federal Housing Administration
5.888% due 10/29/98 2,500 2,500
-------
2,600
=======
Repurchase Agreement 1.4%
State Street Bank
4.750% due 10/01/98 154 154
(Dated 09/30/98. Collateralized by U.S. Treasury -------
Bond 6.500% 11/15/26 valued at $162,527.
Repurchase proceeds are $154,020.)
U.S. Treasury Bills 0.1%
4.920% due 12/03/98 10 10
-------
Total Short-Term Instruments 2,764
(Cost $2,764) =======
Total Investments (a) 171.5% $18,908
(Cost $18,821)
Written Options (d) (0.0%) (1)
(Premiums $88)
Other Assets and Liabilities (Net) (71.5%) (7,880)
-------
Net Assets 100.0% $11,027
=======
1998 Semi-Annual Report See accompanying notes 89
<PAGE>
Schedule of Investments (Cont.)
Real Return Bond Fund
September 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
Notes to Schedule of Investments (amounts in thousands):
(a) At September 30, 1998, the net unrealized 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 of value over
tax cost. $ 290
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (203)
----------------
Unrealized appreciation-net $ 87
================
(b) Foreign forward currency contracts outstanding at September 30, 1998:
Principal
Amount Unrealized
Covered by Expiration Appreciation/
Type Contract Month (Depreciation)
- --------------------------------------------------------------------------------
Buy C$ 265 10/98 $ 3
Sell 380 10/98 1
Sell JY 11,074 12/98 3
Sell N$ 562 12/98 (7)
----------------
$ 0
================
(c) Variable rate security. The rate listed is as of September 30, 1998.
(d) Premiums received on written options:
Market
Type Par Premiums Value
- --------------------------------------------------------------------------------
Call - OTC Sanwa Communications
Strike @ 1,270.00 Exp. 02/26/99 JY 35 $ 88 $ 1
(e) Principal amount denoted in indicated currency:
C$- Canadian Dollar
JY- Japanese Yen
N$- New Zealand Dollar
(f) Principal amount of the security is adjusted for inflation.
90 PIMCO Funds See accompanying notes
<PAGE>
Schedule of Investments
Foreign Bond Fund
September 30, 1998 (Unaudited)
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
ARGENTINA (e) 1.2%
- --------------------------------------------------------------------------------
Republic of Argentina
3.044% due 04/01/01(d) AP 3,402 $ 2,608
8.726% due 04/10/05(d) $ 4,240 3,657
3.044% due 04/01/07(d) AP 799 536
-----------
Total Argentina 6,801
(Cost $7,641) ===========
- --------------------------------------------------------------------------------
AUSTRALIA (c)(e) 14.7%
- --------------------------------------------------------------------------------
Commonwealth of Australia
8.750% due 08/15/08 A$ 108,291 82,564
-----------
Total Australia 82,564
(Cost $79,043) ===========
- --------------------------------------------------------------------------------
AUSTRIA 1.6%
- --------------------------------------------------------------------------------
Oesterreich Kontrollbank
5.220% due 11/30/98 $ 8,800 8,723
-----------
Total Austria 8,723
(Cost $8,723) ===========
- --------------------------------------------------------------------------------
BELGIUM (c)(e) 1.1%
- --------------------------------------------------------------------------------
Kingdom of Belgium
9.000% due 03/28/03 BF 200 7
5.100% due 11/21/04(d) 183,200 6,092
-----------
Total Belgium 6,099
(Cost $6,081) ===========
- --------------------------------------------------------------------------------
CANADA (c)(e) 3.8%
- --------------------------------------------------------------------------------
Commonwealth of Canada
6.000% due 06/01/08 C$ 24,800 17,501
Province of British Columbia
5.480% due 11/09/98 $ 1,100 1,093
Rogers Cantel, Inc.
10.500% due 06/01/06 C$ 2,500 1,747
Sears Canada
11.700% due 07/10/00 1,000 721
-----------
Total Canada 21,062
(Cost $20,631) ===========
- --------------------------------------------------------------------------------
COLOMBIA (c)(e) 0.2%
- --------------------------------------------------------------------------------
Republic of Colombia
3.000% due 12/22/00 JY 150,000 1,114
-----------
Total Colombia 1,114
(Cost $1,163) ===========
- --------------------------------------------------------------------------------
CROATIA 0.0%
- --------------------------------------------------------------------------------
Republic of Croatia
6.563% due 07/31/06(d) $ 49 34
-----------
Total Croatia 34
(Cost $44) ===========
- --------------------------------------------------------------------------------
DENMARK (c)(e) 2.6%
- --------------------------------------------------------------------------------
Kingdom of Denmark
6.000% due 11/15/02 DK 53,500 8,928
7.000% due 11/15/07 30,300 5,609
-----------
Total Denmark 14,537
(Cost $13,086) ===========
- --------------------------------------------------------------------------------
FINLAND (c)(e) 3.7%
- --------------------------------------------------------------------------------
Republic of Finland
6.000% due 04/25/08 FM 92,000 20,496
-----------
Total Finland 20,496
(Cost $18,815) ===========
- --------------------------------------------------------------------------------
FRANCE (c) 0.4%
- --------------------------------------------------------------------------------
Electricite de France
5.490% due 10/14/98 $ 2,400 $ 2,395
-----------
Total France 2,395
(Cost $2,395) ===========
- --------------------------------------------------------------------------------
GERMANY (c)(e) 6.1%
- --------------------------------------------------------------------------------
KFW International Finance, Inc.
5.450% due 12/22/98 9,000 8,893
Republic of Germany
6.500% due 07/04/27 DM 34,115 25,437
-----------
Total Germany 34,330
(Cost $28,835) ===========
- --------------------------------------------------------------------------------
GREECE (c)(e) 4.9%
- --------------------------------------------------------------------------------
Hellenic Republic
11.200% due 05/19/03(d) GD 100,000 348
11.100% due 06/17/03(d) 107,400 374
11.000% due 10/23/03(d) 376,000 1,321
8.800% due 06/19/07 7,197,100 25,465
-----------
Total Greece 27,508
(Cost $27,367) ===========
- --------------------------------------------------------------------------------
ITALY (c)(e) 11.7%
- --------------------------------------------------------------------------------
Republic of Italy
6.000% due 01/01/00 IL 62,570,000 38,865
4.750% due 05/01/03 16,810,000 10,527
5.000% due 05/01/08 10,710,000 6,826
7.250% due 11/01/26 12,240,000 9,619
-----------
Total Italy 65,837
(Cost $59,483) ===========
- --------------------------------------------------------------------------------
JAPAN (c) 2.8%
- --------------------------------------------------------------------------------
Bank of Tokyo
5.940% due 01/19/99 $ 9,600 9,600
5.938% due 07/30/99 5,940 5,940
-----------
Total Japan 15,540
(Cost $15,540) ===========
- --------------------------------------------------------------------------------
MEXICO (c)(e) 0.7%
- --------------------------------------------------------------------------------
Petroleos Mexicanos
7.750% due 09/30/98 FF 22,000 3,930
-----------
Total Mexico 3,930
(Cost $3,702) ===========
- --------------------------------------------------------------------------------
NETHERLANDS (c)(e) 0.5%
- --------------------------------------------------------------------------------
Kingdom of Netherlands
5.750% due 01/15/04 DG 4,880 2,834
-----------
Total Netherlands 2,834
(Cost $2,719) ===========
- --------------------------------------------------------------------------------
NEW ZEALAND (c)(e) 2.9%
- --------------------------------------------------------------------------------
Commonwealth of New Zealand
4.500% due 02/15/16(g) N$ 15,000 7,893
International Bank for Reconstruction
& Development
7.250% due 06/20/02 5,150 2,653
7.250% due 05/27/03 10,670 5,536
-----------
Total New Zealand 16,082
(Cost $16,805) ===========
- --------------------------------------------------------------------------------
NORWAY (c)(e) 0.8%
- --------------------------------------------------------------------------------
Norwegian Treasury Bills
4.400% due 03/17/99 NK 35,000 4,665
-----------
Total Norway 4,665
(Cost $4,662) ===========
1998 Semi-Annual Report See accompanying notes 91
<PAGE>
Schedule of Investments (Cont.)
Foreign Bond Fund
September 30, 1998 (Unaudited)
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
SOUTH KOREA 2.9%
- --------------------------------------------------------------------------------
Korean Export-Import Bank
7.250% due 06/25/01 $ 1,945 $ 1,702
6.500% due 02/10/02 800 648
Republic of Korea
8.875% due 04/15/08 (d) 15,950 13,727
---------
Total South Korea 16,077
(Cost $17,975) =========
- --------------------------------------------------------------------------------
SPAIN (c)(e) 7.9%
- --------------------------------------------------------------------------------
Kingdom of Spain
5.250% due 01/31/03 SP 1,491,000 11,125
6.000% due 01/31/08 3,363,600 26,614
6.000% due 01/31/29 858,200 6,548
---------
Total Spain 44,287
(Cost $40,653) =========
- --------------------------------------------------------------------------------
SUPRANATIONAL (e) 0.1%
- --------------------------------------------------------------------------------
World Bank
10.250% due 04/11/02 PP 31,000 585
---------
Total Supranational 585
(Cost $1,178) =========
- --------------------------------------------------------------------------------
SWEDEN (c)(e) 1.9%
- --------------------------------------------------------------------------------
Kingdom of Sweden
10.250% due 05/05/00 SK 9,000 1,246
13.000% due 06/15/01 11,200 1,729
6.500% due 05/05/08 54,300 7,837
---------
Total Sweden 10,812
(Cost $10,434) =========
- --------------------------------------------------------------------------------
UNITED KINGDOM (c)(e) 13.6%
- --------------------------------------------------------------------------------
Federal National Mortgage Assn.
6.875% due 06/07/02 BP 10,230 17,971
Middleweb PLC
10.500% due 05/30/08 4,300 5,650
Orange PLC
8.625% due 08/01/08 4,810 7,774
United Kingdom Gilt
8.500% due 12/07/05 9,656 19,783
7.250% due 12/07/07 12,569 25,111
---------
Total United Kingdom 76,289
(Cost $71,546) =========
- --------------------------------------------------------------------------------
UNITED STATES 59.2%
- --------------------------------------------------------------------------------
Asset-Backed Securities 1.5%
Conti Mortgage Home Equity Loan Trust
5.811% due 10/15/12 (d) $ 4,899 4,921
Emergent Home Equity Loan Trust
6.745% due 05/15/12 3,300 3,338
---------
8,259
=========
Corporate Bonds & Notes 15.5%
Associates Corp. of North America
5.788% due 08/27/01 (d) 5,000 5,013
6.000% due 04/15/03 700 722
AT&T Capital Corp.
6.061% due 04/01/99 (d) 7,800 7,801
6.410% due 08/13/99 4,310 4,339
CSFP Credit
6.199% due 11/19/04 (h) 19,000 18,620
Ford Motor Credit Corp.
8.200% due 02/15/02 1,580 1,718
6.125% due 04/28/03 3,300 3,402
Fuji Bank
9.870% due 12/31/49 (d) 2,200 978
General Motors Acceptance Corp.
5.694% due 12/10/01 (d) 2,000 2,001
6.750% due 02/07/02 1,000 1,044
5.788% due 11/12/02 (d) 5,100 5,094
J.P. Morgan & Co.
6.189% due 02/15/12 (g) 5,000 4,775
Lehman Brothers, Inc.
5.877% due 02/27/01 (d) 4,900 4,737
Merrill Lynch & Co.
5.758% due 11/01/01 (d) 6,230 6,234
National Power Corp.
9.625% due 05/15/28 2,200 1,412
Residential Reinsurance
9.848% due 06/01/99 (d) 2,250 2,239
RJR Nabisco
8.625% due 12/01/02 4,100 4,291
Salomon, Smith Barney Holdings
3.650% due 02/14/02 (g) 5,145 5,000
Sumitomo
9.400% due 12/29/49 (d) 5,200 4,376
Tokai Capital Corp.
9.980% due 12/29/49 (d) 4,500 3,392
---------
87,188
=========
Mortgage-Backed Securities 19.2%
Collateralized Mortgage Obligation Trust
9.000% due 05/01/14 6 6
Federal Home Loan Mortgage Corp.
9.050% due 06/15/19 113 122
6.000% due 10/14/28 88,090 88,090
Federal National Mortgage Assn.
5.500% due 02/25/05 943 948
Government National Mortgage Assn.
6.500% due 12/20/25-11/20/26 (b)(d) 1,681 1,710
6.875% due 05/20/22-05/20/23 (b)(d) 932 957
7.000% due 11/20/21-12/20/26 (b)(d) 14,042 14,315
Independent National Mortgage Corp.
8.195% due 11/25/24(d) 134 139
Morgan Stanley Mortgage
8.150% due 07/20/21 3 3
Resolution Trust Corp.
10.561% due 05/25/24 (d) 30 30
7.750% due 04/25/28 275 274
Sears Mortgage
6.738% due 06/25/22 (d) 133 135
Structured Asset Securities Corp.
5.794% due 01/25/00 (d) 1,133 1,133
---------
107,862
=========
U.S. Government Agencies 7.7%
Federal Home Loan Bank
5.388% due 02/15/02 (d) 14,000 13,733
Student Loan Marketing Assn.
5.877% due 01/25/03 (d) 7,072 7,078
5.702% due 04/25/04 (d) 639 639
5.823% due 04/25/07 (d) 21,700 21,695
---------
43,145
=========
U.S. Treasury Obligations 15.3%
Treasury Inflation Protected Securities
3.625% due 07/15/02 (g) 80,295 80,671
U.S. Treasury Notes
5.750% due 11/30/02 5,300 5,577
---------
86,248
---------
Total United States 332,702
(Cost $334,356) =========
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 36.4%
- --------------------------------------------------------------------------------
Commercial Paper 36.0%
American Express Credit
5.450% due 10/01/98 1,800 1,800
5.490% due 10/06/98 4,500 4,497
BellSouth Telecommunications, Inc.
5.490% due 10/06/98 3,600 3,597
Coca-Cola Co.
5.420% due 11/06/98 12,500 12,432
92 PIMCO Funds See accompanying notes
<PAGE>
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
E.I. Du Pont de Nemours
5.490% due 10/20/98 $ 2,200 $ 2,194
5.500% due 10/22/98 3,500 3,489
5.500% due 10/27/98 2,200 2,191
5.270% due 10/29/98 5,400 5,378
5.430% due 11/03/98 10,000 9,950
5.490% due 11/05/98 1,600 1,592
Emerson Electric Co.
5.380% due 10/28/98 12,400 12,350
Federal Home Loan Mortgage Corp.
5.460% due 10/16/98 10,000 9,977
Ford Motor Credit Corp.
5.510% due 10/02/98 8,200 8,199
5.510% due 10/09/98 5,000 4,994
5.490% due 10/15/98 4,000 3,991
5.390% due 01/08/99 5,000 4,928
General Electric Capital Corp.
5.490% due 10/19/98 5,000 4,986
5.510% due 11/02/98 2,900 2,886
5.280% due 11/04/98 5,200 5,174
5.500% due 11/18/98 2,700 2,680
5.490% due 11/19/98 2,100 2,084
IBM Credit Corp.
5.510% due 10/21/98 9,100 9,072
5.220% due 11/18/98 5,000 4,965
5.480% due 11/18/98 4,000 3,971
Motorola, Inc.
5.480% due 10/13/98 800 799
5.520% due 10/13/98 1,500 1,497
5.480% due 12/03/98 3,600 3,567
5.270% due 12/17/98 13,500 13,349
National Rural Utilities Cooperative
5.490% due 10/09/98 2,000 1,998
5.510% due 10/19/98 1,200 1,197
5.320% due 12/11/98 6,000 5,938
New Center Asset Trust
5.520% due 11/10/98 10,400 10,336
5.520% due 11/19/98 500 496
5.460% due 12/17/98 1,500 1,483
Pfizer, Inc.
5.500% due 10/20/98 2,800 2,792
Procter & Gamble Co.
5.510% due 12/16/98 1,400 1,384
5.310% due 12/28/98 16,000 15,796
5.400% due 12/29/98 7,500 7,402
SBC Communications, Inc.
5.480% due 11/17/98 7,000 6,950
----------
202,361
==========
Repurchase Agreement 0.1%
State Street Bank
4.750% due 10/01/98 664 664
(Dated 09/30/98. Collateralized by ----------
U.S. Treasury Note 5.750% 10/31/02
valued at $679,450. Repurchase
proceeds are $664,088.)
U.S. Treasury Bills (b) 0.3%
4.980% due 10/15/98-12/03/98 1,745 1,740
----------
Total Short-Term Instruments 204,765
(Cost $204,751) ==========
Total Investments (a) 181.7% $1,020,068
(Cost $997,628)
Other Assets and Liabilities (Net) (81.7%) (458,764)
----------
Net Assets 100.0% $ 561,304
==========
Notes to Schedule of Investments (amounts in thousands):
(a) At September 30, 1998, the net unrealized 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 of value over
tax cost. $ 33,012
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (10,572)
----------
Unrealized appreciation-net $ 22,440
==========
(b) Securities are grouped by coupon and represent a range of maturities.
(c) Foreign forward currency contracts outstanding at September 30, 1998:
Principal
Amount Unrealized
Covered by Expiration Appreciation/
Type Contract Month (Depreciation)
- --------------------------------------------------------------------------------
Buy A$ 93 10/98 $ (2)
Sell 3,265 10/98 (56)
Sell BF 216,993 12/98 (410)
Buy BP 1,181 10/98 26
Sell 12,582 10/98 (764)
Buy 1,644 12/98 32
Sell C$ 41,042 10/98 855
Buy 36,617 10/98 (90)
Sell DG 5,458 12/98 (33)
Sell DK 109 10/98 (1)
Buy DM 80,150 10/98 393
Sell 300 10/98 0
Buy 37,781 11/98 197
Sell 105,974 11/98 (2,991)
Buy FF 21,407 12/98 69
Sell 57,301 12/98 (642)
Buy FM 7,286 10/98 82
Sell 7,520 10/98 (98)
Buy GD 3,997,000 10/98 126
Sell 1,031,713 10/98 (124)
Buy IL 434,290 10/98 3
Sell 9,237 10/98 0
Sell 891,800 11/98 (4)
Sell JY 16,467 10/98 0
Buy 1,010,101 11/98 416
Sell 4,373,330 11/98 (1,747)
Sell 4,563,084 12/98 859
Sell N$ 11,196 10/98 147
Sell 15,006 12/98 (114)
Buy NK 270,996 10/98 1,256
Buy 107,882 11/98 407
Buy 13,119 12/98 29
Sell 35,282 12/98 (12)
Sell S$ 22,080 10/98 (259)
Sell SF 28,499 10/98 (652)
Sell SK 235 10/98 0
Sell SP 184,242 12/98 (15)
---------
$ (3,117)
=========
(d) Variable rate security. The rate listed is as of September 30, 1998.
1998 Semi-Annual Report See accompanying notes 93
<PAGE>
Schedule of Investments (Cont.)
Foreign Bond Fund
September 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
(e) Principal amount denoted in indicated currency:
A$ - Australian Dollar
AP - Argentine Peso
BF - Belgian Franc
BP - British Pound
C$ - Canadian Dollar
DG - Dutch Guilder
DK - Danish Krone
DM - German Mark
FF - French Franc
FM - Finnish Markka
GD - Greek Drachma
IL - Italian Lira
JY - Japanese Yen
N$ - New Zealand Dollar
NK - Norwegian Kron
PP - Philippines Peso
S$ - Singapore Dollar
SF - Swiss Franc
SK - Swedish Krona
SP - Spanish Peseta
(f) Swap agreements outstanding at September 30, 1998:
Notional Unrealized
Type Amount Appreciation
- --------------------------------------------------------------------------------
Receive fixed rate equal to 5.701% and pay
floating rate on 3 month LIBOR.
Broker: Merrill Lynch
Exp. 09/07/05 $ 26,640 $ 902
(g) Principal amount of the security is adjusted for inflation.
(h) Restricted security.
94 PIMCO Funds See accompanying notes
<PAGE>
Schedule of Investments
Global Bond Fund
September 30, 1998 (Unaudited)
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
ARGENTINA (e) 1.3%
- --------------------------------------------------------------------------------
Republic of Argentina
3.044% due 04/01/01 (d) AP 1,296 $ 994
8.726% due 04/10/05 (d) $ 2,610 2,251
3.044% due 04/01/07 (d) AP 380 255
---------
Total Argentina 3,500
(Cost $3,952) =========
- --------------------------------------------------------------------------------
AUSTRALIA (e)(h) 12.3%
- --------------------------------------------------------------------------------
Commonwealth of Australia
8.750% due 08/15/08 A$ 44,818 34,170
---------
Total Australia 34,170
(Cost $32,681) =========
- --------------------------------------------------------------------------------
AUSTRIA 1.3%
- --------------------------------------------------------------------------------
Oesterreich Kontrollbank
5.220% due 11/30/98 $ 3,600 3,568
---------
Total Austria 3,568
(Cost $3,569) =========
- --------------------------------------------------------------------------------
BELGIUM (e)(h) 1.2%
- --------------------------------------------------------------------------------
Kingdom of Belgium
5.100% due 11/21/04 (d) BF 95,900 3,189
---------
Total Belgium 3,189
(Cost $3,167) =========
- --------------------------------------------------------------------------------
CANADA (e)(h) 3.2%
- --------------------------------------------------------------------------------
Commonwealth of Canada
6.000% due 06/01/08 C$ 1,100 776
4.250% due 12/01/26 (g) 5,861 3,954
Rogers Cantel, Inc.
10.500% due 06/01/06 6,000 4,192
---------
Total Canada 8,922
(Cost $9,536) =========
- --------------------------------------------------------------------------------
COLOMBIA 0.3%
- --------------------------------------------------------------------------------
Republic of Colombia
3.000% due 12/22/00 (d) JY 100,000 743
---------
Total Colombia 743
(Cost $775) =========
- --------------------------------------------------------------------------------
DENMARK (e)(h) 1.7%
- --------------------------------------------------------------------------------
Kingdom of Denmark
6.000% due 11/15/02 DK 18,800 3,137
7.000% due 11/15/07 9,100 1,684
---------
Total Denmark 4,821
(Cost $4,343) =========
- --------------------------------------------------------------------------------
FINLAND (e)(h) 3.6%
- --------------------------------------------------------------------------------
Republic of Finland
6.000% due 04/25/08 FM 45,000 10,025
---------
Total Finland 10,025
(Cost $9,178) =========
- --------------------------------------------------------------------------------
GERMANY (e)(h) 3.8%
- --------------------------------------------------------------------------------
KFW International Finance, Inc.
5.490% due 11/03/98 $ 1,800 1,791
Republic of Germany
5.625% due 01/04/28 DM 13,030 8,683
---------
Total Germany 10,474
(Cost $9,348) =========
- --------------------------------------------------------------------------------
GREECE (e)(h) 5.2%
- --------------------------------------------------------------------------------
Hellenic Republic
11.200% due 05/19/03 (d) GD 100,000 348
11.100% due 06/17/03 (d) 69,100 241
11.000% due 10/23/03 (d) 344,000 1,208
8.800% due 06/19/07 3,536,500 12,513
---------
Total Greece 14,310
(Cost $14,479) =========
- --------------------------------------------------------------------------------
ITALY (e)(h) 8.3%
- --------------------------------------------------------------------------------
Republic of Italy
6.000% due 01/01/00 IL 29,960,000 18,609
4.750% due 05/01/03 4,420,000 2,768
5.000% due 05/01/08 2,500,000 1,593
---------
Total Italy 22,970
(Cost $21,320) =========
- --------------------------------------------------------------------------------
JAPAN (e)(h) 2.9%
- --------------------------------------------------------------------------------
Bank of Tokyo
5.940% due 01/19/99 $ 5,000 5,000
5.927% due 07/30/99 3,080 3,080
---------
Total Japan 8,080
(Cost $8,080) =========
- --------------------------------------------------------------------------------
NEW ZEALAND (e)(h) 3.2%
- --------------------------------------------------------------------------------
Commonwealth of New Zealand
4.500% due 02/15/16 (g) N$ 5,000 2,631
International Bank of Reconstruction & Development
7.250% due 05/27/03 9,190 4,768
7.250% due 06/20/02 2,560 1,319
---------
Total New Zealand 8,718
(Cost $9,242) =========
- --------------------------------------------------------------------------------
SOUTH KOREA 3.3%
- --------------------------------------------------------------------------------
Korean Export-Import Bank
7.250% due 06/25/01 $ 1,300 1,138
6.500% due 02/10/02 300 243
Republic of Korea
8.875% due 04/15/08 (d) 9,120 7,849
---------
Total South Korea 9,230
(Cost $10,344) =========
- --------------------------------------------------------------------------------
SPAIN (e)(h) 7.1%
- --------------------------------------------------------------------------------
Kingdom of Spain
5.250% due 01/31/03 SP 98,000 731
6.000% due 01/31/08 2,037,860 16,119
6.000% due 01/31/29 362,100 2,763
---------
Total Spain 19,613
(Cost $18,670) =========
- --------------------------------------------------------------------------------
SUPRANATIONAL (e) 0.2%
- --------------------------------------------------------------------------------
World Bank
10.250% due 04/11/02 PP 29,000 547
---------
Total Supranational 547
(Cost $1,102) =========
- --------------------------------------------------------------------------------
SWEDEN (e)(h) 1.4%
- --------------------------------------------------------------------------------
Kingdom of Sweden
13.000% due 06/15/01 SK 10,300 1,590
6.500% due 05/05/08 15,600 2,251
---------
Total Sweden 3,841
(Cost $3,726) =========
1998 Semi-Annual Report See accompanying notes 95
<PAGE>
Schedule of Investments (Cont.)
Global Bond Fund
September 30, 1998 (Unaudited)
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
UNITED KINGDOM (e)(h) 13.3%
- --------------------------------------------------------------------------------
Equitable
8.000% due 08/29/49 (d) BP 6,100 $ 10,714
Federal National Mortgage Assn.
6.875% due 06/07/02 6,010 10,558
Middleweb PLC
10.500% due 05/30/08 2,360 3,101
Orange PLC
8.625% due 08/01/08 2,520 4,073
United Kingdom Gilt
7.000% due 06/07/02 900 1,616
8.500% due 12/07/05 3,000 6,146
7.250% due 12/07/07 363 725
---------
Total United Kingdom 36,933
(Cost $35,696) =========
- --------------------------------------------------------------------------------
UNITED STATES (e) 72.5%
- --------------------------------------------------------------------------------
Asset-Backed Securities 1.9%
Conti Mortgage Home Equity Loan Trust
5.811% due 10/15/12 (d) $ 2,368 2,379
Emergent Home Equity Loan Trust
6.745% due 05/15/12 1,600 1,618
Pacific Southwest Bank
6.060% due 06/15/02 1,176 1,172
---------
5,169
=========
Corporate Bonds & Notes 16.7%
Associates Corp. of North America
5.788% due 08/27/01 (d) 2,400 2,406
6.000% due 04/15/03 200 206
AT&T Capital Corp.
6.410% due 08/13/99 2,000 2,013
CSFP Credit
6.199% due 11/19/04 10,750 10,535
Dean Witter Discover
5.762% due 02/01/99 (d) 1,000 1,001
5.762% due 02/05/99 (d) 1,000 1,001
Ford Motor Credit Corp.
6.125% due 04/28/03 1,100 1,134
Fuji Bank
9.870% due 12/31/49 (d) 1,300 578
General Motors Acceptance Corp.
5.694% due 12/10/01 (d) 1,900 1,901
6.750% due 02/07/02 500 522
9.000% due 10/15/02 1,140 1,329
Hewlett-Packard Finance
5.625% due 11/20/00 DM 1,300 806
Lehman Brothers, Inc.
5.877% due 02/27/01 (d) $ 2,300 2,224
Merrill Lynch & Co.
5.758% due 11/01/01 (d) 2,970 2,972
Residential Reinsurance
9.848% due 06/01/99 (d) 1,250 1,244
RJR Nabisco
8.625% due 12/01/02 2,400 2,512
Salomon, Smith Barney Holdings
3.650% due 02/14/02 (g) 6,174 6,000
Sumitomo
9.400% due 12/29/49 (d) 3,000 2,524
TCI Communications, Inc.
6.175% due 04/01/02 (d) 2,700 2,730
Tokai Capital Corp.
9.980% due 12/29/49 (d) 2,600 1,960
United Air Lines
10.670% due 05/01/04 500 624
---------
46,222
=========
Mortgage-Backed Securities 19.9%
Federal Home Loan Mortgage Corp.
7.534% due 05/01/23 (d) 594 617
6.000% due 10/14/28 37,830 37,830
Federal Housing Administration
7.400% due 02/01/21 1,539 1,600
Federal National Mortgage Assn.
7.500% due 11/01/01-01/01/02 (f) 506 518
5.500% due 02/25/05 440 442
6.500% due 04/01/09 610 624
7.848% due 11/01/23 (d) 416 425
7.655% due 03/01/24 (d) 293 301
Government National Mortgage Assn.
7.000% due 07/20/22-12/20/26 (d)(f) 8,206 8,363
6.875% due 05/20/23-06/20/23 (d)(f) 911 932
6.500% due 12/20/25-11/20/26 (d)(f) 933 949
Independent National Mortgage Corp.
8.195% due 11/25/24 (d) 67 69
Residential Funding
8.196% due 03/25/25 (d) 873 898
Resolution Trust Corp.
8.000% due 04/25/25 863 896
Structured Asset Securities Corp.
5.794% due 01/25/00 (d) 566 567
---------
55,031
=========
U.S. Government Agencies 5.9%
Student Loan Marketing Assn.
5.877% due 01/25/03 (d) 3,899 3,902
5.702% due 04/25/04 (d) 639 639
5.823% due 04/25/07 (d) 11,900 11,897
---------
16,438
=========
U.S. Treasury Obligations 28.1%
Treasury Inflation Protected Securities
3.625% due 07/15/02 (g) 44,020 44,226
U.S. Treasury Bonds
6.000% due 02/15/26 3,381 3,785
U.S. Treasury Notes
5.750% due 11/30/02 4,480 4,714
7.000% due 07/15/06 16,700 19,466
6.500% due 10/15/06 5,070 5,761
---------
77,952
---------
Total United States 200,812
(Cost $199,912) =========
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 16.9%
- --------------------------------------------------------------------------------
Commercial Paper 12.7%
E.I. Du Pont de Nemours
5.400% due 10/14/98 400 399
5.530% due 10/20/98 4,000 3,988
5.440% due 11/20/98 3,000 2,977
Ford Motor Credit Corp.
5.490% due 10/15/98 1,100 1,098
5.520% due 10/16/98 1,000 998
5.470% due 11/19/98 2,600 2,581
5.440% due 01/08/99 1,300 1,281
General Electric Capital Corp.
5.530% due 11/13/98 1,400 1,391
5.500% due 11/18/98 4,000 3,971
General Motors Acceptance Corp.
5.400% due 11/04/98 4,500 4,477
National Rural Utilities Cooperative
5.400% due 12/14/98 800 791
New Center Asset Trust
5.460% due 12/17/98 800 791
Pfizer, Inc.
5.270% due 10/30/98 1,400 1,394
Procter & Gamble Co.
5.310% due 12/28/98 3,000 2,961
5.400% due 12/29/98 5,000 4,935
Washington Post
5.420% due 12/16/98 1,000 989
---------
35,022
=========
96 PIMCO Funds See accompanying notes
<PAGE>
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
Repurchase Agreements 4.0%
State Street Bank
4.750% due 10/01/98 $ 2,201 $ 2,201
(Dated 09/30/98. Collateralized by
U.S. Treasury Note 5.750% 11/15/00
valued at $2,249,773. Repurchase
proceeds are $2,201,290.)
First Boston
5.250% due 10/01/98 9,000 9,000
(Dated 09/30/98. Collateralized by
U.S. Treasury Note 6.875% 03/31/00
valued at $9,216,915. Repurchase
proceeds are $9,001,313.)
-----------
11,201
===========
U.S. Treasury Bills (b)(f) 0.2%
4.980% due 10/15/98-12/03/98 670 669
-----------
Total Short-Term Instruments 46,892
(Cost $46,889) ===========
Total Investments (a) 163.0% $ 451,358
(Cost $446,009)
Other Assets and Liabilities (Net) (63.0%) (174,506)
-----------
Net Assets 100.0% $ 276,852
===========
Notes to Schedule of Investments (amounts in thousands):
(a) At September 30, 1998, the net unrealized 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 of value over
tax cost. $ 12,035
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (7,579)
-----------
Unrealized appreciation-net $ 5,349
===========
(b) Securities with an aggregate market value of $669
have been segregated with the custodian to cover margin
requirements for the following open futures contracts at
September 30, 1998:
Unrealized
Type Contracts Appreciation
- --------------------------------------------------------------------------------
U.S. Treasury 10 Year Note (12/98) 146 $ 958
(c) Swap agreements outstanding at September 30, 1998:
Notional Unrealized
Type Amount Appreciation
- --------------------------------------------------------------------------------
Receive fixed rate equal to 5.701% and pay floating rate
on 3 month LIBOR.
Broker: Merrill Lynch
Exp. 09/07/05 $ 12,680 $ 429
(d) Variable rate security. The rate listed is as of September 30, 1998.
(e) Principal amount denoted in indicated currency:
A$ - Australian Dollar GD - Greek Drachma
AP - Argentine Peso IL - Italian Lira
BF - Belgian Franc JY - Japanese Yen
BP - British Pound N$ - New Zealand Dollar
C$ - Canadian Dollar NK - Norwegian Kron
DG - Dutch Guilder PP - Philippines Peso
DK - Danish Krone S$ - Singapore Dollar
DM - German Mark SF - Swiss Franc
FF - French Franc SK - Swedish Krona
FM - Finnish Markka SP - Spanish Peseta
(f) Securities are grouped by coupon and represent a range of maturities.
(g) Principal amount of the security is adjusted for inflation.
(h) Foreign forward currency contracts outstanding at September 30, 1998:
Principal
Amount Unrealized
Covered by Expiration Appreciation/
Type Contract Month (Depreciation)
- --------------------------------------------------------------------------------
Buy A$ 3,640 10/98 $ (90)
Sell 1,669 10/98 (29)
Buy BF 279,153 12/98 552
Sell 20,975 12/98 (6)
Buy BP 4,171 10/98 278
Sell 2,504 10/98 (156)
Buy 297 12/98 5
Sell 2,346 12/98 (55)
Sell C$ 29,417 10/98 615
Buy 26,789 10/98 (66)
Buy DG 12,456 10/98 45
Buy 4,035 12/98 148
Sell 1,197 12/98 (7)
Buy DK 29,914 10/98 318
Sell 1,009 10/98 (2)
Sell DM 142 10/98 0
Buy 39,663 10/98 194
Sell 22,942 11/98 (344)
Buy 31,914 11/98 585
Buy FF 136,307 12/98 1,648
Sell 14,671 12/98 (25)
Buy FM 34,895 10/98 393
Sell 35,530 10/98 (455)
Sell GD 882,780 10/98 (106)
Buy 1,890,000 10/98 60
Sell IL 400,292 10/98 0
Buy 30,764,292 11/98 131
Sell 349,638 11/98 (2)
Buy JY 223,746 11/98 93
Sell 2,130,604 11/98 (853)
Buy 3,933,204 12/98 (204)
Sell 726,297 12/98 229
Sell N$ 9,643 10/98 127
Sell 10,963 12/98 (69)
Buy NK 106,737 10/98 560
Buy 132,184 11/98 354
Sell 70,560 11/98 (393)
Buy 6,166 12/98 14
Sell S$ 10,790 10/98 (127)
Sell SF 13,647 10/98 (312)
Buy SK 34,242 10/98 42
Sell 1,035 10/98 0
Buy SP 1,254,049 12/98 99
---------
$ 3,189
=========
1998 Semi-Annual Report See accompanying notes 97
<PAGE>
Schedule of Investments
Global Bond Fund II
September 30, 1998 (Unaudited)
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
ARGENTINA (d) 1.3%
- --------------------------------------------------------------------------------
Republic of Argentina
3.044% due 04/01/01 (c) AP 186 $ 143
8.726% due 04/10/05 (c) $ 410 354
3.044% due 04/01/07 (c) AP 55 37
---------
Total Argentina 534
(Cost $613) =========
- --------------------------------------------------------------------------------
AUSTRALIA (b)(d) 14.7%
- --------------------------------------------------------------------------------
Commonwealth of Australia
9.500% due 08/15/03 A$ 100 71
8.750% due 08/15/08 8,001 6,100
---------
Total Australia 6,171
(Cost $5,898) =========
- --------------------------------------------------------------------------------
AUSTRIA 0.7%
- --------------------------------------------------------------------------------
Oesterreich Kontrollbank
5.220% due 11/30/98 $ 300 297
---------
Total Austria 297
(Cost $297) =========
- --------------------------------------------------------------------------------
BELGIUM (d) 0.5%
- --------------------------------------------------------------------------------
Kingdom of Belgium
5.100% due 11/21/04 (c) BF 5,800 193
---------
Total Belgium 193
(Cost $192) =========
- --------------------------------------------------------------------------------
CANADA (b)(d) 5.2%
- --------------------------------------------------------------------------------
Commonwealth of Canada
6.000% due 06/01/08 C$ 1,200 847
4.250% due 12/01/26 (f) 156 105
Province of British Columbia
5.490% due 10/05/98 $ 1,000 999
Rogers Cantel, Inc.
10.500% due 06/01/06 C$ 320 224
---------
Total Canada 2,175
(Cost $2,168) =========
- --------------------------------------------------------------------------------
CROATIA 0.0%
- --------------------------------------------------------------------------------
Republic of Croatia
6.563% due 07/31/06 (c) $ 4 3
---------
Total Croatia 3
(Cost $4) =========
- --------------------------------------------------------------------------------
DENMARK (b)(d) 1.9%
- --------------------------------------------------------------------------------
Kingdom of Denmark
6.000% due 11/15/02 DK 3,100 517
7.000% due 11/15/07 1,500 278
---------
Total Denmark 795
(Cost $716) =========
- --------------------------------------------------------------------------------
FINLAND (b)(d) 3.7%
- --------------------------------------------------------------------------------
Republic of Finland
6.000% due 04/25/08 FM 7,000 1,559
---------
Total Finland 1,559
(Cost $1,420) =========
- --------------------------------------------------------------------------------
GERMANY (b)(d) 2.7%
- --------------------------------------------------------------------------------
Hewlett-Packard Finance
5.625% due 11/20/00 DM 100 62
Republic of Germany
5.625% due 01/04/28 1,640 1,093
---------
Total Germany 1,155
(Cost $1,019) =========
- --------------------------------------------------------------------------------
GREECE (b)(d) 5.2%
- --------------------------------------------------------------------------------
Hellenic Republic
11.100% due 06/17/03 (c) GD 7,400 26
11.000% due 10/23/03 (c) 33,600 118
8.800% due 06/19/07 571,400 2,022
---------
Total Greece 2,166
(Cost $2,120) =========
- --------------------------------------------------------------------------------
ITALY (b)(d) 7.1%
- --------------------------------------------------------------------------------
Republic of Italy
6.000% due 01/01/00 IL 3,435,000 2,134
5.000% due 05/01/08 920,000 586
7.250% due 11/01/26 310,000 244
---------
Total Italy 2,964
(Cost $2,715) =========
- --------------------------------------------------------------------------------
JAPAN 3.2%
- --------------------------------------------------------------------------------
Bank of Tokyo
5.940% due 01/19/99 $ 800 800
5.938% due 07/30/99 530 530
---------
Total Japan 1,330
(Cost $1,330) =========
- --------------------------------------------------------------------------------
NEW ZEALAND (b)(d) 2.8%
- --------------------------------------------------------------------------------
International Bank of Reconstruction & Development
7.250% due 04/09/01 N$ 976 499
7.250% due 06/20/02 430 221
7.250% due 05/27/03 890 462
---------
Total New Zealand 1,182
(Cost $1,183) =========
- --------------------------------------------------------------------------------
SOUTH KOREA 3.6%
- --------------------------------------------------------------------------------
Korean Export-Import Bank
7.250% due 06/25/01 $ 260 228
Republic of Korea
8.875% due 04/15/08 (c) 1,500 1,291
---------
Total South Korea 1,519
(Cost $1,695) =========
- --------------------------------------------------------------------------------
SPAIN (b)(d) 8.2%
- --------------------------------------------------------------------------------
Kingdom of Spain
5.250% due 01/31/03 SP 64,000 478
6.000% due 01/31/08 328,580 2,600
6.000% due 01/31/29 48,100 367
---------
Total Spain 3,445
(Cost $3,234) =========
- --------------------------------------------------------------------------------
SUPRANATIONAL (d) 0.1%
- --------------------------------------------------------------------------------
World Bank
10.250% due 04/11/02 PP 2,000 38
---------
Total Supranational 38
(Cost $76) =========
- --------------------------------------------------------------------------------
SWEDEN (b)(d) 1.4%
- --------------------------------------------------------------------------------
Kingdom of Sweden
13.000% due 06/15/01 SK 900 139
6.500% due 05/05/08 3,000 433
---------
Total Sweden 572
(Cost $551) =========
98 PIMCO Funds See accompanying notes
<PAGE>
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
UNITED KINGDOM (b)(d) 11.0%
- --------------------------------------------------------------------------------
Equitable
8.000% due 08/29/49 (c) BP 700 $ 1,229
Federal National Mortgage Assn.
6.875% due 06/07/02 250 439
Middleweb PLC
10.500% due 05/30/08 390 512
Orange PLC
8.625% due 08/01/08 420 679
United Kingdom Gilt
7.250% due 12/07/07 875 1,748
----------
Total United Kingdom 4,607
(Cost $4,502) ==========
- --------------------------------------------------------------------------------
UNITED STATES 67.7%
- --------------------------------------------------------------------------------
Asset-Backed Securities 0.6%
Daimler-Benz Vehicle Trust
5.850% due 07/20/03 $ 56 57
Emergent Home Equity Loan Trust
6.745% due 05/15/12 200 202
----------
259
==========
Corporate Bonds & Notes 12.9%
Associates Corp. of North America
5.788% due 08/27/01 (c) 400 401
CSFP Credit
6.199% due 11/19/04 (h) 1,750 1,715
Dean Witter Discover
5.762% due 02/01/99 (c) 250 250
Ford Motor Credit Corp.
6.125% due 04/28/03 200 206
Fuji Bank
9.870% due 12/31/49 (c) 800 356
General Motors Acceptance Corp.
6.750% due 02/07/02 100 104
Merrill Lynch & Co.
5.758% due 11/01/01 (c) 510 510
National Power Corp.
9.625% due 05/15/28 200 128
Salomon, Smith Barney Holdings
3.650% due 02/14/02 (f) 257 250
Sumitomo
9.400% due 12/29/49 (c) 500 421
TCI Communications, Inc.
6.175% due 04/01/02 (c) 300 303
Tokai Capital Corp.
9.980% due 12/29/49 (c) 1,000 754
----------
5,398
==========
Mortgage-Backed Securities 22.9%
Federal Home Loan Mortgage Corp.
6.000% due 10/14/28 7,220 7,220
Federal National Mortgage Assn.
5.500% due 02/25/05 63 63
Government National Mortgage Assn.
6.500% due 12/20/25-11/20/26 (c)(e) 150 153
7.000% due 11/20/21-12/20/26 (c)(e) 2,126 2,167
----------
9,603
==========
U.S. Government Agencies 8.4%
Student Loan Marketing Assn.
5.877% due 01/25/03 (c) 635 635
5.823% due 04/25/07 (c) 2,000 2,000
5.877% due 10/25/07 (c) 900 899
----------
3,534
==========
U.S. Treasury Obligations 22.9%
Treasury Inflation Protected Securities
3.625% due 07/15/02 (f) 7,133 7,166
U.S. Treasury Bonds
6.000% due 02/15/26 2,200 2,463
----------
9,629
----------
Total United States 28,423
(Cost $28,988) ==========
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 28.8%
- --------------------------------------------------------------------------------
Commercial Paper 28.2%
Abbott Laboratories
5.480% due 10/05/98 1,200 1,199
E.I. Du Pont de Nemours
5.510% due 10/07/98 600 599
5.440% due 11/20/98 800 794
Florida Power Corp.
5.490% due 10/19/98 1,300 1,296
Ford Motor Credit Corp.
5.520% due 10/16/98 700 698
5.420% due 01/08/99 600 591
General Motors Acceptance Corp.
5.500% due 11/04/98 1,600 1,592
IBM Credit Corp.
5.480% due 11/18/98 500 496
National Rural Utilities Cooperative
5.490% due 10/19/98 300 299
5.320% due 12/11/98 500 495
Pfizer, Inc.
5.270% due 10/30/98 2,000 1,992
Procter & Gamble Co.
5.310% due 12/28/98 800 790
5.400% due 12/29/98 1,000 987
----------
11,828
==========
Repurchase Agreement 0.1%
State Street Bank
4.750% due 10/01/98 43 43
(Dated 09/30/98. Collateralized by ----------
U.S. Treasury Note 7.500% 10/31/99
valued at $47,756. Repurchase
proceeds are $43,006.)
U.S. Treasury Bills (e) 0.5%
4.973% due 10/15/98-12/03/98 225
----------
Total Short-Term Instruments 12,096
(Cost $12,095) ==========
Total Investments (a) 169.8% $ 71,224
(Cost $70,816)
Other Assets and Liabilities (Net) (69.8%) (29,267)
----------
Net Assets 100.0% $ 41,957
==========
Notes to Schedule of Investments (amounts in thousands):
(a) At September 30, 1998, the net unrealized 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 of value over
tax cost. $ 1,816
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (1,408)
----------
Unrealized appreciation-net $ 408
==========
1998 Semi-Annual Report See accompanying notes 99
<PAGE>
Schedule of Investments (Cont.)
Global Bond Fund II
September 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
(b) Foreign forward currency contracts outstanding at September 30, 1998:
Principal
Amount Unrealized
Covered by Expiration Appreciation/
Type Contract Month (Depreciation)
- --------------------------------------------------------------------------------
Sell A$ 249 10/98 $ (3)
Buy BP 206 10/98 4
Sell 2,063 10/98 (133)
Buy 253 12/98 6
Buy C$ 3,455 10/98 (9)
Sell 3,986 10/98 85
Sell DK 15 10/98 0
Buy DM 6,863 10/98 34
Sell 25 10/98 0
Buy 1,645 11/98 9
Sell 7,318 11/98 (184)
Buy FF 187 12/98 0
Sell 750 12/98 (9)
Buy FM 977 10/98 11
Sell 1,078 10/98 (13)
Buy GD 333,000 10/98 11
Sell 63,056 10/98 (8)
Buy IL 11,000 10/98 0
Sell 234 10/98 0
Buy 34,488 11/98 0
Sell 44,470 11/98 0
Buy JY 102,867 11/98 15
Sell 350,561 11/98 (140)
Buy 6,000 12/98 0
Sell 245,036 12/98 68
Sell N$ 1,011 10/98 9
Sell 1,584 12/98 (5)
Buy NK 18,655 10/98 98
Sell 5,000 10/98 1
Buy 9,879 11/98 51
Sell 209 11/98 (1)
Buy 1,035 12/98 2
Buy S$ 1,810 10/98 29
Sell 1,810 10/98 (21)
Sell SF 2,320 10/98 (53)
Sell SP 1,687 10/98 0
Buy 98,633 10/98 12
Sell 110,022 12/98 (9)
----------
$ (143)
==========
(c) Variable rate security. The rate listed is as of September 30, 1998.
(d) Principal amount denoted in indicated currency:
A$ - Australian Dollar
AP - Argentine Peso
BF - Belgian Franc
BP - British Pound
C$ - Canadian Dollar
DK - Danish Krone
DM - German Mark
FF - French Franc
FM - Finnish Markka
GD - Greek Drachma
IL - Italian Lira
JY - Japanese Yen
N$ - New Zealand Dollar
NK - Norwegian Kron
PP - Philippines Peso
S$ - Singapore Dollar
SF - Swiss Franc
SK - Swedish Krona
SP - Spanish Peseta
(e) Securities are grouped by coupon and represent a range of maturities.
(f) Principal amount of the security is adjusted for inflation.
(g) Swap agreements outstanding at September 30, 1998:
Notional Unrealized
Type Amount Appreciation
- --------------------------------------------------------------------------------
Receive fixed rate 5.701% and pay floating rate
on 3 month LIBOR.
Broker: Merrill Lynch
Exp. 09/07/05 $ 2,160 $ 73
(h) Restricted security.
100 PIMCO Funds See accompanying notes
<PAGE>
Schedule of Investments
Emerging Markets Bond Fund
September 30, 1998 (Unaudited)
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
ARGENTINA (c) 19.7%
- --------------------------------------------------------------------------------
Republic of Argentina
8.750% due 07/10/02 AP 100 $ 70
8.726% due 04/10/05 (d) $ 200 172
11.375% due 01/30/17 500 458
---------
Total Argentina 700
(Cost $823) =========
- --------------------------------------------------------------------------------
BRAZIL 16.4%
- --------------------------------------------------------------------------------
Government of Brazil
6.688% due 04/15/12 (d) 550 275
8.000% due 04/15/14 522 310
---------
Total Brazil 585
(Cost $574) =========
- --------------------------------------------------------------------------------
COLOMBIA 5.1%
- --------------------------------------------------------------------------------
Republic of Columbia
8.625% due 04/01/08 250 181
---------
Total Colombia 181
(Cost $246) =========
- --------------------------------------------------------------------------------
ECUADOR 2.9%
- --------------------------------------------------------------------------------
Government of Ecuador
3.500% due 02/28/25 (d) 250 101
---------
Total Ecuador 101
(Cost $138) =========
- --------------------------------------------------------------------------------
MEXICO 18.2%
- --------------------------------------------------------------------------------
Petroleos Mexicanos
11.157% due 07/15/05 (d) 250 218
United Mexican States
6.250% due 12/31/19 250 182
11.500% due 05/15/26 250 243
---------
Total Mexico 643
(Cost $757) =========
- --------------------------------------------------------------------------------
PHILIPPINES 5.1%
- --------------------------------------------------------------------------------
Republic of Philipines
6.500% due 12/01/17 250 180
---------
Total Philippines 180
(Cost $188) =========
- --------------------------------------------------------------------------------
POLAND 1.9%
- --------------------------------------------------------------------------------
Republic of Poland
3.000% due 10/27/24 (d) 100 66
---------
Total Poland 66
(Cost $63) =========
- --------------------------------------------------------------------------------
RUSSIA 1.6%
- --------------------------------------------------------------------------------
Republic of Russia
6.625% due 12/15/15 (d) 505 39
6.625% due 12/15/20 (d) 300 18
---------
Total Russia 57
(Cost $538) =========
- --------------------------------------------------------------------------------
SOUTH KOREA 15.2%
- --------------------------------------------------------------------------------
Korea Development Bank
6.250% due 05/01/00 200 182
Korean Export-Import Bank
7.100% due 03/15/07 175 143
Republic of Korea
8.875% due 04/15/08 250 215
---------
Total South Korea 540
(Cost $569) =========
- --------------------------------------------------------------------------------
UNITED STATES 15.6%
- --------------------------------------------------------------------------------
Asset-Backed Securities 5.4%
IMC Home Equity Loan Trust
5.796% due 05/21/12 (d) 109 109
NationsBank Auto Owner Trust
6.375% due 07/15/00 80 81
---------
190
=========
Corporate Bonds & Notes 7.4%
Chrysler Financial Corp.
5.675% due 06/08/01 (d) 100 100
Ford Motor Credit Corp.
5.788% due 08/27/01 (d) 100 100
Supercanal Holdings
11.500% due 05/15/05 100 61
---------
261
=========
U.S. Government Agencies 2.8%
Student Loan Marketing Assn.
5.823% due 04/25/07 (d) 100 100
---------
Total United States 551
(Cost $590) =========
- --------------------------------------------------------------------------------
URUGUAY 5.8%
- --------------------------------------------------------------------------------
Banco Central Del Uruguay
6.813% due 02/19/06 (d) 221 204
---------
Total Uruguay 204
(Cost $219) =========
- --------------------------------------------------------------------------------
VENEZUELA 7.3%
- --------------------------------------------------------------------------------
Government of Venezuela
6.625% due 12/18/07 (d) 452 258
---------
Total Venezuela 258
(Cost $257) =========
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 11.6%
- --------------------------------------------------------------------------------
Commercial Paper 8.4%
Federal Home Loan Mortgage Corp.
5.190% due 10/16/98 200 199
5.340% due 11/17/98 100 99
---------
298
=========
Repurchase Agreements 2.9%
State Street Bank
4.750% due 10/01/98 103 103
(Dated 09/30/98. Collateralized by ---------
U.S. Treasury Note 5.750% 11/15/00
valued at $109,873. Repurchase
proceeds are $103,014.)
U.S. Treasury Bills (b) 0.3%
4.925% due 12/03/98 10 10
---------
Total Short-Term Instruments 411
(Cost $411) =========
Total Investments (a) 126.4% $ 4,477
(Cost $5,373)
Other Assets and Liabilities (Net) (26.4%) (935)
---------
Net Assets 100.0% $ 3,542
=========
1998 Semi-Annual Report See accompanying notes 101
<PAGE>
Schedule of Investments (Cont.)
Emerging Markets Bond Fund
September 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
Notes to Schedule of Investments (amounts in thousands):
(a) At September 30, 1998, the net unrealized 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 of value over
tax cost. $ 29
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (925)
----------
Unrealized depreciation-net $ (896)
==========
(b) Securities with an aggregate market value of $10
have been segregated with the custodian to cover margin
requirements for the following open futures contracts at
September 30, 1998:
Unrealized
Type Contracts Appreciation
- -------------------------------------------------------------------------------
U.S. Treasury 10 Year Note (12/98) 2 $ 9
(c) Principal amount denoted in the indicated currency:
AP - Argentine Peso
(d) Variable rate security. The rate listed is as of September 30, 1998.
102 PIMCO Funds See accompanying notes
<PAGE>
Schedule of Investments
High Yield Fund
September 30, 1998 (Unaudited)
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
CORPORATE BONDS & NOTES 81.7%
- --------------------------------------------------------------------------------
Banking & Finance 3.3%
Arvin Capital
9.500% due 02/01/27 $ 19,000 $ 22,181
Bay View Capital Corp.
9.125% due 08/15/07 8,000 7,720
Forest City Enterprises
8.500% due 03/15/08 14,350 14,135
Fuji Bank
9.870% due 12/31/49 (b) 26,000 11,556
General Motors Acceptance Corp.
5.813% due 04/29/02 (b) 800 800
Helicon Group
11.000% due 11/01/03 (b) 2,000 2,090
SB Treasury Co. LLC
9.400% due 12/29/49 (b) 24,800 20,869
Trizec Finance Limited
10.875% due 10/15/05 2,441 2,599
---------
81,950
=========
Industrials 63.4%
Abbey Healthcare Group
9.500% due 11/01/02 16,120 15,072
Advanced Lighting
8.000% due 03/15/08 6,350 5,810
AEI Holding Co.
10.000% due 11/15/07 9,580 8,933
Albritton Communications
9.750% due 11/30/07 5,500 5,665
American Airlines
10.610% due 03/04/10 650 885
American Commercial Lines
10.250% due 06/30/08 6,550 6,485
American Standard
7.375% due 02/01/08 10,800 10,854
9.250% due 12/01/16 7,388 7,573
Amerigas Partners LP
10.125% due 04/15/07 4,200 4,132
Amphenol Corp.
9.875% due 05/15/07 7,100 6,958
Ball Corp.
7.750% due 08/01/06 12,250 12,648
8.250% due 08/01/08 8,450 8,725
Benedek Broadcasting Corp.
11.875% due 03/01/05 25,940 27,821
Benedek Communications
0.000% due 05/15/06 (c) 1,500 1,072
Beverly Enterprises, Inc.
9.000% due 02/15/06 17,200 17,286
Buckeye Technologies, Inc.
8.000% due 10/15/10 14,100 13,818
Building Materials Corp.
0.000% due 07/01/04 (c) 4,150 4,129
7.750% due 07/15/05 18,450 18,035
8.000% due 10/15/07 3,750 3,703
8.625% due 12/15/06 500 493
Call-Net Enterprises, Inc.
8.000% due 08/15/08 12,575 12,009
Canadian Forest Oil Limited
8.750% due 09/15/07 5,000 4,525
Century Communications Corp.
0.000% due 01/15/08 (c) 5,000 2,375
0.000% due 03/15/03 (c) 10,400 7,371
8.750% due 10/01/07 5,000 5,350
CF Cable TV, Inc.
9.125% due 07/15/07 9,000 10,130
Chattem, Inc.
8.875% due 04/01/08 4,300 4,193
Circus Circus Enterprises
6.750% due 07/15/03 17,400 16,489
Clark R&M Holdings
8.625% due 08/15/08 7,000 6,510
8.375% due 11/15/07 5,000 4,575
Coltec Industries Rights
7.500% due 04/15/08 38,000 36,146
Columbus McKinnon
8.500% due 04/01/08 16,500 15,592
Comcast Cellular
9.500% due 05/01/07 4,100 4,223
Comcast Corp.
9.500% due 01/15/08 6,837 7,213
Container Corp. of America
11.250% due 05/01/04 1,425 1,503
Cross Timbers Oil Co.
8.750% due 11/01/09 5,500 5,087
CSC Holdings, Inc.
9.875% due 02/15/13 2,000 2,170
7.875% due 02/15/18 10,000 9,850
9.875% due 04/01/23 9,000 10,035
10.500% due 05/15/16 11,000 12,485
Cumberland Farms
10.500% due 10/01/03 4,701 4,630
Dailey International, Inc.
9.500% due 02/15/08 4,750 2,779
Delta Air Lines
10.790% due 03/26/14 2,264 3,021
Dialog Corp. PLC
11.000% due 11/15/07 3,350 3,484
Doane Products Co.
10.625% due 03/01/06 1,300 1,398
Echostar Communications Corp.
0.000% due 06/01/04 (c) 31,090 30,312
Envirosource, Inc.
9.750% due 06/15/03 12,068 10,921
Extended Stay America
9.150% due 03/15/08 11,500 11,327
Extendicare Health Services
9.350% due 12/15/07 7,150 6,721
EZ Communication, Inc.
9.750% due 12/01/05 2,500 2,688
Falcon Cable
0.000% due 04/15/10 (c) 11,700 8,015
Falcon Holding Group LP
8.375% due 04/15/10 7,150 7,186
Federal-Mogul Corp.
7.500% due 07/01/04 24,000 24,560
7.750% due 07/01/06 9,100 9,399
Ferrellgas Partners LP
9.375% due 06/15/06 3,625 3,516
Fisher Scientific
9.000% due 02/01/08 23,475 22,624
7.125% due 12/15/05 6,500 6,082
Foamex LP
9.875% due 06/15/07 1,700 2,050
Forcenergy, Inc.
9.500% due 11/01/06 4,300 3,160
Gardern State Newspapers
8.750% due 10/01/09 22,500 21,938
Globalstar LP
11.375% due 02/15/04 8,350 5,678
11.250% due 06/15/04 5,500 3,768
10.750% due 11/01/04 3,106 2,019
Goss Graphic Systems, Inc.
12.000% due 10/15/06 6,450 5,934
Granite Broadcasting Corp.
10.375% due 05/15/05 1,500 1,517
Grupo Televisa SA
11.375% due 05/15/03 1,300 1,186
0.000% due 05/15/08 (c) 6,475 4,419
Gulf Canada Resources
9.250% due 01/15/04 12,575 12,849
9.625% due 07/01/05 2,000 2,025
HMH Properties, Inc.
7.875% due 08/01/05 22,150 22,261
Hollinger International Publishing
9.250% due 02/01/06 7,800 8,054
8.625% due 03/15/05 5,350 5,524
1998 Semi-Annual Report See accompanying notes 103
<PAGE>
Schedule of Investments (Cont.)
High Yield Fund
September 30, 1998 (Unaudited)
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
Holmes Products Corp.
9.875% due 11/15/07 $ 5,200 $ 4,758
Huntsman Packaging Corp.
9.125% due 10/01/07 8,050 7,648
Impsat Corp.
12.375% due 06/15/08 7,400 5,439
Integrated Health Services
9.500% due 09/15/07 2,950 2,758
Intermedia Communications, Inc.
8.500% due 01/15/08 4,950 4,913
0.000% due 05/15/06 (c) 32,585 27,044
ISP Holdings, Inc.
9.000% due 10/15/03 23,370 24,363
ITC Deltacom, Inc.
11.000% due 06/01/07 3,250 3,534
IXC Communications, Inc.
9.000% due 04/15/08 8,500 8,436
J. Ray McDermott
9.375% due 07/15/06 10,400 10,894
J.Q. Hammons Hotels
8.875% due 02/15/04 11,500 10,868
Jones Intercable, Inc.
8.875% due 04/01/07 10,060 10,563
K Mart Corp.
9.350% due 01/02/20 15,374 15,876
9.780% due 01/05/20 9,575 10,275
8.130% due 12/16/03 1,250 1,298
K-III Communications Co.
8.500% due 02/01/06 18,190 18,463
L-3 Communications Corp.
10.375% due 05/01/07 5,750 6,311
Lenfest Communications
8.375% due 11/01/05 13,650 14,367
Les, Inc.
9.250% due 06/01/08 18,100 18,281
Level 3 Communications, Inc.
9.125% due 05/01/08 30,200 28,690
Lin Holdings Corp.
0.000% due 03/01/08 (c) 18,750 12,328
Lin Television Corp.
8.375% due 03/01/08 8,800 8,536
Magnum Hunter Resources, Inc.
10.000% due 06/01/07 3,900 3,140
Marcus Cable
0.000% due 08/01/04 (c) 11,400 11,229
Market Hub Partners
8.250% due 03/01/08 10,700 10,647
Marsh Supermarkets, Inc.
8.875% due 08/01/07 7,250 7,214
McLeodusa, Inc.
0.000% due 03/01/07 (c) 16,650 12,155
MJD Communications, Inc.
9.500% due 05/01/08 6,525 6,492
Navistar International Corp.
8.000% due 02/01/08 13,000 13,000
Newpark Resources, Inc.
8.625% due 12/15/07 5,050 4,823
Newsquest Capital
11.000% due 05/01/06 2,550 2,869
Ocean Rig Norway
10.250% due 06/01/08 6,325 4,712
Optel, Inc.
11.500% due 07/01/08 6,800 6,358
Orion Network Systems, Inc.
0.000% due 01/15/07 (c) 20,350 13,533
11.250% due 01/15/07 15,875 15,478
Owens & Minor, Inc.
10.875% due 06/01/06 950 1,009
P&L Coal Holdings
8.875% due 05/15/08 30,000 30,600
Packard Bioscience Co.
9.375% due 03/01/07 2,950 2,714
Perkins Family Restaurants
10.125% due 12/15/07 3,450 3,450
Perry-Judd
10.625% due 12/15/07 5,550 5,522
Petroleos Mexicanos
11.157% due 07/15/05 (b) 8,600 7,504
Phar-Mor, Inc.
11.720% due 09/11/02 10,255 10,358
Pharmerica, Inc.
8.375% due 04/01/08 6,300 5,765
Physician Sales and Service, Inc.
8.500% due 10/01/07 8,415 8,478
Polymer Group, Inc.
9.000% due 07/01/07 20,555 19,733
8.750% due 03/01/08 6,200 5,890
Pool Energy Co.
8.625% due 04/01/08 8,650 7,742
Primedia, Inc.
7.625% due 04/01/08 8,250 8,044
Printpack, Inc.
9.875% due 08/15/04 5,450 5,409
Qwest Communications International, Inc.
0.000% due 02/01/08 (c) 6,800 5,100
0.000% due 10/15/07 (c) 8,340 6,464
R.H. Donnelley, Inc.
9.125% due 06/01/08 4,600 4,646
Racers
8.375% due 10/01/07 21,500 23,237
Regal Cinemas, Inc.
9.500% due 06/01/08 12,150 12,211
Renaissance Media Group
0.000% due 04/15/08 (c) 21,250 14,131
Revlon Consumer Products
8.125% due 02/01/06 26,750 26,483
Riviera Holdings Corp.
10.000% due 08/15/04 1,850 1,610
RJR Nabisco
8.000% due 07/15/01 2,000 2,045
8.625% due 12/01/02 11,500 12,036
Rogers Cablesystems, Inc.
10.000% due 03/15/05 7,500 8,288
Rogers Cantel Mobile
9.375% due 06/01/08 15,500 15,810
Rogers Cantel, Inc.
8.300% due 10/01/07 12,385 11,890
Salem Communications
9.500% due 10/01/07 4,850 4,899
Satelites Mexicanos
9.391% due 06/30/04 (b) 9,985 6,540
SC International Services, Inc.
9.250% due 09/01/07 8,200 8,015
Scotsman Group, Inc.
8.625% due 12/15/07 4,000 3,915
Sea Containers
10.500% due 07/01/03 1,000 1,040
Silgan Holdings, Inc.
9.000% due 06/01/09 20,760 20,085
Smith's Food & Drug Centers, Inc.
8.640% due 07/02/12 9,575 9,623
9.200% due 07/02/18 9,000 11,049
Smithfield Foods
7.625% due 02/15/08 5,900 5,812
Stater Brothers Holdings
11.000% due 03/01/01 6,720 6,955
Stone Container
11.500% due 10/01/04 2,000 1,995
Sun Healthcare Group, Inc.
9.375% due 05/01/08 5,300 4,797
9.500% due 07/01/07 1,550 1,418
Supercanal Holdings
11.500% due 05/15/05 4,800 2,904
Synthetic Industries, Inc.
9.250% due 02/15/07 9,850 9,850
Telewest Communications
9.625% due 10/01/06 12,750 12,878
104 PIMCO Funds See accompanying notes
<PAGE>
Principal
Amount Value
(000s) (000s)
- ---------------------------------------------------------------------------
Tenet Healthcare Corp.
8.000% due 01/15/05 $ 2,000 $ 2,060
8.625% due 01/15/07 3,500 3,649
7.625% due 06/01/08 20,000 20,750
8.625% due 12/01/03 1,050 1,114
TFM SA de CV
11.750% due 06/15/09 (c) 7,800 3,841
Trans-Resources, Inc.
10.750% due 03/15/08 15,650 15,180
U.S. Can Corp.
10.125% due 10/15/06 600 618
Unisys Corp.
7.875% due 04/01/08 6,500 6,516
12.000% due 04/15/03 14,900 16,688
11.750% due 10/15/04 5,000 5,650
United Defense Industry, Inc.
8.750% due 11/15/07 3,500 3,526
United Refining Co.
10.750% due 06/15/07 2,950 2,375
US Air, Inc.
9.330% due 01/01/06 6,593 6,840
9.625% due 09/01/03 18,083 20,408
Vintage Petroleum
9.000% due 12/15/05 10,490 10,647
Westpoint Stevens, Inc.
7.875% due 06/15/05 5,500 5,603
7.875% due 06/15/08 13,950 14,264
World Color Press, Inc.
9.125% due 03/15/03 24,035 24,155
Young Broadcasting, Inc.
9.000% due 01/15/06 11,000 11,083
8.750% due 06/15/07 4,200 4,190
Ziff-Davis, Inc.
8.500% due 05/01/08 24,250 23,401
---------
1,566,768
=========
Utilities 15.0%
AES Corp.
10.250% due 07/15/06 14,235 14,804
8.500% due 11/01/07 2,500 2,375
Beaver Valley Funding Corp.
9.000% due 06/01/17 37,000 42,584
Bridas Corp.
12.500% due 11/15/99 4,500 4,523
California Energy
9.875% due 06/30/03 5,000 5,526
9.500% due 09/15/06 5,000 5,550
Calpine Corp.
9.250% due 02/01/04 10,500 10,553
7.875% due 04/01/08 15,000 14,475
8.750% due 07/15/07 14,650 15,016
CMS Energy
7.000% due 01/15/05 12,000 12,087
8.125% due 05/15/02 9,500 9,838
Coho Energy, Inc.
8.875% due 10/15/07 17,552 16,060
Espirito Santo Centrais
10.000% due 07/15/07 2,450 1,390
Flag Limited
8.250% due 01/30/08 38,850 37,199
GST Network
0.000% due 05/01/08 (c) 8,000 3,880
Intermedia Communications
0.000% due 07/15/07 (c) 6,250 4,500
ITC Deltacom
8.875% due 03/01/08 12,300 12,177
Mastec, Inc.
7.750% due 02/01/08 5,600 5,236
Metronet Communications Corp.
0.000% due 06/15/08 (c) 8,975 4,981
Nextel Communications, Inc.
0.000% due 02/15/08 (c) 38,750 22,959
Niagara Mohawk Power
9.500% due 03/01/21 2,500 2,659
7.875% due 04/01/24 7,500 7,586
9.990% due 05/11/04 2,500 2,530
7.750% due 05/15/06 1,100 1,229
7.625% due 10/01/05 10,000 10,428
7.750% due 10/01/08 27,000 28,848
North Atlantic Energy
9.050% due 06/01/02 7,265 7,699
Orange PLC
8.000% due 08/01/08 47,450 46,264
Rural Cellular Corp.
9.625% due 05/15/08 8,800 8,448
Wilmington Trust Co. - Tucson Electric (d)
10.211% due 01/01/09 500 565
10.732% due 01/01/13 6,993 8,106
---------
370,075
---------
Total Corporate Bonds & Notes 2,018,793
(Cost $2,069,972) =========
- ---------------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS 0.3%
- ---------------------------------------------------------------------------
U.S. Treasury Strips
0.000% due 08/15/26 29,700 6,911
---------
Total U.S. Treasury Obligations 6,911
(Cost $5,875) =========
- ---------------------------------------------------------------------------
MORTGAGE-BACKED SECURITIES 1.9%
- ---------------------------------------------------------------------------
Collateralized Mortgage Obligations 1.5%
Asset Securitization Corp.
7.384% due 08/13/29 (b) 1,500 1,662
Federal Deposit Insurance Corp.
6.875% due 11/25/26 (b) 400 443
Green Tree Financial Corp.
8.000% due 07/15/18 7,000 7,234
NationsBanc Mortgage Capital Corp.
8.060% due 05/25/28 (b) 3,835 3,310
Red Mountain Funding Corp.
9.150% due 11/28/27 5,727 6,131
Resolution Trust Corp.
6.900% due 02/25/27 7,494 7,314
7.000% due 05/25/27 5,928 6,121
9.250% due 06/25/23 3,286 3,296
9.050% due 08/25/23 678 684
---------
36,195
=========
Other Mortgage-Backed Securities 0.3%
LTC Commercial Corp.
9.200% due 08/04/23 3,235 3,930
Resolution Trust Corp.
9.500% due 05/25/24 49 49
6.880% due 09/25/20 (b) 585 526
Structured Asset Securities Corp.
7.050% due 11/25/02 4,000 3,724
---------
8,229
=========
Stripped Mortgage-Backed Securities 0.1%
Federal National Mortgage Assn. (IO)
7.000% due 04/25/19 12,000 1,141
6.500% due 06/25/17 1,685 105
6.000% due 07/25/05 1,141 46
7.000% due 07/25/08 5,141 517
7.000% due 12/25/21 9,324 717
Fund America (IO)
9.590% due 10/20/21 1,204 26
---------
2,552
---------
Total Mortgage-Backed Securities 46,976
(Cost $46,188) =========
1998 Semi-Annual Report See accompanying notes 105
<PAGE>
Schedule of Investments (Cont.)
High Yield Fund
September 30, 1998 (Unaudited)
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
ASSET-BACKED SECURITIES 4.4%
- --------------------------------------------------------------------------------
Airplanes Pass Through Trust
10.875% due 03/15/19 $ 26,570 $ 30,180
Apria Healthcare Group
7.938% due 08/09/01 (b) 8,750 8,498
BCP SA
9.900% due 03/31/06 10,000 9,813
Decision One
8.450% due 08/07/03 11,000 10,931
Federal-Mogul Corp.
8.063% due 09/30/06 (b) 5,000 4,987
Huntsman Corp.
9.187% due 03/20/07 (b) 3,500 3,535
Morgan Stanley Aircraft Finance
8.700% due 03/15/23 21,750 21,119
NTL Group
8.594% due 01/31/99 (b) 4,211 4,187
8.688% due 01/31/99 (b) 5,789 5,761
TFM SA de CV
9.690% due 06/30/03 (b) 4,000 4,000
Varig SA
10.500% due 06/02/05 1,849 1,572
11.500% due 06/02/05 5,847 4,970
----------
Total Asset-Backed Securities 109,553
(Cost $102,092) ==========
- --------------------------------------------------------------------------------
SOVEREIGN ISSUES 1.6%
- --------------------------------------------------------------------------------
Republic of Argentina
6.625% due 03/31/05 (b) 5,711 4,511
5.750% due 03/31/23 (b) 9,000 6,030
Republic of Korea
8.875% due 04/15/08 (b) 28,550 24,571
Republic of Poland
3.750% due 10/27/24 (b) 5,000 3,450
----------
Total Sovereign Issues 38,562
(Cost $40,070) ==========
- --------------------------------------------------------------------------------
PREFERRED STOCK 3.6%
- --------------------------------------------------------------------------------
Shares
CSC Holdings, Inc.
11.932% due 01/01/00 160,043 17,605
Fresenius Medical Care
7.875% due 01/01/00 21,175 20,432
9.000% due 12/01/06 28,395 28,324
Newscorp Overseas Limited
2.156% due 01/01/00 133,200 3,272
Primedia, Inc.
8.625% due 01/01/00 50,000 4,563
9.200% due 12/01/06 70,000 6,738
Sig Capital Trust
9.500% due 08/15/27 7,000 6,939
----------
Total Preferred Stock 87,873
(Cost $91,377) ==========
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 6.1%
- --------------------------------------------------------------------------------
Principal
Amount
(000s)
Commercial Paper 6.0%
Abbott Laboratories
5.490% due 10/06/98 12,200 12,191
E.I. Du Pont de Nemours
5.400% due 10/14/98 8,000 7,985
5.490% due 10/20/98 3,100 3,091
Ford Motor Credit Corp.
5.470% due 11/19/98 5,800 5,757
5.490% due 11/19/98 200 199
5.470% due 12/04/98 11,600 11,491
General Electric Capital Corp.
5.500% due 11/13/98 10,300 10,232
5.500% due 11/18/98 20,400 20,250
General Motors Acceptance Corp.
5.490% due 11/19/98 13,700 13,598
IBM Credit Corp.
5.560% due 10/07/98 11,500 11,489
KFW International Finance, Inc.
5.390% due 10/28/98 3,100 3,087
5.450% due 12/22/98 3,900 3,854
Motorola, Inc.
5.480% due 10/13/98 300 299
5.480% due 12/03/98 3,000 2,972
National Rural Utilities Cooperative
5.490% due 10/26/98 600 598
5.490% due 10/28/98 700 697
New Center Asset Trust
5.530% due 10/26/98 1,800 1,793
5.510% due 11/19/98 2,100 2,084
5.480% due 12/16/98 3,200 3,165
Oesterreich Kontrollbank
5.220% due 11/30/98 18,300 18,138
Pfizer, Inc.
5.270% due 10/30/98 15,000 14,936
Washington Post
5.420% due 12/16/98 1,000 989
----------
148,895
==========
Repurchase Agreements 0.1%
State Street Bank
4.750% due 10/01/98 656 656
(Dated 09/30/98. Collateralized by
U.S. Treasury Note 5.750% 11/15/00
valued at $669,700. Repurchase
proceeds are $656,087.)
First Boston
5.150% due 10/01/98 2,300 2,300
(Dated 09/30/98. Collateralized by
U.S. Treasury Note 4.500% 09/30/00
valued at $2,357,532. Repurchase
proceeds are $2,300,329.)
----------
2,956
----------
Total Short-Term Instruments 151,851
(Cost $151,845) ==========
Total Investments (a) 99.6% $2,460,519
(Cost $2,507,419)
Other Assets and Liabilities (Net) 0.4% 9,614
----------
Net Assets 100.0% $2,470,133
==========
Notes to Schedule of Investments (amounts in thousands):
(a) At September 30, 1998, the net unrealized 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 of value over
tax cost. $ 47,100
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (94,000)
----------
Unrealized depreciation-net $ (46,900)
==========
(b) Variable rate security. The rate listed is as of September 30, 1998.
(c) Security becomes interest bearing at a future date.
(d) Restricted security.
106 PIMCO Funds See accompanying notes
<PAGE>
Schedule of Investments
Municipal Bond Fund
September 30, 1998 (Unaudited)
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
MUNICIPAL BONDS & NOTES 98.1%
- --------------------------------------------------------------------------------
Alabama 0.4%
Mobile, Alabama General Obligation Bonds,
(MBIA Insured), Series 1998, 4.380%, 02/15/08 (b) $ 325 $ 217
---------
Arizona 4.2%
Santa Cruz County, Arizona Utility Revenue Bonds,
Series 1997, 4.750%, 08/01/20 100 102
Scottsdale, Arizona Industrial Development Authority
Hospital Revenue Bonds, (AMBAC Insured),
Series 1997 A, 6.500%, 09/01/04 1,130 1,280
Show Low, Arizona Industrial Development
Authority Hospital Revenue Bond, Series 1998,
5.500%, 12/01/17 1,000 1,044
---------
2,426
=========
California 12.1%
City of San Jose Redevelopment Agency Merged
Area Project, Tax Allocation Bonds, (MBIA Insured),
Series 1993, 6.000%, 08/01/15 500 583
Irvine, California Special Assessment Bond,
Series 1998, 4.800%, 09/02/04. 150 151
Irvine, California Special Assessment Bond,
Series 1998, 4.900%, 09/02/05. 310 313
Irvine, California Special Assessment Bond,
Series 1998, 5.000%, 09/02/06. 150 152
Los Angeles County Transportation Commission,
Sales Tax Revenue Refunding Bonds, Series 1991 B,
6.500%, 07/01/13 1,000 1,086
Los Angeles, California Convention & Exhibition
Center Authority Lease Revenue Bonds, (MBIA Insured),
Series 1993, 6.125%, 08/15/11 1,000 1,180
Northern California Power Agency, Revenue Bond,
Series 1998, 3.500%, 07/01/32 1,200 1,200
Orange County, California Improvement Bond,
Series 1998 A, 4.900%, 09/02/05 300 304
Pittsburg, California Infrastructure Refunding Bonds,
Series 1998 A, 4.900%, 09/02/03 150 154
Pittsburg, California Infrastructure Refunding Bonds,
Series 1998 A, 5.000%, 09/02/04 150 154
Sacramento County, California Refunding Bonds,
Series 1998, 4.900%, 09/02/05 300 302
San Jose, California Redevelopment Agency
Tax Allocation Bond, Series 1998, 5.000%, 08/01/21 1,000 1,004
West Sacramento, California Refunding Bonds,
Series 1998, 5.000%, 09/02/04 350 358
---------
6,941
=========
Colorado 5.1%
Colorado Public Highway Authority Revenue Bond,
Series 1997 A, 5.000%, 09/01/26 1,500 1,504
Denver, Colorado Health & Hospital Revenue Bonds,
Series 1998 A, 5.000%, 12/01/09 1,390 1,423
---------
2,927
=========
Florida 6.1%
Dade County, Florida General Obligation Bonds,
(AMBAC Insured), Series 1988, 7.600%, 10/01/06 1,690 2,112
Gainesville, Florida Revenue Bonds, Series 1979,
6.200%, 10/01/02 300 313
Jacksonville Electric Authority, Bulk Power Supply
System Revenue Bonds, (Prerefunded 10/01/00),
Scherer 4-1-A Project, Issue One, Series 1991,
6.750%, 10/01/21 1,000 1,074
---------
3,499
=========
Georgia 0.2%
Dawson County, Georgia School District General
Obligation Bond, Series 1997, 4.900%, 04/01/12 105 108
---------
Illinois 3.8%
Chicago, Illinois Wastewater Transmission
Revenue Bond, Series 1998 A, 5.000%, 01/01/19 1,000 1,009
State of Illinois, Sales Tax Revenue Refunding
Bonds, Series 1992 Q, 6.000%, 6/15/12 1,000 1,157
---------
2,166
=========
Indiana 6.2%
Indiana Local Public Improvement Bonds Bank,
Transportation Revenue Bonds, Series 1992,
6.750%, 02/01/14 1,000 1,225
Indiana Transportation Revenue Bonds,
Series 1996, 6.000%, 11/01/11 2,000 2,312
---------
3,537
=========
Michigan 2.5%
Michigan State Building Authority Revenue Bonds,
Series 1997, 5.000%, 10/15/14 100 103
Michigan State Environmental Protection General
Obligation Bonds, Series 1992, 6.250%, 11/01/12 1,100 1,321
---------
1,424
=========
Minnesota 1.8%
New Richland, Minnesota Revenue Bond,
Series 1998, 4.500%, 08/02/04 1,000 1,014
---------
Mississippi 0.3%
Mississippi State Department of Corrections,
Certificate Participation Bonds, (AMBAC Insured),
Series 1997, 4.600%, 01/01/08 150 154
---------
Missouri 0.2%
Kansas City Water Revenue Bonds, Series 1998 B,
4.750%, 12/01/03 100 104
---------
New Hampshire 2.1%
New Hampshire Turnpike System, Refunding
Revenue Bonds, (FGIC Insured), Series 1991 A,
6.750%, 11/01/11 1,000 1,185
---------
New Jersey 0.3%
New Jersey State Transportation Revenue Bonds,
(FSA Insured), Series 1997 A, 5.000%, 06/15/18 150 152
---------
New Mexico 2.8%
Bernalillo County, New Mexico General
Obligation Bonds, Series 1997, 4.750%, 12/01/13 150 156
Los Alamos County, Utility Revenue Bonds,
Series 1994 A, 6.000%, 07/01/08 1,000 1,110
Santa Fe County, El Castillo Retirement Nursing
Home Bonds, Series 1998 A, 5.250%, 05/15/07 315 313
---------
1,579
=========
1998 Semi-Annual Report See accompanying notes 107
<PAGE>
Schedule of Investments (Cont.)
Municipal Bond Fund
September 30, 1998 (Unaudited)
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
New York 18.5%
New York City General Obligation Bonds,
(FGIC Insured), Series 1992, 3.550%, 10/01/21 (b) $ 800 $ 800
New York City General Obligation Bonds,
(Morgan Guaranty Trust Insured), Series 1993,
3.200%, 08/15/19 (b) 100 100
New York City General Obligation Bonds,
Series 1993, 4.150%, 08/15/18 (b) 100 100
New York City General Obligation Bonds,
Series 1995 B, 6.750%, 08/15/03 1,000 1,120
New York City General Obligation Bonds,
Series 1996 A, 7.000%, 08/01/07 1,000 1,198
New York City Municipal Water and Sewer System
Revenue Bonds, Series 1998, 4.750%, 06/15/25 1,000 969
New York Metropolitan Transit Authority Commuter
Revenue Bonds, Series 1997, 5.500%, 07/01/21 1,000 1,040
New York State Dorm Authority Mental Health Services
Revenue Bonds, Series 1997 B, 6.000%, 08/15/05 1,850 2,032
New York State Dorm Authority Revenue Bonds,
Series 1998 B, 4.900%, 02/15/09 100 102
New York State Environmental Facilities Special
Obligation Revenue Bonds, Series 1996,
5.125%, 04/01/22 1,000 1,014
State of New York Thruway Authority Revenue
Bonds, (AMBAC-TCRS Insured), Series 1996,
6.000%, 04/01/05 1,000 1,116
State of New York Thruway Authority Revenue Bonds,
(MBIA Insured), Series 1995 A, 5.500%, 04/01/15 1,000 1,059
----------
10,650
==========
North Carolina 3.8%
North Carolina Municipal Power Agency, Catawaba
Electric Revenue Bonds, (AMBAC Insured),
Series 1992, 6.000%, 01/01/08 1,000 1,126
North Carolina State School Improvement Bonds,
Series 1998, 4.750%, 04/01/12 1,000 1,035
----------
2,161
==========
North Dakota 1.9%
Mercer County Pollution Control Revenue Bonds,
Series 1991, 6.900% 02/01/19 1,000 1,076
----------
Ohio 3.9%
Cleveland Water and Sewer Refunding and
Improvement Revenue Bonds, (MBIA Insured),
Series 1993 G, Number 1, 5.500%, 01/01/21 1,000 1,089
Ohio State Water Development Authority Pollution
Control Revenue Bonds, (MBIA Insured),
Series 1995, 6.000%, 06/01/05 1,000 1,116
----------
2,205
==========
Pennsylvania 3.3%
Delaware County, Pennsylvania Hospital Revenue Bonds,
Series 1998, 4.900%, 12/01/08 100 102
Philadelphia Gas Revenue Bonds, (FSA Insured),
Series 1998 C, 4.600%, 07/01/08 100 103
Pittsburgh, Pennsylvania General Obligation Bonds,
(AMBAC Insured), Series 1993 A, 5.500%, 09/01/14 1,525 1,685
----------
1,890
==========
Puerto Rico 1.8%
Puerto Rico Industrial Tourist Educational,
Medical and Environmental Control,
Series 1998, 5.000%, 10/01/18 1,000 1,018
----------
South Carolina 1.8%
Piedmont Municipal Power Agency Electric
Revenue Bonds, (MBIA Insured), Series 1996 B,
5.250%, 01/01/13 1,000 1,049
----------
Tennessee 3.6%
Memphis-Shelby County Tennessee Airport Authority
Special Facilities and Project Revenue Bonds,
Series 1997, 5.350%, 09/01/12 1,000 1,054
Nashville & Davidson County, Tennessee Revenue
Bonds, Series 1998, 4.450%, 08/01/07 1,000 1,005
----------
2,059
==========
Texas 10.6%
Beaumont, Texas Independent School District General
Obligation Bonds, Series 1997, 5.000%, 02/15/16 150 152
Board of Regents of the University of Texas System,
Revenue Financing System Refunding Bonds,
Prefunded and Unrefunded Series 1991 B,
6.750%, 08/15/13 735 801
Houston, Texas Revenue Bonds, Series 1998,
0.000%, 09/15/09 175 110
Houston, Texas, Water & Sewer System Revenue
Bonds, Series 1993 B, 5.000%, 12/01/18 2,000 2,018
Lone Star, Texas Improvement Authority Revenue
Bonds, (Royal Bank of Canada Insured),
Series 1984 B-3, 3.450%, 12/01/14 (b) 200 200
Pflugerville, Texas Independent School District General
Obligation Bonds, Series 1997, 5.000%, 08/15/17 150 152
San Antonio, Texas Refunding Bonds,
Series 1998, 5.000%, 02/01/14 1,380 1,408
University of Texas Revenue Bonds,
Series 1996, 5.250%, 08/15/07 1,000 1,079
Waco, Texas General Obligation Bonds,
Series 1997, 4.800%, 02/01/11 150 154
----------
6,074
==========
Virginia 0.3%
Pocahontas Parkway Association, Virginia Highway
Revenue Bonds, Series 1998 A, 5.250%, 08/15/09 200 203
----------
Washington State 0.2%
King County, Washington Public Hospital Facilities
Revenue Bonds, Series 1998, 4.750%, 09/01/10 100 101
----------
Washington, DC 0.3%
District of Columbia Revenue Bonds,
Series 1997, 4.750%, 02/01/11 150 154
----------
Total Municipal Bonds & Notes 56,073
(Cost $52,577) ==========
108 PIMCO Funds See accompanying notes
<PAGE>
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 0.1%
- --------------------------------------------------------------------------------
State Street Global Advisors Tax Free Money Market
3.257% due 10/01/98 $ 75 $ 75
--------
Total Short-Term Instruments 75
(Cost $75) ========
Total Investments (a) 98.2% $ 56,148
(Cost $52,652)
Other Assets and Liabilities (Net) 1.8% 1,012
--------
Net Assets 100.0% $ 57,160
========
Notes to Schedule of Investments (amounts in thousands):
(a) At September 30, 1998, the net unrealized 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 of value over
tax cost. $ 3,496
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. 0
--------
Unrealized appreciation-net $ 3,496
========
(b) Variable rate security. The rate listed is as of September 30, 1998.
1998 Semi-Annual Report See accompanying notes 109
<PAGE>
Schedule of Investments
Money Market Fund
September 30, 1998 (Unaudited)
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 97.9%
- --------------------------------------------------------------------------------
Certificates of Deposit 0.4%
Bank of Tokyo
5.940% due 01/19/99 $ 1,000 $ 1,000
-----------
Commercial Paper 55.9%
Aluminum Co. of America
5.530% due 10/09/98 475 474
Archer-Daniels-Midland Co.
5.490% due 11/03/98 1,062 1,057
5.430% due 12/08/98 2,700 2,672
5.430% due 12/09/98 10,000 9,896
Australian Wheat Board
5.420% due 10/19/98 8,000 7,978
5.480% due 10/19/98 2,000 1,995
5.420% due 02/22/99 3,500 3,424
Bankers Trust
5.490% due 11/04/98 10,000 9,948
Canadian Wheat Board
5.400% due 02/25/99 10,000 9,780
Coca-Cola Co.
5.430% due 11/12/98 1,000 994
Disney (Walt) Co.
5.400% due 01/05/99 725 715
E.I. Du Pont de Nemours
5.520% due 10/09/98 7,450 7,441
Eastman Kodak Co.
5.500% due 10/06/98 3,700 3,697
Electricite de France
5.500% due 10/09/98 530 529
Ford Motor Credit Corp.
5.500% due 10/22/98 10,000 9,968
5.380% due 01/25/99 4,000 3,931
Franklin Resources
5.530% due 10/13/98 1,600 1,597
5.410% due 12/01/98 10,000 9,908
General Electric Capital Corp.
5.460% due 11/17/98 430 427
General Motors Acceptance Corp.
5.550% due 10/07/98 4,950 4,945
5.530% due 10/21/98 1,200 1,196
Goldman Sachs & Co.
5.460% due 11/06/98 5,450 5,420
5.450% due 11/24/98 4,000 3,967
Motorola, Inc.
5.250% due 10/13/98 10,000 9,983
National Rural Utilities Cooperative
5.490% due 11/09/98 12,500 12,425
Procter & Gamble Co.
5.400% due 11/06/98 1,750 1,741
5.450% due 12/22/98 6,600 6,518
USAA Capital Corp.
5.480% due 11/20/98 12,000 11,909
Washington Post
5.510% due 10/28/98 9,000 8,963
-----------
153,498
===========
Repurchase Agreements 41.6%
State Street Bank
4.750% due 10/01/98 $ 1,930 $ 1,930
(Dated 09/30/98. Collateralized by
U.S. Treasury Note 6.250% 02/28/02
valued at $1,972,225. Repurchase
proceeds are $1,930,255.)
Goldman Sachs
5.100% due 10/01/98 56,300 56,300
(Dated 09/30/98. Collateralized by
U.S. Treasury Note 6.625% 04/30/02
valued at $56,323,397. Repurchase
proceeds are $56,307,976.)
First Boston
5.150% due 10/01/98 56,000 56,000
(Dated 09/30/98. Collateralized by
U.S. Treasury Note 6.875% 03/31/00
valued at $57,347,281. Repurchase
proceeds are $56,008,011.)
-----------
114,230
-----------
Total Short-Term Instruments 268,728
(Cost $268,728) ===========
Total Investments 97.9% $ 268,728
(Cost $268,728)
Other Assets and Liabilities (Net) 2.1% 5,697
-----------
Net Assets 100.0% $ 274,425
===========
110 PIMCO Funds See accompanying notes
<PAGE>
Schedule of Investments
StocksPLUS Fund
September 30, 1998 (Unaudited)
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
CORPORATE BONDS & NOTES 39.0%
- --------------------------------------------------------------------------------
Banking & Finance 25.5%
Advanta National Bank
6.125% due 01/15/99 (d) $ 2,000 $ 1,990
AT&T Capital Corp.
6.260% due 02/18/99 10,000 10,027
6.920% due 04/29/99 5,725 5,767
Bankers Trust
5.788% due 05/11/03 (d) 20,000 20,035
Caterpillar Financial
5.400% due 04/01/99 (d) 2,000 2,002
CIT Group, Inc.
6.200% due 10/20/00 10,000 10,165
Den Danske Bank
6.000% due 06/30/00 (d) 450 451
Edison Funding
6.000% due 09/20/99 15,000 15,143
Ford Motor Credit Corp.
5.480% due 11/09/98 (d) 500 500
5.340% due 03/30/99 (d) 250 250
5.293% due 04/05/99 (d) 340 339
7.020% due 10/10/00 11,000 11,418
5.813% due 02/13/03 (d) 15,000 15,026
General Motors Acceptance Corp.
5.330% due 03/16/99 (d) 2,000 2,004
5.788% due 08/18/03 (d) 15,300 15,303
Goldman Sachs & Co.
5.867% due 01/25/01 (d) 10,000 10,006
Heller Financial, Inc.
5.830% due 09/25/00 (d) 15,500 15,519
HRPT Properties Trust
6.288% due 07/09/99 (d) 5,000 5,001
Lehman Brothers, Inc.
8.875% due 11/01/98 1,685 1,687
5.540% due 08/11/00 (d) 9,400 9,169
MBNA Corp.
5.992% due 10/18/99 (d) 10,000 10,006
6.008% due 09/13/01 (d) 4,000 4,001
Merrill Lynch & Co.
5.938% due 10/10/00 (d) 3,000 3,004
5.919% due 02/04/03 (d) 6,000 5,989
Residential Reinsurance
9.848% due 06/01/99 (d) 2,000 1,991
Salomon, Inc.
5.582% due 04/05/99 (d) 500 500
Salomon, Smith Barney Holdings
5.875% due 02/01/01 5,000 5,041
3.650% due 02/14/02 (g) 2,058 2,000
5.938% due 03/26/03 (d) 5,000 4,991
Sanwa Business Credit
6.338% due 07/13/01 (d) 10,000 9,988
----------
199,313
==========
Industrials 11.2%
Air Canada
6.425% due 07/31/05 (d) 12,000 9,944
Black & Decker Corp.
6.606% due 12/20/01 (d) 7,250 7,323
Cemex SA
10.750% due 07/15/00 3,650 3,509
COFIRI International, Inc.
5.987% due 10/27/00 (d) 2,000 1,995
Columbia HCA Healthcare
6.410% due 06/15/00 5,000 4,909
Merita
6.073% due 12/01/05 (d) 1,000 996
Occidental Petroleum
5.850% due 11/09/98 6,000 5,996
Petroleos Mexicanos
7.600% due 06/15/00 2,050 1,932
RJR Nabisco
8.300% due 04/15/99 2,300 2,307
8.000% due 07/15/01 500 511
TCI Communications, Inc.
7.250% due 06/15/99 (d) 30,000 30,424
6.140% due 04/03/02 (d) 11,600 11,718
6.200% due 03/11/03 (d) 4,000 4,052
Tenneco, Inc.
10.075% due 02/01/01 1,400 1,510
----------
87,126
==========
Utilities 2.3%
Beaver Valley Funding Corp.
8.250% due 06/01/03 2,413 2,511
Niagara Mohawk Power
7.000% due 10/01/00 5,000 5,061
7.125% due 07/01/01 9,000 9,145
North Atlantic Energy
9.050% due 06/01/02 1,220 1,293
----------
18,010
----------
Total Corporate Bonds & Notes 304,449
(Cost $305,015) ==========
- --------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCIES 1.8%
- --------------------------------------------------------------------------------
Student Loan Marketing Assn.
5.727% due 10/25/05 (d) 14,496 14,429
----------
Total U.S. Government Agencies 14,429
(Cost $14,446) ==========
- --------------------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS 6.5%
- --------------------------------------------------------------------------------
Treasury Inflation Protected Securities
3.625% due 07/15/02 (g) 21,704 21,806
U.S. Treasury Notes
5.750% due 11/30/02 27,200 28,620
----------
Total U.S. Treasury Obligations 50,426
(Cost $48,997) ==========
- --------------------------------------------------------------------------------
MORTGAGE-BACKED SECURITIES 20.2%
- --------------------------------------------------------------------------------
Collateralized Mortgage Obligations 2.5%
Bank Mart
7.457% due 03/01/19 (d)(h) 7,718 8,275
Citicorp Mortgage Securities, Inc.
7.419% due 09/25/18 (d) 68 68
Donaldson, Lufkin & Jenrette
6.460% due 10/17/20 (d) 292 301
Federal National Mortgage Assn.
7.723% due 04/25/20 (d) 83 84
Greenwich
7.127% due 10/25/22 (d) 28 28
PaineWebber Mortgage
6.511% due 02/25/01 (d) 1,277 1,279
Prudential Home
7.050% due 05/25/24 467 468
Red Mountain Funding Corp.
6.450% due 11/28/27 11 11
Residential Funding
6.196% due 03/25/18 (d) 2,873 2,876
Resolution Trust Corp.
7.588% due 01/25/20 (d) 759 784
7.227% due 05/25/21 (d) 55 55
6.518% due 09/25/21 (d) 984 981
8.000% due 07/25/24 3,157 3,221
6.588% due 05/25/29 (d) 422 423
Structured Asset Securities Corp.
7.750% due 02/25/28 756 771
----------
19,625
==========
Federal Home Loan Mortgage Corporation 4.6%
6.764% due 07/01/19 (d) 1,805 1,837
7.370% due 06/01/22 (d) 682 710
7.500% due 10/14/28 30,000 30,909
7.635% due 12/01/22 (d) 994 1,031
8.500% due 06/01/12-06/01/25 (f) 1,512 1,571
----------
36,058
==========
1998 Semi-Annual Report See accompanying notes 111
<PAGE>
Schedule of Investments (Cont.)
StocksPLUS Fund
September 30, 1998 (Unaudited)
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
Federal National Mortgage Association 2.2%
6.130% due 05/01/17 (d) $ 375 $ 379
6.131% due 04/01/18-05/01/36 (d)(f) 7,309 7,396
6.132% due 08/01/29-11/01/35 (d)(f) 1,062 1,075
6.143% due 05/01/36 (d) 7,041 7,141
6.153% due 07/01/18 (d) 650 657
7.373% due 05/01/22 (d) 446 452
----------
17,100
==========
Government National Mortgage Association 10.2%
6.000% due 12/20/27 (d) 8,971 9,102
6.500% due 01/20/28-10/21/28 (d)(f) 55,195 56,421
6.875% due 02/20/26-05/20/26 (d)(f) 10,844 11,019
7.000% due 09/20/22 (d) 2,160 2,210
----------
78,752
==========
Other Mortgage-Backed Securities 0.6%
California Federal Savings & Loan
6.645% due 01/01/19 (d) 48 48
Fund America
7.415% due 06/25/23 (d) 183 191
General Electric Capital Mortgage
6.300% due 09/25/23 2,000 2,030
Great Western Savings & Loan
6.381% due 01/25/18 (d) 81 82
J.P. Morgan & Co.
6.999% due 01/25/18 (d) 716 718
Resolution Trust Corp.
7.048% due 12/25/23 (d) 29 29
Structured Asset Securities Corp.
6.845% due 09/25/36 (d) 1,346 1,376
Western Federal Savings & Loan
6.537% due 10/25/18 (d) 199 200
6.895% due 03/25/19 (d) 50 50
6.631% due 06/25/19 (d) 292 292
----------
5,016
==========
Stripped Mortgage-Backed Securities 0.1%
Federal Home Loan Mortgage Corp. (IO)
992.576% due 07/15/16 51 245
Federal National Mortgage Assn. (IO)
6.000% due 11/25/00 633 28
7.000% due 07/25/06 469 47
6.500% due 02/25/21 (d) 5,088 512
7.000% due 07/25/21 1,090 97
----------
929
----------
Total Mortgage-Backed Securities 157,480
(Cost $155,668) ==========
- --------------------------------------------------------------------------------
ASSET-BACKED SECURITIES 2.1%
- --------------------------------------------------------------------------------
Community Trust Bancorp, Inc.
6.500% due 09/15/03 3,306 3,328
Green Tree Financial Group
6.420% due 04/15/28 2,170 2,181
6.220% due 02/15/29 10,445 10,499
----------
Total Asset-Backed Securities 16,008
(Cost $15,925) ==========
- --------------------------------------------------------------------------------
SOVEREIGN ISSUES 4.9%
- --------------------------------------------------------------------------------
Republic of Argentina
6.625% due 03/31/05 (d) 17,014 13,441
8.726% due 04/10/05 (d) 7,000 6,038
Republic of Korea
8.031% due 04/07/99 (d) 10,000 9,588
United Mexican States
7.002% due 06/27/02 (d) 10,000 9,210
----------
Total Sovereign Issues 38,277
(Cost $42,173) ==========
- --------------------------------------------------------------------------------
FOREIGN CURRENCY-DENOMINATED ISSUES (c)(e) 1.1%
- --------------------------------------------------------------------------------
Commonwealth of Canada
4.250% due 12/01/26 (g) C$ 5,205 3,511
Commonwealth of New Zealand
4.500% due 02/15/16 (g) N$ 9,750 5,131
Kingdom of Sweden
10.250% due 05/05/00 SK 1,000 138
----------
Total Foreign Currency-Denominated Issues 8,780
(Cost $10,494) ==========
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 37.2%
- --------------------------------------------------------------------------------
Commercial Paper 28.7%
Canadian Wheat Board
5.450% due 12/11/98 4,000 3,958
Coca-Cola Co.
5.420% due 11/06/98 10,000 9,946
E.I. Du Pont de Nemours
5.490% due 10/07/98 26,100 26,076
5.430% due 11/03/98 6,000 5,970
5.250% due 11/04/98 2,500 2,488
Federal Home Loan Mortgage Corp.
5.460% due 10/16/98 10,000 9,977
Florida Power Corp.
5.490% due 10/19/98 4,200 4,188
Ford Motor Credit Corp.
5.510% due 10/09/98 7,000 6,991
General Electric Capital Corp.
5.520% due 10/01/98 14,000 14,000
5.470% due 11/06/98 5,000 4,973
5.500% due 11/13/98 2,800 2,782
5.500% due 11/18/98 3,100 3,077
General Motors Acceptance Corp.
5.520% due 10/29/98 5,900 5,875
5.500% due 11/18/98 1,000 993
IBM Credit Corp.
5.560% due 10/07/98 3,500 3,497
5.480% due 11/24/98 1,800 1,785
KFW International Finance, Inc.
5.490% due 10/09/98 20,800 20,775
5.390% due 10/28/98 10,000 9,959
Motorola, Inc.
5.490% due 10/06/98 10,000 9,992
5.480% due 10/13/98 1,800 1,797
5.490% due 10/19/98 7,000 6,981
5.480% due 12/03/98 5,900 5,845
National Rural Utilities Cooperative
5.490% due 10/28/98 2,600 2,589
5.500% due 10/29/98 1,700 1,693
5.420% due 12/07/98 4,500 4,456
New Center Asset Trust
5.530% due 11/13/98 7,000 6,954
5.490% due 12/17/98 2,200 2,175
Pfizer, Inc.
5.500% due 10/20/98 5,100 5,085
5.490% due 10/30/98 10,000 9,956
Procter & Gamble Co.
5.240% due 11/09/98 7,000 6,960
5.480% due 11/12/98 3,400 3,378
SBC Communications, Inc.
5.290% due 11/06/98 4,900 4,874
Washington Post
5.510% due 10/23/98 4,200 4,186
Wisconsin Electric Power & Light
5.290% due 10/21/98 9,400 9,372
----------
223,603
==========
112 PIMCO Funds See accompanying notes
<PAGE>
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
Repurchase Agreements 1.4%
State Street Bank
4.750% due 10/01/98 $ 1,068 $ 1,068
(Dated 09/30/98. Collateralized by
U.S. Treasury Note 7.750% 12/31/99
valued at $1,093,057.
Repurchase proceeds are $1,068,141.)
First Boston
5.150% due 10/01/98 10,000 10,000
(Dated 09/30/98. Collateralized by
U.S. Treasury Note 4.500% 09/30/00
valued at $10,250,448. Repurchase
proceeds are $10,001,430.)
-----------
11,068
===========
U.S. Treasury Bills (b)(f) 7.1%
4.745% due 10/01/98-02/04/99 55,863 55,463
-----------
Total Short-Term Instruments 290,134
(Cost $290,127) ===========
Total Investments (a) 112.8% $ 879,983
(Cost $882,845)
Other Assets and Liabilities (Net) (12.8%) (99,527)
-----------
Net Assets 100.0% $ 780,456
===========
Notes to Schedule of Investments (amounts in thousands):
(a) At September 30, 1998, the net unrealized 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 of value over
tax cost. $ 5,259
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (8,121)
-----------
Unrealized depreciation-net $ (2,862)
===========
(b) Securities with an aggregate market value of $55,463
have been segregated with the custodian to cover margin
requirements for the following open futures contracts at
September 30, 1998:
Unrealized
Contracts Appreciation
- --------------------------------------------------------------------------------
S&P 500 Index (12/98) 2,623 $ 5,008
United Kingdom 90 Day LIBOR Future (03/99) 8 6
United Kingdom 90 Day LIBOR Future (06/99) 58 57
-----------
$ 5,071
===========
(c) Foreign forward currency contracts outstanding at September 30, 1998:
Principal
Amount Unrealized
Covered by Expiration Appreciation/
Type Contract Month (Depreciation)
- --------------------------------------------------------------------------------
Sell C$ 5,545 10/98 $ 14
Sell N$ 9,711 12/98 (77)
Sell SK 1,843 10/98 (2)
-----------
$ (65)
===========
(d) Variable rate security. The rate listed is as of September 30, 1998.
(e) Principal amount denoted in indicated currency:
C$ - Canadian Dollar
N$ - New Zealand Dollar
SK - Swedish Krona
(f) Securities are grouped by coupon and represent a range of maturities.
(g) Principal amount of the security is adjusted for inflation.
(h) Restricted security.
1998 Semi-Annual Report See accompanying notes 113
<PAGE>
Schedule of Investments
Strategic Balanced Fund
September 30, 1998 (Unaudited)
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
CORPORATE BONDS & NOTES 29.3%
- --------------------------------------------------------------------------------
Banking & Finance 18.6%
Advanta National Bank
6.125% due 01/15/99 (d) $ 400 $ 398
AT&T Capital Corp.
6.580% due 09/03/99 300 303
Ford Motor Credit Corp.
5.968% due 03/21/01 (d) 500 503
Lehman Brothers, Inc.
5.570% due 01/12/99 (d) 342 342
6.330% due 08/01/00 1,205 1,197
Merrill Lynch & Co.
5.849% due 10/01/03 (d) 2,000 2,003
NationsBank Corp.
7.033% due 02/18/02 (d) 100 98
Okobank
7.312% due 09/27/49 (d) 500 504
Republic New York Corp.
5.799% due 10/28/02 (d) 100 100
Salomon, Smith Barney Holdings
3.650% due 02/14/02 (h) 1,111 1,080
Sparbanken Sverige AB
7.531% due 10/29/49 (d) 500 503
----------
7,031
==========
Industrials 4.8%
Gulf Canada Resources
9.000% due 08/15/99 300 306
Imperial Chemical
5.750% due 12/05/98 (d) 500 500
Occidental Petroleum
6.013% due 04/03/08 600 600
RJR Nabisco
8.625% due 12/01/02 100 105
Sequa Corp.
9.625% due 10/15/99 300 307
----------
1,818
==========
Utilities 5.9%
Cleveland Electric/Toledo Edison
7.190% due 07/01/00 500 512
System Energy Resources
7.710% due 08/01/01 650 688
Texas Utilities Co.
6.410% due 11/21/01 1,000 1,037
----------
2,237
----------
Total Corporate Bonds & Notes 11,086
(Cost $11,052) ==========
- --------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCIES 2.4%
- --------------------------------------------------------------------------------
Student Loan Marketing Assn
5.684% due 06/30/00 (d) 900 900
----------
Total U.S. Government Agencies 900
(Cost $899) ==========
- --------------------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS 8.7%
- --------------------------------------------------------------------------------
Treasury Inflation Protected Securities
3.625% due 07/15/02 (h) 2,241 2,252
U.S. Treasury Notes
5.750% due 10/31/02 1,000 1,051
----------
Total U.S. Treasury Obligations 3,303
(Cost $3,253) ==========
- --------------------------------------------------------------------------------
MORTGAGE-BACKED SECURITIES 40.7%
- --------------------------------------------------------------------------------
Collateralized Mortgage Obligations 23.3%
Federal Home Loan Mortgage Corp.
6.500% due 11/15/00 361 363
6.600% due 12/15/03 100 100
6.500% due 01/15/04 418 419
5.500% due 07/15/05 544 545
6.750% due 03/15/17 496 498
7.000% due 05/15/23 1,589 1,673
6.500% due 08/15/23 187 194
6.500% due 03/15/24 281 293
Federal National Mortgage Assn.
6.500% due 10/25/04 497 500
5.750% due 02/25/15 109 109
5.700% due 06/25/17 2,566 2,573
8.000% due 07/25/20 719 721
6.500% due 06/25/21 198 204
4.000% due 01/25/22 126 120
5.000% due 04/25/22 48 47
7.000% due 06/25/23 245 270
6.500% due 12/25/23 136 146
Residential Funding
7.500% due 06/25/27 25 25
----------
8,800
==========
Federal Housing Administration 6.7%
7.430% due 01/25/23 2,367 2,544
----------
Federal National Mortgage Association 1.2%
6.210% due 03/01/29 (d) 442 447
-----------
Government National Mortgage Association 8.6%
6.500% due 10/21/28 1,000 1,022
6.875% due 06/20/27 (d) 1,305 1,332
7.000% due 07/20/23-01/20/27 (d)(g) 891 908
-----------
3,262
===========
Stripped Mortgage-Backed Securities 0.9%
Collateralized Mortgage Obligation Trust (PO)
0.000% due 04/23/17 21 21
Federal Home Loan Mortgage Corp. (IO)
7.000% due 05/15/04 607 9
7.000% due 02/15/17 835 33
Federal National Mortgage Assn. (IO)
6.500% due 05/25/05 1,069 103
6.500% due 09/25/08 678 71
Federal National Mortgage Assn. (PO)
0.000% due 11/25/22 100 99
-----------
336
-----------
Total Mortgage-Backed Securities 15,389
(Cost $14,991) ===========
- --------------------------------------------------------------------------------
ASSET-BACKED SECURITIES 5.7%
- --------------------------------------------------------------------------------
Conti Mortgage Home Equity Loan Trust
5.811% due 10/15/12 (d) 1,143 1,148
Ford Motor Credit Corp.
6.500% due 11/15/99 272 272
Green Tree Financial Group
6.420% due 04/15/28 130 131
6.220% due 02/15/29 183 184
Premiere Auto Trust
8.050% due 04/04/00 432 433
-----------
Total Asset-Backed Securities 2,168
(Cost $2,163) ===========
114 PIMCO Funds See accompanying notes
<PAGE>
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
SOVEREIGN ISSUES 6.1%
- --------------------------------------------------------------------------------
Government of Brazil
6.625% due 04/15/06 (d) $ 291 $ 166
Hydro Quebec
5.813% due 09/29/49 (d) 200 170
Republic of Argentina
6.625% due 03/31/05 (d) 1,316 1,040
Republic of Korea
8.281% due 04/08/00 (d) 1,000 918
----------
Total Sovereign Issues 2,294
(Cost $2,506) ==========
- --------------------------------------------------------------------------------
FOREIGN CURRENCY-DENOMINATED ISSUES (c)(e) 0.2%
- --------------------------------------------------------------------------------
Commonwealth of Canada
4.250% due 12/01/26 (h) C$ 104 70
----------
Total Foreign Currency-Denominated Issues 70
(Cost $70) ==========
- --------------------------------------------------------------------------------
PURCHASED CALL OPTIONS 0.3%
- --------------------------------------------------------------------------------
U.S. Treasury Note (OTC)
5.750% due 11/30/02
Strike @ 94.39 Exp. 12/02/98 $ 1,000 107
----------
Total Purchased Call Options 107
(Cost $79) ==========
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 15.5%
- --------------------------------------------------------------------------------
Commercial Paper 10.2%
Coca-Cola Co.
5.440% due 11/12/98 300 298
E.I. Du Pont de Nemours
5.270% due 10/29/98 1,000 996
Federal Home Loan Mortgage Corp.
5.240% due 10/16/98 200 199
5.350% due 10/16/98 300 299
5.390% due 11/06/98 100 99
Ford Motor Credit Corp.
5.500% due 10/06/98 700 699
General Electric Capital Corp.
5.490% due 11/18/98 400 397
Procter & Gamble Co.
5.240% due 11/09/98 500 497
5.310% due 12/28/98 400 395
----------
3,879
==========
Repurchase Agreement 2.0%
State Street Bank
4.750% due 10/01/98 766 766
(Dated 09/30/98. Collateralized by ----------
U.S. Treasury Note 5.750% 10/31/02
valued at $786,450. Repurchase
proceeds are $766,101.)
U.S. Treasury Bills 3.3% (b)(g)
4.920% due 10/01/98-02/04/99 1,263 1,257
----------
Total Short-Term Instruments 5,902
(Cost $5,901) ==========
Total Investments (a) 108.9% $ 41,219
(Cost $40,914)
Other Assets and Liabilities (Net) (8.9%) (3,374)
----------
Net Assets 100.0% $ 37,845
==========
Notes to Schedule of Investments (amounts in thousands):
(a) At September 30, 1998, the net unrealized 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 of value over
tax cost. $ 695
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (390)
----------
Unrealized appreciation-net $ 305
==========
(b) Securities with an aggregate market value of $1,256
have been segregated with the custodian to cover margin
requirements for the following open futures contracts at
September 30, 1998:
Unrealized
Appreciation/
Type Contracts (Depreciation)
- --------------------------------------------------------------------------------
Eurodollar September Futures (09/00) 1 $ 3
Eurodollar December Futures (12/00) 1 2
Eurodollar March Futures (03/01) 1 2
Eurodollar June Futures (06/01) 1 2
Eurodollar September Futures (09/01) 4 7
Eurodollar December Futures (12/01) 4 6
Eurodollar March Futures (03/02) 4 6
Eurodollar June Futures (06/02) 4 6
Mini S&P 500 Index (12/98) 4 (4)
S&P 500 Index (12/98) 58 229
U.S. Treasury 5 Year Note (12/98) 21 105
U.S. Treasury 10 Year Note (12/98) 14 62
U.S. Treasury 30 Year Bond (12/98) 13 56
United Kingdom 90 Day LIBOR Future (03/99) 2 2
United Kingdom 90 Day LIBOR Future (06/99) 2 2
--------------
$ 486
==============
(c) Foreign forward currency contracts outstanding at September 30, 1998:
<TABLE>
<CAPTION>
Principal
Amount
Covered by Expiration Unrealized
Type Contract Month Appreciation
- ---------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sell C$ 109 10/98 $ 0
</TABLE>
(d) Variable rate security. The rate listed is as of September 30, 1998.
(e) Principal amount denoted in indicated currency:
C$ - Canadian Dollar
(f) Swap agreements outstanding at September 30, 1998:
Notional Unrealized
Type Amount Appreciation
Receive total return on S&P 500 Index and
pay floating rate based on 1 month LIBOR.
Broker: Lehman Brothers
Exp. 07/31/99 $ 6,335 $ 0
(g) Securities are grouped by coupon and represent a range of maturities.
(h) Principal amount of the security is adjusted for inflation.
1998 Semi-Annual Report See accompanying notes 115
<PAGE>
Notes to Financial Statements
September 30, 1998 (Unaudited)
1. Organization
PIMCO Funds: Pacific Investment Management Series (the "Trust") was established
as a Massachusetts business trust on February 19, 1987. The Trust is registered
under the Investment Company Act of 1940 (the "Act"), as amended, as an open-end
investment management company. The Trust currently consists of 25 separate
investment funds (the "Funds"). The Trust may offer up to six classes of shares:
Institutional, Administrative, A, B, C and D. Each share class has identical
voting rights (except that shareholders of a class have exclusive voting rights
regarding any matter relating solely to that class of shares). The Commercial
Mortgage Securities and StocksPLUS Short Strategy Funds had not commenced
operations as of September 30, 1998. Information presented in these financial
statements pertains to the Institutional and Administrative Classes (the
"Institutional Classes") of the Trust. Certain detailed financial information
for the A, B, C and D Classes (the "Other Classes") is provided separately and
is available upon request.
2. Significant Accounting Policies
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements in
conformity with generally accepted accounting principles. 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.
Security Valuation. Portfolio securities and other financial instruments 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, are normally
valued on the basis of quotes obtained from brokers and dealers or pricing
services. Short-term investments which mature in 60 days or less are valued at
amortized cost, which approximates market value. Certain fixed income securities
for which daily market quotations are not readily available may be valued,
pursuant to guidelines established by the Board of Trustees, with reference to
fixed income securities whose prices are more readily obtainable.
Securities Transactions and Investment Income. Securities 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.
Realized gains and losses from securities sold are recorded on the identified
cost basis. Dividend income is recorded on the ex-dividend date, except certain
dividends from foreign securities where the ex-dividend date may have passed,
are recorded as soon as the Fund is informed of the ex-dividend date. Interest
income, adjusted for the accretion of discounts and amortization of premiums, is
recorded on the accrual basis.
116 PIMCO Funds
<PAGE>
Dividends and Distributions to Shareholders. Dividends from net investment
income, if any, of each Fund, except the StocksPLUS and Strategic Balanced
Funds, are declared on each day the Trust is open for business and are
distributed to shareholders monthly. Dividends from net investment income, if
any, of the StocksPLUS and Strategic Balanced Funds are declared and distributed
to shareholders quarterly. Net realized capital gains earned by a Fund, if any,
will be distributed no less frequently than once each year.
Income dividends 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, net
operating losses and capital loss carryforwards.
Distributions reflected as a tax basis return of capital in the
accompanying Statements of Changes in Net Assets have been reclassified to paid
in capital. In addition, other amounts have been reclassified between
undistributed net investment income, accumulated undistributed net realized
gains or losses and paid in capital to more appropriately conform financial
accounting to tax characterizations of dividends and distributions.
Foreign Currency. Foreign currencies, investments, and other assets and
liabilities are translated into U.S. dollars at the exchange rates prevailing at
the end of the period. Fluctuations in the value of these assets and liabilities
resulting from changes in exchange rates are recorded as unrealized foreign
currency gains (losses). Realized gains (losses) and unrealized appreciation
(depreciation) on investment securities and income and expenses are translated
on the respective dates of such transactions. The effect of changes in foreign
currency exchange rates on investments in securities are not segregated in the
Statements of Operations from the effects of changes in market prices of those
securities, but are included with the net realized and unrealized gain or loss
on investment securities.
Multiclass Operations. Each class offered by the Trust has equal rights as to
assets and voting privileges. Income and non-class specific expenses of each
Fund, except the StocksPLUS and Strategic Balanced Funds, are allocated daily to
each class of shares based on the relative value of settled shares. Income and
non-class specific expenses of the StocksPLUS and Strategic Balanced Funds are
allocated daily to each class of shares based on the relative net assets of each
class. Realized and unrealized capital gains and losses of each Fund are
allocated daily to each class of shares based on the relative net assets of each
class.
Federal Income Taxes. Each Fund intends to qualify as a regulated investment
company and distribute all of its taxable income and net realized gains, if
applicable, to shareholders. Accordingly, no provision for Federal income taxes
has been made.
Financing Transactions. A Fund may enter into financing transactions consisting
of the sale by the Fund of securities, together with a commitment to repurchase
similar securities at a future date. The difference between the selling price
and the future purchase price is an adjustment to interest income. If the
counter-party to whom the Fund sells the security becomes insolvent, a Fund's
right to repurchase the security may be restricted; the value of the security
may change over the term of the financing transaction; and the return earned by
a Fund with the proceeds of a financing transaction may not exceed transaction
costs. Included in payable for investments and foreign currency purchased are
amounts of $958,768,306, $6,253,222, $18,459,213, $4,841,002, $111,689,167,
$15,578,323, $506,949,577, $209,684,410, $25,092,170, $1,031,379, $23,125,500,
$138,319 and $1,822,540 for the Total Return, Total Return III, Moderate
Duration, Low Duration, Long-Term U.S. Government, Real Return Bond, Foreign
Bond, Global Bond, Global Bond II, Emerging Markets Bond, High Yield, StocksPLUS
and Strategic Balanced Funds, respectively, related to these financing
transactions.
1998 Semi-Annual Report 117
<PAGE>
Notes to Financial Statements (Cont.)
September 30, 1998 (Unaudited)
Futures and Options. Certain Funds are authorized to enter into futures
contracts and options. A Fund may use futures contracts and options to manage
its exposure to the securities markets or to movements in interest rates and
currency values. 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 a Fund and the prices of futures contracts and options, the
possibility of an illiquid market, and the inability of the counterparty to meet
the terms of the contract. 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
the value of such instruments are recorded as unrealized appreciation
(depreciation) until terminated, at which time realized gains and losses are
recognized.
Forward Currency Transactions. Certain Funds are 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. A Fund also may enter into these
contracts for purposes of increasing exposure to a foreign currency or to shift
exposure to foreign currency fluctuations from one country to another. All
commitments are marked to market daily at the applicable translation rates and
any resulting unrealized gains or losses are recorded. Realized gains or losses
are recorded at the time the forward contract matures 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.
Swaps. Certain Funds are authorized to enter into interest rate, total return
and currency exchange swap agreements in order to obtain a desired return at a
lower cost than if the Fund had invested directly in the asset that yielded the
desired return. Swaps involve commitments to exchange components of income
(generally interest or returns) pegged to the underlying assets based on a
notional principal amount. Swaps are marked to market daily based upon
quotations from market makers and the change, if any, is recorded as unrealized
gains or losses in the Statement of Operations. A Fund bears the risk of loss of
the amount expected to be received under a swap agreement in the event of the
default or bankruptcy of a counterparty.
Stripped Mortgage-Backed Securities (SMBS). SMBS represent a participation in,
or are secured by and payable from, mortgage loans on real property, and may be
structured in classes with rights to receive varying proportions of principal
and interest. SMBS include interest-only securities (IOs), which receive all of
the interest, and principal-only securities (POs), which receive all of the
principal. If the underlying mortgage assets experience greater than anticipated
payments of principal, a Fund may fail to recoup some or all of its initial
investment in these securities. The market value of these securities is highly
sensitive to changes in interest rates.
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.
118 PIMCO Funds
<PAGE>
Inflation-Indexed Bonds. Inflation-indexed bonds are fixed income securities
whose principal value is periodically adjusted to the rate of inflation. The
interest rate on these bonds is generally fixed at issuance at a rate lower than
typical bonds. Over the life of an inflation-indexed bond, however, interest
will be paid based on a principal value which is adjusted for inflation. Any
increase in the principal amount of an inflation-indexed bond will be considered
interest income, even though investors do not receive their principal until
maturity.
Repurchase Agreements. Each Fund may engage in repurchase transactions. Under
the terms of a typical repurchase agreement, the Fund takes possession of an
underlying debt obligation subject to an obligation of the seller to repurchase,
and the Fund to resell, the obligation at an agreed-upon price and time. The
market value of the collateral must be equal at all times to the total amount of
the repurchase obligations, including interest. Generally, in the event of
counterparty default, the Fund has the right to use the collateral to offset
losses incurred.
Reverse Repurchase Agreements. Certain Funds are authorized to enter into
reverse repurchase agreements. In a reverse repurchase agreement, the Fund sells
to a financial institution a security that it holds with an agreement to
repurchase the same security at an agreed-upon price and date. A reverse
repurchase agreement involves the risk that the market value of the security
sold by the Fund may decline below the repurchase price of the security.
Restricted Securities. Certain funds are permitted to invest in securities that
are subject to legal or contractual restrictions on resale. These securities
generally may be resold in transactions exempt from registration or to the
public if the securities are registered. Disposal of these securities may
involve time-consuming negotiations and expense, and prompt sale at an
acceptable price may be difficult.
3. Fees, Expenses, and Related Party Transactions
Investment Advisory Fee. Pacific Investment Management Company (PIMCO) is a
wholly owned subsidiary partnership of PIMCO Advisors L.P. which serves as
investment adviser (the "Adviser") to the Trust, pursuant to an investment
advisory contract. The Adviser receives a monthly fee from each Fund at an
annual rate based on average daily net assets of the Fund. The Advisory Fee is
charged at an annual rate of 0.15% for the Money Market Fund, 0.40% for the
StocksPLUS and Strategic Balanced Funds, 0.45% for the Emerging Markets Bond
Fund and 0.25% for all other Funds.
Administration Fee. Pacific Investment Management Company (PIMCO) is a wholly
owned subsidiary partnership of PIMCO Advisors L.P. which also serves as
administrator (the "Administrator"), and provides administrative services to the
Trust for which it receives from each Fund a monthly administrative fee based on
each share class's average daily net assets. The Administration Fee for the
Institutional Classes is charged at the annual rate of 0.18% for the Total
Return and Low Duration Funds, 0.20% for the Moderate Duration, Short-Term and
Money Market Funds, 0.30% for the Global Bond and Global Bond II Funds, 0.40%
for the Emerging Markets Bond Fund and 0.25% for all other Funds. The
Administration Fee for the A,B and C Classes is charged at an annual rate of
0.35% for the Short-Term, Money Market and Municipal Bond Funds, 0.45% for the
Foreign Bond and Global Bond II Fund, 0.55% for the Emerging Markets Bond Fund
and 0.40% for all other Funds. The Administration Fee for Class D is charged at
the annual rate of 0.25% for the Short-Term, Total Return and Low Duration,
Funds, 0.35% for the Municipal Bond, 0.45% for the Foreign Bond and 0.40% for
all other Funds.
1998 Semi-Annual Report 119
<PAGE>
Notes to Financial Statements (Cont.)
September 30, 1998 (Unaudited)
Distribution and Servicing Fees. PIMCO Funds Distributors LLC, ("PFD"), formerly
PIMCO Funds Distribution Company, a wholly-owned subsidiary of PIMCO Advisors
L.P., serves as the distributor of the Trust's shares.
The Trust is permitted to reimburse, out of the Administrative Class assets
of each Fund offering Administrative Class shares in an amount up to 0.25% on an
annual basis of the average daily net assets of that class, financial
intermediaries that provide services in connection with the distribution of
shares or administration of plans or programs that use Fund shares as their
funding medium. The effective rate paid to PFD was 0.25% during current fiscal
year.
Pursuant to the Distribution and Servicing Plans adopted by the A, B, C and
D Classes of the Trust, the Trust compensates PFD or an affiliate with respect
to Class D for services provided and expenses incurred in connection with
assistance rendered in the sale of shares and services rendered to shareholders
and for maintenance of shareholder accounts of the A, B, C and D Classes. The
Trust paid PFD distribution and servicing fees at an effective rate as set forth
below (calculated as a percentage of each Fund's average daily net assets
attributable to each class):
<TABLE>
<CAPTION>
Effective Rate Allowable Rate
---------------------------------------------------------------------------------------
Distribution Fee (%) Servicing Fee (%) Distribution Fee (%) Servicing Fee (%)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A
Money Market Fund -- 0.10 -- 0.20
All other Funds -- 0.25 -- 0.25
Class B
All Funds 0.75 0.25 0.75 0.25
Class C
Total Return, Long-Term U.S. Gov't,
Foreign Bond, Global Bond II
Emerging Markets Bond and High Yield Funds 0.75 0.25 0.75 0.25
Low Duration Fund 0.50 0.25 0.50 0.25
Real Return Bond, Municipal Bond
and StocksPLUS Funds 0.50 0.25 0.75 0.25
Short-Term Fund 0.30 0.25 0.75 0.25
Money Market Fund -- 0.10 -- 0.20
Class D
Short-Term, Low Duration
and Total Return Funds -- 0.25 -- 0.50
Municipal Bond Fund -- 0.25 -- 0.60
Foreign Bond Fund -- 0.25 -- 0.70
All other Funds -- 0.25 -- 0.65
</TABLE>
PFD also receives the proceeds of the initial sales charges paid by the
shareholders upon the purchase of Class A shares, except for the Money Market
Fund, and the contingent deferred sales charges paid by the shareholders upon
certain redemptions of A, B and C Class shares. For the period ended September
30, 1998, PFD received $3,213,189 representing commissions (sales charges) and
contingent deferred sales charges.
120 PIMCO Funds
<PAGE>
Expenses. The Trust 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 cost of
borrowing money, including interest expense; (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; (vii) expenses, such as
organizational expenses, which are capitalized in accordance with generally
accepted accounting principles; and (viii) any expenses allocated or allocable
to a specific class of shares, which include service fees payable with respect
to the Administrative Class shares and may include certain other expenses as
permitted by the Trust's Multiple Class Plan adopted pursuant to Rule 18f-3
under the Act and subject to review and approval by the Trustees. The ratio of
expenses to average net assets per share class, as disclosed in Financial
Highlights, may differ from the annual fund operating expenses per share class
as disclosed in the Prospectus for the reasons set forth above. Each
unaffiliated Trustee receives an annual retainer of $45,000, plus $3,000 for
each Board of Trustees meeting attended in person and $500 for each meeting
attended telephonically, plus reimbursement of related expenses. In addition,
each committee chair receives an annual retainer of $1,500. These expenses are
allocated to the Funds of the Trust according to their respective net assets.
4. Purchases and Sales of Securities
Purchases and sales of securities (excluding short-term investments) for the
period ended September 30, 1998 were as follows (amounts in thousands):
<TABLE>
<CAPTION>
U.S. Government/Agency All Other
--------------------------------------------------------------------------
Purchases Sales Purchases Sales
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Total Return Fund $ 21,070,030 $ 17,926,804 $ 8,892,839 $ 2,123,781
Total Return Fund II 675,709 613,473 430,059 22,000
Total Return Fund III 283,041 239,820 146,525 47,054
Total Return Mortgage Fund 3,779 3,345 168 0
Moderate Duration Fund 140,505 136,778 146,753 91,814
Low Duration Fund 3,891,728 4,601,476 1,154,565 123,601
Low Duration Fund II 984,913 1,131,484 133,670 59,740
Low Duration Fund III 30,822 30,385 11,062 4,970
Low Duration Mortgage Fund 851 1,729 950 200
Short-Term Fund 240,970 30,181 140,330 105,375
Long-Term U.S. Gov't Fund 384,674 290,241 98,801 1,722
Real Return Bond Fund 65,713 63,739 5,381 4,318
Foreign Bond Fund 374,478 196,631 837,914 680,177
Global Bond Fund 167,514 106,322 415,123 337,880
Global Bond Fund II 29,451 15,232 64,941 55,606
Emerging Markets Bond Fund 0 0 9,455 8,359
High Yield Fund 5,760 7,121 965,248 602,127
Municipal Bond Fund 0 0 63,027 13,274
StocksPLUS Fund 267,354 194,934 250,111 110,473
Strategic Balanced Fund 3,884 1,008 13,266 4,967
</TABLE>
1998 Semi-Annual Report 121
<PAGE>
Notes to Financial Statements (Cont.)
September 30, 1998 (Unaudited)
5. Shares of Beneficial Interest
The Trust may issue an unlimited number of shares of beneficial interest with a
$.0001 par value.
Changes in shares of beneficial interest were as follows (shares and amounts
in thousands):
<TABLE>
<CAPTION>
Total Return Fund
------------------------------------------------------------------
Six Months Ended 9/30/98 Year Ended 3/31/98
Shares Amount Shares Amount
------------------------------------------------------------------
<S> <C> <C> <C> <C>
Receipts for shares sold
Institutional Class 398,605 $4,273,055 569,689 $6,060,910
- ------------------------------------------------------------- ------------------------------------------------------------------
Administrative Class 63,758 684,843 39,423 420,992
- ------------------------------------------------------------- ------------------------------------------------------------------
Other Classes 56,265 604,586 68,465 730,357
- ------------------------------------------------------------- ------------------------------------------------------------------
Issued as reinvestment of distributions
Institutional Class 41,205 443,703 97,133 1,031,930
- ------------------------------------------------------------- ------------------------------------------------------------------
Administrative Class 1,676 18,065 2,241 23,828
- ------------------------------------------------------------- ------------------------------------------------------------------
Other Classes 2,655 28,601 4,339 46,126
- ------------------------------------------------------------- ------------------------------------------------------------------
Cost of shares redeemed
Institutional Class (224,210) (2,415,818) (333,872) (3,556,685)
- ------------------------------------------------------------- ------------------------------------------------------------------
Administrative Class (10,977) (118,050) (11,009) (117,585)
- ------------------------------------------------------------- ------------------------------------------------------------------
Other Classes (16,057) (172,865) (17,283) (183,785)
- ------------------------------------------------------------- ------------------------------------------------------------------
Net increase resulting from
Fund share transactions 312,920 $3,346,120 419,126 $4,456,088
============================================================= ==================================================================
<CAPTION>
Total Return Fund II
------------------------------------------------------------------
Six Months Ended 9/30/98 Year Ended 3/31/98
Shares Amount Shares Amount
------------------------------------------------------------------
<S> <C> <C> <C> <C>
Receipts for shares sold
Institutional Class 26,528 $ 275,819 33,950 $ 347,509
- ------------------------------------------------------------- ------------------------------------------------------------------
Administrative Class 4,722 49,066 1,005 10,297
- ------------------------------------------------------------- ------------------------------------------------------------------
Other Classes 0 0 0 0
- ------------------------------------------------------------- ------------------------------------------------------------------
Issued as reinvestment of distributions
Institutional Class 1,736 18,167 2,944 30,055
- ------------------------------------------------------------- ------------------------------------------------------------------
Administrative Class 86 904 60 610
- ------------------------------------------------------------- ------------------------------------------------------------------
Other Classes 0 0 0 0
- ------------------------------------------------------------- ------------------------------------------------------------------
Cost of shares redeemed
Institutional Class (4,481) (46,403 (29,485) (299,345)
- ------------------------------------------------------------- ------------------------------------------------------------------
Administrative Class (724) (7,534) (124) (1,264)
- ------------------------------------------------------------- ------------------------------------------------------------------
Other Classes 0 0 0 0
- ------------------------------------------------------------- ------------------------------------------------------------------
Net increase resulting from
Fund share transactions 27,867 $ 290,019 8,350 $ 87,862
============================================================= ==================================================================
<CAPTION>
Total Return Fund III
------------------------------------------------------------------
Six Months Ended 9/30/98 Year Ended 3/31/98
Shares Amount Shares Amount
------------------------------------------------------------------
<S> <C> <C> <C> <C>
Receipts for shares sold
Institutional Class 5,531 $ 53,780 16,851 $ 160,414
- ------------------------------------------------------------- ------------------------------------------------------------------
Administrative Class 159 1,522 23 211
- ------------------------------------------------------------- ------------------------------------------------------------------
Other Classes 0 0 0 0
- ------------------------------------------------------------- ------------------------------------------------------------------
Issued as reinvestment of distributions
Institutional Class 1,076 10,426 2,151 20,471
- ------------------------------------------------------------- ------------------------------------------------------------------
Administrative Class 3 26 0 1
- ------------------------------------------------------------- ------------------------------------------------------------------
Other Classes 0 0 0 0
- ------------------------------------------------------------- ------------------------------------------------------------------
Cost of shares redeemed
Institutional Class (450) (4,350) (1,903) (17,962)
- ------------------------------------------------------------- ------------------------------------------------------------------
Administrative Class 0 (2) (4) (39)
- ------------------------------------------------------------- ------------------------------------------------------------------
Other Classes 0 0 0 0
- ------------------------------------------------------------- ------------------------------------------------------------------
Net increase resulting from
Fund share transactions 6,319 $ 61,402 17,118 $ 163,096
============================================================= ==================================================================
</TABLE>
<TABLE>
<CAPTION>
Low Duration Fund III
------------------------------------------------------------------
Six Months Ended 9/30/98 Year Ended 3/31/98
Shares Amount Shares Amount
------------------------------------------------------------------
<S> <C> <C> <C> <C>
Receipts for shares sold
Institutional Class 107 $ 1,073 1,281 $ 12,870
- ------------------------------------------------------------- ------------------------------------------------------------------
Administrative Class 0 0 0 0
- ------------------------------------------------------------- ------------------------------------------------------------------
Other Classes 0 0 0 0
- ------------------------------------------------------------- ------------------------------------------------------------------
Issued as reinvestment of distributions
Institutional Class 72 722 81 816
- ------------------------------------------------------------- ------------------------------------------------------------------
Administrative Class 0 0 0 0
- ------------------------------------------------------------- ------------------------------------------------------------------
Other Classes 0 0 0 0
- ------------------------------------------------------------- ------------------------------------------------------------------
Cost of shares redeemed
Institutional Class (134) (1,345) 0 (1)
- ------------------------------------------------------------- ------------------------------------------------------------------
Administrative Class 0 0 0 0
- ------------------------------------------------------------- ------------------------------------------------------------------
Other Classes 0 0 0 0
- ------------------------------------------------------------- ------------------------------------------------------------------
Net increase resulting from
Fund share transactions 45 $ 450 1,362 $ 13,685
============================================================= ==================================================================
<CAPTION>
Low Duration Mortgage Fund
-------------------------------------------------------------------
Six Months Ended 9/30/98 Year Ended 3/31/98
Shares Amount Shares Amount
-------------------------------------------------------------------
<S> <C> <C> <C> <C>
Receipts for shares sold
Institutional Class 0 $ 0 355 $ 3,553
- ------------------------------------------------------------- ------------------------------------------------------------------
Administrative Class 0 0 0 0
- ------------------------------------------------------------- ------------------------------------------------------------------
Other Classes 0 0 0 0
- ------------------------------------------------------------- ------------------------------------------------------------------
Issued as reinvestment of distributions
Institutional Class 12 124 16 159
- ------------------------------------------------------------- ------------------------------------------------------------------
Administrative Class 0 0 0 0
- ------------------------------------------------------------- ------------------------------------------------------------------
Other Classes 0 0 0 0
- ------------------------------------------------------------- ------------------------------------------------------------------
Cost of shares redeemed
Institutional Class (1) (9) (1) (7)
- ------------------------------------------------------------- ------------------------------------------------------------------
Administrative Class 0 0 0 0
- ------------------------------------------------------------- ------------------------------------------------------------------
Other Classes 0 0 0 0
- ------------------------------------------------------------- ------------------------------------------------------------------
Net increase resulting from
Fund share transactions 11 $ 115 370 $ 3,705
============================================================= ==================================================================
<CAPTION>
Short-Term Fund
-------------------------------------------------------------------
Six Months Ended 9/30/98 Year Ended 3/31/98
Shares Amount Shares Amount
-------------------------------------------------------------------
<S> <C> <C> <C> <C>
Receipts for shares sold
Institutional Class 52,225 $ 525,596 30,985 $311,342
- ------------------------------------------------------------- ------------------------------------------------------------------
Administrative Class 87 1,031 458 4,605
- ------------------------------------------------------------- ------------------------------------------------------------------
Other Classes 6,731 67,629 5,433 54,585
- ------------------------------------------------------------- ------------------------------------------------------------------
Issued as reinvestment of distributions
Institutional Class 629 6,314 904 9,089
- ------------------------------------------------------------- ------------------------------------------------------------------
Administrative Class 67 40 3 35
- ------------------------------------------------------------- ------------------------------------------------------------------
Other Classes 107 1,077 67 681
- ------------------------------------------------------------- ------------------------------------------------------------------
Cost of shares redeemed
Institutional Class (36,818) (369,919) (30,360) (305,111)
- ------------------------------------------------------------- ------------------------------------------------------------------
Administrative Class (441) (4,439) (401) (4,023)
- ------------------------------------------------------------- ------------------------------------------------------------------
Other Classes (3,476) (34,901) (2,700) (27,134)
- ------------------------------------------------------------- ------------------------------------------------------------------
Net increase resulting from
Fund share transactions 19,111 $ 192,428 4,389 $ 44,069
============================================================= ==================================================================
</TABLE>
122 PIMCO Funds
<PAGE>
<TABLE>
<CAPTION>
Total Return Mortgage Fund
------------------------------------------------------------------
Six Months Ended 9/30/98 Year Ended 3/31/98
Shares Amount Shares Amount
------------------------------------------------------------------
<S> <C> <C> <C> <C>
Receipts for shares sold
Institutional Class 0 $ 0 336 $ 3,365
- ------------------------------------------------------------- ------------------------------------------------------------------
Administrative Class 0 0 0 0
- ------------------------------------------------------------- ------------------------------------------------------------------
Other Classes 10 100 0 0
- ------------------------------------------------------------- ------------------------------------------------------------------
Issued as reinvestment of distributions
Institutional Class 10 104 14 142
- ------------------------------------------------------------- ------------------------------------------------------------------
Administrative Class 0 0 0 0
- ------------------------------------------------------------- ------------------------------------------------------------------
Other Classes 0 3 0 0
- ------------------------------------------------------------- ------------------------------------------------------------------
Cost of shares redeemed
Institutional Class 0 0 0 0
- ------------------------------------------------------------- ------------------------------------------------------------------
Administrative Class 0 0 0 0
- ------------------------------------------------------------- ------------------------------------------------------------------
Other Classes 0 0 0 0
- ------------------------------------------------------------- ------------------------------------------------------------------
Net increase resulting from
Fund share transactions 20 $ 207 350 $ 3,507
============================================================= ==================================================================
<CAPTION>
Moderate Duration Fund
------------------------------------------------------------------
Six Months Ended 9/30/98 Year Ended 3/31/98
Shares Amount Shares Amount
------------------------------------------------------------------
<S> <C> <C> <C> <C>
Receipts for shares sold
Institutional Class 9,485 $ 96,596 22,490 $226,998
- ------------------------------------------------------------- ------------------------------------------------------------------
Administrative Class 0 0 0 0
- ------------------------------------------------------------- ------------------------------------------------------------------
Other Classes 0 0 0 0
- ------------------------------------------------------------- ------------------------------------------------------------------
Issued as reinvestment of distributions
Institutional Class 619 6,332 602 6,096
- ------------------------------------------------------------- ------------------------------------------------------------------
Administrative Class 0 0 0 0
- ------------------------------------------------------------- ------------------------------------------------------------------
Other Classes 0 0 0 0
- ------------------------------------------------------------- ------------------------------------------------------------------
Cost of shares redeemed
Institutional Class (9,074) (92,552) (881) (8,890)
- ------------------------------------------------------------- ------------------------------------------------------------------
Administrative Class 0 0 0 0
- ------------------------------------------------------------- ------------------------------------------------------------------
Other Classes 0 0 0 0
- ------------------------------------------------------------- ------------------------------------------------------------------
Net increase resulting from
Fund share transactions 1,030 $ 10,376 22,211 $224,204
============================================================= ==================================================================
<CAPTION>
Low Duration Fund
------------------------------------------------------------------
Six Months Ended 9/30/98 Year Ended 3/31/98
Shares Amount Shares Amount
------------------------------------------------------------------
<S> <C> <C> <C> <C>
Receipts for shares sold
Institutional Class 97,060 $ 988,280 144,295 $1,467,244
- ------------------------------------------------------------- ------------------------------------------------------------------
Administrative Class 10,993 112,009 3,319 33,741
- ------------------------------------------------------------- ------------------------------------------------------------------
Other Classes 37,374 380,433 41,975 427,414
- ------------------------------------------------------------- ------------------------------------------------------------------
Issued as reinvestment of distributions
Institutional Class 7,796 79,405 15,257 155,141
- ------------------------------------------------------------- ------------------------------------------------------------------
Administrative Class 304 3,096 182 1,852
- ------------------------------------------------------------- ------------------------------------------------------------------
Other Classes 572 5,822 757 7,702
- ------------------------------------------------------------- ------------------------------------------------------------------
Cost of shares redeemed
Institutional Class (79,470 (808,877) (168,625) (1,713,570)
- ------------------------------------------------------------- ------------------------------------------------------------------
Administrative Class (1,580) (16,065) (1,324) (13,425)
- ------------------------------------------------------------- ------------------------------------------------------------------
Other Classes (28,466) (289,604) (36,330) (369,736)
- ------------------------------------------------------------- ------------------------------------------------------------------
Net increase resulting from
Fund share transactions 44,583 $ 454,499 (494) $ (3,637)
============================================================= ==================================================================
<CAPTION>
Low Duration Fund II
------------------------------------------------------------------
Six Months Ended 9/30/98 Year Ended 3/31/98
Shares Amount Shares Amount
------------------------------------------------------------------
<S> <C> <C> <C> <C>
Receipts for shares sold
Institutional Class 1,816 $ 18,196 17,716 $177,099
- ------------------------------------------------------------- ------------------------------------------------------------------
Administrative Class 753 7,525 7 72
- ------------------------------------------------------------- ------------------------------------------------------------------
Other Classes 0 0 0 0
- ------------------------------------------------------------- ------------------------------------------------------------------
Issued as reinvestment of distributions
Institutional Class 1,102 11,068 2,014 20,086
- ------------------------------------------------------------- ------------------------------------------------------------------
Administrative Class 7 74 0 0
- ------------------------------------------------------------- ------------------------------------------------------------------
Other Classes 0 0 0 0
- ------------------------------------------------------------- ------------------------------------------------------------------
Cost of shares redeemed
Institutional Class (2,452) (24,588) (14,185) (141,508)
- ------------------------------------------------------------- ------------------------------------------------------------------
Administrative Class (7) (70) (2) (16)
- ------------------------------------------------------------- ------------------------------------------------------------------
Other Classes 0 0 0 0
- ------------------------------------------------------------- ------------------------------------------------------------------
Net increase resulting from
Fund share transactions 1,219 $ 12,205 5,550 $ 55,733
============================================================= ==================================================================
<CAPTION>
Long-Term U.S. Government Fund
------------------------------------------------------------------
Six Months Ended 9/30/98 Year Ended 3/31/98
Shares Amount Shares Amount
------------------------------------------------------------------
<S> <C> <C> <C> <C>
Receipts for shares sold
Institutional Class 7,645 $ 84,506 4,747 $ 48,113
- ------------------------------------------------------------- ------------------------------------------------------------------
Administrative Class 154 1,686 478 4,924
- ------------------------------------------------------------- ------------------------------------------------------------------
Other Classes 4,655 51,544 2,183 22,677
- ------------------------------------------------------------- ------------------------------------------------------------------
Issued as reinvestment of distributions
Institutional Class 160 1,770 194 1,998
- ------------------------------------------------------------- ------------------------------------------------------------------
Administrative Class 11 122 9 97
- ------------------------------------------------------------- ------------------------------------------------------------------
Other Classes 60 666 34 353
- ------------------------------------------------------------- ------------------------------------------------------------------
Cost of shares redeemed
Institutional Class (1,774) (19,422) (2,479) (25,182)
- ------------------------------------------------------------- ------------------------------------------------------------------
Administrative Class (177) (1,899) (18) (191)
- ------------------------------------------------------------- ------------------------------------------------------------------
Other Classes (1,077) (11,970) (443) (4,654)
- ------------------------------------------------------------- ------------------------------------------------------------------
Net increase resulting from
Fund share transactions 9,657 $ 107,003 4,705 $ 48,135
============================================================= ==================================================================
<CAPTION>
Real Return Bond Fund
------------------------------------------------------------------
Six Months Ended 9/30/98 Year Ended 3/31/98
Shares Amount Shares Amount
------------------------------------------------------------------
<S> <C> <C> <C> <C>
Receipts for shares sold
Institutional Class 63 $ 612 465 $ 4,626
- ------------------------------------------------------------- ------------------------------------------------------------------
Administrative Class 0 0 0 0
- ------------------------------------------------------------- ------------------------------------------------------------------
Other Classes 448 4,373 363 3,598
- ------------------------------------------------------------- ------------------------------------------------------------------
Issued as reinvestment of distributions
Institutional Class 17 167 34 333
- ------------------------------------------------------------- ------------------------------------------------------------------
Administrative Class 0 0 0 0
- ------------------------------------------------------------- ------------------------------------------------------------------
Other Classes 6 68 8 91
- ------------------------------------------------------------- ------------------------------------------------------------------
Cost of shares redeemed
Institutional Class (62) (604) (501) (5,016)
- ------------------------------------------------------------- ------------------------------------------------------------------
Administrative Class 0 0 0 0
- ------------------------------------------------------------- ------------------------------------------------------------------
Other Classes (167) (1,640) (197) (1,953)
- ------------------------------------------------------------- ------------------------------------------------------------------
Net increase resulting from
Fund share transactions 305 $ 2,976 172 $ 1,679
============================================================= ==================================================================
<CAPTION>
Foreign Bond Fund
------------------------------------------------------------------
Six Months Ended 9/30/98 Year Ended 3/31/98
Shares Amount Shares Amount
------------------------------------------------------------------
<S> <C> <C> <C> <C>
Receipts for shares sold
Institutional Class 12,681 $ 137,189 21,531 $230,125
- ------------------------------------------------------------- ------------------------------------------------------------------
Administrative Class 115 1,240 28 298
- ------------------------------------------------------------- ------------------------------------------------------------------
Other Classes 3,174 34,321 3,209 34,319
- ------------------------------------------------------------- ------------------------------------------------------------------
Issued as reinvestment of distributions
Institutional Class 849 9,184 2,017 21,425
- ------------------------------------------------------------- ------------------------------------------------------------------
Administrative Class 2 25 2 21
- ------------------------------------------------------------- ------------------------------------------------------------------
Other Classes 94 1,025 151 1,599
- ------------------------------------------------------------- ------------------------------------------------------------------
Cost of shares redeemed
Institutional Class (5,218) (56,405) (9,581) (102,060)
- ------------------------------------------------------------- ------------------------------------------------------------------
Administrative Class (5) (55) (4) (38)
- ------------------------------------------------------------- ------------------------------------------------------------------
Other Classes (484) (5,227) (244) (2,599)
- ------------------------------------------------------------- ------------------------------------------------------------------
Net increase resulting from
Fund share transactions 11,208 $ 121,297 17,109 $183,090
============================================================= ==================================================================
<CAPTION>
Global Bond Fund
------------------------------------------------------------------
Six Months Ended 9/30/98 Year Ended 3/31/98
Shares Amount Shares Amount
------------------------------------------------------------------
<S> <C> <C> <C> <C>
Receipts for shares sold
Institutional Class 2,639 $ 26,036 9,748 $ 97,041
- ------------------------------------------------------------- ------------------------------------------------------------------
Administrative Class 27 264 1,869 18,488
- ------------------------------------------------------------- ------------------------------------------------------------------
Other Classes 0 0 0 0
- ------------------------------------------------------------- ------------------------------------------------------------------
Issued as reinvestment of distributions
Institutional Class 548 5,373 1,552 15,183
- ------------------------------------------------------------- ------------------------------------------------------------------
Administrative Class 3 33 16 163
- ------------------------------------------------------------- ------------------------------------------------------------------
Other Classes 0 0 0 0
- ------------------------------------------------------------- ------------------------------------------------------------------
Cost of shares redeemed
Institutional Class (2,427) (23,728) (6,739) (66,343)
- ------------------------------------------------------------- ------------------------------------------------------------------
Administrative Class (98) (959) (1,761) (17,243)
- ------------------------------------------------------------- ------------------------------------------------------------------
Other Classes 0 0 0 0
- ------------------------------------------------------------- ------------------------------------------------------------------
Net increase resulting from
Fund share transactions 692 $ 7,019 4,685 $ 47,289
============================================================= ==================================================================
</TABLE>
1998 Semi-Annual Report 123
<PAGE>
Notes to Financial Statements (Cont.)
September 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
Global Bond Fund II
------------------------------------------------------------------
Six Months Ended 9/30/98 Year Ended 3/31/98
Shares Amount Shares Amount
------------------------------------------------------------------
<S> <C> <C> <C> <C>
Receipts for shares sold
Institutional Class 192 $ 1,896 2,462 $ 24,247
- ------------------------------------------------------------- ------------------------------------------------------------------
Administrative Class 0 0 0 0
- ------------------------------------------------------------- ------------------------------------------------------------------
Other Classes 194 1,935 774 8,381
- ------------------------------------------------------------- ------------------------------------------------------------------
Shares issued in reorganization
Other Classes 0 0 0 0
- ------------------------------------------------------------- ------------------------------------------------------------------
Issued as reinvestment of distributions
Institutional Class 72 715 10 100
- ------------------------------------------------------------- ------------------------------------------------------------------
Administrative Class 0 0 0 0
- ------------------------------------------------------------- ------------------------------------------------------------------
Other Classes 35 345 257 2,575
- ------------------------------------------------------------- ------------------------------------------------------------------
Cost of shares redeemed
Institutional Class 0 0 0 0
- ------------------------------------------------------------- ------------------------------------------------------------------
Administrative Class 0 0 0 0
- ------------------------------------------------------------- ------------------------------------------------------------------
Other Classes (532) (5,263) (839) (9,329)
- ------------------------------------------------------------- ------------------------------------------------------------------
Net increase resulting from
Fund share transactions (39) $ (372) 2,664 $ 25,974
============================================================= ==================================================================
<CAPTION>
Emerging Markets Bond Fund
------------------------------------------------------------------
Six Months Ended 9/30/98 Period Ended 3/31/98
Shares Amount Shares Amount
------------------------------------------------------------------
<S> <C> <C> <C> <C>
Receipts for shares sold
Institutional Class 58 $ 506 395 $ 3,907
- ------------------------------------------------------------- ------------------------------------------------------------------
Administrative Class 0 0 0 0
- ------------------------------------------------------------- ------------------------------------------------------------------
Other Classes 69 562 82 779
- ------------------------------------------------------------- ------------------------------------------------------------------
Shares issued in reorganization
Other Classes 0 0 0 0
- ------------------------------------------------------------- ------------------------------------------------------------------
Issued as reinvestment of distributions
Institutional Class 20 133 22 212
- ------------------------------------------------------------- ------------------------------------------------------------------
Administrative Class 0 0 0 0
- ------------------------------------------------------------- ------------------------------------------------------------------
Other Classes 3 46 3 22
- ------------------------------------------------------------- ------------------------------------------------------------------
Cost of shares redeemed
Institutional Class (3) (22) (37) (350)
- ------------------------------------------------------------- ------------------------------------------------------------------
Administrative Class 0 0 0 0
- ------------------------------------------------------------- ------------------------------------------------------------------
Other Classes (86) (670) (6) (57)
- ------------------------------------------------------------- ------------------------------------------------------------------
Net increase resulting from
Fund share transactions 61 $ 555 459 $ 4,513
============================================================= ==================================================================
<CAPTION>
High Yield Fund
------------------------------------------------------------------
Six Months Ended 9/30/98 Year Ended 3/31/98
Shares Amount Shares Amount
------------------------------------------------------------------
<S> <C> <C> <C> <C>
Receipts for shares sold
Institutional Class 36,347 $ 419,057 85,745 $ 991,624
- ------------------------------------------------------------- ------------------------------------------------------------------
Administrative Class 5,808 66,588 5,481 63,673
- ------------------------------------------------------------- ------------------------------------------------------------------
Other Classes 18,555 214,148 25,809 298,068
- ------------------------------------------------------------- ------------------------------------------------------------------
Shares issued in reorganization
Other Classes 0 0 0 0
- ------------------------------------------------------------- ------------------------------------------------------------------
Issued as reinvestment of distributions
Institutional Class 5,983 68,460 7,846 90,586
- ------------------------------------------------------------- ------------------------------------------------------------------
Administrative Class 290 3,310 123 1,429
- ------------------------------------------------------------- ------------------------------------------------------------------
Other Classes 1,027 11,764 1,683 19,420
- ------------------------------------------------------------- ------------------------------------------------------------------
Cost of shares redeemed
Institutional Class (20,945) (239,214) (20,969) (238,595)
- ------------------------------------------------------------- ------------------------------------------------------------------
Administrative Class (1,439) (16,262) (546) (6,334)
- ------------------------------------------------------------- ------------------------------------------------------------------
Other Classes (13,596) (156,510) (10,129) (116,831)
- ------------------------------------------------------------- ------------------------------------------------------------------
Net increase resulting from
Fund share transactions 32,030 $ 371,341 95,043 $ 1,103,040
============================================================= ==================================================================
</TABLE>
6. Transactions in Written Call and Put Options
Transactions in written call and put options were as follows (amounts in
thousands):
<TABLE>
<CAPTION>
Total Total Low Real Return Global
Total Return Fund Return Fund II Return Fund III Duration Fund Bond Fund Bond Fund
--------------------------------------------------------------------------------------------------------
----------------------------------------------- Premium ----------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance at 03/31/98 $ 3,653 $ 0 $ 198 $ 0 $ 88 $ 0
Sales 17,788 547 496 859 0 3,275
Closing Buys 0 0 0 0 0 (3,275)
Expirations (5,423) 0 (198) 0 0 0
Exercised (770) 0 0 0 0 0
--------------------------------------------------------------------------------------------------------
Balance at 09/30/98 $ 15,248 $ 547 $ 496 $ 859 $ 88 $ 0
========================================================================================================
</TABLE>
7. Reorganization
The Acquiring Fund, as listed below, acquired the assets and certain liabilities
of the Acquired Fund, also listed below, in a tax-free exchange for shares of
the Acquiring Fund, pursuant to a plan of reorganization approved by the
Acquired Fund's shareholders (amounts in thousands):
<TABLE>
<CAPTION>
Total
Shares Value of Total Net Total Net Net Assets Acquired
Issued by Shares Issued Assets of Assets of of Acquiring Fund
Acquiring by Acquiring Acquired Acquiring Fund After Unrealized
Acquiring Fund Acquired Fund Date Fund Fund Fund Fund Acquisition Appreciation
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PIMCO Municipal PIMCO Tax
Bond Fund Exempt Fund 06/26/98 4,715 $47,296 $47,296 $4,295 $51,585 $2,335
</TABLE>
124 PIMCO Funds
<PAGE>
<TABLE>
<CAPTION>
Municipal Bond Fund
------------------------------------------------------------------
Six Months Ended 9/30/98 Period Ended 3/31/98
Shares Amount Shares Amount
------------------------------------------------------------------
<S> <C> <C> <C> <C>
Receipts for shares sold
Institutional Class 318 $ 3,215 300 $ 3,000
- ------------------------------------------------------------- ------------------------------------------------------------------
Administrative Class 10 100 0 0
- ------------------------------------------------------------- ------------------------------------------------------------------
Other Classes 533 5,361 0 0
- ------------------------------------------------------------- ------------------------------------------------------------------
Shares issued in reorganization
Other Classes 4,715 47,296 0 0
- ------------------------------------------------------------- ------------------------------------------------------------------
Issued as reinvestment of distributions
Institutional Class 8 83 3 33
- ------------------------------------------------------------- ------------------------------------------------------------------
Administrative Class 0 0 0 0
- ------------------------------------------------------------- ------------------------------------------------------------------
Other Classes 32 321 0 0
- ------------------------------------------------------------- ------------------------------------------------------------------
Cost of shares redeemed
Institutional Class (8) (76) 0 0
- ------------------------------------------------------------- ------------------------------------------------------------------
Administrative Class 0 0 0 0
- ------------------------------------------------------------- ------------------------------------------------------------------
Other Classes (332) (3,347) 0 0
- ------------------------------------------------------------- ------------------------------------------------------------------
Net increase resulting from
Fund share transactions 5,276 $ 52,953 303 $ 3,033
============================================================= ==================================================================
<CAPTION>
Money Market Fund
-------------------------------------------------------------------
Six Months Ended 9/30/98 Year Ended 3/31/98
Shares Amount Shares Amount
-------------------------------------------------------------------
<S> <C> <C> <C> <C>
Receipts for shares sold
Institutional Class 72,781 $ 72,781 126,866 $ 126,866
- ------------------------------------------------------------- -------------------------------------------------------------------
Administrative Class 9,841 9,841 1,317 1,317
- ------------------------------------------------------------- -------------------------------------------------------------------
Other Classes 2,868,281 2,868,281 3,188,249 3,188,249
- ------------------------------------------------------------- -------------------------------------------------------------------
Shares issued in reorganization
Other Classes 0 0 0 0
- ------------------------------------------------------------- -------------------------------------------------------------------
Issued as reinvestment of distributions
Institutional Class 756 756 1,408 1,408
- ------------------------------------------------------------- -------------------------------------------------------------------
Administrative Class 36 36 15 15
- ------------------------------------------------------------- -------------------------------------------------------------------
Other Classes 2,680 2,680 3,634 3,634
- ------------------------------------------------------------- -------------------------------------------------------------------
Cost of shares redeemed
Institutional Class (80,970) (80,970) (96,437) (96,437)
- ------------------------------------------------------------- -------------------------------------------------------------------
Administrative Class (8,198) (8,198) (594) (594)
- ------------------------------------------------------------- -------------------------------------------------------------------
Other Classes (2,746,873) (2,746,873) (3,224,002) (3,224,002)
- ------------------------------------------------------------- -------------------------------------------------------------------
Net increase resulting from
Fund share transactions 118,334 $ 118,334 456 $ 456
============================================================= ===================================================================
<CAPTION>
StocksPLUS Fund
------------------------------------------------------------------
Six Months Ended 9/30/98 Year Ended 3/31/98
Shares Amount Shares Amount
------------------------------------------------------------------
<S> <C> <C> <C> <C>
Receipts for shares sold
Institutional Class 7,524 $ 104,321 16,854 $225,911
- ------------------------------------------------------------- ------------------------------------------------------------------
Administrative Class 166 2,249 98 1,303
- ------------------------------------------------------------- ------------------------------------------------------------------
Other Classes 12,772 177,908 17,361 233,963
- ------------------------------------------------------------- ------------------------------------------------------------------
Shares issued in reorganization
Other Classes 0 0 0 0
- ------------------------------------------------------------- ------------------------------------------------------------------
Issued as reinvestment of distributions
Institutional Class 365 5,090 4,247 54,317
- ------------------------------------------------------------- ------------------------------------------------------------------
Administrative Class 3 35 17 211
- ------------------------------------------------------------- ------------------------------------------------------------------
Other Classes 215 2,998 2,078 26,317
- ------------------------------------------------------------- ------------------------------------------------------------------
Cost of shares redeemed
Institutional Class (4,800) (67,354) (12,110) (165,345)
- ------------------------------------------------------------- ------------------------------------------------------------------
Administrative Class (19) (267) (22) (291)
- ------------------------------------------------------------- ------------------------------------------------------------------
Other Classes (3,866) (53,322) (3,197) (43,168)
- ------------------------------------------------------------- ------------------------------------------------------------------
Net increase resulting from
Fund share transactions 12,360 $ 171,658 25,326 $333,218
============================================================= ==================================================================
<CAPTION>
Strategic Balanced Fund
------------------------------------------------------------------
Six Months Ended 9/30/98 Year Ended 3/31/98
Shares Amount Shares Amount
------------------------------------------------------------------
<S> <C> <C> <C> <C>
Receipts for shares sold
Institutional Class 14 $ 173 2,472 $ 29,336
- ------------------------------------------------------------- ------------------------------------------------------------------
Administrative Class 0 0 0 0
- ------------------------------------------------------------- ------------------------------------------------------------------
Other Classes 7 100 0 0
- ------------------------------------------------------------- ------------------------------------------------------------------
Shares issued in reorganization
Other Classes 0 0 0 0
- ------------------------------------------------------------- ------------------------------------------------------------------
Issued as reinvestment of distributions
Institutional Class 1 9 53 617
- ------------------------------------------------------------- ------------------------------------------------------------------
Administrative Class 0 0 0 0
- ------------------------------------------------------------- ------------------------------------------------------------------
Other Classes 0 1 0 0
- ------------------------------------------------------------- ------------------------------------------------------------------
Cost of shares redeemed
Institutional Class (1) (14) (448) (5,202)
- ------------------------------------------------------------- ------------------------------------------------------------------
Administrative Class 0 0 0 0
- ------------------------------------------------------------- ------------------------------------------------------------------
Other Classes 0 0 0 0
- ------------------------------------------------------------- ------------------------------------------------------------------
Net increase resulting from
Fund share transactions 21 $ 269 2,077 $ 24,751
============================================================= ==================================================================
</TABLE>
8. Federal Income Tax Matters
As of March 31, 1998, the Funds listed in the table below had remaining capital
loss carryforwards that were realized or acquired in prior years. Use of the
acquired capital loss carryforwards may be limited under current tax laws. As of
March 31, 1998, $13,760,932 of capital loss carryforwards in the High Yield Fund
expired.
Additionally, the Moderate Duration, Low Duration, Low Duration II, Low
Duration III, Short-Term, Foreign Bond, Global Bond and Emerging Markets Bond
Funds realized capital losses and/or foreign currency losses during the period
November 1, 1997 through March 31, 1998 which the Fund elected to defer to the
following fiscal year pursuant to income tax regulations. The amounts are
$421,380, $547,213, $142,259, $26,286, $85,720, $115,196, $5,549,505 and
$161,447, respectively.
Each Fund will resume capital gains distributions in the future to the
extent gains are realized in excess of the available carryforwards.
<TABLE>
<CAPTION>
Capital Loss Carryforwards (amounts in thousands)
-------------------------------------------------------------------------------------------
Realized Losses Acquired Losses Expiration
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Total Return Fund $ 0 $ 988 03/31/04
0 8,185 03/31/02
High Yield Fund 0 50,541 03/31/02
0 5,495 03/31/01
</TABLE>
1998 Semi-Annual Report 125
<PAGE>
Pacific Investment Management Company is responsible for the management and
administration of the PIMCO Funds. Founded in 1971, Pacific Investment
Management Company currently manages assets in excess of $148 billion on behalf
of mutual fund and institutional clients located around the world.
Pacific Investment Management Company is one of seven investment advisory firms
which form PIMCO Advisors Holdings L.P., the nation's fourth largest publicly
traded investment management concern with combined assets under management in
excess of $226 billion. Widely recognized for providing consistent performance
and high-quality client service, the seven affiliated firms are:
Pacific Investment Management Company/Newport Beach, California
Oppenheimer Capital/New York, New York
Columbus Circle Investors/Stamford, Connecticut
Cadence Capital Management/Boston, Massachusetts
NFJ Investment Group/Dallas, Texas
Parametric Portfolio Associates/Seattle, Washington
Blairlogie Capital Management/Edinburgh, Scotland
Units of PIMCO Advisors Holdings L.P. trade on the New York Stock Exchange under
the ticker symbol "PA."
Trustees and Officers
Brent R. Harris Chairman and Trustee
R. Wesley Burns President and Trustee
Guilford C. Babcock Trustee
Vern O. Curtis Trustee
Thomas P. Kemp Trustee
William J. Popejoy Trustee
Garlin G. Flynn Secretary
John P. Hardaway Treasurer
Investment Adviser and Administrator
Pacific Investment Management Company
840 Newport Center Drive, Suite 300
Newport Beach, California 92660
Transfer Agent and Custodian
Investors Fiduciary Trust Company
801 Pennsylvania
Kansas City, Missouri 64105
Counsel
Dechert Price & Rhoads
1775 Eye Street, N.W.
Washington, D.C. 20006-2401
Independent Accountants
PricewaterhouseCoopers LLP
1055 Broadway
Kansas City, Missouri 64105
<PAGE>
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.
[LOGO OF PIMCO FUNDS APPEARS HERE]
840 NEWPORT CENTER DRIVE, SUITE 300
NEWPORT BEACH, CA 92660
800.927.4648
