<PAGE>
PIMCO
FUNDS
PACIFIC
INVESTMENT [ARTWORK APPEARS HERE]
MANAGEMENT
SERIES
ANNUAL REPORT
March 31, 1998
<PAGE>
Contents
Chairman's Message ...........................................1
Market Review ................................................2
An Interview with William Gross ..............................3
Financial Highlights ........................................24
Statement of Assets and Liabilities .........................32
Statement of Operations .....................................35
Statement of Changes in Net Assets ..........................38
Statement of Cash Flows .....................................44
Notes to Financial Statements ..............................103
Fund Schedule of
Summary Investments
Total Return Fund ............................................4 45
Total Return Fund II .........................................5 58
Total Return Fund III ........................................6 60
Total Return Mortgage Fund ...................................7 63
Moderate Duration Fund .......................................8 64
Low Duration Fund ............................................9 67
Low Duration Fund II ........................................10 72
Low Duration Fund III .......................................11 74
Low Duration Mortgage Fund ..................................12 75
Short-Term Fund .............................................13 76
Long-Term U.S. Government Fund ..............................14 78
Real Return Bond Fund .......................................15 80
Foreign Bond Fund ...........................................16 81
Global Bond Fund ............................................17 85
Global Bond Fund II .........................................23 88
Emerging Markets Bond Fund ..................................18 91
High Yield Fund .............................................19 93
Money Market Fund ...........................................20 97
StocksPLUS Fund .............................................21 98
Strategic Balanced Fund .....................................22 101
<PAGE>
Chairman's Letter
Dear PIMCO Funds Shareholder:
Both the stock and bond markets posted strong returns for the one-year period
ended March 31, 1998, surprising many investors. The stock market, as measured
by the Standard & Poor's 500 Index of stocks, rose a remarkable 48%, and the
overall bond market, as measured by the Lehman Aggregate Bond Index, posted a
12% return.
POSITIVE CONDITIONS CONTINUE The last twelve months have been fruitful for both
fixed income and equity investors, who experienced overall positive results.
There have been ups and downs along the way, however. Last October, the Dow
Jones Industrial Average fell 554 points in reaction to the mounting financial
crisis in Asia, and the ripple effects continue in the form of market
volatility. But, for the most part, investors have taken these events in stride,
adhering to a long-term investment horizon.
Bond yields fluctuated in a fairly narrow range throughout 1997 and early this
year. We expect this trend to persist, as long-term interest rates should remain
between 5 and 7% through the year 2000. Given this environment, we believe bonds
will post good returns in the coming several years.
LOOKING AHEAD As we enter the second quarter of 1998, there are few signs to
indicate that the financial markets are going to stop their ascent, although we
don't foresee it maintaining this feverish pace. Steady, if not slowing,
economic growth, combined with relatively low inflation and interest rates, are
close to ideal conditions for a sustained bond bull market. However, stock
market valuations are at record highs, and events perceived as negative by
investors could lead to increased volatility in the equity market.
On the next 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.
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 us at
1-800-927-4648. Or, visit our Web site at www.pimcofunds.com.
Sincerely,
/s/ Brent R. Harris
Brent R. Harris
Chairman of the Board
April 23, 1998
1998 Annual Report 1
<PAGE>
Market Review
The Bond Market
Smooth Sailing Ahead?
The bull market reached beyond equities this past year, as the bond market also
posted impressive returns. Bond prices rose during 1997, as long-term interest
rates fell from 7.1% to 5.9%. High yield bonds led the bond market rally, and
almost every sector of the fixed income market participated.
There were several factors that contributed to the bond market's performance in
1997, including the strong U.S. dollar, the potential for a slowing U.S. economy
due to the Asian financial crisis, low inflation, and a reduced threat of a
Federal Reserve interest rate hike. In addition, the volatility in the stock
market, combined with portfolio rebalancing stemming from strong equity
performance, caused many investors to reallocate assets into bonds.
While yields were steady during the first three months of 1998, all was not
quiet on the fixed income front. Much of the excitement revolved around
investors trying to decipher what impact the Asian crisis would have on the U.S.
economy. The U.S. bond market rallied at the beginning of the year, as investors
from around the globe worried about the events in Asia and took shelter in the
safe haven of U.S. Treasury securities.
In February, interest rates increased on signs that the U.S. economy was
stronger than many had expected, which ignited fears that inflation pressures
were building. However, many of those fears were alleviated in March, when
statistics indicated that inflation was still muted. The bond market then
rallied back to yield levels where it started the year.
Looking ahead, the Asian crisis and an underlying global glut of goods are key
pieces in the link towards lower yields and higher bond prices. As a result, we
believe that U.S. inflation could dip below 1% and U.S. Treasury bonds could
approach 5% over the next 12-18 months. For additional details on our bond
market outlook, please refer to the interview with Bill Gross on the following
page.
After surging in early 1997, interest rates fell causing bond prices to rise.
[LINE GRAPH APPEARS HERE]
30-Year Treasury Rates, Monthly (4/97 to 3/98)
7.126
7.169
7.056
7.145
6.877
6.893
6.9
6.989
6.908
6.776
6.726
6.663
6.744
6.629
6.531
6.532
6.456
6.456
6.636
6.548
6.651
6.612
6.643
6.588
6.379
6.368
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
The Stock Market
Better-Than-Expected Returns
As the first quarter of 1998 ended, the U.S. stock market exceeded most
investors expectations by posting very strong gains. The Standard & Poor's 500
Index returned 13.9% during the quarter. The market rebounded from fears that
the Asian crisis would hinder U.S. corporate profits for an extended period.
Evidence of a strong domestic economy, a benign inflation environment, and a
favorable interest rate outlook prompted the market to look beyond several
first-quarter earnings disappointments from some of America's largest companies.
Stock market investors were truly forward-looking, as they believed that the
current economic backdrop would allow healthy corporate earnings growth later
this year and into 1999. In fact, investors seemed to fear not being fully
invested in the stock market at all times. Money that was flowing out of
companies that were providing disappointing results was simply reinvested in
other stocks that were still performing well.
Despite disappointing earnings announcements from companies such as Intel and
Motorola, the technology sector provided very strong returns early in 1998's
first quarter, rebounding from a weak fourth quarter in 1997. Financial stocks
also performed well, amid strong profits and takeover activity.
Strong equity returns were not limited to the U.S. markets. Many European stocks
soared, as investors embraced the low inflation, low interest rate environment,
and signaled their approval for the ongoing wave of corporate restructuring.
Several Asian markets rebounded vigorously in the first quarter of 1998 from
their dismal performances of 1997. However, the troubles in Asia have probably
not run their course, which could lead to further volatility in these markets.
Looking ahead, we are cautiously optimistic about the prospects for the stock
market. The current environment is positive, but we could see an acceleration in
market unrest if inflation and interest rates move upwards. Given this scenario,
it's important for investors to maintain a long-term outlook.
Despite some bumps in the road, stocks continued their seven year climb.
[LINE GRAPH APPEARS HERE]
S&P 500 Index, Monthly (4/97 - 3/98)
757.9
737.65
766.34
765.37
812.97
824.78
829.75
847.03
848.28
858.01
893.27
898.7
887.3
916.92
916.68
915.3
938.79
947.14
933.54
900.81
923.54
899.47
929.05
923.91
950.51
945.22
965.03
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
1068.59
1099.16
1095.44
2 PIMCO Funds
<PAGE>
PIMCO Funds
Managing Director and Founder of Pacific Investment Management Company
William Gross
[PICTURE OF WILLIAM GROSS
APPEARS HERE]
William Gross is a Managing Director and founder of Pacific Investment
Management Company, a PIMCO Advisors institutional investment firm. He is also
the portfolio manager of several of the PIMCO Funds, including the highly-rated
PIMCO Total Return, Low Duration, and Short-Term Funds and is leader of the team
that manages the StocksPLUS Fund. Mr. Gross' views on the financial markets are
regularly 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: How would you describe economic conditions in the United States?
A: The current environment is quite unique for a variety of reasons. First,
we've experienced eight years of economic growth with seemingly no end in
sight. Second, there have been three consecutive years of 20-plus percent
gains in the stock market, with the public expecting more than 30 percent
return annually through the turn of the century. But, the most dramatic
difference is that inflation is declining in the face of 4.7 percent
unemployment-the tightest job market in decades. Historically, declining
unemployment levels have triggered increasing rates of inflation.
Q: Does this mean you feel inflation is on the upswing?
A: Not at all. The Asian crisis has helped contain inflation, and it will
continue to affect U.S. prices. Because of the dramatic depreciation of
many Asian currencies against the dollar, the prices of many goods imported
from that region have declined noticeably. Those price declines have in
turn helped keep the cost of many U.S. manufactured goods down as well. If,
as I expect, U.S. economic growth is substantially affected by the
Asian crisis, then unemployment will likely increase in coming months,
helping to alleviate wage pressures.
Q: How long could the current economic climate last?
A: Despite the fact that the Asian crisis may hinder world economic growth for
perhaps one to two years, there is little reason to believe that the U.S.
dollar can continue to appreciate at 10 to 15 percent annually as it has in
the recent past. Absent those types of gains, the inflation-lowering
impact of reduced import prices may fade beginning next year.
Q: What are your current predictions for the global economy?
A: I believe that U.S. consumers, supported by high employment, gains in real
personal income, and asset appreciation, will sustain U.S. economic growth
at a steady pace over the next six to nine months. However, the Asian
crisis has placed us in a period of global glut, meaning that there are too
many goods being produced relative to demand. As I believe that this glut
is more than cyclical in nature, I expect that Asia and the rest of the
world will go through a period of slower than average growth for the next
several years.
Q: What do you think will happen in the bond market?
A: Along with the worldwide slowdown in growth will be sharply lower commodity
prices and pressure on corporate profit margins, which should trigger even
lower inflation and a continuation of the bond bull market. Over the next
12-18 months, U.S. inflation is likely to dip below 1% and U.S. Treasury
bonds could approach 5%. The Asian crisis, its conflicting solutions, and
the underlying global glut are key pieces in the link towards lower yields
and higher bond prices.
Q: What is your strategy for the flagship PIMCO Total Return Fund going
forward?
A: We will underweight the investment grade corporate sector of the Fund's
portfolio, as we see corporate profits slowing and these bonds' returns
trailing those of U.S. government securities. Our international holdings
will remain selective, as we feel that foreign bonds currently offer less
value than domestic issues. The portfolio will, however, retain a small
exposure to debt in those emerging market countries that we believe are
well insulated from any further Asian turmoil.
The views of Mr. Gross are not indicative of any past or future performance
of a PIMCO Fund.
1998 Annual Report 3
<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:
5.0 years
Total Net Assets:
$18,092 million
Sector Breakdown:*
[PIE CHART APPEARS HERE]
Mortgage-Backed Securities 42.5%
Corporate Bonds and Notes 23.4%
Short-Term Instruments 15.0%
U.S. Government Agencies 6.2%
Asset-Backed Securities 4.9%
Other 8.0%
Quality Breakdown:*
[PIE CHART APPEARS HERE]
AAA 80%
AA 2%
A 9%
BBB 5%
BB 4%
*% of Total Investments as of March 31, 1998
- --------------------------------------------------------------------------------
PERFORMANCE
- --------------------------------------------------------------------------------
TOTAL RETURN INVESTMENT PERFORMANCE For the Period Ended March 31, 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>
1 Year 12.63% 12.36% 11.98% 10.78%
3 Years* 10.10% 9.86% 9.18% 8.36%
5 Years* 7.78% -- 6.94% 6.17%
10 Years* 9.96% -- 8.94% 8.26%
Since Inception* 9.82% 9.37% -- --
</TABLE>
* Annualized
CUMULATIVE RETURNS THROUGH MARCH 31, 1998
$5,000,000 invested at inception
[LINE GRAPH APPEARS HERE]
Lehman Brothers
Total Return Aggregate Bond
MONTH Fund Index
----- ------------- ---------------
05/31/87 5,000,000.00 5,000,000.00
06/30/87 5,063,956.34 5,068,813.30
09/30/87 4,913,547.24 4,930,537.52
12/31/87 5,153,725.88 5,217,151.39
06/30/88 5,451,096.95 5,476,986.50
09/30/88 5,574,381.00 5,586,211.37
12/31/88 5,637,131.44 5,628,570.50
03/31/89 5,697,790.05 5,692,677.23
06/30/89 6,168,243.70 6,146,130.88
09/30/89 6,221,536.05 6,215,431.06
12/31/89 6,440,082.87 6,446,377.56
03/31/90 6,344,778.35 6,395,092.18
06/30/90 6,569,704.69 6,628,797.71
09/30/90 6,578,457.98 6,685,601.14
12/31/90 6,958,353.92 7,023,987.28
03/31/91 7,216,807.61 7,220,851.73
06/30/91 7,401,768.00 7,338,029.08
09/30/91 7,894,693.54 7,754,803.95
12/31/91 8,319,146.95 8,148,045.96
03/31/92 8,292,135.33 8,043,852.25
06/30/92 8,616,471.95 8,368,443.26
09/30/92 9,043,979.79 8,727,927.81
12/31/92 9,129,278.40 8,751,136.07
03/31/93 9,560,206.46 9,112,892.76
06/30/93 9,876,645.33 9,354,550.77
09/30/93 10,204,889.62 9,598,643.21
12/31/93 10,271,501.07 9,604,323.55
03/31/94 9,995,399.21 9,329,070.37
06/30/94 9,814,015.06 9,232,829.14
09/30/94 9,917,752.98 9,289,145.68
12/31/94 9,904,417.17 9,324,201.51
03/31/95 10,417,455.79 9,794,533.89
06/30/95 10,929,712.70 10,391,294.47
09/30/95 11,244,354.79 10,595,299.92
12/31/95 11,863,137.98 11,046,806.02
03/31/96 11,578,391.40 10,850,915.35
06/30/96 11,683,872.98 10,912,587.64
09/30/96 11,973,192.96 11,114,483.25
12/31/96 12,419,446.40 11,447,838.22
03/31/97 12,342,925.19 11,383,893.79
06/30/97 12,843,893.73 11,801,967.02
09/30/97 13,301,627.11 12,194,072.97
12/31/97 13,681,811.85 12,553,070.63
03/31/98 13,902,210.91 12,747,338.35
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 Fund's Institutional Class shares outperformed the Lehman Brothers
Aggregate Bond Index for the fiscal year, returning 12.63% compared to
11.98% for the benchmark.
. The Fund's duration was held longer than its benchmark for much of the
period which added to returns as yields fell across the curve in the latter
half of 1997.
. The Fund's emphasis on intermediate maturity holdings during most of the
period enhanced relative performance as this segment of the yield curve
experienced declines of about 100 basis points.
. The Fund's underweight of Treasuries added slightly to performance as
Treasuries underperformed on a duration-adjusted basis during the fiscal
year.
. The Fund maintained an overweighted allocation to mortgages which
outperformed during the period as investors were attracted to their initial
higher yields which led to spread tightening, further enhancing sector
performance.
. Limited emerging market and high yield bond exposure added to relative
returns as yield spreads versus Treasuries contracted on higher-quality,
below-investment-grade corporate bonds and select holdings in South
American and Pacific Rim countries.
. The Fund's international debt holdings slightly detracted from performance
as yield enhancement was difficult to achieve due to similar real yields
among developed countries.
4 PIMCO Funds
<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:
5.5 years
Total Net Assets:
$590 million
Sector Breakdown:*
[PIE CHART APPEARS HERE]
Mortgage-Backed Securities 55.4%
Corporate Bonds and Notes 21.9%
Short-Term Instruments 17.8%
Asset-Backed Securities 4.7%
U.S. Government Agencies 0.2%
Quality Breakdown:*
[PIE CHART APPEARS HERE]
AAA 81%
AA 2%
A 9%
BBB 7%
BB 1%
*% of Total Investments as of March 31, 1998
- --------------------------------------------------------------------------------
PERFORMANCE
- --------------------------------------------------------------------------------
TOTAL RETURN INVESTMENT PERFORMANCE For the Period Ended March 31, 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>
1 Year 11.99% 11.71% 11.98% 10.78%
3 Years* 9.55% 9.27% 9.18% 8.36%
5 Years* 7.42% -- 6.94% 6.17%
Since Inception* 8.21% 10.09% -- --
</TABLE>
* Annualized
CUMULATIVE RETURNS THROUGH MARCH 31, 1998
$5,000,000 invested at inception
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Lehman Brothers
Total Return Aggregate Bond
MONTH Fund II Index
======== ============ ===============
<S> <C> <C>
12/31/91 5,000,000.00 5,000,000.00
03/31/92 4,937,872.54 4,936,062.15
06/30/92 5,149,979.44 5,135,245.49
09/30/92 5,437,040.85 5,355,841.05
12/31/92 5,471,600.16 5,370,082.66
03/31/93 5,719,996.80 5,592,072.50
06/30/93 5,920,354.14 5,740,364.51
09/30/93 6,093,001.53 5,890,150.38
12/31/93 6,067,801.62 5,893,636.09
03/31/94 5,910,177.59 5,724,728.61
06/30/94 5,845,103.89 5,665,670.75
09/30/94 5,896,835.44 5,700,229.06
12/31/94 5,933,421.21 5,721,740.86
03/31/95 6,223,521.86 6,010,357.53
06/30/95 6,551,568.81 6,376,556.12
09/30/95 6,717,352.56 6,501,742.85
12/31/95 7,059,284.02 6,778,806.89
03/31/96 6,882,876.95 6,658,599.74
06/30/96 6,917,298.83 6,696,444.58
09/30/96 7,079,836.65 6,820,336.62
12/31/96 7,331,445.66 7,024,897.92
03/31/97 7,305,830.65 6,985,658.80
06/30/97 7,571,276.14 7,242,206.95
09/30/97 7,837,156.08 7,482,820.44
12/31/97 8,063,867.49 7,703,117.22
03/31/98 8,181,805.94 7,822,328.45
</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
- --------------------------------------------------------------------------------
. Fund performance matched the Lehman Brothers Aggregate Bond Index for the
fiscal year, at 11.99% versus 11.98% for the benchmark.
. The Fund's above-index duration added to performance as yields fell across
the curve in the latter half of 1997.
. A focus on intermediate maturity holdings during most of the period
enhanced returns as this segment of the yield curve fell about 100 basis
points.
. In response to historically narrow yield spreads, the corporate sector was
underweighted throughout the period which placed a drag on relative
performance as generally stable spreads and an initial yield advantage
caused the corporate sector to post relatively strong returns, however, the
strategy did pay off in the fourth quarter of 1997 when the Asian crisis
broke and investors sought protection in high quality securities.
. The Fund's Treasury positions detracted slightly from performance as
Treasuries underperformed on a duration-adjusted basis during the fiscal
year.
. The Fund maintained an overweighted allocation to the mortgage sector which
outperformed as investors were attracted to higher yields offered by
mortgaged-backed securities.
1998 Annual Report 5
<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:
5.0 years
Total Net Assets:
$365 million
Sector Breakdown:*
[PIE CHART APPEARS HERE]
Mortgage-Backed Securities 42.6%
Corporate Bonds and Notes 29.4%
Short-Term Instruments 16.4%
U.S. Government Agencies 6.7%
Other 4.9%
Quality Breakdown:*
[PIE CHART APPEARS HERE]
AAA 94%
A 4%
BBB 2%
*% of Total Investments as of March 31, 1998
- --------------------------------------------------------------------------------
PERFORMANCE
- --------------------------------------------------------------------------------
TOTAL RETURN INVESTMENT PERFORMANCE For the Period Ended March 31, 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>
1 Year 12.62% - 11.98% 10.78%
3 Years* 9.79% - 9.18% 8.36%
5 Years* 7.96% - 6.94% 6.17%
Since Inception 9.61%* 12.46% - -
</TABLE>
* Annualized
CUMULATIVE RETURNS THROUGH MARCH 31, 1998
$5,000,000 invested at inception
[LINE GRAPH APPEARS HERE]
Total Return Lehman Brothers
MONTH Fund III Aggregate Bond
Index
==============================================================
04/30/91 5,000,000.00 5,000,000.00
06/30/91 5,011,359.52 5,026,682.08
09/30/91 5,362,298.54 5,312,180.37
12/31/91 5,687,512.05 5,581,558.23
03/31/92 5,621,305.61 5,510,183.66
06/30/92 5,844,833.24 5,732,534.35
09/30/92 6,112,922.43 5,978,787.74
12/31/92 6,200,946.89 5,994,685.82
03/31/93 6,434,448.98 6,242,495.66
06/30/93 6,644,495.93 6,408,035.75
09/30/93 6,894,098.61 6,575,243.47
12/31/93 6,984,684.68 6,579,134.61
03/31/94 6,797,242.16 6,390,581.22
06/30/94 6,681,327.69 6,324,654.24
09/30/94 6,760,588.20 6,363,232.09
12/31/94 6,745,187.69 6,387,245.96
03/31/95 7,131,605.55 6,709,432.12
06/30/95 7,468,981.79 7,118,223.86
09/30/95 7,661,663.64 7,257,971.27
12/31/95 8,042,734.75 7,567,261.08
03/31/96 7,848,991.23 7,433,072.44
06/30/96 7,938,312.39 7,475,319.07
09/30/96 8,134,266.56 7,613,621.20
12/31/96 8,415,106.52 7,841,975.36
03/31/97 8,379,283.78 7,798,172.28
06/30/97 8,714,471.27 8,084,559.97
09/30/97 9,006,608.47 8,353,159.60
12/31/97 9,274,214.91 8,599,079.47
03/31/98 9,436,938.50 8,732,156.36
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
- --------------------------------------------------------------------------------
. The Fund's Institutional Class shares outperformed the Lehman Brothers
Aggregate Bond Index for the fiscal year, returning 12.62% compared to
11.98% for the benchmark.
. Fund duration was held longer than its benchmark which added to returns as
yields declined across the curve in the latter half of 1997, while the
Fund's emphasis on intermediate-term maturities was also positive as this
segment of the yield curve fell about 100 basis points.
. A corporate sector underweighting which detracted from performance
throughout much of the period, boosted relative performance in the fourth
quarter of 1997 when the Asian crisis broke and investors sought protection
in high quality securities.
. The Fund's underweight of Treasuries added slightly to performance as
Treasuries underperformed on a duration-adjusted basis during the fiscal
year.
. The Fund maintained an overweighted mortgage sector allocation during the
period as a means of enhancing portfolio yield which added favorably to
performance relative to its benchmark.
. Limited exposure to emerging markets and high yield bonds helped returns as
higher-quality below-investment-grade corporate bonds and select holdings
in South American and Pacific Rim countries performed well.
. The Fund's international holdings detracted from performance as yield
enhancement was difficult to achieve due to similar real yields among
developed countries.
6 PIMCO Funds
<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:
3.2 years
Total Net Assets:
$4 million
Sector Breakdown:*
[PIE CHART APPEARS HERE]
Mortgage-Backed Securities 77.4%
U.S. Treasury Obligations 13.6%
Short-Term Instruments 9.0%
*% of Total Investments as of March 31, 1998
- --------------------------------------------------------------------------------
PERFORMANCE
- --------------------------------------------------------------------------------
TOTAL RETURN INVESTMENT PERFORMANCE For the Period Ended March 31, 1998
Inst'l Class Lehman Brothers
(Incep. 7/31/97) Mortgage Index
- --------------------------------------------------------------------------------
Since Inception 6.69% --
CUMULATIVE RETURNS THROUGH MARCH 31, 1998
$5,000,000 invested at inception
[LINE GRAPH APPEARS HERE]
Total Return Lehman Brothers
MONTH Mortgage Mortgage Index
Fund
- -------------------------------------------------------------
07/31/97 5,000,000.00 5,000,000.00
08/31/97 5,005,044.02 4,988,118.02
09/30/97 5,084,467.10 5,051,381.52
10/31/97 5,160,309.11 5,107,387.38
11/30/97 5,184,725.69 5,124,150.60
12/31/97 5,246,121.53 5,170,843.56
01/31/98 5,304,037.55 5,222,289.30
02/28/98 5,314,353.66 5,233,336.33
03/31/98 5,334,651.89 5,255,494.61
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
- --------------------------------------------------------------------------------
. The Total Return Mortgage Fund was launched on 7/31/97, and since inception
has outperformed its market benchmark, the Lehman Brothers Mortgage Index
by 158 basis points (6.69% Fund return versus 5.11% for the Index).
. The Fund's duration was kept longer than its benchmark which enhanced
returns as interest rates fell across the yield curve in the latter-half of
1997.
. Maturity mix was positioned broader than the index, boosting performance as
the yield curve continued to flatten.
. The Fund's use of lower-coupon mortgages added value as these positions
outperformed higher coupon issues because of the greater prepayment
protection they afforded.
. Adjustable-rate mortgages were also positive for relative returns as they
outperformed other short duration assets.
. Limited exposure to well structured collateralized mortgage obligations
added yield while allowing the Fund to achieve desired risk
characteristics.
1998 Annual Report 7
<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:
3.7 years
Total Net Assets:
$239 million
Sector Breakdown:*
[PIE CHART APPEARS HERE]
Mortgage-Backed Securities 42.3%
Short-Term Instruments 19.7%
Corporate Bonds and Notes 16.6%
Foreign Currency-
Denominated Issues 6.6%
Sovereign Issues 5.3%
Other 9.5%
Quality Breakdown:*
[PIE CHART APPEARS HERE]
AAA 83%
AA 1%
A 5%
BBB 7%
BB 4%
*% of Total Investments as of March 31, 1998
- --------------------------------------------------------------------------------
PERFORMANCE
- --------------------------------------------------------------------------------
TOTAL RETURN INVESTMENT PERFORMANCE For the Period Ended March 31, 1998
<TABLE>
<CAPTION>
Lehman Brothers Lipper Short
Inst'l Class Intermediate Government/ Intermediate Grade
(Incep. 12/31/96) Corporate Bond Index Debt Fund Average
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1 Year 9.80% 9.67% 8.23%
Since Inception* 7.57% -- --
</TABLE>
* Annualized
CUMULATIVE RETURNS THROUGH MARCH 31, 1998
$5,000,000 invested at inception
[LINE GRAPH APPEARS HERE]
Moderate Lehman Brothers
MONTH Duration Intermed. Gov't/
Bond Corporate Bond
Index
===========================================================
12/31/96 5,000,000.00 5,000,000.00
01/31/97 5,018,573.17 5,019,499.43
02/28/97 5,025,671.35 5,029,036.84
03/31/97 4,987,552.32 4,994,336.61
04/30/97 5,045,822.33 5,053,269.64
05/31/97 5,078,972.76 5,095,211.88
06/30/97 5,141,279.51 5,141,578.32
07/31/97 5,240,625.65 5,245,952.19
08/31/97 5,220,094.11 5,219,722.44
09/30/97 5,282,528.84 5,280,271.32
10/31/97 5,331,653.93 5,338,881.93
11/30/97 5,354,914.95 5,350,627.65
12/31/97 5,398,733.85 5,393,432.39
01/31/98 5,454,128.23 5,464,086.53
02/28/98 5,448,867.66 5,459,715.32
03/31/98 5,476,199.39 5,477,186.26
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 Fund returned 9.80% for the period, modestly outperforming its
benchmark, the Lehman Brothers Intermediate Government Corporate Bond
Index, which returned 9.67%.
. The Fund maintained its average duration near- to above-benchmark for the
period, seeking to capitalize on an outlook for declining interest rates
which helped performance as yields on 2- to 10-year Treasuries declined by
approximately 0.8% to 1.2% during the period.
. The yield advantage and price appreciation of the Fund's substantial
allocation to adjustable and fixed-rate mortgage-backed issues aided
returns.
. An underweighted allocation to corporate bonds was a slight negative for
performance as continued narrow yield spreads allowed the corporate sector
to generally outperform similar duration Treasuries.
. Currency hedged positions in short-maturity non-U.S. markets, both
developed and emerging, increased performance and portfolio
diversification.
. In particular, dollar-denominated Latin American holdings continued their
contribution to returns while currency hedged holdings of developed
dollar-bloc countries - primarily the United Kingdom - also aided Fund
returns.
8 PIMCO Funds
<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:
2.6 years
Total Net Assets:
$3,002 million
Sector Breakdown:*
[PIE CHART APPEARS HERE]
Mortgage-Backed Securities 78.8%
Corporate Bonds and Notes 10.3%
Short-Term Instruments 4.8%
Sovereign Issues 2.3%
U.S. Government Agencies 1.7%
Other 1.1%
Quality Breakdown:*
[PIE CHART APPEARS HERE]
AAA 86%
AA 1%
A 1%
BBB 8%
BB 4%
*% of Total Investments as of March 31, 1998
- --------------------------------------------------------------------------------
PERFORMANCE
- --------------------------------------------------------------------------------
TOTAL RETURN INVESTMENT PERFORMANCE For the Period Ended March 31, 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>
1 Year 9.00% 8.73% 7.51% 7.00%
3 Years* 8.36% 8.08% 6.86% 6.55%
5 Years* 6.63% -- 5.52% 5.27%
10 Years* 8.26% -- 7.17% 6.93%
Since Inception* 8.29% 8.29% -- --
</TABLE>
* Annualized
CUMULATIVE RETURNS THROUGH MARCH 31, 1998
$5,000,000 invested at inception
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Low Duration Merrill Lynch
MONTH Fund 1-3 Year Treasury
Index
=========== ============ =================
<S> <C> <C>
05/31/87 5,000,000.00 5,000,000.00
06/30/87 5,046,628.48 5,054,485.75
09/30/87 5,052,060.34 5,063,694.37
12/31/87 5,222,390.45 5,239,923.80
03/31/88 5,380,985.81 5,378,053.17
06/30/88 5,466,197.62 5,433,787.83
09/30/88 5,568,286.26 5,512,752.20
12/31/88 5,652,042.78 5,565,872.47
03/31/89 5,730,286.34 5,635,161.96
06/30/89 6,046,639.03 5,915,300.64
09/30/89 6,137,963.43 6,001,275.55
12/31/89 6,307,553.55 6,173,858.16
03/31/90 6,381,163.67 6,228,693.61
06/30/90 6,554,775.06 6,403,041.34
09/30/90 6,676,367.70 6,555,691.36
12/31/90 6,878,681.99 6,774,100.62
03/31/91 7,057,271.42 6,923,107.15
06/30/91 7,245,424.79 7,059,426.43
09/30/91 7,527,775.31 7,296,717.53
12/31/91 7,804,629.42 7,565,276.33
03/31/92 7,854,904.81 7,577,109.32
06/30/92 8,065,551.62 7,794,942.42
09/30/92 8,309,644.16 8,027,322.80
12/31/92 8,404,634.31 8,041,993.33
03/31/93 8,633,490.85 8,219,526.61
06/30/93 8,771,815.15 8,308,112.58
09/30/93 8,922,962.07 8,427,301.82
12/31/93 9,056,846.09 8,477,096.67
03/31/94 9,027,600.01 8,434,788.62
06/30/94 9,007,245.73 8,441,777.51
09/30/94 9,116,482.30 8,524,951.54
12/31/94 9,113,801.39 8,525,249.62
03/31/95 9,352,866.19 8,811,584.55
06/30/95 9,692,390.65 9,094,069.51
09/30/95 9,890,345.07 9,230,696.86
12/31/95 10,201,089.33 9,463,013.97
03/31/96 10,206,317.43 9,494,623.03
06/30/96 10,324,796.28 9,590,447.68
09/30/96 10,559,003.22 9,748,887.64
12/31/96 10,827,171.97 9,934,177.48
03/31/97 10,918,161.31 9,999,821.82
06/30/97 11,232,679.19 10,220,212.68
09/30/97 11,508,993.65 10,420,534.40
12/31/97 11,718,949.70 10,595,345.07
03/31/98 11,900,388.55 10,751,005.79
</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 Fund capitalized on the declining interest rate environment and posted
strong results, with Institutional Class shares returning 9.00%,
outperforming the benchmark Merrill Lynch 1-3 Year Treasury Index return of
7.51%.
. The Fund maintained an above-index duration throughout the fiscal period,
which enhanced returns as interest rates declined by approximately 0.2% to
1.2% on short to intermediate maturity instruments.
. The yield advantage and price appreciation of the Fund's significant
allocation to adjustable- and fixed-rate mortgage-backed issues made the
largest contribution to outperforming the all-Treasury benchmark.
. Limiting exposure to investment grade corporate bonds was a slight drag on
performance as these securities outperformed Treasuries, however the Fund's
overall corporate strategy was positive as a small allocation to below
investment-grade issues aided returns through premium yields and price
gains as yield spreads continued to narrow.
. Currency hedged positions in short-maturity non-U.S. markets, both
developed and emerging, increased performance and portfolio
diversification.
. Dollar-denominated Latin American bonds continued their strong contribution
to performance and currency-hedged holdings of developed dollar-bloc
countries also aided Fund returns as investors responded positively to
declining government deficits and the improving inflation and economic
fundamentals in many countries.
1998 Annual Report 9
<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:
2.6 years
Total Net Assets:
$401 million
Sector Breakdown:*
[PIE CHART APPEARS HERE]
Mortgage-Backed Securities 70.4%
Short-Term Instruments 24.0%
Corporate Bonds and Notes 4.3%
Asset-Backed Securities 0.8%
U.S. Treasury Obligations 0.4%
Other 0.1%
Quality Breakdown:*
[PIE CHART APPEARS HERE]
AAA 95%
A 5%
*% of Total Investments as of March 31, 1998
- --------------------------------------------------------------------------------
PERFORMANCE
- --------------------------------------------------------------------------------
TOTAL RETURN INVESTMENT PERFORMANCE For the Period Ended March 31, 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>
1 Year 8.29% -- 7.51% 7.00%
3 Years* 7.31% -- 6.86% 6.55%
5 Years* 5.96% -- 5.52% 5.27%
Since Inception 6.53%* 0.58% -- --
</TABLE>
* Annualized
CUMULATIVE RETURNS THROUGH MARCH 31, 1998
$5,000,000 invested at inception
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Merrill Lynch
Low Duration 1-3 Year Treasury
MONTH Fund II Index
======= ============ =================
<S> <C> <C>
10/31/91 5,000,000.00 5,000,000.00
12/31/91 5,150,788.16 5,128,941.26
03/31/92 5,157,326.03 5,136,963.54
06/30/92 5,302,475.76 5,284,645.27
09/30/92 5,426,036.14 5,442,189.47
12/31/92 5,471,783.06 5,452,135.47
03/31/93 5,619,040.49 5,572,495.62
06/30/93 5,710,513.66 5,632,553.20
09/30/93 5,794,689.46 5,713,358.53
12/31/93 5,831,720.27 5,747,117.35
03/31/94 5,796,319.85 5,718,434.26
06/30/94 5,772,325.63 5,723,172.44
09/30/94 5,810,813.12 5,779,560.96
12/31/94 5,850,353.97 5,779,763.04
03/31/95 6,074,369.85 5,973,886.16
06/30/95 6,235,805.38 6,165,399.16
09/30/95 6,346,020.45 6,258,026.79
12/31/95 6,539,804.23 6,415,528.09
03/31/96 6,518,000.20 6,436,957.71
06/30/96 6,575,781.95 6,501,922.82
09/30/96 6,719,144.92 6,609,338.49
12/31/96 6,881,010.53 6,734,957.27
03/31/97 6,930,530.16 6,779,461.39
06/30/97 7,099,424.28 6,928,877.18
09/30/97 7,257,639.95 7,064,686.93
12/31/97 7,405,208.00 7,183,201.26
03/31/98 7,505,393.02 7,288,732.73
</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
- --------------------------------------------------------------------------------
. Declining interest rates and successful sector strategies enabled the Fund
to earn an 8.29% return which led the 7.51% return of its benchmark, the
Merrill Lynch 1-3 Year Treasury Index.
. The Fund maintained an above-index duration throughout the period which
enhanced returns as interest rates declined by approximately 0.2% to 1.2%
on short to intermediate maturities.
. The Fund employed a modified barbell maturity structure for most of the
period to enhance yield during a period of declining interest rates, then
moved to a more distributed maturity mix as the yield curve flattened.
. The yield advantage and price appreciation of significant allocations to
adjustable- and fixed-rate mortgage-backed issues made the largest
contribution to outperforming the Fund's all-Treasury benchmark.
. The Fund's limited allocation to the corporate sector was a slight negative
for performance as corporate issues modestly outperformed Treasuries during
the period through premium yields and price gains as yield spreads
continued to narrow.
10 PIMCO Funds
<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:
2.2 years
Total Net Assets:
$24 million
Sector Breakdown:*
[PIE CHART APPEARS HERE]
Mortgage-Backed Securities 63.1%
Short-Term Instruments 32.1%
Corporate Bonds and Notes 4.8%
Quality Breakdown:*
[PIE CHART APPEARS HERE]
AAA 94%
A 4%
BBB 2%
*% of Total Investments as of March 31, 1998
- --------------------------------------------------------------------------------
PERFORMANCE
- --------------------------------------------------------------------------------
TOTAL RETURN INVESTMENT PERFORMANCE For the Period Ended March 31, 1998
<TABLE>
<CAPTION>
Lipper Short
Inst'l Class Merrill Lynch 1-3 Investment Grade
(Incep. 12/31/96) Year Treasury Index Debt Fund Average
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1 Year 7.93% 7.51% 7.00%
Since Inception* 6.80% -- --
</TABLE>
* Annualized
CUMULATIVE RETURNS THROUGH MARCH 31, 1998
$5,000,000 invested at inception
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Merrill Lynch
Low Duration 1-3 Year Treasury
MONTH Fund III Index
======== ============ =================
<S> <C> <C>
12/31/96 5,000,000.00 5,000,000.00
01/31/97 5,019,543.89 5,023,449.84
02/28/97 5,044,723.95 5,035,003.37
03/31/97 5,028,885.20 5,033,039.64
04/30/97 5,074,774.05 5,074,159.63
05/31/97 5,116,879.06 5,108,765.73
06/30/97 5,156,799.63 5,143,965.21
07/31/97 5,193,006.83 5,200,497.44
08/31/97 5,219,919.73 5,205,281.45
09/30/97 5,260,770.54 5,244,789.73
10/31/97 5,310,323.27 5,283,758.25
11/30/97 5,313,691.83 5,296,598.29
12/31/97 5,355,776.48 5,332,774.19
01/31/98 5,393,984.56 5,384,555.10
02/28/98 5,402,861.99 5,389,185.73
03/31/98 5,427,615.71 5,411,120.25
</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
- --------------------------------------------------------------------------------
. The Fund capitalized on declining interest rates to post favorable fiscal
year results, returning 7.93% versus a 7.51% return for its benchmark, the
Merrill Lynch 1-3 Year Treasury Index.
. The Fund's above-index duration contributed to returns during the period as
yields on short- to intermediate-term maturities declined by approximately
0.2% to 1.2%.
. The Fund's maturity strategies benefited returns as the modified barbell
(concentrations of longer and short maturities) structure employed for most
of the period was favorable as rates declined flattening the yield curve,
and the distributed maturity mix in place at the end of the period
reflected the limited opportunities of a flat yield curve environment.
. Sector discretion and diversification remained a key to strong returns led
by the yield advantage and price appreciation of significant allocations to
adjustable- and fixed-rate mortgage-backed issues which contributed
significantly to performance relative to the Fund's all-Treasury Merrill
Lynch Index.
1998 Annual Report 11
<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:
2.3 years
Total Net Assets:
$4 million
Sector Breakdown:*
[PIE CHART APPEARS HERE]
Mortgage-Backed Securities 90.7%
Short-Term Instruments 4.5%
Corporate Bonds and Notes 1.6%
Asset-Backed Securities 1.6%
U.S. Treasury Obligations 1.6%
Quality Breakdown:*
[PIE CHART APPEARS HERE]
AAA 98%
A 2%
*% of Total Investments as of March 31, 1998
- --------------------------------------------------------------------------------
PERFORMANCE
- --------------------------------------------------------------------------------
TOTAL RETURN INVESTMENT PERFORMANCE For the Period Ended March 31, 1998
Inst'l Class Merrill Lynch 1-3
(Incep. 7/31/97) Year Treasury Index
- -----------------------------------------------------------------------------
Since Inception 5.86% --
CUMULATIVE RETURNS THROUGH MARCH 31, 1998
$5,000,000 invested at inception
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Low Duration Merrill Lynch
Mortgage 1-3 Year Treasury
MONTH Fund Index
======== ============ =================
<S> <C> <C>
07/31/97 5,000,000.00 5,000,000.00
08/31/97 5,018,286.33 5,004,599.57
09/30/97 5,111,650.83 5,042,584.66
10/31/97 5,159,820.18 5,080,050.81
11/30/97 5,172,283.82 5,092,395.83
12/31/97 5,218,267.29 5,127,177.02
01/31/98 5,260,371.10 5,176,961.59
02/28/98 5,285,796.16 5,181,413.69
03/31/98 5,293,096.12 5,202,502.56
</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
- --------------------------------------------------------------------------------
. From its inception on 7/31/97, The Low Duration Mortgage Fund's return of
5.86% outpaced its benchmark, the Merrill Lynch 1-3 Year Treasury Index,
which returned a lesser 4.05%.
. The Fund's duration was held longer than its benchmark throughout the
period which enhanced returns as interest rates fell across the yield curve
in the latter-half of 1997.
. Relative Fund performance also benefited from holding a maturity mix
broader than the index which boosted returns as the yield curve continued
to flatten.
. Mortgage-backed securities in general outperformed the Fund's all-Treasury
benchmark as a result of higher yields and price appreciation resulting
from increasing investor demand.
. Adjustable-rate mortgages contributed favorably to performance as they
outperformed other short duration assets.
. Modest holdings of short-term commercial paper also boosted the Fund's
yield adding to performance.
12 PIMCO Funds
<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:
0.7 years
Total Net Assets:
$210 million
Sector Breakdown:*
[PIE CHART APPEARS HERE]
Corporate Bonds and Notes 40.2%
Mortgage-Backed Securities 26.0%
Short-Term Instruments 21.3%
Asset-Backed Securities 7.1%
Sovereign Issues 3.2%
Other 2.2%
Quality Breakdown:*
[PIE CHART APPEARS HERE]
AAA 43%
AA 4%
A 25%
BBB 20%
BB 8%
*% of Total Investments as of March 31, 1998
- --------------------------------------------------------------------------------
PERFORMANCE
- --------------------------------------------------------------------------------
TOTAL RETURN INVESTMENT PERFORMANCE For the Period Ended March 31, 1998
<TABLE>
<CAPTION>
Lipper Ultra-
Inst'l Class Admin. Class Lipper Money Short Obligation
(Incep. 10/7/87) (Incep. 2/1/96) Market Index Fund Average
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 Year 7.06% 6.80% 5.21% 5.98%
3 Years* 7.56% -- 5.20% 5.86%
5 Years* 6.14% -- 4.54% 5.06%
10 Years* 6.58% -- 5.50% 5.59%
Since Inception* 6.60% 6.50% -- --
</TABLE>
* Annualized
CUMULATIVE RETURNS THROUGH MARCH 31, 1998
$5,000,000 invested at inception
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Lipper
Short-Term Money Market
MONTH Fund Index
==================== =================== ====================
<S> <C> <C>
10/31/87 5,000,000.00 5,000,000.00
12/31/87 5,060,118.71 5,057,166.46
03/31/88 5,144,560.09 5,138,509.22
06/30/88 5,232,290.67 5,219,609.26
09/30/88 5,328,408.56 5,316,238.28
12/31/88 5,443,779.03 5,421,119.61
03/31/89 5,571,028.92 5,539,059.94
06/30/89 5,708,265.54 5,667,437.01
09/30/89 5,828,327.55 5,789,008.54
12/31/89 5,957,698.00 5,907,324.85
03/31/90 6,064,841.96 6,022,071.81
06/30/90 6,189,317.66 6,140,264.38
09/30/90 6,309,631.66 6,258,290.37
12/31/90 6,462,141.45 6,377,953.51
03/31/91 6,576,473.50 6,483,125.14
06/30/91 6,682,103.70 6,576,275.25
09/30/91 6,804,471.34 6,666,779.30
12/31/91 6,892,227.52 6,750,463.54
03/31/92 6,948,633.77 6,818,190.47
06/30/92 7,031,099.48 6,879,740.08
09/30/92 7,100,505.24 6,934,231.92
12/31/92 7,142,088.53 6,984,278.75
03/31/93 7,222,352.16 7,031,879.39
06/30/93 7,309,491.37 7,077,685.85
09/30/93 7,378,550.59 7,125,210.35
12/31/93 7,472,267.73 7,173,058.47
03/31/94 7,486,771.83 7,221,944.08
06/30/94 7,544,130.72 7,281,328.29
09/30/94 7,623,522.50 7,353,647.76
12/31/94 7,688,575.65 7,440,763.32
03/31/95 7,820,738.96 7,540,914.09
06/30/95 8,016,387.87 7,646,218.98
09/30/95 8,183,875.26 7,749,905.77
12/31/95 8,396,279.25 7,840,933.32
03/31/96 8,484,975.46 7,937,771.75
06/30/96 8,622,971.03 8,031,807.05
09/30/96 8,792,582.47 8,131,815.05
12/31/96 8,984,288.34 8,228,149.01
03/31/97 9,089,081.02 8,315,673.85
06/30/97 9,273,987.03 8,408,319.50
09/30/97 9,444,784.13 8,508,774.85
12/31/97 9,569,434.20 8,613,865.58
03/31/98 9,730,989.04 8,776,890.00
</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
Money Market Index, an index consisting of the 30 largest equal weighted Money
Market Funds. Whereas money market funds attempt to maintain a stable share
price, the Short-Term Fund's share price will fluctuate in response to market
conditions. 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 2/1/96. The Fund may
invest in foreign securities which involve potentially higher risks including
foreign currency fluctuations and political or economic uncertainty.
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
. The Fund posted strong returns, with Institutional Share performance
(7.06%) leading the Lipper Money Market Index (5.21%) by 185 basis points
for the fiscal year in an environment of declining interest rates.
. The Fund's strategy of holding longer-duration securities added to returns
through the higher portfolio yield available in a positively sloped yield
curve environment, and greater price appreciation as interest rates on one-
and two-year Treasury notes declined 62 and 85 basis points respectively.
. Holdings of mortgage-backed securities also added to returns as both fixed
and adjustable-rate issues enjoyed higher yields than like-duration
Treasury securities with minimal prepayment risk because of the short
duration of Fund holdings.
. Short-maturity, below investment grade corporate securities outperformed
their investment grade counterparts, as yield spreads remained near
historically low levels.
. Modest positions in currency-hedged, non-U.S. dollar positions added to
returns as several developed markets outperformed the U.S. market, while
small holdings of dollar- denominated Latin American bonds, specifically
Argentina and Mexico, benefited Fund performance despite the Asian
financial crisis which manifested itself through widening spreads in the
fourth quarter of 1997.
1998 Annual Report 13
<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:
10.3 years
Total Net Assets:
$74 million
Sector Breakdown:*
[PIE CHART APPEARS HERE]
U.S. Treasury Obligations 45.6%
Mortgage-Backed Securities 41.3%
Short-Term Instruments 5.3%
U.S. Government Agencies 5.2%
Asset-Backed Securities 2.6%
Quality Breakdown:*
[PIE CHART APPEARS HERE]
AAA 99%
AA 1%
*% of Total Investments as of March 31, 1998
- --------------------------------------------------------------------------------
PERFORMANCE
- --------------------------------------------------------------------------------
TOTAL RETURN INVESTMENT PERFORMANCE For the Period Ended March 31, 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>
1 Year 20.23% -- 19.86% 11.98% 11.46%
3 Years* 12.99% -- 11.99% 9.18% 8.07%
5 Years* 9.65% -- 8.68% 6.94% 5.75%
Since Inception 12.76%* 7.60% -- -- --
</TABLE>
* Annualized
CUMULATIVE RETURNS THROUGH MARCH 31, 1998
$5,000,000 invested at inception
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Long-Term LB Int. & 20+ Lehman Brothers
MONTH U.S. Gov't Year Aggregate Bond
Fund Treasury Index Index
=========== ============== ================ ===============
<S> <C> <C> <C>
06/30/91 5,000,000.00 5,000,000.00 5,000,000.00
09/30/91 5,442,626.52 5,415,685.30 5,283,982.84
12/31/91 5,909,198.61 5,774,938.92 5,551,930.82
03/31/92 5,753,678.29 5,562,934.30 5,480,935.11
06/30/92 6,016,162.43 5,781,880.42 5,702,105.54
09/30/92 6,540,766.62 6,149,823.72 5,947,051.80
12/31/92 6,614,191.30 6,221,352.60 5,962,865.48
03/31/93 7,101,318.26 6,608,591.66 6,209,359.93
06/30/93 7,540,953.55 6,950,670.74 6,374,021.32
09/30/93 7,968,888.07 7,351,540.44 6,540,341.49
12/31/93 7,842,784.30 7,252,702.72 6,544,211.97
03/31/94 7,394,708.81 6,825,284.90 6,356,659.44
06/30/94 7,204,477.90 6,629,251.58 6,291,082.41
09/30/94 7,169,096.87 6,580,309.99 6,329,455.48
12/31/94 7,263,265.65 6,705,670.23 6,353,341.89
03/31/95 7,801,463.08 7,134,689.94 6,673,817.84
06/30/95 8,641,206.09 7,879,507.59 7,080,439.69
09/30/95 8,871,163.10 8,063,753.53 7,219,445.30
12/31/95 9,556,575.14 8,682,058.90 7,527,093.38
03/31/96 8,958,506.47 8,135,410.42 7,393,617.02
06/30/96 8,947,395.15 8,133,815.85 7,435,639.40
09/30/96 9,102,967.69 8,252,684.44 7,573,207.41
12/31/96 9,624,384.52 8,631,621.49 7,800,349.45
03/31/97 9,359,769.86 8,360,698.25 7,756,778.87
06/30/97 9,875,451.11 8,816,262.42 8,041,646.39
09/30/97 10,427,123.54 9,303,827.70 8,308,820.28
12/31/97 11,070,317.92 9,873,399.94 8,553,434.78
03/31/98 11,253,545.46 10,021,548.63 8,685,805.28
</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 Fund posted favorable absolute and relative performance for the fiscal
year with Institutional Class shares returning 20.23% compared to 19.86%
for its blended 10-year duration benchmark.
. Yields on 30-year Treasury bonds declined during the fiscal year to just
under 6% as expectations for future inflation declined amid uncertainty
surrounding the ongoing Asian crisis.
. Benign inflation statistics and falling commodity prices provided support
for a flatter yield curve as intermediate- and longer-term Treasury yields
fell on average 118 basis points while short-term rates only declined 58
basis points.
. The Fund's duration, targeted only slightly above its 10-year duration
index throughout the period, had little impact on relative returns, while
exposure to both intermediate- and long-term maturity holdings was a slight
positive for performance as the yield curve flattened.
. Significant exposure to mortgage-backed securities enhanced performance as
these instruments outperformed like-duration Treasuries due to their higher
yields.
14 PIMCO Funds
<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:
2.1 years
Total Net Assets:
$8 million
Sector Breakdown:*
[PIE CHART APPEARS HERE]
U.S. Treasury Obligations 67.5%
Asset-Backed Securities 10.8%
Corporate Bonds and Notes 9.4%
U.S. Government Agencies 5.8%
Short-Term Instruments 2.4%
Preferred Stock 2.4%
Other 1.7%
Quality Breakdown:*
[PIE CHART APPEARS HERE]
AAA 90%
AA 3%
A 7%
*% of Total Investments as of March 31, 1998
- --------------------------------------------------------------------------------
PERFORMANCE
- --------------------------------------------------------------------------------
TOTAL RETURN INVESTMENT PERFORMANCE For the Period Ended March 31, 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>
1 Year 4.70% 3.85% 6.50%
Since Inception* 4.09% -- --
</TABLE>
* Annualized
CUMULATIVE RETURNS THROUGH MARCH 31, 1998
$5,000,000 invested at inception
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Lehman Brothers
Real Return Inflation Linked
MONTH Bond Fund Treasury Index
======== ============= ================
<S> <C> <C>
01/31/97 5,000,000.00 5,000,000.00
02/28/97 5,017,061.42 5,016,498.75
03/31/97 4,971,983.14 4,947,775.56
04/30/97 5,002,809.26 4,977,955.11
05/31/97 5,032,748.09 5,004,837.91
06/30/97 5,021,937.74 4,988,822.94
07/31/97 5,083,741.54 5,036,214.46
08/31/97 5,094,468.92 5,051,321.70
09/30/97 5,104,456.87 5,061,426.43
10/31/97 5,169,084.74 5,113,556.11
11/30/97 5,196,005.70 5,142,194.51
12/31/97 5,169,329.00 5,120,598.50
01/31/98 5,199,465.78 5,145,690.77
02/28/98 5,193,833.08 5,141,057.36
03/31/98 5,205,500.53 5,138,488.78
</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
- --------------------------------------------------------------------------------
. The Fund posted strong relative fiscal year performance, returning 4.70%
compared to 3.85% for its benchmark, the Lehman Brothers Inflation Linked
Treasury Bond Index.
. A moderately above-index duration detracted slightly from returns as U.S.
real yields rose, and the 10-year inflation-protected bond outperformed the
5-year, resulting in an inverted real yield curve.
. Allocations to inflation-linked securities of non-U.S. issuers,
specifically Canada and Australia, were positive for performance as real
yields of those countries declined, allowing their bonds to outperform the
U.S. market.
. The Fund benefited from holdings of short-maturity corporate securities,
both conventional and inflation-protected, due to sustained corporate
profits and stable yield spreads.
1998 Annual Report 15
<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:
5.6 years
Total Net Assets:
$430 million
Country Allocation:*
[PIE CHART APPEARS HERE]
Unites States 11.5%
Germany 8.9%
United Kingdom 8.0%
Sweden 5.6%
Japan 5.0%
Italy 4.2%
Australia 4.1%
Greece 3.9%
Finland 3.7%
Short-Term Instruments/Other 45.1%
Quality Breakdown:*
[PIE CHART APPEARS HERE]
AAA 71%
AA 14%
A 7%
BBB 3%
BB 5%
*% of Total Investments as of March 31, 1998
- --------------------------------------------------------------------------------
PERFORMANCE
- --------------------------------------------------------------------------------
TOTAL RETURN INVESTMENT PERFORMANCE For the Period Ended March 31, 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>
1 Year 12.64% 12.34% 13.28% 4.85%
3 Years* 17.32% -- 13.37% 6.17%
5 Years* 11.31% -- 9.88% 6.92%
Since Inception* 11.59% 9.78% -- --
</TABLE>
* Annualized
CUMULATIVE RETURNS THROUGH MARCH 31, 1998
$5,000,000 invested at inception
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
J.P. Morgan
Foreign Bond Non-U.S.
MONTH Fund Index (Hedged)
======== ============ ==============
<S> <C> <C>
12/31/92 5,000,000.00 5,000,000.00
03/31/93 5,171,806.79 5,139,908.08
06/30/93 5,342,019.45 5,274,660.69
09/30/93 5,580,127.04 5,468,089.71
12/31/93 5,820,067.19 5,695,098.00
03/31/94 5,574,497.53 5,488,717.61
06/30/94 5,340,992.26 5,334,282.88
09/30/94 5,330,821.16 5,322,727.80
12/31/94 5,395,131.92 5,406,367.14
03/31/95 5,471,621.11 5,648,728.49
06/30/95 5,790,385.79 5,907,209.68
09/30/95 6,099,109.96 6,129,011.76
12/31/95 6,540,017.24 6,392,287.42
03/31/96 6,664,336.30 6,446,357.33
06/30/96 6,930,027.40 6,622,589.48
09/30/96 7,370,201.61 6,905,010.25
12/31/96 7,775,387.86 7,169,345.05
03/31/97 7,843,570.24 7,226,702.51
06/30/97 8,118,878.22 7,508,893.80
09/30/97 8,383,474.67 7,772,622.96
12/31/97 8,522,039.64 7,981,112.68
03/31/98 8,835,221.82 8,231,854.67
</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. Government Bond 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
- --------------------------------------------------------------------------------
. The Fund's Institutional Class shares posted a 12.64% return which led U.S.
bond returns but lagged its currency-hedged J.P. Morgan Non-U.S. Index
which rose 13.28% for the period.
. Country selection benefited performance overall due to overweighted
positions in the dollar-bloc nations of Australia and Canada, two of the
world's top-performing markets, and by underweighting Japan, which posted
lower than index results.
. Within Europe, the Fund benefited from an emphasis on conservative EMU
convergence strategies which were expressed through an overweight in
Finland versus lower yielding European countries such as France,
Netherlands and Belgium.
. The Fund took limited tactical exposure to Italy as first round EMU
participation grew more probable, and overweighted Sweden which boosted
performance as the market over-estimated likely monetary tightening,
creating opportunities in two- and three-year maturities.
. Recently, an overweight of the Greek market led to substantial returns,
spurred by the announcement that Greece was targeting EMU entrance for
2001, the subsequent dracma devaluation relieved pressure on short-term
rates which unlocked value in 10-year bonds.
. Declines in modest emerging market positions due to the Asian crisis, had a
negative impact on performance during 1997 but these markets subsequently
enjoyed a rebound during first quarter 1998.
. While limited currency positions in Europe and an overweight of the U.S.
dollar versus the Japanese yen were generally positive, small allocations
to emerging currencies detracted from returns as these positions declined
versus the dollar despite a partial recovery in the final quarter of the
fiscal year.
PIMCO Funds 16
<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:
5.9 years
Total Net Assets:
$258 million
Country Allocation:*
[PIE CHART APPEARS HERE]
United States 27.3%
United Kingdom 9.0%
Finland 7.9%
Japan 6.4%
Greece 5.7%
Canada 4.4%
Australia 4.0%
Germany 2.5%
Italy 2.5%
Short-Term Instruments/Other 30.3%
Quality Breakdown:*
[PIE CHART APPEARS HERE]
AAA 82%
AA 4%
A 10%
BBB 2%
BB 2%
*% of Total Investments as of March 31, 1998
- --------------------------------------------------------------------------------
PERFORMANCE
- --------------------------------------------------------------------------------
TOTAL RETURN INVESTMENT PERFORMANCE For the Period Ended March 31, 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>
1 Year 5.85% 5.57% 6.58% 7.58%
3 Years* 8.19% -- 5.07% 9.81%
Since Inception* 8.01% 5.14% -- --
</TABLE>
* Annualized
CUMULATIVE RETURNS THROUGH MARCH 31, 1998
$5,000,000 invested at inception
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Global Bond J.P. Morgan
MONTH Fund Global Index
======== ============= ============
<S> <C> <C>
11/30/93 5,000,000.00 5,000,000.00
12/31/93 5,159,354.04 5,051,000.98
03/31/94 4,981,799.26 5,019,201.26
06/30/94 4,993,231.71 5,032,746.39
09/30/94 5,045,769.26 5,091,673.36
12/31/94 5,071,554.24 5,114,665.69
03/31/95 5,497,439.30 5,625,054.13
06/30/95 5,791,402.39 5,910,344.05
09/30/95 5,839,678.19 5,902,936.01
12/31/95 6,236,009.23 6,102,287.05
03/31/96 6,159,100.03 5,995,399.36
06/30/96 6,265,488.12 6,031,207.77
09/30/96 6,584,758.53 6,201,903.80
12/31/96 6,879,967.26 6,370,238.58
03/31/97 6,576,928.89 6,121,248.92
06/30/97 6,783,140.48 6,301,651.14
09/30/97 6,895,854.27 6,410,014.34
12/31/97 6,817,844.74 6,460,240.57
03/31/98 6,961,653.90 6,523,829.11
</TABLE>
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, 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
- --------------------------------------------------------------------------------
. Fiscal year performance was not as strong as it had been in previous years,
with Institutional Class shares returning 5.85% compared to a 6.58% return
for the Fund's performance benchmark, the J.P. Morgan Global (Unhedged)
Index.
. Country selection benefited performance overall due to overweighted
positions in the dollar-bloc nations of Australia and Canada, two of the
world's top-performing markets and by underweighting Japan, which posted
lower than index returns.
. Declines in modest emerging market positions due to the Asian crisis had a
negative impact on performance during 1997 but subsequently enjoyed a
rebound, with both Argentina and Mexico posting returns of 7-15% over the
fiscal year.
. The performance of the Fund's European currency strategy was mixed for the
period, first detracting from relative returns as flows from the EMU-zone
caused the Fund's underweighted Swiss franc position to appreciate versus
an overweight of the Spanish peseta despite its low yield, this loss was
reversed in part early in 1998, as overweighted Deutschmark and Norwegian
krona positions appreciated versus the Swiss franc.
. The Fund also maintained small overweighted dollar positions versus Japan,
which added value as the yen declined over the period, and small emerging
currencies positions which detracted from performance as these positions
declined versus the dollar for the most part despite a rebound in the final
quarter of the fiscal year.
. Overall, U.S. dollar strength caused unhedged portfolios, like the Fund, to
lag hedged foreign investments on an absolute basis.
1998 Annual Report 17
<PAGE>
PIMCO Emerging Markets Bond Fund
- --------------------------------------------------------------------------------
FUND CHARACTERISTICS
- --------------------------------------------------------------------------------
Objective:
Maximum total return, consistent with preservation of capital and prudent
investment management.
Portfolio:
Primarily emerging market bonds.
Duration:
4.3 years
Total Net Assets:
$4 million
Country Allocation:*
[PIE CHART APPEARS HERE]
Brazil 18.3%
Argentina 13.3%
United States 11.3%
Mexico 9.6%
Russia 9.0%
Croatia 4.2%
Philippines 4.2%
Bulgaria 3.7%
Venezuela 3.7%
Short-Term Instruments/Other 22.7%
Quality Breakdown:*
[PIE CHART APPEARS HERE]
AAA 6%
BBB 19%
BB 71%
B 4%
*% of Total Investments as of March 31, 1998
- --------------------------------------------------------------------------------
PERFORMANCE
- --------------------------------------------------------------------------------
TOTAL RETURN INVESTMENT PERFORMANCE For the Period Ended March 31, 1998
Inst'l Class J.P. Morgan Emerging
(Incep. 7/31/97) Markets Plus Index
- --------------------------------------------------------------------------------
Since Inception 3.10% --
CUMULATIVE RETURNS THROUGH MARCH 31, 1998
$5,000,000 invested at inception
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Emerging J.P. Morgan
MONTH Markets Bond Emerging
Fund Markets Plus
Index
=========== ============ ============
<S> <C> <C>
07/31/97 5,000,000.00 5,000,000.00
08/31/97 4,941,201.96 4,979,763.31
09/30/97 5,077,992.10 5,132,145.10
10/31/97 4,500,427.05 4,540,920.68
11/30/97 4,738,196.85 4,756,615.47
12/31/97 4,859,659.76 4,920,719.63
01/31/98 4,866,471.81 4,910,879.52
02/28/98 5,005,158.31 5,051,329.11
03/31/98 5,155,188.12 5,177,076.32
</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, which was launched 7/31/97 into the teeth
of the emerging Asian crisis, has experienced relative performance just
below its benchmark, the J. P. Morgan Emerging Markets Plus Index (3.10%
for the Fund versus 3.54% for the Index).
. Country selection focused on higher yielding markets such as Bulgaria and
Brazil, and credits which we deemed undervalued like Croatia, Poland and
the Philippines.
. Although an early underweighting of the Russian market was negative for
relative returns, more recent country allocation decisions have reversed
much of those losses as underweighted positions in Venezuela and Russia,
the two worst recent performers in the index, proved favorable due to
political instability and oil dependency, respectively.
. As part of our tactical opportunity process, the Fund's peso-denominated
Argentine debt position added to relative performance.
. While local currency allocations provided mixed returns, small investments
in the Argentine peso and Polish zloty were positive.
. Relative value strategies such as forward buying of bonds and the
associated cash management added value versus traditional bond purchases.
18 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:
4.4 years
Total Net Assets:
$2,211 million
Sector Breakdown:*
[PIE CHART APPEARS HERE]
Corporate Bonds and Notes 81.9%
Asset-Backed Securities 5.4%
Short-Term Instruments 5.3%
Preferred Stock 4.5%
Mortgage-Backed Securities 2.1%
Other 0.8%
Quality Breakdown:*
[PIE CHART APPEARS HERE]
BBB 7%
BB 47%
B 46%
*% of Total Investments as of March 31, 1998
- --------------------------------------------------------------------------------
PERFORMANCE
- --------------------------------------------------------------------------------
TOTAL RETURN INVESTMENT PERFORMANCE For the Period Ended March 31, 1998
<TABLE>
<CAPTION>
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
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 Year 15.26% 14.98% 12.74% 16.94%
3 Years* 14.32% 14.08% 11.94% 14.26%
5 Years* 12.46% -- 10.34% 10.81%
Since Inception* 13.08% 14.74% -- --
</TABLE>
* Annualized
CUMULATIVE RETURNS THROUGH MARCH 31, 1998
$5,000,000 invested at inception
[LINE CHART APPEARS HERE]
<TABLE>
<CAPTION>
High Yield Lehman BB
MONTH Fund Intermed.
Corp. Index
=========== ============ =============
<S> <C> <C>
12/31/92 5,000,000.00 5,000,000.00
03/31/93 5,313,333.34 5,239,091.78
06/30/93 5,556,253.99 5,435,025.95
09/30/93 5,686,689.07 5,594,144.12
12/31/93 5,935,129.08 5,732,726.39
03/31/94 5,879,245.93 5,643,896.01
06/30/94 5,878,586.94 5,632,494.33
09/30/94 6,025,466.63 5,772,014.62
12/31/94 6,077,393.93 5,781,574.92
03/31/95 6,397,464.08 6,110,147.76
06/30/95 6,781,901.87 6,472,038.80
09/30/95 7,022,542.80 6,639,757.78
12/31/95 7,334,202.07 6,883,602.46
03/31/96 7,402,000.12 6,933,691.24
06/30/96 7,490,201.26 7,015,578.88
09/30/96 7,858,765.33 7,263,474.59
12/31/96 8,191,021.54 7,529,727.93
03/31/97 8,292,841.34 7,601,685.35
06/30/97 8,699,809.32 7,928,522.50
09/30/97 9,072,090.94 8,214,195.36
12/31/97 9,273,056.81 8,376,177.16
03/31/98 9,557,939.39 8,570,184.08
</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
- --------------------------------------------------------------------------------
. The High Yield Fund's 15.26% fiscal year return on Institutional Class
shares strongly outperformed its benchmark, the Lehman BB Intermediate
Corporate Bond Index, which posted a 12.74% return.
. Our preference for issues senior in the capital structure and for
collateralized issues helped relative returns, as did defensive positions
in floating rate, senior-secured syndicated bank loans which added yield
and principal stability.
. Tender offers and premium calls also aided performance as companies took
advantage of low interest rates and a favorable financing environment to
restructure their balance sheets.
. The Fund was largely protected from the negative fallout of the Asian debt
crisis, as Asian corporate debt holdings, and exposure to U.S. corporations
heavily influenced by Asian economic problems, was negligible.
. Small positions in U.S. dollar-denominated Argentine and Mexican Brady
bonds performed well for the first six months of the fiscal year as well as
contributing to performance in 1998's first quarter after recovering from
Asian-induced losses in the fourth quarter of 1997.
. During an extended period of historically narrow yield spreads on high
yield securities, the Fund's quality and subordination stratification
remained defensive and security selection drove relative performance.
1998 Annual Report 19
<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:
$156 million
- --------------------------------------------------------------------------------
PERFORMANCE
- --------------------------------------------------------------------------------
TOTAL RETURN INVESTMENT PERFORMANCE For the Period Ended March 31, 1998
<TABLE>
<CAPTION>
Inst'l Class Admin. Class Lipper Money Lipper Money Market
(Incep. 3/1/91) (Incep. 1/24/95) Market Index Fund Average
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 Year 5.40% 5.12% 5.21% 4.96%
3 Years* 5.52% 5.26% 5.20% 5.01%
5 Years* 4.80% -- 4.54% 4.43%
Since Inception* 4.63% 5.28% -- --
</TABLE>
* Annualized
CUMULATIVE RETURNS THROUGH MARCH 31, 1998
$5,000,000 invested at inception
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Money Market Lipper
MONTH Fund Money Market
Index
=========== ============ ============
<S> <C> <C>
02/28/91 5,000,000.00 5,000,000.00
03/31/91 5,025,170.00 5,026,003.41
06/30/91 5,098,544.48 5,098,217.47
09/30/91 5,168,070.60 5,168,380.18
12/31/91 5,235,295.51 5,233,255.88
03/31/92 5,286,315.66 5,285,760.77
06/30/92 5,333,833.24 5,333,476.73
09/30/92 5,375,416.31 5,375,721.20
12/31/92 5,415,416.59 5,414,519.70
03/31/93 5,452,504.32 5,451,421.81
06/30/93 5,489,090.19 5,486,932.99
09/30/93 5,527,713.80 5,523,776.07
12/31/93 5,567,081.25 5,560,870.04
03/31/94 5,606,275.87 5,598,768.31
06/30/94 5,654,813.75 5,644,805.55
09/30/94 5,714,049.50 5,700,870.79
12/31/94 5,785,415.42 5,768,406.60
03/31/95 5,867,022.99 5,846,047.87
06/30/95 5,950,959.87 5,927,684.85
09/30/95 6,032,542.27 6,008,067.40
12/31/95 6,136,175.15 6,078,635.96
03/31/96 6,217,237.30 6,153,709.36
06/30/96 6,297,219.80 6,226,609.66
09/30/96 6,379,779.59 6,304,140.25
12/31/96 6,460,353.31 6,378,822.57
03/31/97 6,539,910.52 6,446,675.67
06/30/97 6,626,256.14 6,518,498.65
09/30/97 6,714,110.30 6,596,376.05
12/31/97 6,805,246.91 6,677,847.00
03/31/98 6,893,016.19 6,805,583.00
</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 Fund is neither insured
nor guaranteed by the U.S. Government and there can be no assurance that the
Fund will be able to maintain a stable net asset value of $1.00 per share.
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
. The Fund's Institutional Class shares posted favorable relative performance
for the fiscal year, returning 5.40% compared to 5.21% for its benchmark,
the Lipper Money Market Index.
. The Fund's relative performance advantage was primarily achieved through
significant investments in high quality domestic and Yankee commercial
paper.
. Select holdings of short-maturity, investment-grade corporates also
contributed to returns throughout the fiscal year due to the yield
advantage these securities offered over shorter-term Treasuries.
. Investments in Treasury repurchase agreements served to increase the Fund's
yield, which combined with other yield enhancing strategies, boosted the
Fund's 30-day SEC yield during the period despite the fact that yields on
three-month T-bills declined during the same time period.
20 PIMCO Funds
<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:
0.7 years
Total Net Assets:
$678 million
Sector Breakdown:*
[PIE CHART APPEARS HERE]
Short-Term Instruments 34.3%
Corporate Bonds and Notes 26.1%
Mortgage-Backed Securities 20.5%
Asset-Backed Securities 7.5%
Sovereign Issues 4.5%
Other 7.1%
Quality Breakdown:*
[PIE CHART APPEARS HERE]
AAA 81%
AA 1%
A 8%
BBB 6%
BB 4%
*% of Total Investments as of March 31, 1998
- --------------------------------------------------------------------------------
PERFORMANCE
- --------------------------------------------------------------------------------
TOTAL RETURN INVESTMENT PERFORMANCE For the Period Ended March 31, 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>
1 Year 47.75% 47.19% 48.00% 40.15%
3 Years* 33.25% -- 32.81% 27.89%
Since Inception* 24.57% 37.39% -- --
</TABLE>
* Annualized
CUMULATIVE RETURNS THROUGH MARCH 31, 1998
$5,000,000 invested at inception
[LINE CHART APPEARS HERE]
<TABLE>
<CAPTION>
StocksPLUS S&P 500
MONTH Fund Index
<S> <C> <C>
05/31/93 5,000,000.00 5,000,000.00
06/30/93 5,027,261.21 5,014,649.98
09/30/93 5,147,774.20 5,144,221.06
12/31/93 5,306,421.11 5,263,491.95
03/31/94 5,077,284.04 5,063,891.79
06/30/94 5,126,078.23 5,085,204.36
09/30/94 5,473,356.54 5,333,861.37
12/31/94 5,461,225.21 5,333,021.73
03/31/95 6,023,776.17 5,852,274.13
06/30/95 6,643,179.01 6,410,973.53
09/30/95 7,193,848.16 6,920,402.55
12/31/95 7,673,723.11 7,337,059.16
03/31/96 8,076,117.06 7,730,880.59
06/30/96 8,445,186.92 8,077,811.87
09/30/96 8,704,241.74 8,327,467.15
12/31/96 9,444,045.60 9,021,642.13
03/31/97 9,646,436.55 9,263,514.55
06/30/97 11,344,245.14 10,880,732.84
09/30/97 12,220,453.72 11,695,788.64
12/31/97 12,546,229.14 12,031,559.53
03/31/98 14,253,075.69 13,709,819.31
</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 Fund's exposure to the S&P 500 Index captured most of the market's
strong gains producing a fiscal year return of 47.75% on Institutional
Class shares versus 48.00% for the S&P 500 Index.
. An above-neutral duration on the cash portfolio used to back the Fund's S&P
500 Index exposure (exposure is achieved through investments in S&P futures
and swap contracts) was positive for performance as 3-month and 1-year
rates fell 18 basis points and 62 basis points, respectively, during the
period causing longer duration instruments to experience price appreciation
relative to 3-month Treasury bills.
. For the fiscal year, the positive impact of a longer duration was partially
offset by wider spreads in adjustable-rate and fixed-rate mortgage issues
due to prepayment concerns from increased refinancing activity.
. While corporate spreads also widened during the fiscal year on the
expectation of slower corporate earnings, an initial yield advantage
allowed these issues to modestly outperform similar maturity Treasuries and
a small allocation to BB-rated corporate issues, aided returns as those
issues outperformed the investment-grade sector.
. Foreign issues were mixed with currency-hedged Canadian and United Kingdom
bonds adding to returns and New Zealand bonds detracting.
. A small allocation to U.S. dollar-denominated debt from Argentina
contributed to performance.
1998 Annual Report 21
<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:
2.5 years
Total Net Assets:
$39 million
Sector Breakdown:*
[PIE CHART APPEARS HERE]
Mortgage-Backed Securities 32.0%
Short-Term Instruments 23.4%
Corporate Bonds and Notes 17.1%
Asset-Backed Securities 12.1%
U.S. Treasury Obligations 8.4%
Other 7.0%
Quality Breakdown:*
[PIE CHART APPEARS HERE]
AAA 86%
A 5%
BBB 4%
BB 5%
*% of Total Investments as of March 31, 1998
- --------------------------------------------------------------------------------
PERFORMANCE
- --------------------------------------------------------------------------------
TOTAL RETURN INVESTMENT PERFORMANCE For the Period Ended March 31, 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>
1 Year 33.40% 32.74% 28.93% 28.13%
Since Inception* 25.67% -- -- --
</TABLE>
* Annualized
CUMULATIVE RETURNS THROUGH MARCH 31, 1998
$5,000,000 invested at inception
[LINE CHART APPEARS HERE]
<TABLE>
<CAPTION>
60% S&P 500 Index
Strategic and 40% Lehman Lipper
Balanced Brothers Aggregate Balanced
MONTH Fund Bond Index Index
======== ============ ================== ============
<S> <C> <C> <C>
06/30/96 5,000,000.00 5,000,000.00 5,000,000.00
09/30/96 5,175,000.00 5,132,224.39 5,131,195.88
12/31/96 5,511,545.44 5,450,953.27 5,416,758.49
03/31/97 5,591,599.64 5,528,616.82 5,440,114.68
06/30/97 6,275,397.83 6,181,438.54 6,020,301.34
09/30/97 6,659,150.09 6,545,208.18 6,406,984.23
12/31/97 6,843,897.26 6,738,297.47 6,500,291.04
03/31/98 7,459,338.55 7,338,611.10 7,013,913.74
</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 Fund returned 33.40% for the fiscal year, outperforming both the Lipper
Balanced Fund Index, which returned 28.93%; and a 60/40 blend of the S&P
500 and Lehman Aggregate Bond Indexes, which returned 32.74%.
. Asset allocation strategy, which favored equities over fixed income, added
to returns as stocks strongly outperformed bonds for the fiscal year.
. Equity sector performance benefited from holdings of short-maturity
corporate and mortgage-backed securities which enhanced the yield of the
portion of the Fund used to fully back futures and swap exposure to the S&P
500 Index.
. Fund duration was positioned longer than the benchmark which added to
returns as yields fell across the yield curve in the latter half of 1997.
. Fixed income performance was boosted by an overweighted allocation to the
mortgage sector which delivered strong relative performance thanks to the
higher initial yield offered by mortgage securities and strong investor
interest in the sector.
. A strategy of utilizing short maturity, lower quality instruments (rated
BBB and BB) was also positive, as was limited exposure to non-U.S.
securities which offered superior yield and the potential for appreciation.
22 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:
5.6 years
Total Net Assets:
$42 million
- --------------------------------------------------------------------------------
PORTFOLIO CHARACTERISTICS
- --------------------------------------------------------------------------------
Country Allocation:*
[PIE CHART APPEARS HERE]
United Kingdom 15.9%
United States 12.6%
Sweden 8.9%
France 6.7%
Germany 3.0%
Greece 2.6%
Italy 2.0%
Spain 1.6%
Canada 1.4%
Short-Term Instruments/Other 45.3%
Quality Breakdown:*
[PIE CHART APPEARS HERE]
AAA 77%
AA 11%
A 8%
BBB 2%
BB 2%
*% of Total Investments as of March 31, 1998
Past performance is not an indication of future results. The Institutional Class
of the Global Bond Fund II was opened on February 25, 1998. The total return
performance of the Institutional Class since inception was 1.55%. The Fund may
invest in foreign securities which involve potentially higher risks including
foreign currency fluctuations and political or economic uncertainty.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1998 Annual Report 23
<PAGE>
Financial Highlights - Institutional Classes
<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 the Year Beginning Net Investment Gain (Loss) on Investment Investment Investment
or Period Ended: of Period Income Investments Operations Income Income
--------- -------------- -------------- ----------- ---------- -------------
Total Return Fund
Institutional Class
<S> <C> <C> <C> <C> <C> <C>
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
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
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
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 9.34 0.56 0.88 1.44 (0.55) 0.00
Total Return Fund III
Institutional Class
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
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
07/31/97-03/31/98 $ 10.00 $ 0.41 (a) $ 0.30 (a) $ 0.71 $ (0.46) $ 0.00
Moderate Duration Fund
Institutional Class
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
</TABLE>
24 PIMCO Funds See Accompanying notes
<PAGE>
<TABLE>
<CAPTION>
Financial Highlights - Institutional Classes 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
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
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
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
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.................... (0.01) 0.00 0.00 (0.56) 10.22
Total Return Fund III
Institutional Class
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
04/11/97-03/31/98.................... (0.16) 0.00 0.00 (0.69) 9.55
Total Return Mortgage Fund
Institutional Class
07/31/97-03/31/98.................... $ (0.01) $ 0.00 $ 0.00 $ (0.47) $ 10.24
Moderate Duration Fund
Institutional Class
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
<CAPTION>
Ratio of Net
Ratio of Investment
Expenses to Income to
Net Assets End Average Net Average Net Portfolio
Total Return of Period (000s) Assets Assets Turnover Rate
------------ ---------------- ----------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Total Return Fund
Institutional Class
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
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
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
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.................... 15.92 3,163 0.76+ 6.22+ 41
Total Return Fund III
Institutional Class
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
04/11/97-03/31/98.................... 12.46 178 0.76+ 5.85+ 183
Total Return Mortgage Fund
Institutional Class
07/31/97-03/31/98.................... 6.69% 3,588 0.52%+ 6.07%+ 593%
Moderate Duration Fund
Institutional Class
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
</TABLE>
+ Annualized
(a) Per share amounts based on average number of shares outstanding during the
period.
1998 Annual Report See Accompanying notes 25
<PAGE>
Financial Highlights - Institutional Classes (Cont.)
<TABLE>
<CAPTION>
Net Asset Net Realized Total Dividends Dividends
Value Net and Unrealized Income from from Net in Excess of
Beginning Investment Gain (Loss) on Investment Investment Net Investment
Selected Per Share Data for the Year or Period Ended: of Period Income Investments Operations Income Income
--------- ---------- ------------- ----------- ---------- --------------
<S> <C> <C> <C> <C> <C> <C>
Low Duration Fund
Institutional Class
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
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
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
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
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
07/31/97--03/31/98................................ $ 10.00 $ 0.43 (a) $ 0.14 (a) $ 0.57 $ (0.42) $ 0.00
Short-Term Fund
Institutional Class
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
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
</TABLE>
26 PIMCO FUNDS See accompanying notes
<PAGE>
Financial Highlights - Institutional Classes (Cont.)
<TABLE>
<CAPTION>
Distributions Distributions
from Net in Excess of Tax Basis Net Asset
Realized Net Realized Return of Total Value End
Selected Per Share Data for the Year or Period Ended: Capital Gains Capital Gains Capital Distributions of Period
------------- ------------- --------- ------------- ---------
<S> <C> <C> <C> <C> <C>
Low Duration Fund
Institutional Class
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
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
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
02/02/98--03/31/98........................................ 0.00 0.00 0.00 (0.09) 10.00
Low Duration Fund III
Institutional Class
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
07/31/97--03/31/98........................................ (0.02) $ 0.00 $ 0.00 $ (0.44) $ 10.13
Short-Term Fund
Institutional Class
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
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
02/01/9--03/31/96......................................... 0.00 0.00 0.00 (0.10) 9.92
<CAPTION>
Ratio of Net
Ratio of Investment
Expenses to Income to
Net Assets End Average Net Average Net Portfolio
Selected Per Share Data for the Year or Period Ended: Total Return of Period (000s) Assets Assets Turnover Rate
------------ ---------------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Low Duration Fund
Institutional Class
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
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
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
02/02/98--03/31/98................................. 0.58 56 0.75+ 8.53+ 335
Low Duration Fund III
Institutional Class
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
07/31/97--03/31/98................................. 5.86% $ 3,748 1.81%(b) 6.30%+ 486%
Short-Term Fund
Institutional Class
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
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
</TABLE>
+ Annualized
(a) Per share amounts based on average number of shares outstanding during the
period.
(b) Ratio of expenses to average net assets excluding interest expense on
reverse repurchase agreements is .50%
1998 Annual Report See accompanying notes 27
<PAGE>
Financial Highlights - Institutional Classes (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 the Year Beginning Net Investment Gain (Loss) on Investment Investment Investment
or Period Ended: of Period Income Investments Operations Income Income
--------- -------------- -------------- ----------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C>
Long-Term U.S. Government Fund
Institutional Class
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
09/23/97-03/31/98..................... 10.17 0.26 (a) 0.51 (a) 0.77 (0.31) 0.00
Real Return Bond Fund
Institutional Class
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
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
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
Global Bond Fund
Institutional Class
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
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
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
07/31/97-03/31/98..................... $ 10.00 $ 0.46 (a) $ (0.18)(a) $ 0.28 $ (0.46) $ 0.00
</TABLE>
28
<PAGE>
Financial Highlights - Institutional Classes (Cont.)
<TABLE>
<CAPTION>
Distributions Distributions
from Net in Excess of Tax Basis Net Asset
Selected Per Share Data for the Year Realized Net Realized Return of Total Value End
or Period Ended: Capital Gains Capital Gains Capital Distributions of Period Total Return
------------- ------------- ---------- ------------- --------- ------------
<S> <C> <C> <C> <C> <C> <C>
Long-Term U.S. Government Fund
Institutional Class
03/31/98......................... $ (0.06) $ 0.00 $ 0.00 $ (0.68) $ 10.57 20.23%
03/31/97......................... 0.00 (0.33) 0.00 (1.01) 9.39 4.48
03/31/96......................... (0.50) (0.16) 0.00 (1.38) 9.96 14.83
03/31/95......................... 0.00 0.00 0.00 (0.62) 9.85 5.50
03/31/94......................... (0.70) (0.17) 0.00 (1.96) 9.96 4.13
Administrative Class
09/23/97-03/31/98................ (0.06) 0.00 0.00 (0.37) 10.57 7.60
Real Return Bond Fund
Institutional Class
03/31/98......................... $ (0.14) $ 0.00 $ 0.00 $ (0.65) $ 9.77 4.70%
01/29/97-03/31/97................ 0.00 0.00 0.00 (0.08) 9.93 0.09
Foreign Bond Fund
Institutional Class
03/31/98......................... $ (0.31) $ 0.00 $ 0.00 $ (0.94) $ 10.74 12.64%
03/31/97......................... (1.49) 0.00 0.00 (1.89) 10.41 17.69
03/31/96......................... (0.25) (0.03) 0.00 (0.87) 10.50 21.80
03/31/95......................... 0.00 0.00 (0.61) (0.61) 9.38 (1.85)
03/31/94......................... (0.06) (0.37) 0.00 (0.98) 10.18 7.79
Administrative Class
03/31/98......................... (0.31) 0.00 0.00 (0.91) 10.74 12.34
01/28/97-03/31/97................ 0.00 0.00 0.00 (0.05) 10.41 (0.72)
Global Bond Fund
Institutional Class
03/31/98......................... $ 0.00 $ (0.19) $ 0.00 $ (0.72) $ 9.70 5.85%
03/31/97......................... (0.44) 0.00 0.00 (0.88) 9.86 6.78
03/31/96......................... (0.21) (0.17) 0.00 (0.99) 10.05 12.04
03/31/95......................... 0.00 0.00 0.00 (0.53) 9.87 10.35
11/23/93-03/31/94................ 0.00 0.00 0.00 (0.16) 9.85 0.08
Administrative Class
03/31/98......................... 0.00 (0.19) 0.00 (0.70) 9.70 5.57
08/01/96-03/31/97................ (0.44) 0.00 0.00 (0.70) 9.86 2.97
Global Bond Fund II
Institutional Class
02/25/98-03/31/98................ $ 0.00 $ 0.00 $ 0.00 $ (0.05) $ 9.92 1.02%
Emerging Markets Bond Fund
Institutional Class
07/31/97-03/31/98................ $ (0.15) $ 0.00 $ 0.00 $ (0.61) $ 9.67 3.10%
<CAPTION>
Ratio of Investment
Expenses to Income to
Selected Per Share Data for the Year Net Assets End Average Net Average Net Portfolio
or Period Ended: of Period (000s) Assets Assets Turnover Rate
---------------- ----------- ----------- -------------
<S> <C> <C> <C> <C>
Long-Term U.S. Government Fund
Institutional Class
03/31/98......................... $ 48,547 0.51% 4.88% 177%
03/31/97......................... 19,995 0.63 7.63 402
03/31/96......................... 32,511 0.56 6.80 238
03/31/95......................... 32,349 0.50 6.62 89
03/31/94......................... 25,978 0.50 5.37 98
Administrative Class
09/23/97-03/31/98................ 4,957 0.76+ 4.87+ 177
Real Return Bond Fund
Institutional Class
03/31/98......................... $ 5,526 0.52% 4.46% 967%
01/29/97-03/31/97................ 5,638 0.51+ 6.54+ 160
Foreign Bond Fund
Institutional Class
03/31/98......................... $ 392,198 0.50% 6.32% 280%
03/31/97......................... 234,880 0.50 7.88 984
03/31/96......................... 258,493 0.52 5.83 1,234
03/31/95......................... 232,700 0.47 6.44 299
03/31/94......................... 498,521 0.54 5.12 260
Administrative Class
03/31/98......................... 315 0.75 6.07 280
01/28/97-03/31/97................ 30 0.79+ 7.63+ 984
Global Bond Fund
Institutional Class
03/31/98......................... $ 256,274 0.55% 6.64% 389%
03/31/97......................... 215,631 0.56 7.51 911
03/31/96......................... 133,833 0.58 5.88 1,083
03/31/95......................... 76,476 0.64 5.59 461
11/23/93-03/31/94................ 40,485 0.50+ 4.55+ 132
Administrative Class
03/31/98......................... 1,548 0.80 6.39 389
08/01/96-03/31/97................ 346 0.78+ 5.66+ 911
Global Bond Fund II
Institutional Class
02/25/98-03/31/98................ $ 24,517 0.55%+ 6.24%+ 369%
Emerging Markets Bond Fund
Institutional Class
07/31/97-03/31/98................ $ 3,676 0.86%+ 7.21%+ 695%
</TABLE>
+ Annualized
(a) Per share amounts based on average number of shares outstanding during the
period.
PIMCO Funds See accompanying notes 29
<PAGE>
Financial Highlights - Institutional Classes (Cont.)
<TABLE>
<CAPTION>
Net Realized Total Dividends Dividends in
Net Asset and Unrealized Income from from Net Excess of Net
Selected Per Share Data for the Year Value Beginning Net Investment Gain (Loss) on Investment Investment Investment
or Period Ended: of Period Income Investments Operations Income Income
--------------- -------------- --------------- ------------ ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
High Yield Fund
Institutional Class
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
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
Money Market Fund
Institutional Class
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
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
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
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
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.
30 PIMCO Funds See accompanying notes
<PAGE>
Financial Highlights - Institutional Classes (Cont.)
<TABLE>
<CAPTION>
Distributions Distributions
from Net in Excess of Tax Basis Net Asset
Selected Per Share Data for the Year Realized Net Realized Return of Total Value End
or Period Ended: Capital Gains Capital Gains Capital Distributions of Period Total Return
------------- ------------- --------- ------------- --------- ------------
<S> <C> <C> <C> <C> <C> <C>
High Yield Fund
Institutional Class
03/31/98........................... $ 0.00 $ (0.09) $ 0.00 $ (1.07) $ 11.66 15.26%
03/31/97........................... (0.13) 0.00 0.00 (1.10) 11.10 12.04
03/31/96........................... (0.05) 0.00 0.00 (1.06) 10.94 15.70
03/31/95........................... 0.00 (0.02) 0.00 (0.97) 10.42 8.81
03/31/94........................... (0.07) 0.00 0.00 (0.97) 10.52 10.65
Administrative Class
03/31/98........................... 0.00 (0.09) 0.00 (1.04) 11.66 14.98
03/31/97........................... (0.13) 0.00 0.00 (1.07) 11.10 11.76
03/31/96........................... (0.05) 0.00 0.00 (1.03) 10.94 15.54
01/16/95-03/31/95.................. 0.00 0.00 0.00 (0.21) 10.41 4.66
Money Market Fund
Institutional Class
03/31/98........................... $ 0.00 $ 0.00 $ 0.00 $ (0.05) $ 1.00 5.40%
03/31/97........................... 0.00 0.00 0.00 (0.05) 1.00 5.19
11/01/95-03/31/96.................. 0.00 0.00 0.00 (0.02) 1.00 2.58
10/31/95........................... 0.00 0.00 0.00 (0.06) 1.00 5.67
10/31/94........................... 0.00 0.00 0.00 (0.03) 1.00 3.53
10/31/93........................... 0.00 0.00 0.00 (0.03) 1.00 2.83
Administrative Class
03/31/98........................... 0.00 0.00 0.00 (0.05) 1.00 5.12
03/31/97........................... 0.00 0.00 0.00 (0.05) 1.00 4.94
11/01/95-03/31/96.................. 0.00 0.00 0.00 (0.02) 1.00 2.47
01/24/95-10/31/95.................. 0.00 0.00 0.00 (0.05) 1.00 4.21
StocksPLUS Fund
Institutional Class
03/31/98.......................... $ (1.09) $ 0.00 $ 0.00 $ (2.50) $ 14.09 47.75%
03/31/97.......................... (0.52) 0.00 0.00 (1.79) 11.46 19.44
03/31/96.......................... (1.62) (0.04) 0.00 (2.71) 11.16 34.07
03/31/95.......................... 0.00 0.00 0.00 (0.76) 10.48 18.64
05/14/93-03/31/94................. (0.10) (0.47) 0.00 (0.92) 9.52 1.55
Administrative Class
03/31/98.......................... (1.09) 0.00 0.00 (2.48) 14.06 47.19
01/07/97-03/31/97................. 0.00 0.00 0.00 (0.15) 11.46 0.34
Strategic Balanced Fund
Institutional Class
03/31/98......................... $ (0.23) $ 0.00 $ 0.00 $ (1.07) $ 12.60 33.40%
06/28/96-03/31/97................ (0.21) 0.00 0.00 (0.84) 10.32 11.83
<CAPTION>
Ratio of Net
Ratio of Investment
Expenses to Income to
Selected Per Share Data for the Year Net Assets End Average Net Average Net Portfolio
or Period Ended: of Period (000s) Assets Assets Turnover Rate
--------------- ----------- ----------- -------------
<S> <C> <C> <C> <C>
High Yield Fund
Institutional Class
03/31/98......................... $ 1,628,930 0.50% 8.52% 37%
03/31/97......................... 744,498 0.50 8.77 67
03/31/96......................... 536,983 0.47 9.28 66
03/31/95......................... 336,310 0.48 9.37 78
03/31/94......................... 219,976 0.50 8.40 112
Administrative Class
03/31/98......................... 69,937 0.75 8.21 37
03/31/97......................... 10,428 0.76 8.48 67
03/31/96......................... 1,007 0.80 9.16 66
01/16/95-03/31/95................ 41 0.73+ 10.12+ 78
Money Market Fund
Institutional Class
03/31/98......................... $ 55,335 0.35% 5.29% N/A
03/31/97......................... 23,497 0.40 5.08 N/A
11/01/95-03/31/96................ 25,935 0.33+ 5.44+ N/A
10/31/95......................... 7,741 0.40 5.53 N/A
10/31/94......................... 7,454 0.40 3.52 N/A
10/31/93......................... 5,836 0.40 2.78 N/A
Administrative Class
03/31/98......................... 749 0.60 5.04 N/A
03/31/97......................... 12 0.66 4.83 N/A
11/01/95-03/31/96................ 10 0.61+ 5.95+ N/A
01/24/95-10/31/95................ 10 0.68+ 5.94+ N/A
StocksPLUS Fund
Institutional Class
03/31/98......................... $ 416,600 0.65% 13.74% 30%
03/31/97......................... 235,829 0.65 11.78 47
03/31/96......................... 151,869 0.70 15.23 102
03/31/95......................... 46,498 0.50 11.89 177
05/14/93-03/31/94................ 14,330 0.50+ 4.00+ 33
Administrative Class
03/31/98......................... 2,143 0.90 13.49 30
01/07/97-03/31/97................ 682 0.95+ 4.83+ 47
Strategic Balanced Fund
Institutional Class
03/31/98......................... $ 38,806 0.65% 10.84% 56%
06/28/96-03/31/97................ 10,360 0.90+ 9.72+ 95
</TABLE>
+ Annualized
(a) Per share amounts based on average number of shares outstanding during the
period.
1998 Annual Report See accompanying notes 31
<PAGE>
Statement of Assets and Liabilities
March 31, 1998
<TABLE>
<CAPTION>
Total
Total Total Total Return Moderate
Amounts in thousands, except per Return Return Return Mortgage Duration
share amounts Fund Fund II Fund III Fund Fund
----------- --------- ------------ ------------- --------------
<S> <C> <C> <C> <C> <C>
Assets:
Investments, at value................................. $ 21,746,274 $ 710,886 $ 426,442 $ 4,416 $ 295,152
Cash and foreign currency............................. 40,257 5 0 0 1,102
Receivable for investments and foreign currency sold.. 2,523,370 44,840 39,924 1,653 25,779
Receivable for Fund shares sold....................... 222,430 861 8 0 402
Variation margin receivable........................... 24,440 923 612 0 177
Interest and dividends receivable..................... 176,822 5,239 4,789 36 2,171
Other assets.......................................... 6,179 301 128 0 31
24,739,772 763,055 471,903 6,105 324,814
====================================================================================================================================
Liabilities:
Payable for investments and foreign currency purchased $ 6,604,539 $ 172,621 $ 105,645 $ 2,515 $ 85,143
Notes payable......................................... 0 0 0 0 0
Written options outstanding........................... 1,459 0 109 0 0
Payable for Fund shares redeemed...................... 17,120 121 38 0 0
Dividends payable..................................... 15,275 311 171 0 429
Accrued investment advisor's fee...................... 3,713 120 77 1 50
Accrued administrator's fee........................... 2,877 120 77 1 40
Accrued distribution fee.............................. 463 3 0 0 0
Accrued servicing fee................................. 231 0 0 0 0
Other liabilities..................................... 2,384 0 359 0 0
6,648,061 173,296 106,476 2,517 85,662
====================================================================================================================================
Net Assets............................................ $ 18,091,711 $ 589,759 $ 365,427 $ 3,588 $ 239,152
====================================================================================================================================
Net Assets Consist of:
Paid in capital....................................... $ 17,814,558 $ 579,091 $ 360,009 $ 3,507 $ 237,823
Undistributed (overdistributed) net investment income. 111,760 2,245 1,694 25 560
Accumulated undistributed net realized gain (loss).... 40,149 2,243 666 (5) (198)
Net unrealized appreciation (depreciation)............ 125,244 6,180 3,058 61 967
$ 18,091,711 $ 589,759 $ 365,427 $ 3,588 $ 239,152
====================================================================================================================================
Shares Issued and Outstanding:
Institutional Class................................... 1,552,606 56,008 38,229 350 23,580
Administrative Class.................................. 45,374 1,479 19 0 0
Retail Classes........................................ 106,045 0 0 0 0
Net Asset Value and Redemption Price* Per Share
(Net Assets Per Share Outstanding):
Institutional Class................................... $ 10.62 $ 10.26 $ 9.55 $ 10.24 $ 10.14
Administrative Class.................................. 10.62 10.26 9.55 0 0
Class A............................................... 10.62 0 0 0 0
Class B............................................... 10.62 0 0 0 0
Class C............................................... 10.62 0 0 0 0
Cost of Investments Owned............................. $ 21,634,433 $ 703,935 $ 423,384 $ 4,357 $ 293,657
====================================================================================================================================
Cost of Foreign Currency Held......................... $ 35,189 $ 0 $ 0 $ 0 $ 1,119
====================================================================================================================================
</TABLE>
32 PIMCO Funds See accompanying notes
<PAGE>
Statement of Assets and Liabilities
March 31, 1998
<TABLE>
<CAPTION>
Low Low Low
Amounts in thousands, except per Duration Duration Duration Low Duration Short-Term
share amounts Fund Fund II Fund III Mortgage Fund Fund
---------- ------------ ------------- ------------- ------------
<S> <C> <C> <C> <C> <C>
Assets:
Investments, at value................................... $4,129,223 $ 763,529 $ 30,011 $ 6,295 $ 213,036
Cash and foreign currency............................... 826 0 1 1 142
Receivable for investments and foreign currency sold.... 108,405 120,487 0 1,441 231
Receivable for Fund shares sold......................... 6,790 66 0 0 1,911
Variation margin receivable............................. 481 132 12 0 4
Interest and dividends receivable....................... 22,254 1,937 104 38 2,021
Other assets............................................ 1,823 211 5 0 117
4,269,802 886,362 30,133 7,775 217,462
===================================================================================================================================
Liabilities:
Payable for investments and foreign currency purchased.. $1,247,421 $ 484,770 $ 6,225 $ 2,655 $ 5,059
Notes payable........................................... 0 0 0 1,356 0
Written options outstanding............................. 0 0 0 0 0
Payable for Fund shares redeemed........................ 16,677 2 0 0 1,894
Dividends payable....................................... 2,736 149 0 0 221
Accrued investment advisor's fee........................ 647 84 5 1 44
Accrued administrator's fee............................. 502 84 5 1 39
Accrued distribution fee................................ 43 0 0 0 3
Accrued servicing fee................................... 41 0 0 0 6
Other liabilities....................................... 97 13 2 14 0
1,268,164 485,102 6,237 4,027 7,266
===================================================================================================================================
Net Assets.............................................. $3,001,638 $ 401,260 $ 23,896 $ 3,748 $ 210,196
===================================================================================================================================
Net Assets Consist of:
Paid in capital......................................... $2,975,977 $ 399,669 $ 23,834 $ 3,705 $ 208,978
Undistributed (overdistributed) net investment income... 736 48 22 15 741
Accumulated undistributed net realized gain (loss)...... (16) (298) (13) 0 (85)
Net unrealized appreciation (depreciation).............. 24,941 1,841 53 28 562
$3,001,638 $ 401,260 $ 23,896 $ 3,748 $ 210,196
===================================================================================================================================
Shares Issued and Outstanding:
Institutional Class..................................... 271,121 40,122 2,377 370 17,177
Administrative Class.................................... 4,538 6 0 0 512
Retail Classes.......................................... 19,249 0 0 0 3,200
Net Asset Value and Redemption Price* Per Share
(Net Assets Per Share Outstanding):
Institutional Class..................................... $ 10.18 $ 10.00 $ 10.05 $ 10.13 $ 10.06
Administrative Class.................................... 10.18 10.00 0 0 10.06
Class A................................................. 10.18 0 0 0 10.06
Class B................................................. 10.18 0 0 0 10.06
Class C................................................. 10.18 0 0 0 10.06
Cost of Investments Owned............................... $4,106,489 $ 761,865 $ 29,950 $ 6,267 $ 212,787
===================================================================================================================================
Cost of Foreign Currency Held........................... $ 0 $ 0 $ 0 $ 0 $ 56
===================================================================================================================================
<CAPTION>
Long-Term
Amounts in thousands, except per U.S. Gov't Real Return Foreign Global
share amounts Fund Bond Fund Bond Fund Bond Fund
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Assets:
Investments, at value................................... $ 116,173 $ 13,958 $ 673,178 $ 346,061
Cash and foreign currency............................... 23 2 1,867 414
Receivable for investments and foreign currency sold.... 10,385 17 61,321 43,015
Receivable for Fund shares sold......................... 350 1 3,709 922
Variation margin receivable............................. 0 0 193 266
Interest and dividends receivable....................... 1,307 43 8,378 4,981
Other assets............................................ 0 7 0 0
128,238 14,028 748,646 395,659
=========================================================================================================================
Liabilities:
Payable for investments and foreign currency purchased.. $ 53,459 $ 6,082 $ 316,688 $ 136,232
Notes payable........................................... 0 0 0 0
Written options outstanding............................. 0 55 0 0
Payable for Fund shares redeemed........................ 230 3 591 610
Dividends payable....................................... 49 1 413 369
Accrued investment advisor's fee........................ 16 2 89 56
Accrued administrator's fee............................. 18 2 95 67
Accrued distribution fee................................ 9 1 17 0
Accrued servicing fee................................... 4 0 8 0
Other liabilities....................................... 14 0 939 504
53,799 6,146 318,840 137,838
=========================================================================================================================
Net Assets.............................................. $ 74,439 $ 7,882 $ 429,806 $ 257,821
=========================================================================================================================
Net Assets Consist of:
Paid in capital......................................... $ 72,038 $ 8,022 $ 411,893 $ 268,576
Undistributed (overdistributed) net investment income... 488 (25) 20,944 (4,637)
Accumulated undistributed net realized gain (loss)...... 461 6 (63) 14
Net unrealized appreciation (depreciation).............. 1,452 (121) (2,968) (6,132)
$ 74,439 $ 7,882 $ 429,806 $ 257,821
=========================================================================================================================
Shares Issued and Outstanding:
Institutional Class..................................... 4,591 566 36,526 26,439
Administrative Class.................................... 469 0 29 160
Retail Classes.......................................... 1,980 241 3,473 0
Net Asset Value and Redemption Price* Per Share
(Net Assets Per Share Outstanding):
Institutional Class..................................... $ 10.57 $ 9.77 $ 10.74 $ 9.70
Administrative Class.................................... 10.57 0 10.74 9.70
Class A................................................. 10.57 9.77 10.74 0
Class B................................................. 10.57 9.77 10.74 0
Class C................................................. 10.57 9.77 10.74 0
Cost of Investments Owned............................... $ 114,745 $ 14,124 $ 681,526 $ 350,746
=========================================================================================================================
Cost of Foreign Currency Held........................... $ 0 $ 0 $ 1,841 $ 419
=========================================================================================================================
</TABLE>
* With respect to the Retail Classes, the redemption price may vary by the
length of time shares are held.
1998 Annual Report See accompanying notes 33
<PAGE>
Statement of Assets and Liabilities (Cont.)
March 31, 1998
<TABLE>
<CAPTION>
Emerging
Amounts in thousands, except per share amounts Global Markets High Money
Bond Fund II Bond Fund Yield Fund Market Fund
------------ --------- ------------- ------------
<S> <C> <C> <C> <C>
Assets:
Investments, at value.................................... $ 60,160 $ 5,241 $ 2,185,181 $ 195,575
Cash and foreign currency................................ 224 203 1,050 201
Receivable for investments and foreign currency sold..... 5,813 105 14,279 0
Receivable for Fund shares sold.......................... 3 0 6,513 20,803
Variation margin receivable.............................. 63 0 0 0
Interest and dividends receivable........................ 523 56 36,500 6
Other assets............................................. 3 2 0 0
66,789 5,607 2,243,523 216,585
========================================================= =========== ========= ============= ============
Liabilities:
Payable for investments and foreign currency purchased... $ 24,772 $ 1,166 $ 26,775 $ 0
Written options outstanding.............................. 0 0 0 0
Payable for Fund shares redeemed......................... 31 2 2,043 60,059
Dividends payable........................................ 10 2 2,557 306
Accrued investment advisor's fee......................... 8 2 457 19
Accrued administrator's fee.............................. 11 2 520 40
Accrued distribution fee................................. 7 0 287 2
Accrued servicing fee.................................... 4 0 106 10
Variation margin payable................................. 0 0 0 0
Other liabilities........................................ 44 0 118 57
24,887 1,174 32,863 60,493
========================================================= =========== ========= ============= ============
Net Assets............................................... $ 41,902 $ 4,433 $ 2,210,660 $ 156,092
========================================================= =========== ========= ============= ============
Net Assets Consist of:
Paid in capital.......................................... $ 42,190 $ 4,512 $ 2,193,777 $ 156,072
Undistributed (overdistributed) net investment income.... 141 27 (2,529) 20
Accumulated undistributed net realized gain (loss)....... (12) (195) (56,082) 0
Net unrealized appreciation (depreciation)............... (417) 89 75,494 0
$ 41,902 $ 4,433 $ 2,210,660 $ 156,092
========================================================= =========== ========= ============= ============
Shares Issued and Outstanding:
Institutional Class...................................... 2,471 380 139,702 55,336
Administrative Class..................................... 0 0 5,998 749
Retail Classes........................................... 1,753 79 43,894 100,010
Net Asset Value and Redemption Price* Per Share
(Net Assets Per Share Outstanding):
Institutional Class..................................... $ 9.92 $ 9.67 $ 11.66 $ 1.00
Administrative Class.................................... 0 0 11.66 1.00
Class A................................................. 9.92 9.67 11.66 1.00
Class B................................................. 9.92 9.67 11.66 1.00
Class C................................................. 9.92 9.67 11.66 1.00
Cost of Investments Owned................................ $ 60,644 $ 5,155 $ 2,109,835 $ 195,575
========================================================= =========== ========= ============= ============
Cost of Foreign Currency Held............................ $ 218 $ 0 $ 0 $ 0
========================================================= =========== ========= ============= ============
<CAPTION>
Amounts in thousands, except per share amounts StocksPLUS Strategic
Fund Balanced Fund
------------- -------------
<S> <C> <C>
Assets:
Investments, at value.................................... $ 664,637 $ 38,072
Cash and foreign currency................................ 1,629 57
Receivable for investments and foreign currency sold..... 1,231 19
Receivable for Fund shares sold.......................... 4,608 0
Variation margin receivable.............................. 2,460 128
Interest and dividends receivable........................ 9,818 551
Other assets............................................. 200 0
684,583 38,827
========================================================= ============= ==========
Liabilities:
Payable for investments and foreign currency purchased... $ 5,139 $ 0
Written options outstanding.............................. 0 0
Payable for Fund shares redeemed......................... 1,062 0
Dividends payable........................................ 133 0
Accrued investment advisor's fee......................... 220 13
Accrued administrator's fee.............................. 168 8
Accrued distribution fee................................. 96 0
Accrued servicing fee.................................... 51 0
Variation margin payable................................. 0 0
Other liabilities........................................ 2 0
6,871 21
========================================================= ============= ==========
Net Assets............................................... $ 677,712 $ 38,806
========================================================= ============= ==========
Net Assets Consist of:
Paid in capital.......................................... $ 591,465 $ 34,769
Undistributed (overdistributed) net investment income.... 43,808 2,019
Accumulated undistributed net realized gain (loss)....... 31,583 1,593
Net unrealized appreciation (depreciation)............... 10,856 425
$ 677,712 $ 38,806
========================================================= ============= ==========
Shares Issued and Outstanding:
Institutional Class...................................... 29,564 3,080
Administrative Class..................................... 152 0
Retail Classes........................................... 18,455 0
Net Asset Value and Redemption Price* Per Share
(Net Assets Per Share Outstanding):
Institutional Class..................................... $ 14.09 $ 12.60
Administrative Class.................................... 14.06 0
Class A................................................. 14.06 0
Class B................................................. 14.01 0
Class C................................................. 14.03 0
Cost of Investments Owned................................ $ 664,639 $ 37,914
========================================================= ============= ==========
Cost of Foreign Currency Held............................ $ 1,612 $ 56
========================================================= ============= ==========
</TABLE>
* With respect to the Retail Classes, the redemption price may vary by the
length of time shares are held.
34 PIMCO Funds See accompanying notes
<PAGE>
Statement of Operations
For the year or period ended March 31, 1998
<TABLE>
<CAPTION>
Total
Amounts in thousands Total Total Total Return Moderate Low
Return Return Return Mortgage Duration Duration
Fund Fund II Fund III Fund Fund Fund
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Investment Income:
Interest......................................... $ 993,323 $ 30,570 $ 18,221 $ 152 $ 7,439 $ 202,520
Dividends........................................ 1,329 0 0 0 183 0
Total Income.................................. 994,652 30,570 18,221 152 7,622 202,520
Expenses:
Investment advisory fees......................... 38,328 1,146 701 6 294 7,416
Administration fees.............................. 29,220 1,146 701 6 236 5,666
Distribution fees-Administrative Class........... 692 22 0 0 0 73
Distribution and servicing fees-Retail Classes... 5,343 0 0 0 0 750
Trustees' fees................................... 185 6 3 0 1 37
Reorganization costs............................. 0 0 0 0 0 0
Miscellaneous.................................... 176 15 23 0 1 42
Total Expenses................................ 73,944 2,335 1,428 12 532 13,984
Net Investment Income (Loss)..................... 920,708 28,235 16,793 140 7,090 188,536
================================================= ========== ========== ========== ========== ========== ==========
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on investments.......... 156,245 6,692 2,193 22 140 19,479
Net realized gain (loss) on futures
contracts and written options................. 455,420 9,403 8,272 0 251 3,387
Net realized gain (loss) on
foreign currency transactions................. 32,489 0 516 0 537 2,558
Net change in unrealized appreciation
(depreciation) on investments................. 158,814 8,834 3,272 61 1,690 43,345
Net change in unrealized appreciation
(depreciation) on futures contracts
and written options........................... 35,424 (1,443) 592 0 (243) (3,327)
Net change in unrealized appreciation
(depreciation) on translation of assets and
liabilities denominated in foreign currencies. 2,015 0 (431) 0 (316) (1,195)
Net Gain...................................... 840,407 23,486 14,414 83 2,059 64,247
Net Increase in Assets Resulting from Operations. $1,761,115 $ 51,721 $ 31,207 $ 223 $ 9,149 $ 252,783
================================================= ========== ========== ========== ========== ========== ==========
</TABLE>
1998 Annual Report See accompanying notes 35
<PAGE>
Statement of Operations (Cont.)
For the year or period ended March 31, 1998
<TABLE>
<CAPTION>
Amounts in thousands Low Low Low Duration Short-Term Long-Term
Duration Fund II Duration Fund III Mortgage Fund Fund U.S. Gov't Fund
---------------- ----------------- ------------- ---------- ---------------
<S> <C> <C> <C> <C> <C>
Investment Income:
Interest............................ $ 22,667 $ 849 $ 208 $ 12,824 $ 2,634
Dividends........................... 0 0 0 0 0
Total Income 22,667 849 208 12,824 2,634
==================================== ================ ================= ============= ========== ===============
Expenses:
Investment advisory fees............ 870 33 6 487 117
Administration fees................. 870 33 6 411 130
Distribution fees -
Administrative Class............. 0 0 0 10 5
Distribution and servicing
fees - Retail Classes............ 0 0 0 53 63
Trustees' fees...................... 4 0 0 2 0
Interest expense.................... 0 0 46 0 0
Miscellaneous 3 0 0 0 7
Total Expenses................... 1,747 66 58 963 322
Net Investment Income (Loss) 20,920 783 150 11,861 2,312
==================================== ================ ================= ============= ========== ===============
Net Realized and Unrealized
Gain (Loss):.....................
Net realized gain (loss) on
investments...................... 1,556 104 25 96 2,751
Net realized gain (loss) on futures
contracts and written options.... 1,229 (30) 0 30 522
Net realized gain (loss) on
foreign currency transactions.... 0 0 0 796 0
Net change in unrealized
appreciation (depreciation)......
on investments................... 3,697 128 27 490 1,824
Net change in unrealized
appreciation (depreciation) on...
futures contracts and written....
options.......................... 246 (14) 0 17 36
Net change in unrealized
appreciation (depreciation) on...
translation of assets and........
liabilities denominated in.......
foreign currencies............... 0 0 0 (52) 0
Net Gain (Loss).................. 6,728 188 52 1,377 5,133
Net Increase in Assets Resulting
from Operations.................. $ 27,648 $ 971 $ 202 $ 13,238 $ 7,445
==================================== ================ ================= ============= ========== ===============
</TABLE>
36 PIMCO Funds See accompanying notes
<PAGE>
<TABLE>
<CAPTION>
Amounts in thousands Real Return Foreign Global Global
Bond Fund Bond Fund Bond Fund Bond Fund II
----------- --------- --------- ------------
<S> <C> <C> <C> <C>
Investment Income:
Interest................................................... $ 376 $ 22,152 $ 18,466 $ 1,383
Dividends.................................................. 0 0 0 0
Total Income 376 22,152 18,466 1,383
================================================================================================================================
Expenses:
Investment advisory fees................................... 19 812 642 50
Administration fees........................................ 22 850 771 88
Distribution fees - Administrative Class................... 0 1 9 0
Distribution and servicing fees - Retail Classes........... 15 159 0 121
Trustees' fees............................................. 0 4 3 0
Interest expense........................................... 0 0 0 0
Miscellaneous.............................................. 3 0 1 0
Total Expenses 59 1,826 1,426 259
Net Investment Income (Loss) 317 20,326 17,040 1,124
================================================================================================================================
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on investments.................... 24 (124) 3,501 487
Net realized gain (loss) on futures
contracts and written options........................... (3) 767 4,618 263
Net realized gain (loss) on
foreign currency transactions........................... 31 19,408 (8,695) 502
Net change in unrealized appreciation
(depreciation) on investments........................... (53) (2,815) (2,395) (196)
Net change in unrealized appreciation
(depreciation) on futures contracts.....................
and written options..................................... 33 462 708 83
Net change in unrealized appreciation
(depreciation) on translation of assets and.............
liabilities denominated in foreign currencies........... (1) 348 (1,047) (65)
Net Gain (Loss) 31 18,046 (3,310) 1,074
Net Increase in Assets Resulting from Operations $ 348 $ 38,372 $ 13,730 $ 2,198
================================================================================================================================
<CAPTION>
Amounts in thousands Emerging Markets High Yield Money StocksPLUS Strategic
Bond Fund Fund Market Fund Fund Balanced Fund
---------------- ----------- ----------- ---------- -------------
<S> <C> <C> <C> <C> <C>
Investment Income:
Interest........................................... $ 207 $ 126,284 $ 7,811 $ 69,130 $ 3,387
Dividends.......................................... 0 6,121 0 0 4
Total Income 207 132,405 7,811 69,130 3,391
====================================================================================================================================
Expenses:
Investment advisory fees........................... 11 3,671 205 1,919 118
Administration fees................................ 11 4,258 424 1,393 73
Distribution fees - Administrative Class........... 0 60 1 3 0
Distribution and servicing fees - Retail Classes... 2 3,551 125 908 0
Trustees' fees..................................... 0 17 2 5 0
Interest expense................................... 0 0 0 0 0
Miscellaneous...................................... 0 10 2 4 0
Total Expenses 24 11,567 759 4,232 191
Net Investment Income (Loss) 183 120,838 7,052 64,898 3,200
====================================================================================================================================
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on investments............ (170) 17,622 0 522 30
Net realized gain (loss) on futures
contracts and written options................... 22 0 0 83,632 3,126
Net realized gain (loss) on
foreign currency transactions................... 40 0 0 1,469 15
Net change in unrealized appreciation
(depreciation) on investments................... 87 53,329 0 (112) 131
Net change in unrealized appreciation
(depreciation) on futures contracts.............
and written options............................. 1 0 0 21,478 509
Net change in unrealized appreciation
(depreciation) on translation of assets and.....
liabilities denominated in foreign currencies... 1 0 0 (67) (10)
Net Gain (Loss) (19) 70,951 0 106,922 3,801
Net Increase in Assets Resulting from Operations $ 164 $ 191,789 $ 7,052 $ 171,820 $ 7,001
====================================================================================================================================
</TABLE>
1998 Annual Report See accompanying notes 37
<PAGE>
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Amounts in thousands Total Return Fund Total Return Fund II Total Return Fund III
----------------------------- ----------------------------- ------------------------------
Increase (Decrease) in Net Assets from: Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended
March 31, 1998 March 31, 1997 March 31, 1998 March 31, 1997 March 31, 1998 March 31, 1997
<S> <C> <C> <C> <C> <C> <C>
Operations:
Net investment income................. $ 920,708 $ 770,314 $ 28,235 $ 29,897 $ 16,793 $ 10,473
Net realized gain (loss).............. 644,154 (57,928) 16,095 (3,972) 10,981 (2,381)
Net change in unrealized appreciation
(depreciation)..................... 196,253 15,459 7,391 514 3,433 2,258
Net increase (decrease) resulting from
operations......................... 1,761,115 727,845 51,721 26,439 31,207 10,350
Distributions to Shareholders:
From net investment income
Institutional Class................ (843,692) (737,816) (26,226) (29,298) (15,906) (10,093)
Administrative Class............... (15,470) (8,454) (506) (270) (7) 0
Retail Classes..................... (36,268) (5,252) 0 0 0 0
In excess of net investment income
Institutional Class................ (23,175) (18,432) (1,502) (328) (857) (380)
Administrative Class............... (425) (211) (30) (3) 0 0
Retail Classes..................... (996) (131) 0 0 0 0
From net realized capital gains
Institutional Class................ (375,236) 0 (5,211) 0 (5,401) 0
Administrative Class............... (8,344) 0 (104) 0 (2) 0
Retail Classes..................... (20,592) 0 0 0 0 0
In excess of net realized capital gains
Institutional Class................ 0 0 0 0 0 (283)
Administrative Class............... 0 0 0 0 0 0
Retail Classes..................... 0 0 0 0 0 0
Tax basis return of capital
Institutional Class................ 0 0 0 0 0 0
Administrative Class............... 0 0 0 0 0 0
Retail Classes..................... 0 0 0 0 0 0
Total Distributions (1,324,198) (770,296) (33,579) (29,899) (22,173) (10,756)
Fund Share Transactions:
Receipts for shares sold
Institutional Class................ 6,060,910 3,709,839 347,509 88,832 160,414 56,444
Administrative Class............... 420,992 132,504 10,297 1,824 211 0
Retail Classes..................... 730,357 59,247 0 0 0 0
Issued in reorganization
Retail Classes..................... 0 499,338 0 0 0 0
Issued as reinvestment of distributions
Institutional Class................ 1,031,930 606,425 30,055 28,378 20,471 10,374
Administrative Class............... 23,828 8,479 610 273 1 0
Retail Classes..................... 46,126 3,729 0 0 0 0
Cost of shares redeemed
Institutional Class................ (3,556,685) (2,001,935) (299,345) (90,902) (17,962) (15,338)
Administrative Class............... (117,585) (94,080) (1,264) (93) (39) 0
Retail Classes..................... (183,785) (34,612) 0 0 0 0
Net increase (decrease) resulting from
Fund share transactions............. 4,456,088 2,888,934 87,862 28,312 163,096 51,480
Total Increase (Decrease) in Net Assets 4,893,005 2,846,483 106,004 24,852 172,130 51,074
Net Assets:
Beginning of period................... 13,198,706 10,352,223 483,755 458,903 193,297 142,223
End of period *....................... $ 18,091,711 $ 13,198,706 $ 589,759 $ 483,755 $ 365,427 $ 193,297
*Including net undistributed
(overdistributed) investment income of: $ 111,760 $ (25,279) $ 2,245 $ (1,503) $ 1,694 $ (880)
</TABLE>
38 PIMCO Funds See accompanying notes
<PAGE>
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Amounts in thousands Total Return
Mortgage Fund Moderate Duration Fund Low Duration Fund
---------------- ---------------------------------- --------------------------------
Increase (Decrease) in Net Assets from: Period from
July 31, 1997 to Year Ended Three Months Ended Year Ended Year Ended
March 31, 1998 March 31, 1998 March 31, 1997 March 31, 1998 March 31, 1997
<S> <C> <C> <C> <C> <C>
Operations:
Net investment income.................... $ 140 $ 7,090 $ 160 $ 188,536 $ 177,362
Net realized gain (loss)................. 22 928 (12) 25,424 1,645
Net change in unrealized appreciation
(depreciation)........................ 61 1,131 (164) 38,823 4,354
Net increase (decrease) resulting from
operations............................ 223 9,149 (16) 252,783 183,361
Distributions to Shareholders:
From net investment income
Institutional Class................... (140) (7,093) (159) (171,675) (170,430)
Administrative Class.................. 0 0 0 (1,723) (511)
Retail Classes........................ 0 0 0 (8,106) (1,302)
In excess of net investment income
Institutional Class................... 0 (1) 0 (6,016) (5,074)
Administrative Class.................. 0 0 0 (61) (15)
Retail Classes........................ 0 0 0 (283) (38)
From net realized capital gains
Institutional Class................... (2) (565) 0 (7,885) 0
Administrative Class.................. 0 0 0 (78) 0
Retail Classes........................ 0 0 0 (496) 0
In excess of net realized capital gains
Institutional Class................... 0 0 0 0 0
Administrative Class.................. 0 0 0 0 0
Retail Classes........................ 0 0 0 0 0
Tax basis return of capital
Institutional Class................... 0 0 0 0 0
Administrative Class.................. 0 0 0 0 0
Retail Classes........................ 0 0 0 0 0
Total Distributions...................... (142) (7,659) (159) (196,323) (177,370)
Fund Share Transactions:
Receipts for shares sold
Institutional Class................... 3,365 226,998 13,681 1,467,244 1,394,715
Administrative Class.................. 0 0 0 33,741 22,564
Retail Classes........................ 0 0 0 427,414 39,148
Issued in reorganization
Retail Classes........................ 0 0 0 0 120,271
Issued as reinvestment of distributions
Institutional Class................... 142 6,096 159 155,141 149,996
Administrative Class.................. 0 0 0 1,852 518
Retail Classes........................ 0 0 0 7,702 1,143
Cost of shares redeemed
Institutional Class................... 0 (8,890) (207) (1,713,570) (1,432,178)
Administrative Class.................. 0 0 0 (13,425) (1,971)
Retail Classes........................ 0 0 0 (369,736) (31,492)
Net increase (decrease) resulting from
Fund share transactions................ 3,507 224,204 13,633 (3,637) 262,714
Total Increase (Decrease) in Net Assets.. 3,588 225,694 13,458 52,823 268,705
Net Assets:
Beginning of period...................... 0 13,458 0 2,948,815 2,680,110
End of period *.......................... $ 3,588 $ 239,152 $ 13,458 $ 3,001,638 $ 2,948,815
*Including net undistributed
(overdistributed) investment income of:. $ 25 $ 560 $ 2 $ 736 $ (7,032)
<CAPTION>
Amounts in thousands Low Duration Fund II
------------------------------------
Increase (Decrease) in Net Assets from: Year Ended Year Ended
March 31, 1998 March 31, 1997
<S> <C> <C>
Operations:
Net investment income..................... $ 20,920 $ 17,299
Net realized gain (loss).................. 2,785 (1,091)
Net change in unrealized appreciation
(depreciation)......................... 3,943 (128)
Net increase (decrease) resulting from
operations............................. 27,648 16,080
Distributions to Shareholders:
From net investment income
Institutional Class.................... (19,648) (15,937)
Administrative Class................... (1) 0
Retail Classes......................... 0 0
In excess of net investment income
Institutional Class.................... (1,272) (469)
Administrative Class................... 0 0
Retail Classes......................... 0 0
From net realized capital gains
Institutional Class.................... (575) 0
Administrative Class................... 0 0
Retail Classes......................... 0 0
In excess of net realized capital gains
Institutional Class.................... 0 0
Administrative Class................... 0 0
Retail Classes......................... 0 0
Tax basis return of capital
Institutional Class.................... 0 (280)
Administrative Class................... 0 0
Retail Classes......................... 0 0
Total Distributions....................... (21,496) (16,686)
Fund Share Transactions:
Receipts for shares sold
Institutional Class.................... 177,099 139,963
Administrative Class................... 72 0
Retail Classes......................... 0 0
Issued in reorganization
Retail Classes......................... 0 0
Issued as reinvestment of distributions
Institutional Class.................... 20,086 15,824
Administrative Class................... 0 0
Retail Classes......................... 0 0
Cost of shares redeemed
Institutional Class.................... (141,508) (69,105)
Administrative Class................... (16) 0
Retail Classes......................... 0 0
Net increase (decrease) resulting from
Fund share transactions................. 55,733 86,682
Total Increase (Decrease) in Net Assets... 61,885 86,076
Net Assets:
Beginning of period....................... 339,375 253,299
End of period *........................... $ 401,260 $ 339,375
*Including net undistributed
(overdistributed) investment income of:.. $ 48 $ (1,272)
</TABLE>
38 PIMCO Funds See accompanying notes
<PAGE>
Statement of Changes in Net Assets (Cont.)
<TABLE>
<CAPTION>
Low Duration
Amounts in thousands Low Duration Fund III Mortgage Fund Short-Term Fund
----------------------------- ------------- ---------------------------
Three Months Period from
Increase (Decrease) in Net Assets from: Year Ended Ended July 31, 1997 Year Ended Year Ended
March 31, March 31, to March 31, March 31, March 31,
1998 1997 1998 1998 1997
<S> <C> <C> <C> <C> <C>
Operations:
Net investment income............................... $ 783 $ 149 $ 150 $ 11,861 $ 7,616
Net realized gain (loss)............................ 74 (32) 25 922 282
Net change in unrealized appreciation
(depreciation)................................... 114 (61) 27 455 620
Net increase (decrease) resulting from
operations....................................... 971 56 202 13,238 8,518
Distributions to Shareholders:
From net investment income
Institutional Class.............................. (778) (149) (150) (10,663) (7,220)
Administrative Class............................. 0 0 0 (239) (221)
Retail Classes................................... 0 0 0 (751) (15)
In excess of net investment income
Institutional Class.............................. (5) 0 0 (192) (156)
Administrative Class............................. 0 0 0 (4) (5)
Retail Classes................................... 0 0 0 (13) 0
From net realized capital gains
Institutional Class.............................. (33) 0 (9) (251) 0
Administrative Class............................. 0 0 0 (7) 0
Retail Classes................................... 0 0 0 (25) 0
In excess of net realized capital gains
Institutional Class.............................. 0 0 0 0 0
Administrative Class............................. 0 0 0 0 0
Retail Classes................................... 0 0 0 0 0
Tax basis return of capital
Institutional Class.............................. 0 0 0 0 0
Administrative Class............................. 0 0 0 0 0
Retail Classes................................... 0 0 0 0 0
Total Distributions................................. (816) (149) (159) (12,145) (7,617)
Fund Share Transactions:
Receipts for shares sold
Institutional Class.............................. 12,870 10,000 3,553 311,342 180,257
Administrative Class............................. 0 0 0 4,605 8,640
Retail Classes................................... 0 0 0 54,585 6,035
Issued in reorganization
Retail Classes................................... 0 0 0 0 0
Issued as reinvestment of distributions
Institutional Class.............................. 816 149 159 9,089 6,243
Administrative Class............................. 0 0 0 35 15
Retail Classes................................... 0 0 0 681 10
Cost of shares redeemed
Institutional Class.............................. (1) 0 (7) (305,111) (132,676)
Administrative Class............................. 0 0 0 (4,023) (8,162)
Retail Classes................................... 0 0 0 (27,134) (2,025)
Net increase (decrease) resulting from
Fund share transactions.......................... 13,685 10,149 3,705 44,069 58,337
Total Increase (Decrease) in Net Assets............. 13,840 10,056 3,748 45,162 59,238
Net Assets:
Beginning of period................................. 10,056 0 0 165,034 105,796
End of period *..................................... $ 23,896 $ 10,056 $ 3,748 $ 210,196 $ 165,034
*Including net undistributed
(overdistributed) investment income of:.......... $ 22 $ (5) $ 15 $ 741 $ (208)
</TABLE>
40 PIMCO Funds See accompanying notes
<PAGE>
<TABLE>
<CAPTION>
Amounts in thousands Long-Term U.S. Gov't Fund Real Return Bond Fund
--------------------------------- -------------------------------------
Period from
Increase (Decrease) in Net Assets from: Year Ended Year Ended Year Ended January 29, 1997 to
March 31, 1998 March 31, 1997 March 31, 1998 March 31, 1997
<S> <C> <C> <C> <C>
Operations:
Net investment income............................... $ 2,312 $ 1,963 $ 317 $ 63
Net realized gain (loss)............................ 3,273 (431) 52 1
Net change in unrealized appreciation
(depreciation)................................... 1,860 (602) (21) (67)
Net increase (decrease) resulting from
operations....................................... 7,445 930 348 (3)
Distributions to Shareholders:
From net investment income
Institutional Class.............................. (2,186) (1,773) (248) (45)
Administrative Class............................. (122) 0 0 0
Retail Classes................................... (443) (13) (71) (1)
In excess of net investment income
Institutional Class.............................. (1) 0 (18) 0
Administrative Class............................. 0 0 0 0
Retail Classes................................... 0 0 (5) 0
From net realized capital gains
Institutional Class.............................. (218) 0 (68) 0
Administrative Class............................. (21) 0 0 0
Retail Classes................................... (78) 0 (31) 0
In excess of net realized capital gains
Institutional Class.............................. 0 (693) 0 0
Administrative Class............................. 0 0 0 0
Retail Classes................................... 0 0 0 0
Tax basis return of capital
Institutional Class.............................. 0 0 0 0
Administrative Class............................. 0 0 0 0
Retail Classes................................... 0 0 0 0
Total Distributions................................. (3,069) (2,479) (441) (46)
Fund Share Transactions:
Receipts for shares sold
Institutional Class.............................. 48,113 6,985 4,626 5,636
Administrative Class............................. 4,924 0 0 0
Retail Classes................................... 22,677 1,987 3,598 663
Issued in reorganization
Retail Classes................................... 0 0 0 0
Issued as reinvestment of distributions
Institutional Class.............................. 1,998 2,113 333 45
Administrative Class............................. 97 0 0 0
Retail Classes................................... 353 3 91 1
Cost of shares redeemed
Institutional Class.............................. (25,182) (20,121) (5,016) 0
Administrative Class............................. (191) 0 0 0
Retail Classes................................... (4,654) (1) (1,953) 0
Net increase (decrease) resulting from
Fund share transactions.......................... 48,135 (9,034) 1,679 6,345
Total Increase (Decrease) in Net Assets............. 52,511 (10,583) 1,586 6,296
Net Assets:
Beginning of period................................. 21,928 32,511 6,296 0
End of period *..................................... $ 74,439 $ 21,928 $ 7,882 $ 6,296
*Including net undistributed
(overdistributed) investment income of:.......... $ 488 $ 438 $ (25) $ 19
<CAPTION>
Amounts in thousands Foreign Bond Fund Global Bond Fund
--------------------------------- ---------------------------------
Increase (Decrease) in Net Assets from: Year Ended Year Ended Year Ended Year Ended
March 31, 1998 March 31, 1997 March 31, 1998 March 31, 1997
<S> <C> <C> <C> <C>
Operations:
Net investment income............................... $ 20,326 $ 17,013 $ 17,040 $ 12,777
Net realized gain (loss)............................ 20,051 25,654 (576) 479
Net change in unrealized appreciation
(depreciation)................................... (2,005) (7,478) (2,734) (4,670)
Net increase (decrease) resulting from
operations....................................... 38,372 35,189 13,730 8,586
Distributions to Shareholders:
From net investment income
Institutional Class.............................. (18,748) (7,980) (13,779) (7,187)
Administrative Class............................. (13) 0 (167) (4)
Retail Classes................................... (1,045) (6) 0 0
In excess of net investment income
Institutional Class.............................. 0 0 0 (17)
Administrative Class............................. 0 0 0 0
Retail Classes................................... 0 0 0 0
From net realized capital gains
Institutional Class.............................. (9,705) (24,345) 0 (2,270)
Administrative Class............................. (7) 0 0 (4)
Retail Classes................................... (761) 0 0 0
In excess of net realized capital gains
Institutional Class.............................. 0 0 (5,218) (5,240)
Administrative Class............................. 0 0 (11) (9)
Retail Classes................................... 0 0 0 0
Tax basis return of capital
Institutional Class.............................. 0 0 0 0
Administrative Class............................. 0 0 0 0
Retail Classes................................... 0 0 0 0
Total Distributions................................. (30,279) (32,331) (19,175) (14,731)
Fund Share Transactions:
Receipts for shares sold
Institutional Class.............................. 230,125 155,503 97,041 87,843
Administrative Class............................. 298 30 18,488 632
Retail Classes................................... 34,319 3,760 0 0
Issued in reorganization
Retail Classes................................... 0 0 0 0
Issued as reinvestment of distributions
Institutional Class.............................. 21,425 23,548 15,183 12,695
Administrative Class............................. 21 0 163 17
Retail Classes................................... 1,599 6 0 0
Cost of shares redeemed
Institutional Class.............................. (102,060) (205,567) (66,343) (12,625)
Administrative Class............................. (38) 0 (17,243) (273)
Retail Classes................................... (2,599) (8) 0 0
Net increase (decrease) resulting from
Fund share transactions.......................... 183,090 (22,728) 47,289 88,289
Total Increase (Decrease) in Net Assets............. 191,183 (19,870) 41,844 82,144
Net Assets:
Beginning of period................................. 238,623 258,493 215,977 133,833
End of period *..................................... $ 429,806 $ 238,623 $ 257,821 $ 215,977
*Including net undistributed
(overdistributed) investment income of:.......... $ 20,944 $ 12,308 $ 4,637 $ 5,553
</TABLE>
1998 Annual Report See accompanying notes 41
<PAGE>
Statement of Changes in Net Assets (Cont.)
<TABLE>
<CAPTION>
Emerging
Markets
Amounts in thousands Global Bond Fund II Bond Fund High Yield Fund
----------------------------------- ---------------- -------------------------------
Period from
Year Ended Six Months Ended July 31, 1997 to Year Ended Year Ended
Increase (Decrease) in Net Assets from: March 31, 1998 March 31, 1997 (a) March 31, 1998 March 31, 1998 March 31, 1997
<S> <C> <C> <C> <C> <C>
Operations:
Net investment income.................... $ 1,124 $ 388 $ 183 $ 120,838 $ 68,899
Net realized gain (loss)................. 1,252 816 (108) 17,622 15,566
Net change in unrealized appreciation
(depreciation)........................ (178) (575) 89 53,329 1,240
Net increase (decrease) resulting from
operations............................ 2,198 629 164 191,789 85,705
========================================= ==================================== ================= ================================
Distributions to Shareholders:
From net investment income
Institutional Class................... (100) 0 (165) (90,115) (64,102)
Administrative Class.................. 0 0 0 (1,993) (407)
Retail Classes........................ (833) (276) (19) (29,187) (4,408)
In excess of net investment income
Institutional Class................... 0 0 0 0 0
Administrative Class.................. 0 0 0 0 0
Retail Classes........................ 0 0 0 0 0
From net realized capital gains
Institutional Class................... 0 0 0 0 (9,166)
Administrative Class.................. 0 0 0 0 (88)
Retail Classes........................ (2,237) (600) 0 0 0
In excess of net realized capital gains
Institutional Class................... 0 0 (51) (8,670) 0
Administrative Class.................. 0 0 0 (190) 0
Retail Classes........................ 0 0 (9) (3,379) 0
Tax basis return of capital
Institutional Class................... 0 0 0 0 0
Administrative Class.................. 0 0 0 0 0
Retail Classes........................ 0 0 0 0 0
Total Distributions...................... (3,170) (876) (244) (133,534) (78,171)
========================================= ==================================== ================= ================================
Fund Share Transactions:
Receipts for shares sold
Institutional Class................... 24,247 0 3,907 991,624 414,058
Administrative Class.................. 0 0 0 63,673 14,665
Retail Classes........................ 8,381 4,263 779 298,068 32,970
Issued in reorganization
Retail Classes........................ 0 0 0 0 283,718
Issued as reinvestment of distributions
Institutional Class................... 100 0 212 90,586 69,870
Administrative Class.................. 0 0 0 1,429 353
Retail Classes........................ 2,575 524 22 19,420 2,502
Cost of shares redeemed
Institutional Class................... 0 0 (350) (238,595) (286,865)
Administrative Class.................. 0 0 0 (6,334) (5,554)
Retail Classes........................ (9,329) (1,699) (57) (116,831) (21,876)
Net increase (decrease) resulting from
Fund share transactions............... 25,974 3,088 4,513 1,103,040 503,841
Total Increase (Decrease) in Net Assets.. 25,002 2,841 4,433 1,161,295 511,375
========================================= ==================================== ================= ================================
Net Assets:
Beginning of period...................... 16,900 14,059 0 1,049,365 537,990
End of period *.......................... $ 41,902 $ 16,900 $ 4,433 $ 2,210,660 1,049,365
*Including net undistributed
(overdistributed) investment income of:. $ 141 $ 701 $ 27 $ (2,529) $ 1,003
</TABLE>
(a) Formerly the Global Income Fund of the PIMCO Advisors Funds.
42 PIMCO Funds See accompanying notes
<PAGE>
<TABLE>
<CAPTION>
Amounts in thousands Money Market Fund StocksPLUS Fund
---------------------------------- ---------------------------------
Year Ended Year Ended Year Ended Year Ended
Increase (Decrease) in Net Assets from: March 31, 1998 March 31, 1997 March 31, 1998 March 31, 1997
<S> <C> <C> <C> <C>
Operations:
Net investment income..................... $ 7,052 $ 2,257 $ 64,898 $ 22,028
Net realized gain (loss).................. 0 0 85,623 19,189
Net change in unrealized appreciation
(depreciation)......................... 0 0 21,299 (10,645)
Net increase (decrease) resulting from
operations............................. 7,052 2,257 171,820 30,572
========================================== ================================== ==================================
Distributions to Shareholders:
From net investment income
Institutional Class.................... (1,932) (1,360) (35,277) (21,952)
Administrative Class................... (15) (1) (126) (8)
Retail Classes (5,105) (896) (15,120) (324)
In excess of net investment income
Institutional Class.................... (1) 0 0 0
Administrative Class................... 0 0 0 0
Retail Classes......................... (2) 0 0 0
From net realized capital gains
Institutional Class.................... 0 0 (25,683) (8,793)
Administrative Class................... 0 0 (96) 0
Retail Classes......................... 0 0 (12,860) 0
In excess of net realized capital gains
Institutional Class.................... 0 0 0 0
Administrative Class................... 0 0 0 0
Retail Classes......................... 0 0 0 0
Tax basis return of capital
Institutional Class.................... 0 0 0 0
Administrative Class................... 0 0 0 0
Retail Classes......................... 0 0 0 0
Total Distributions (7,055) (2,257) (89,162) (31,077)
========================================== ================================== ==================================
Fund Share Transactions:
Receipts for shares sold
Institutional Class.................... 126,866 48,817 225,911 91,156
Administrative Class................... 1,317 8 1,303 746
Retail Classes......................... 3,188,249 570,164 233,963 30,494
Issued in reorganization
Retail Classes......................... 0 69,202 0 0
Issued as reinvestment of distributions
Institutional Class.................... 1,408 1,077 54,317 28,060
Administrative Class................... 15 1 211 8
Retail Classes......................... 3,634 812 26,317 306
Cost of shares redeemed
Institutional Class.................... (96,437) (52,332) (165,345) (36,460)
Administrative Class................... (594) (7) (291) (58)
Retail Classes......................... (3,224,002) (508,048) (43,168) (3,780)
Net increase (decrease) resulting from
Fund share transactions................ 456 129,694 333,218 110,472
Total Increase (Decrease) in Net Assets 453 129,694 415,876 109,967
========================================== ================================== ==================================
Net Assets:
Beginning of period....................... 155,639 25,945 261,836 151,869
End of period *........................... $ 156,092 $ 155,639 $ 677,712 $ 261,836
*Including net undistributed
(overdistributed) investment income of:.. $ 20 $ 0 $ 43,808 $ 2,028
<CAPTION>
Amounts in thousands Strategic Balanced Fund
--------------------------------------
Period from
Year Ended June 26, 1996 to
Increase (Decrease) in Net Assets from: March 31, 1998 March 31, 1997
<S> <C> <C>
Operations:
Net investment income..................... $ 3,200 $ 772
Net realized gain (loss).................. 3,171 602
Net change in unrealized appreciation
(depreciation)......................... 630 (205)
Net increase (decrease) resulting from
operations............................. 7,001 1,169
========================================== =======================================
Distributions to Shareholders:
From net investment income
Institutional Class.................... (2,495) (632)
Administrative Class................... 0 0
Retail Classes......................... 0 0
In excess of net investment income
Institutional Class.................... 0 0
Administrative Class................... 0 0
Retail Classes......................... 0 0
From net realized capital gains
Institutional Class.................... (811) (212)
Administrative Class................... 0 0
Retail Classes......................... 0 0
In excess of net realized capital gains
Institutional Class.................... 0 0
Administrative Class................... 0 0
Retail Classes......................... 0 0
Tax basis return of capital
Institutional Class.................... 0 0
Administrative Class................... 0 0
Retail Classes......................... 0 0
Total Distributions (3,306) (844)
========================================== =======================================
Fund Share Transactions:
Receipts for shares sold
Institutional Class.................... 29,336 10,032
Administrative Class................... 0 0
Retail Classes......................... 0 0
Issued in reorganization
Retail Classes......................... 0 0
Issued as reinvestment of distributions
Institutional Class.................... 617 3
Administrative Class................... 0 0
Retail Classes......................... 0 0
Cost of shares redeemed
Institutional Class.................... (5,202) 0
Administrative Class................... 0 0
Retail Classes......................... 0 0
Net increase (decrease) resulting from
Fund share transactions................ 24,751 10,035
Total Increase (Decrease) in Net Assets 28,446 10,360
========================================== =======================================
Net Assets:
Beginning of period....................... 10,360 0
End of period *........................... $ 38,806 $ 10,360
*Including net undistributed
(overdistributed) investment income of:.. $ 2,019 $ 225
</TABLE>
1998 Annual Report See accompanying notes 43
<PAGE>
Statement of Cash Flows
For the year or period ended March 31, 1998
<TABLE>
<CAPTION>
Amounts in thousands Low Duration Long-Term Real Return Foreign
Mortgage Fund U.S. Gov't Fund Bond Fund Bond Fund
------------- --------------- ----------- ------------
<S> <C> <C> <C> <C>
Increase (Decrease) in Cash and Foreign Currency from:
Financing Activities
Sales of Fund shares................................. $ 3,553 $ 75,371 $ 8,260 $ 262,712
Redemptions of Fund shares........................... (7) (29,799) (6,966) (104,424)
Distributions paid................................... 0 (584) (16) (6,293)
Proceeds from financing transactions................. 1,356 25,250 6,014 197,159
Net increase (decrease) from financing activities 4,902 70,238 7,292 349,154
Operating Activities
Purchases of long-term securities and foreign currency (31,756) (159,413) (112,985) (1,563,581)
Proceeds from sales of long-term securities and foreign currency 27,015 92,209 101,095 1,319,344
Net (purchases)/sales of short-term securities (288) (4,291) 4,257 (123,948)
Net investment income 150 2,312 317 20,326
Change in other assets & liabilities (net) (22) (1,037) 25 (308)
Net increase (decrease) from operating activities (4,901) (70,220) (7,291) (348,167)
Net Increase in Cash and Foreign Currency 1 18 1 987
Cash and Foreign Currency
Beginning of period 0 5 1 880
End of period $ 1 $ 23 $ 2 $ 1,867
<CAPTION>
Amounts in thousands Global Global
Bond Fund Bond Fund II
------------- ---------------
<S> <C> <C>
Increase (Decrease) in Cash and Foreign Currency from:
Financing Activities
Sales of Fund shares................................. $ 114,614 $ 32,648
Redemptions of Fund shares........................... (83,749) (9,327)
Distributions paid................................... (3,428) (500)
Proceeds from financing transactions................. (82,209) 9,698
Net increase (decrease) from financing activities.... (54,772) 32,519
Operating Activities
Purchases of long-term securities and foreign currency (1,264,233) (129,780)
Proceeds from sales of long-term securities and foreign currency 1,326,726 113,901
Net (purchases)/sales of short-term securities (25,907) (17,608)
Net investment income 17,040 1,124
Change in other assets & liabilities (net) 943 (2)
Net increase (decrease) from operating activities 54,569 (32,365)
Net Increase in Cash and Foreign Currency (203) 154
Cash and Foreign Currency
Beginning of period 617 70
End of period $ 414 $ 224
</TABLE>
<PAGE>
Schedule of Investments
Total Return Fund
March 31, 1998
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
CORPORATE BONDS AND NOTES 28.2%
- --------------------------------------------------------------------------------
Banking and Finance 17.4%
Ahmanson (H.F.) & Co.
6.350% due 09/01/98 $ 6,000 $ 6,014
7.650% due 04/15/00 175 181
American Express Credit
8.500% due 08/15/01 250 269
6.800% due 12/15/03 1,500 1,539
American General Finance
7.250% due 04/15/00 500 511
5.875% due 07/01/00 75 75
Associates Corp. of North America
6.625% due 05/15/98 100 100
8.800% due 08/01/98 987 996
6.250% due 03/15/99 1,200 1,203
7.500% due 05/15/99 700 712
7.400% due 07/07/99 125 127
7.250% due 09/01/99 285 290
6.750% due 10/15/99 90 91
7.850% due 10/20/99 500 515
8.250% due 12/01/99 200 207
7.250% due 12/17/99 660 675
7.470% due 03/27/00 1,000 1,029
6.000% due 06/15/00 2,634 2,633
6.310% due 06/16/00 500 505
6.250% due 09/15/00 50 50
7.500% due 04/15/02 185 194
AT&T Capital Corp.
6.900% due 04/15/98 19,800 19,805
6.300% due 06/09/98 37,000 37,025
6.240% due 11/27/98 19,000 19,020
6.250% due 12/08/98 (d) 10,000 10,010
5.858% due 01/15/99 (d) 12,000 12,050
5.950% due 02/16/99 105,850 105,647
6.120% due 02/26/99 20,000 19,987
6.050% due 04/01/99 (d) 158,500 158,500
6.580% due 09/03/99 500 503
AVCO Financial Services
6.350% due 09/15/00 100 101
7.375% due 08/15/01 300 311
Bancomer
8.000% due 07/07/98 7,000 7,000
Banesto Delaware
8.250% due 07/28/02 28,900 30,880
BankAmerica Corp.
6.050% due 06/10/98 36,000 36,004
6.052% due 11/01/99 (d) 3,000 3,023
5.700% due 03/05/01 (d) 7,000 7,003
5.938% due 02/20/02 (d) 180 179
7.750% due 07/15/02 60 63
7.200% due 09/15/02 400 415
7.500% due 10/15/02 1,000 1,049
6.850% due 03/01/03 50 51
8.375% due 05/01/07 3 3
Bankers Trust Co.
8.625% due 04/01/18 124 127
Bear Stearns
5.825% due 09/10/99 (d) 25,000 25,047
6.750% due 08/15/00 50 51
5.560% due 08/25/00 (d) 1,400 1,406
5.860% due 08/29/00 (d) 37,500 37,732
6.750% due 04/15/03 105 107
Beneficial Corp.
9.600% due 10/16/98 250 255
5.782% due 11/27/00 (d) 70,000 69,898
6.050% due 01/09/01 (d) 9,000 9,005
5.795% due 01/23/02 (d) 5,000 4,994
6.069% due 03/01/02 (d) 15,000 15,017
BT Securities Corp.
5.915% due 08/16/99 (d) 10,000 9,985
Capital One Bank
6.356% due 06/08/98 (d) 900 900
6.830% due 08/16/99 275 277
Caterpillar Financial
6.350% due 12/01/98 125 125
Charles Schwab
5.670% due 09/30/98 525 524
Chase Manhattan Corp.
8.500% due 02/15/02 200 215
8.000% due 05/01/05 200 200
Chemical Banking Corp.
6.294% due 04/03/05 (d) 5,000 5,000
6.125% due 11/01/08 400 390
Chrysler Financial Corp.
8.420% due 02/01/99 695 709
5.350% due 02/04/99 (d) 9,000 8,997
6.350% due 06/22/99 8,000 8,028
8.460% due 01/19/00 700 729
6.250% due 03/06/00 14,735 14,772
5.410% due 07/28/00 (d) 100 100
5.860% due 01/16/01 500 497
5.742% due 07/17/02 (d) 20,000 19,993
5.867% due 02/03/03 (d) 15,000 15,018
Chubb Capital Corp.
8.750% due 11/15/99 80 80
6.875% due 02/01/03 100 103
Citicorp
9.750% due 08/01/99 2,200 2,304
6.025% due 10/20/99 (d) 10,000 10,042
6.021% due 10/25/99 (d) 11,000 11,046
5.855% due 05/23/00 (d) 25,000 25,073
7.070% due 05/25/00 1,250 1,258
6.109% due 06/01/00 5,000 5,015
5.922% due 11/28/00 (d) 5,000 5,016
5.932% due 02/01/01 (d) 10,000 10,042
5.750% due 05/24/01 (d) 39,000 38,977
5.705% due 11/13/01 (d) 10,000 9,992
5.956% due 06/27/02 (d) 11,450 11,416
5.715% due 08/15/02 (d) 11,500 11,503
5.754% due 11/12/02 (d) 30,000 29,951
Coast Savings
10.000% due 03/01/00 8,000 8,440
Commercial Credit Co.
6.750% due 05/15/00 100 101
6.000% due 06/15/00 300 300
8.250% due 11/01/01 2,500 2,665
7.750% due 03/01/05 50 54
Dean Witter Discover
5.749% due 03/02/99 (d) 100 100
6.750% due 08/15/00 100 102
Deutsche Bank Financial
7.500% due 04/25/09 3,000 3,207
Exxon Capital Corp.
7.450% due 12/15/01 250 263
First Chicago
5.855% due 02/10/00 (d) 20,000 20,044
5.768% due 03/11/02 (d) 10,000 10,008
First Interstate Bancorp
8.875% due 01/01/09 (k) 245 253
Fleet Financial Group
9.900% due 06/15/01 200 221
Ford Motor Credit Corp.
7.240% due 04/01/98 11,000 11,000
5.750% due 04/30/98 300 300
5.400% due 11/09/98 (d) 17,080 17,124
8.000% due 01/15/99 500 508
8.875% due 06/15/99 100 103
7.750% due 10/01/99 35 36
8.375% due 01/15/00 195 203
6.950% due 05/15/00 8,450 8,602
5.470% due 08/14/00 (d) 100 100
6.850% due 08/15/00 1,500 1,529
7.020% due 10/10/00 70,000 71,530
6.157% due 03/05/01 (d) 5,000 5,014
5.838% due 04/10/01 (d) 10,850 10,846
7.020% due 06/07/01 1,000 1,025
6.042% due 09/03/01 (d) 9,000 9,001
7.000% due 09/25/01 1,125 1,156
7.320% due 05/23/02 14,000 14,140
6.068% due 06/04/02 (d) 2,000 2,003
5.792% due 02/03/03 (d) 30,000 30,025
1998 Annual Report See accompanying notes 45
<PAGE>
Schedule of Investments (Cont.)
Total Return Fund
March 31, 1998
Principal
Amount Value
(000s) (000s)
================================================================================
5.725% due 02/13/03 (d) $ 100,000 $ 100,116
6.625% due 06/30/03 575 586
5.876% due 06/02/04 (d) 1,500 1,501
8.250% due 02/23/05 2,500 2,768
6.125% due 01/09/06 25 25
7.700% due 05/15/97 450 495
General Electric Capital Corp.
5.980% due 03/19/99 1,500 1,503
8.375% due 03/01/01 600 639
5.500% due 11/01/01 50 49
8.300% due 09/20/09 150 174
General Motors Acceptance Corp.
7.250% due 07/20/98 25,785 25,899
7.750% due 01/15/99 500 507
5.700% due 02/09/99 12,600 12,575
7.375% due 05/26/99 190 193
5.958% due 06/04/99 (d) 5,000 5,000
7.375% due 06/09/99 10,000 10,150
8.625% due 06/15/99 650 670
6.700% due 06/24/99 3,700 3,728
6.625% due 07/07/99 10,000 10,069
7.375% due 09/09/99 1,000 1,018
6.150% due 09/20/99 20,300 20,366
8.000% due 10/01/99 10,850 11,115
6.050% due 10/04/99 2,550 2,549
6.375% due 10/12/99 2,000 2,009
8.400% due 10/15/99 360 373
6.250% due 10/18/99 1,000 1,003
8.170% due 01/02/00 1,447 1,491
8.625% due 01/10/00 5,000 5,212
7.000% due 03/01/00 100 102
7.875% due 03/15/00 5,650 5,835
7.500% due 06/09/00 1,000 1,030
5.500% due 01/16/01 15,000 14,759
8.625% due 01/18/01 15,000 15,946
8.500% due 01/19/01 3,675 3,899
6.800% due 04/17/01 500 509
6.700% due 04/30/01 3,000 3,045
7.125% due 05/01/01 95 98
5.645% due 10/22/01 (d) 25,000 24,948
9.625% due 12/15/01 300 334
6.750% due 02/07/02 590 601
5.750% due 04/29/02 (d) 41,240 41,204
7.000% due 09/15/02 250 258
5.875% due 01/22/03 30,500 30,165
8.950% due 07/02/09 21,500 23,811
Goldman Sachs
5.775% due 11/21/00 (d) 10,000 10,022
6.085% due 11/24/00 (d) 106,000 106,000
6.056% due 12/22/00 (d) 17,000 17,069
5.848% due 01/09/01 (d) 105,000 105,259
5.805% due 01/25/01 (d) 47,000 46,998
6.208% due 12/07/01 (d) 25,000 25,005
Goldman Sachs Mortgage Corp.
6.000% due 12/31/07 (k) 10,761 10,220
Great Western Bank
8.625% due 12/01/98 6,000 6,099
Hartford Life
7.650% due 06/15/27 15,000 16,024
Heller Financial
6.250% due 01/15/99 200,000 200,486
5.765% due 04/01/99 (d) 19,000 19,052
5.981% due 09/03/99 (d) 4,000 4,007
5.755% due 08/25/00 (d) 7,100 7,109
Household Bank
6.066% due 09/26/01 (d) 9,000 9,000
5.813% due 10/22/03 (d) 15,000 14,898
Household Finance Corp.
5.650% due 05/26/98 500 500
6.580% due 05/17/99 165 166
5.802% due 11/01/01 (d) 5,000 4,995
Inter-American Development Bank
9.450% due 09/15/98 200 203
8.875% due 06/01/09 200 244
International Lease Finance
5.750% due 12/15/99 50 50
6.420% due 09/11/00 500 504
Key Bank N.A.
6.050% due 04/06/98 19,875 19,875
Kimco Realty Corp.
6.500% due 10/01/03 200 200
Korean Export-Import Bank
6.500% due 10/06/99 7,000 6,684
Lehman Brothers, Inc.
7.850% due 05/11/98 4,350 4,358
6.375% due 06/01/98 100 100
6.875% due 06/08/98 5,800 5,810
6.400% due 06/22/98 (d) 25,000 25,038
6.250% due 06/29/98 5,400 5,405
7.625% due 08/01/98 250 251
6.840% due 09/25/98 20,750 20,829
5.740% due 01/12/99 (d) 600 599
5.550% due 09/01/99 (d) 10,000 9,973
7.110% due 09/27/99 20 20
5.938% due 01/18/00 (d) 50,000 50,178
6.112% due 04/03/00 (d) 30,000 30,016
6.525% due 07/27/00 (d) 3,000 3,042
5.983% due 02/27/01 (d) 49,000 48,933
6.442% due 08/28/02 (d) 6,500 6,582
MBNA Corp.
6.275% due 12/01/99 (d) 50,700 50,736
Mellon Bank
6.500% due 08/01/05 75 76
Merrill Lynch & Co.
6.375% due 03/30/99 400 402
6.200% due 07/19/99 10,000 10,021
5.695% due 04/17/00 (d) 5,000 5,011
6.620% due 06/06/00 500 506
6.450% due 06/20/00 350 353
5.925% due 08/03/00 (d) 5,000 5,019
5.675% due 10/03/00 (d) 20,000 19,978
5.990% due 12/05/00 (d) 89,000 89,025
6.500% due 04/01/01 100 101
5.694% due 01/15/02 (d) 17,000 17,014
8.300% due 11/01/02 200 217
7.000% due 03/15/06 1,500 1,557
7.000% due 04/27/08 100 104
NationsBank Corp.
5.125% due 09/15/98 100 100
6.750% due 02/26/01 500 509
7.000% due 09/15/01 1,500 1,542
6.088% due 06/17/02 (d) 10,000 9,942
7.750% due 08/01/02 796 797
Northern Trust
9.000% due 05/15/98 200 201
Norwest Corp.
5.750% due 11/16/98 300 300
Norwest Financial, Inc.
6.230% due 09/01/98 100 100
7.000% due 01/15/03 300 310
6.000% due 02/01/04 50 49
PaineWebber
6.250% due 06/15/98 100 100
7.000% due 03/01/00 200 203
6.950% due 03/31/00 120 122
PNC Bank Corp.
5.725% due 01/24/02 (d) 19,000 19,057
PNC Funding Corp.
6.875% due 03/01/03 100 103
Polysindo International Finance
9.375% due 07/30/07 3,610 2,211
Popular, Inc.
6.715% due 06/06/00 20,000 20,199
Reliance Group Holdings
9.000% due 11/15/00 19,000 19,886
Salomon, Inc.
6.125% due 05/15/98 12,820 12,823
5.721% due 07/24/98 (d) 55,000 55,013
5.732% due 08/04/98 (d) 15,000 15,003
46 PIMCO Funds See accompanying notes
<PAGE>
Schedule of Investments (Cont.)
Total Return Fund
March 31, 1998
Principal
Amount Value
(000s) (000s)
================================================================================
5.250% due 10/15/98 $ 400 $ 399
5.975% due 11/19/98 (d) 3,000 3,006
6.220% due 11/19/98 2,300 2,302
6.776% due 02/12/99 (d) 1,000 1,002
7.000% due 05/15/99 21,790 21,998
5.790% due 06/24/99 (d) 9,000 8,969
7.590% due 01/28/00 150 154
6.500% due 03/01/00 14,350 14,464
6.625% due 11/30/00 235 238
6.025% due 05/16/02 (d) 12,000 12,012
Salomon, Smith Barney Holdings
7.980% due 03/01/00 12,000 12,399
3.650% due 02/14/02 (h) 17,321 16,719
SB Treasury Co. LLC
9.400% due 12/29/49 (d) 17,000 17,672
Sears Financial
0.000% due 07/12/98 3,480 3,423
Sears Roebuck Acceptance
6.000% due 03/20/03 135,000 133,857
Security Pacific Corp.
6.000% due 05/01/00 600 599
Signet Bank Corp.
5.875% due 04/15/98 (d) 9,000 8,999
9.625% due 06/01/99 6,500 6,749
Smith Barney Holdings
6.625% due 06/01/00 95 96
Societe Generale
7.400% due 06/01/06 1,500 1,560
Sparbanken Sverige AB
7.664% due 10/29/49 (d) 12,670 12,717
Swedbank
7.664% due 10/29/49 (d) 12,000 12,161
Textron Financial Corp.
5.725% due 11/24/99 (d) 10,000 9,994
Tokai Capital Corp.
9.980% due 12/31/49 (d) 20,000 20,337
Toyota Motor Credit Corp.
6.969% due 02/15/02 (h) 40,000 38,528
Transamerica Financial
5.665% due 04/20/99 (d) 500 499
Trizec Finance Limited
10.875% due 10/15/05 2,489 2,757
U.S. Bancorp
5.747% due 01/16/02 (d) 49,000 48,997
U.S. West Financial, Inc.
8.400% due 09/15/99 50 52
Wachovia Bank
6.700% due 04/14/99 500 504
Wells Fargo & Co.
8.750% due 05/01/02 100 109
World Savings & Loan
9.900% due 07/01/00 250 258
Xerox Corp.
7.010% due 04/30/99 120 121
-------------
3,140,935
=============
Industrials 7.4%
Albertson's, Inc.
6.375% due 06/01/00 150 151
American Home Products
7.700% due 02/15/00 300 309
Amerigas Partners LP
10.125% due 04/15/07 1,730 1,855
AMR Corp.
9.500% due 07/15/98 5,500 5,557
9.270% due 08/13/98 1,000 1,012
8.050% due 03/05/99 4,000 4,074
9.750% due 03/15/00 10,760 11,476
10.610% due 01/11/01 4,000 4,443
10.570% due 01/15/01 3,000 3,339
10.590% due 01/31/01 3,000 3,345
10.000% due 02/01/01 2,000 2,187
9.400% due 05/08/01 3,000 3,263
9.500% due 05/15/01 2,250 2,457
9.130% due 10/25/01 2,000 2,186
8.470% due 02/20/02 $ 2,000 $ 2,142
8.500% due 02/26/02 1,000 1,072
10.210% due 01/01/10 6,500 8,131
Arkla, Inc.
8.740% due 05/14/98 3,000 3,008
Baxter International
9.500% due 06/15/08 200 246
Bellat Racers
5.875% due 04/01/03 20,000 20,000
Boise Cascade Co.
9.900% due 03/15/00 235 249
Building Materials Corp.
0.000% due 07/01/04 (i) 20,320 19,075
Canadian Pacific Limited
9.450% due 08/01/21 2,750 3,508
CBS, Inc.
7.625% due 01/01/02 100 101
Cemex SA
8.500% due 08/31/00 10,000 10,200
Centerior Fuel Corp.
9.200% due 08/02/98 (k) 15,000 15,074
9.540% due 08/02/99 (k) 10,000 10,431
9.750% due 08/02/00 (k) 8,000 8,520
Century Communications Corp.
9.500% due 08/15/00 6,000 6,278
CF Cable TV, Inc.
9.125% due 07/15/07 1,600 1,758
Coca-Cola Co.
6.375% due 08/01/01 200 202
Continental Cablevision
11.000% due 06/01/07 4,536 5,000
Cumberland Farms
10.500% due 10/01/03 3,666 3,629
Dayton Hudson Co.
10.000% due 12/01/00 1,000 1,094
Delta Air Lines
10.140% due 08/14/12 1,000 1,250
Dimon, Inc.
8.875% due 06/01/06 2,000 2,075
E.I. Du Pont de Nemours
9.150% due 04/15/00 100 106
Eli Lilly & Co.
8.125% due 02/07/00 387 400
Enron Corp.
5.775% due 11/18/99 (d) 35,000 34,984
Federal Express
10.000% due 09/01/98 800 813
Ford Motor Co.
9.000% due 09/15/01 200 218
Gaylord Containers
12.750% due 05/15/05 65,000 69,875
Gillette Co.
5.750% due 10/15/05 1,500 1,467
Gulf Canada Resources
9.250% due 01/15/04 7,250 7,614
9.625% due 07/01/05 2,000 2,165
HMH Properties, Inc.
9.500% due 05/15/05 2,000 2,130
Hollinger International Publishing
9.250% due 02/01/06 3,000 3,203
IBM Corp.
5.830% due 11/01/99 (d) 35,000 34,956
7.250% due 11/01/02 100 105
7.125% due 12/01/96 2,500 2,612
Imperial Chemical
6.000% due 09/05/98 (d) 79,000 78,968
6.000% due 12/05/98 (d) 77,000 76,969
6.000% due 03/05/99 (d) 72,700 72,793
INDSPEC Chemical Corp.
0.000% due 12/01/03 (i) 5,500 5,583
Ingersoll-Rand
6.255% due 02/15/01 295 297
1998 Annual Report See accompanying notes 47
<PAGE>
Schedule of Investments (Cont.)
Total Return Fund
March 31, 1998
Principal
Amount Value
(000s) (000s)
================================================================================
ISP Holdings, Inc.
9.750% due 02/15/02 $ 3,000 $ 3,195
9.000% due 10/15/03 5,000 5,263
ITT Corp.
6.250% due 11/15/00 70 69
K-III Communications Co.
8.500% due 02/01/06 4,000 4,110
Kellogg
5.750% due 02/02/01 74,850 74,265
Keystone Group
9.750% due 09/01/03 250 262
Lenfest Communications
8.375% due 11/01/05 5,000 5,206
Mallinckrodt, Inc.
6.300% due 03/15/11 (d) 10,000 9,989
Mazda Manufacturing Corp.
10.500% due 07/01/08 (k) 1,980 2,540
Mobil Corp.
8.375% due 02/12/01 40 43
Nabisco, Inc.
6.125% due 02/01/33 15,000 14,805
Nabisco, Inc.
6.800% due 09/01/01 3,000 3,063
New York Times
7.625% due 03/15/05 1,000 1,080
News America Holdings Corp.
7.500% due 03/01/00 65 67
8.625% due 02/01/03 750 816
Nike, Inc.
6.510% due 06/16/00 1,000 1,013
Noranda, Inc.
7.000% due 07/15/05 1,800 1,837
Owens Corning
7.000% due 05/15/00 200 203
PDV America, Inc.
7.250% due 08/01/98 10,719 10,761
Pepsico, Inc.
5.463% due 07/01/98 400 400
7.750% due 10/01/98 800 808
7.625% due 11/01/98 1,500 1,515
Philip Morris Co.
7.375% due 02/15/99 115 116
8.625% due 03/01/99 200 204
6.150% due 03/15/00 20,000 20,017
7.500% due 01/15/02 50 52
6.800% due 12/01/03 48,345 49,123
Quantas Airways
6.625% due 06/30/98 25,000 25,047
Revlon Consumer Products Corp.
9.375% due 04/01/01 5,255 5,491
RJR Nabisco
8.000% due 01/15/00 6,777 6,876
7.625% due 09/01/00 6,000 6,163
8.000% due 07/15/01 35,605 36,619
8.625% due 12/01/02 3,000 3,154
7.625% due 09/15/03 9,000 9,105
8.750% due 04/15/04 19,000 20,092
8.750% due 07/15/07 25,000 26,454
Rockwell
8.375% due 02/15/01 150 159
Rogers Cablesystems, Inc.
10.000% due 12/01/07 5,000 5,563
Rogers Cantel Mobile
9.375% due 06/01/08 2,750 2,929
Saferco
9.460% due 05/31/99 (k) 1,000 1,040
9.590% due 05/31/01 (k) 3,000 3,298
SCI Television
11.000% due 06/30/05 3,275 3,362
Sears Roebuck & Co.
9.250% due 04/15/98 2,125 2,127
7.960% due 02/18/99 500 508
5.820% due 02/22/99 125 125
6.800% due 05/07/01 500 508
6.790% due 05/21/01 500 509
9.400% due 08/02/01 250 274
Sears Roebuck Acceptance
5.817% due 06/27/00 (d) 5,000 5,005
6.120% due 12/13/01 260 259
Showboat, Inc.
9.250% due 05/01/08 1,000 1,080
Smithfield Foods
7.625% due 02/15/08 2,000 2,000
Supervalu, Inc.
6.500% due 10/06/00 140 141
TCI Communications, Inc.
6.375% due 09/15/99 39,175 39,305
5.860% due 02/02/00 (d) 50,000 49,979
6.185% due 09/11/00 (d) 47,000 46,728
6.656% due 12/20/00 (d) 10,000 10,008
Telecommunications, Inc.
9.875% due 04/01/98 3,000 3,000
8.250% due 01/15/03 125 134
Teleport Communications
0.000% due 07/01/07 (i) 28,000 24,220
Telewest Communications
9.625% due 10/01/06 5,000 5,300
Tenet Healthcare Corp.
9.625% due 09/01/02 6,250 6,781
10.125% due 03/01/05 1,000 1,105
Time Warner, Inc.
7.975% due 08/15/04 31,803 33,966
8.110% due 08/15/06 80,929 88,143
8.180% due 08/15/07 2,400 2,646
7.250% due 09/01/08 125 131
USX Corp.
6.375% due 07/15/98 16,200 16,219
9.800% due 07/01/01 300 330
Wal-Mart Stores
9.100% due 07/15/00 100 107
8.625% due 04/01/01 1,050 1,127
Williams Co.
5.909% due 01/30/00 (d) 23,000 23,010
WMX Technologies
6.700% due 05/01/01 10,000 10,068
World Color Press, Inc.
9.125% due 03/15/03 5,000 5,150
WorldCom, Inc.
9.375% due 01/15/04 21,203 22,475
Xerox Corp.
7.040% due 04/30/99 770 780
7.410% due 05/15/01 1,000 1,039
------------
1,334,416
============
Utilities 3.4%
AES Corp.
10.250% due 07/15/06 4,500 4,973
Bell Atlantic Financial
5.300% due 09/01/98 1,000 998
California Energy
9.875% due 06/30/03 5,000 5,352
10.250% due 01/15/04 39,985 43,134
9.500% due 09/15/06 5,000 5,444
Calpine Corp.
9.250% due 02/01/04 4,150 4,316
7.875% due 04/01/08 2,500 2,522
Carolina Power & Light
5.375% due 07/01/98 100 100
Central Maine Power Co.
6.250% due 11/01/98 1,000 998
6.350% due 09/20/99 15,000 14,947
Chesapeake & Potomac Telephone
8.000% due 10/15/29 1,125 1,317
Cleveland Electric Illuminating Co.
8.150% due 11/30/98 7,500 7,592
7.850% due 11/01/99 6,000 6,127
Cleveland Electric/Toledo Edison
7.190% due 07/01/00 18,600 18,890
CMS Energy
7.375% due 11/15/00 7,000 7,056
7.000% due 01/15/05 18,000 17,298
Coastal Corp.
8.750% due 05/15/99 4,300 4,418
48 PIMCO Funds See accompanying notes
<PAGE>
Schedule of Investments (Cont.)
Total Return Fund
March 31, 1998
Principal
Amount Value
(000s) (000s)
================================================================================
Commonwealth Edison
6.500% due 04/15/00 $ 185 $ 186
8.000% due 10/15/03 7,550 7,671
8.125% due 01/15/07 10,000 10,211
9.875% due 06/15/20 11,700 13,726
Connecticut Light & Power
7.250% due 07/01/99 6,000 5,996
5.750% due 07/01/00 2,000 1,945
7.750% due 06/01/02 5,000 5,113
Consolidated Edison
7.600% due 01/15/00 100 103
Consolidated Natural Gas Co.
5.875% due 10/01/98 500 500
Duke Energy Corp.
8.000% due 11/01/99 40 41
7.000% due 06/01/00 700 713
Eastern Edison Co.
7.780% due 07/30/02 9,000 9,521
El Paso Electric Co.
7.250% due 02/01/99 10,956 11,008
First PV Funding
10.150% due 01/15/16 5,361 5,664
Gulf States Utilities
7.250% due 03/01/99 6,200 6,201
Illinois Power
6.500% due 09/01/99 12,050 12,118
Long Island Lighting Co.
7.300% due 07/15/99 71,085 72,105
6.250% due 07/15/01 7,000 7,049
8.500% due 05/15/06 6,750 7,038
7.900% due 07/15/08 4,335 4,491
8.900% due 07/15/19 46,000 48,990
9.750% due 05/01/21 85,318 87,161
9.625% due 07/01/24 16,400 16,567
Louisiana Power & Light Co.
7.740% due 07/01/02 1,900 1,943
MCI Communications Corp.
6.250% due 03/23/99 600 600
New Jersey Bell Telephone
7.850% due 11/15/29 70 84
New Orleans Public Service
8.670% due 04/01/05 2,230 2,234
New York Telephone Co.
6.250% due 02/15/04 150 150
North Atlantic Energy
9.050% due 06/01/02 4,872 5,004
Northern Illinois Gas Co.
6.450% due 08/01/01 1,450 1,468
Ohio Edison
6.875% due 09/15/99 5,750 5,785
Pacific Gas & Electric Co.
5.375% due 08/01/98 500 499
7.670% due 12/15/98 208 210
6.750% due 12/01/00 709 709
Pacific Northwest Bell
4.375% due 09/01/02 50 47
Pennsylvania Power & Light
5.500% due 04/01/98 250 250
Philadelphia Electric
5.375% due 08/15/98 12,000 11,973
Public Service Electric & Gas
8.750% due 07/01/99 40 41
Public Service of New Hampshire
9.170% due 05/15/98 16,000 16,050
Queststar Pipeline
9.375% due 06/01/21 200 222
Southern California Edison
5.450% due 06/15/98 400 400
Southwestern Bell Telephone Co.
6.125% due 03/01/00 50 50
System Energy Resources
6.000% due 04/01/98 801 801
7.710% due 08/01/01 10,050 10,382
Tenneco
10.000% due 08/01/98 1,600 1,620
Texas Utilities
5.875% due 04/01/98 3,000 3,000
6.250% due 01/31/00 6,000 6,020
Texas Utilities Co.
5.750% due 07/01/98 11,750 11,743
Texas-New Mexico Power
10.750% due 09/15/03 4,950 5,389
Toledo Edison Co.
8.180% due 07/30/02 1,400 1,471
8.700% due 09/01/02 10,000 10,642
7.850% due 03/31/03 7,000 7,306
7.875% due 08/01/04 500 524
Trident NGL, Inc.
10.250% due 04/15/03 7,500 7,842
Tuscon Electric Power
8.500% due 10/01/09 1,000 1,036
U.S. West Communications, Inc.
6.625% due 09/15/05 300 306
United Air Lines
10.670% due 05/01/04 2,050 2,475
Virginia Electric & Power Co.
9.375% due 06/01/98 7,500 7,539
6.250% due 08/01/98 200 200
Western Massachusetts Electric
7.375% due 07/01/01 7,000 7,045
Wilmington Trust Co. - Tucson Electric
10.732% due 01/01/13 (k) 991 1,116
------------
613,776
------------
Total Corporate Bonds and Notes 5,089,127
(Cost $5,119,756) ============
================================================================================
U.S. GOVERNMENT AGENCIES 7.5%
================================================================================
A.I.D. Housing Guarantee - Peru
9.980% due 08/01/08 1,155 1,252
Federal Home Loan Bank
5.740% due 12/23/98 (d) 250 250
8.600% due 06/25/99 20 21
Federal Home Loan Mortgage Corp.
5.950% due 06/19/98 35,000 35,014
6.610% due 08/07/00 1,000 1,002
6.565% due 11/04/02 2,000 2,002
6.170% due 12/11/02 2,000 1,986
7.120% due 09/30/05 100 100
6.780% due 12/07/05 100 100
Federal National Mortgage Assn.
5.250% due 05/13/98 100 100
5.830% due 06/12/98 500,000 500,748
5.840% due 06/19/98 190,000 190,076
5.100% due 07/22/98 250 249
4.875% due 10/15/98 100 100
5.360% due 02/16/01 1,500 1,483
7.650% due 03/10/05 100 110
Government Trust Certificate - Greece
8.000% due 05/15/98 14 14
Resolution Funding
0.000% due 01/15/07 800 478
Student Loan Marketing Assn.
6.000% due 06/30/98 279,500 279,765
5.089% due 02/20/00 (d) 134,700 132,698
6.080% due 06/30/00 (d) 30,600 30,653
5.693% due 04/25/04 (d) 32,175 32,175
5.674% due 10/25/04 (d) 15,895 15,903
5.578% due 10/25/05 (d) 15,395 15,381
6.398% due 01/25/07 (d) 112,000 112,162
Tennessee Valley Authority
6.875% due 01/15/02 125 128
0.000% due 04/15/42 855 325
------------
Total U.S. Government Agencies 1,354,275
(Cost $1,354,188) ============
1998 Annual Report See accompanying notes 49
<PAGE>
Schedule of Investments (Cont.)
Total Return Fund
March 31, 1998
Principal
Amount Value
(000s) (000s)
================================================================================
U.S. TREASURY OBLIGATIONS 3.8%
================================================================================
Treasury Inflation Protected Securities
3.625% due 07/15/02 (h) $ 329,321 $ 326,233
3.375% due 01/15/07 (h) 204 198
U.S. Treasury Bonds
12.375% due 05/15/04 1,000 1,339
U.S. Treasury Notes
5.375% due 05/31/98 2,500 2,500
6.125% due 08/31/98 5,055 5,069
5.875% due 10/31/98 3,250 3,256
8.875% due 11/15/98 300 306
8.875% due 02/15/99 390 401
5.875% due 02/28/99 2,500 2,508
6.250% due 03/31/99 110 111
6.375% due 09/30/01 413 422
7.875% due 11/15/04 293,000 327,428
U.S. Treasury Strips
0.000% due 02/15/99 225 214
0.000% due 05/15/21 44,508 11,093
0.000% due 11/15/21 22,146 5,341
--------------
Total U.S. Treasury Obligations 686,419
(Cost $690,826) ==============
================================================================================
MORTGAGE-BACKED SECURITIES 51.1%
================================================================================
Collateralized Mortgage Obligations 11.9%
American Southwest Financial
9.000% due 06/04/13 55,823 61,545
12.250% due 11/01/14 70 79
12.500% due 04/01/15 698 777
12.000% due 05/01/15 1,176 1,311
11.400% due 09/01/15 921 962
Bear Stearns
9.500% due 06/25/23 750 753
6.381% due 10/25/23 (d) 8,087 8,165
10.000% due 08/25/24 15,018 16,691
7.000% due 03/25/27 7,000 7,049
Capstead Mortgage Corp.
8.750% due 07/25/21 10,000 10,266
Centex Acceptance Corp.
11.000% due 11/01/15 252 263
Chase Mortgage Financial Corp.
8.250% due 10/25/10 2,954 2,976
9.500% due 04/25/24 477 484
5.400% due 05/25/24 534 533
7.500% due 10/25/24 15 15
Citicorp Mortgage Securities, Inc.
8.500% due 04/01/17 262 262
9.500% due 01/01/19 4,799 4,781
9.500% due 09/25/19 250 249
9.500% due 09/25/20 627 644
6.000% due 08/25/21 302 300
7.570% due 10/25/22 (d) 21,202 21,503
7.250% due 02/25/27 360 364
CMC Securities Corp.
7.059% due 09/25/23 (d) 12,861 13,128
7.679% due 04/25/25 (d) 415 427
Collateralized Mortgage Obligation Trust
10.200% due 02/01/16 608 647
8.000% due 01/01/17 269 271
8.000% due 09/20/21 8,156 8,413
Collateralized Mortgage Securities Corp.
11.880% due 04/01/15 1,718 1,804
11.450% due 09/01/15 52 56
11.450% due 11/01/15 (d) 298 322
8.750% due 04/20/19 965 1,023
Countrywide
8.212% due 07/25/24 (d) 13,992 14,193
Donaldson, Lufkin & Jenrette
7.469% due08/01/21 (d)(k) 7,092 7,145
7.971% due 12/25/22 (d) 4,862 5,024
8.093% due 03/25/24 (d) 1,558 1,607
6.500% due 04/25/24 18 18
7.411% due 05/25/24 (d) 352 356
Drexel Mortgage Funding
9.500% due 11/20/17 1,823 1,866
8.600% due 03/01/18 634 636
Federal Home Loan Mortgage Corp.
6.500% due 03/15/00 1,654 1,665
7.000% due 10/15/03 5,875 5,994
5.450% due 03/15/04 3,297 3,294
5.500% due 11/15/04 7,065 7,061
6.000% due 06/15/05 15,848 15,869
10.750% due 11/30/05 130 131
6.500% due 07/15/06 1,075 1,082
6.500% due 08/15/06 710 714
6.500% due 11/15/06 113 113
6.500% due 05/15/08 1,000 1,006
4.500% due 08/15/08 5,578 5,567
5.150% due 12/25/11 8,035 8,012
8.500% due 08/15/13 2,000 2,152
8.500% due 09/15/13 5,941 6,314
5.500% due 12/15/13 931 930
7.000% due 04/25/15 992 994
11.000% due 11/30/15 11,567 13,482
6.900% due 03/15/16 2,991 2,998
7.000% due 11/15/16 14,200 14,373
6.210% due 08/15/17 345 345
6.350% due 03/25/18 200 201
5.250% due 05/15/18 1,084 1,075
9.500% due 01/15/19 124 124
6.500% due 05/15/19 615 619
8.500% due 10/15/19 189 189
9.000% due 11/15/19 1,372 1,382
7.000% due 02/15/20 538 538
8.500% due 03/15/20 779 783
9.125% due 06/15/20 2,090 2,127
8.500% due 09/15/20 10,853 11,007
5.500% due 10/15/20 200 194
8.750% due 10/15/20 406 410
9.500% due 11/15/20 9,538 10,153
6.000% due 12/15/20 400 395
8.750% due 12/15/20 1,265 1,346
9.000% due 12/15/20 6,078 6,390
6.500% due 05/17/21 120 116
8.500% due 06/15/21 50,330 52,797
6.950% due 07/15/21 700 707
8.000% due 07/15/21 9,580 9,945
9.000% due 07/15/21 3,457 3,636
9.500% due 07/15/21 4,739 4,932
6.200% due 08/15/21 1,500 1,503
6.950% due 08/15/21 185 187
8.000% due 08/15/21 23,472 24,260
6.500% due 09/15/21 2,438 2,436
8.000% due 12/15/21 15,079 16,019
6.850% due 01/15/22 700 706
8.250% due 06/15/22 5,000 5,315
7.000% due 07/15/22 7,778 7,845
8.500% due 10/15/22 18,014 18,743
6.500% due 07/15/23 462 452
7.000% due 07/15/23 227 228
7.500% due 01/20/24 480 484
6.500% due 02/15/24 54 54
7.250% due 08/15/24 190 192
8.000% due 09/15/24 16,250 17,692
7.877% due 10/01/26 (d) 7,512 7,722
7.500% due 01/15/27 20,889 21,655
7.500% due 03/17/27 20,000 20,144
7.500% due 07/15/27 160 160
6.500% due 08/15/27 10,131 9,445
7.000% due 11/15/28 9,000 9,120
6.324% due 08/15/32 (d) 45,898 46,017
Federal National Mortgage Assn.
9.100% due 02/25/02 5,203 5,340
5.500% due 12/25/03 412 411
5.750% due 12/25/03 80 79
7.500% due 05/25/05 6,700 6,949
7.000% due 11/25/05 20 20
7.500% due 02/25/06 375 391
6.500% due 07/25/06 75 76
50 PIMCO Funds See accompanying notes
<PAGE>
Schedule of Investments (Cont.)
Total Return Fund
March 31, 1998
Principal
Amount Value
(000s) (000s)
================================================================================
8.000% due 11/25/06 $ 30 $ 31
6.000% due 07/25/07 300 298
7.269% due 08/25/07 (d) 126 124
7.000% due 10/25/07 200 205
7.000% due 02/25/08 932 926
10.500% due 08/25/08 7,146 8,471
7.000% due 11/25/09 711 710
4.950% due 06/25/10 1,542 1,538
6.750% due 11/25/10 1,300 1,310
7.000% due 01/25/11 500 508
7.500% due 04/18/11 159 160
7.500% due 02/17/12 91 91
6.750% due 05/25/13 1,984 1,980
6.400% due 09/25/14 485 485
10.000% due 12/25/14 847 865
6.000% due 11/25/15 2,461 2,456
9.670% due 01/25/17 460 473
9.200% due 12/25/17 928 943
7.000% due 01/25/18 1,105 1,107
9.300% due 05/25/18 1,712 1,801
6.206% due 06/25/18 (d) 8 8
9.500% due 06/25/18 893 944
5.500% due 07/25/18 220 218
7.000% due 08/25/18 4,768 4,769
7.750% due 10/25/18 107 108
9.500% due 11/25/18 14,112 15,176
6.500% due 03/25/19 885 893
9.500% due 06/25/19 3,572 3,818
8.000% due 10/25/19 19,743 20,153
7.500% due 12/25/19 183 189
9.000% due 12/25/19 15,068 16,236
7.500% due 05/25/20 8,000 8,186
8.000% due 07/25/20 99 99
9.000% due 09/25/20 7,836 8,321
8.000% due 12/25/20 21,855 23,090
8.750% due 01/25/21 7,893 8,339
7.500% due 02/17/21 210 213
7.500% due 02/25/21 11,157 11,227
7.500% due 03/25/21 20,919 21,293
6.500% due 06/25/21 4,992 4,919
7.500% due 06/25/21 320 326
8.000% due 07/25/21 28,230 29,139
8.500% due 09/25/21 14,714 15,417
7.000% due 10/25/21 7,825 7,843
8.000% due 10/25/21 22,430 23,516
6.000% due 12/25/21 176 174
8.000% due 01/25/22 21,700 22,647
8.000% due 03/25/22 406 417
7.000% due 04/25/22 17,091 17,541
8.000% due 06/25/22 3,163 3,441
7.000% due 07/25/22 9,884 9,975
8.000% due 07/25/22 50,121 53,349
6.500% due 10/25/22 3,442 3,293
7.800% due 10/25/22 5,658 5,846
6.500% due 12/25/22 941 925
7.000% due 03/25/23 24,406 24,268
6.900% due 05/25/23 134 131
7.000% due 06/25/23 4,179 3,971
6.000% due 08/25/23 5,005 4,844
6.500% due 08/25/23 142 142
6.750% due 10/25/23 505 481
6.500% due 11/25/23 170 165
7.500% due 06/20/24 120 121
7.000% due 02/18/25 140 140
7.500% due 12/25/25 120 122
7.000% due 02/15/26 180 181
7.000% due 07/18/26 210 211
7.500% due 08/18/27 11,983 12,090
First Commonwealth Savings & Loan
10.375% due 04/01/05 21 22
General Electric Capital Mortgage
8.000% due 07/25/23 12,979 13,161
6.500% due 09/25/23 45 42
6.500% due 02/25/24 18 18
6.500% due 03/25/24 12,845 12,010
6.500% due 04/25/24 56,430 51,850
8.000% due 06/25/25 11,330 11,457
7.500% due 04/25/27 360 364
Glendale Federal Savings & Loan
7.394% due 03/01/28 (d) 9,304 9,281
Government National Mortgage Assn.
8.000% due 05/16/24 120 123
7.000% due 08/20/26 170 169
7.500% due 02/16/27 140 143
7.500% due 07/16/27 24,664 25,444
Greenwich
7.292% due 04/25/22 (d) 2,031 2,057
7.237% due 07/25/22 (d) 10,251 10,353
7.319% due 10/25/22 (d) 263 266
7.425% due 04/25/23 (d) 3,279 3,325
7.926% due 04/25/24 (d) 4,411 4,486
8.318% due 06/25/24 (d) 5,243 5,368
8.928% due 08/25/24 (d) 7,862 8,083
8.886% due 11/25/24 (d) 2,473 2,542
Headlands Mortgage Securities, Inc.
7.250% due 11/25/12 7,183 7,300
Imperial CMB Trust
5.992% due 09/25/26 (d) 23,067 23,183
Independent National Mortgage Corp.
6.650% due 10/25/24 2,723 2,672
8.278% due 11/25/24 (d) 9,747 9,997
7.310% due 07/25/25 (d) 27,949 28,705
8.079% due 07/25/25 (d) 27,684 28,255
International Mortgage Acceptance Corp.
12.250% due 03/01/14 540 587
J.P. Morgan & Co.
9.000% due 10/20/20 14,195 14,974
Kidder Peabody Acceptance Corp.
8.390% due 05/20/18 404 410
8.193% due 03/25/24 (d) 13,709 13,781
8.193% due 09/25/24 (d) 20,000 20,244
Marine Midland
8.000% due 04/25/23 23 24
8.000% due 10/25/23 350 358
Merrill Lynch Mortgage
6.875% due 06/15/21 (d) 8,470 8,653
7.714% due 06/15/21 (d) 7,949 8,144
8.173% due 06/25/22 (d) 6,702 6,763
Nascor
6.750% due 04/30/28 27,707 26,668
Nomura Asset Securities Corp.
8.076% due 05/25/24 (d) 10,687 10,978
Norwest Mortgage
12.500% due 02/01/14 1,049 1,121
12.250% due 04/01/14 94 98
PaineWebber Mortgage
6.000% due 04/25/09 11,951 11,572
PNC Mortgage Securities Corp.
7.000% due 06/25/13 14,000 14,042
Prudential Bache
6.213% due 09/01/18 (d) 479 478
9.000% due 01/01/19 535 535
8.400% due 03/20/21 4,646 4,819
Prudential Home
8.000% due 06/25/22 21,019 21,466
6.950% due 11/25/22 222 219
7.000% due 04/25/23 785 782
8.217% due 11/25/23 (d) 10,164 10,446
8.295% due 11/25/23 (d) 872 895
7.000% due 02/25/24 541 540
6.000% due 05/25/24 23 23
7.750% due 10/25/24 4,611 4,640
7.500% due 06/25/25 2,730 2,741
PSB Financial Corp.
11.050% due 12/01/15 977 1,044
Residential Asset Securities Corp.
6.450% due 10/25/12 8,000 8,000
7.000% due 03/25/27 (d) 245 246
7.250% due 05/25/27 (d) 345 349
1998 Annual Report See accompanying notes 51
<PAGE>
Schedule of Investments (Cont.)
Total Return Fund
March 31, 1998
Principal
Amount Value
(000s) (000s)
================================================================================
Residential Funding
6.750% due 01/25/06 $ 41,236 $ 41,342
7.000% due 08/25/08 18,545 18,747
6.500% due 09/25/08 7,000 6,954
6.500% due 01/25/13 215,551 215,180
8.500% due 05/25/17 109 113
8.000% due 01/25/23 10,000 10,333
7.250% due 07/25/23 6,334 6,340
7.750% due 07/25/24 6 6
7.993% due 10/25/24 (d) 12,158 12,401
7.500% due 09/25/25 18,183 18,649
5.400% due 10/25/27 (d) 11,938 11,814
Resolution Trust Corp.
7.573% due 02/25/20 (d) 197 198
7.261% due 09/25/20 (d) 15,471 155
6.043% due 01/25/21 (d) 1,055 1,046
8.457% due 06/25/21 (d) 2,320 2,333
8.718% due 08/25/21 (d) 21,412 21,940
7.940% due 09/25/21 (d) 3,307 3,355
6.260% due 10/25/21 (d) 268 268
6.688% due 10/25/21 (d) 1,240 1,242
8.143% due 10/25/21 (d) 275 278
8.625% due 10/25/21 300 304
7.549% due 01/25/22 (d) 2,898 2,908
7.772% due 03/25/22 (d) 6,691 6,752
8.521% due 05/25/22 (d) 2,871 2,946
6.950% due 06/25/23 (d) 2,524 2,524
7.437% due 08/25/23 (d) 2,001 2,006
7.500% due 08/25/23 240 240
9.450% due 05/25/24 19,693 19,786
10.261% due 05/25/24 (d) 2,323 2,349
6.688% due 07/25/24 (d) 460 461
7.100% due 12/25/24 1,500 1,535
7.750% due 03/25/25 5,000 4,992
7.491% due 07/25/28 (d) 14,001 13,974
7.251% due 10/25/28 (d) 27,951 28,255
7.334% due 10/25/28 (d) 13,398 13,600
7.108% due 05/25/29 (d) 5,203 5,272
7.583% due 05/25/29 (d) 6,810 6,944
Rural Housing Trust
3.330% due 10/01/28 385 355
Ryan Mortgage Acceptance Corp.
9.450% due 10/01/16 170 179
Ryland Acceptance Corp.
9.000% due 12/01/16 877 909
11.500% due 12/25/16 207 208
8.000% due 09/25/22 2,593 2,599
8.200% due 09/25/22 100 103
14.000% due 11/25/31 1,853 2,053
Ryland Mortgage Securities Corp.
7.973% due 08/25/22 (d) 3,662 3,712
7.500% due 08/25/24 66 67
7.277% due 08/25/29 (d) 8,039 8,265
6.987% due 10/25/31 (d) 14,626 14,735
Salomon Brothers Mortgage Securities
7.605% due 11/25/22 (d) 1,543 1,574
8.391% due 07/01/24 (d) 13,973 14,471
Santa Barbara Savings
9.500% due 11/20/18 4,577 4,609
Saxon Mortgage
7.899% due 08/25/23 (d) 42,310 43,434
8.378% due 09/25/24 (d) 13,027 13,491
Sears Mortgage
8.000% due 03/25/22 627 626
7.220% due 09/25/22 (d) 3,263 3,315
7.852% due 12/25/22 (d) 8,162 8,248
8.457% due 05/25/32 (d) 13,095 13,050
Securitized Asset Sales, Inc.
7.821% due 10/25/23 (d) 5,708 5,867
7.857% due 12/26/23 (d) 5,530 5,675
5.944% due 02/25/28 16,320 16,270
Security Pacific National Bank
6.336% due 03/01/18 (d) 148 144
Vendee Mortgage
7.000% due 02/15/00 5,050 5,092
7.750% due 03/15/16 600 620
7.750% due 05/15/18 550 568
Western Federal Savings & Loan
7.104% due 07/01/21 (d) 9,263 9,300
------------
2,158,509
============
Federal Home Loan Mortgage Corporation 14.6%
5.250% due 12/01/98 1 1
5.500% due 04/01/01-03/01/10 (g) 466 462
5.750% due 08/15/20 300 296
6.000% due 12/01/98-05/13/28 (g) 450,567 435,078
6.199% due 07/01/27 (d) 9 9
6.500% due 06/01/03-05/13/28 (g) 1,853,556 1,833,473
6.775% due 11/01/03 70 70
7.000% due 01/01/00-03/01/26 (d)(g) 8,862 8,977
7.210% due 10/25/23 (d) 28,956 30,013
7.500% due 05/01/99-01/01/27 (d)(g) 16,080 16,519
7.540% due 10/25/17 (d) 2,665 2,651
7.589% due 09/01/23 (d) 4,012 4,140
7.611% due 07/01/23 (d) 3,817 3,931
7.625% due 01/01/19 (d) 20 20
7.706% due 05/01/23 (d) 5,425 5,595
7.733% due 04/01/23 (d) 1,210 1,250
7.747% due 10/01/23 (d) 5,166 5,332
7.750% due 04/01/07 50 51
7.757% due 10/01/23 (d) 3,140 3,242
7.820% due 08/01/23 (d) 25 25
7.834% due 01/01/24 (d) 942 973
7.839% due 04/01/24 (d) 16,224 16,919
7.844% due 04/01/29 (d) 3,887 4,061
7.848% due 09/01/23 (d) 27,091 27,786
7.870% due 06/01/24 (d) 2,875 2,952
7.873% due 09/01/23 (d) 6,189 6,390
7.889% due 11/01/23 (d) 1,907 1,967
7.900% due 05/01/23 (d) 2,809 2,903
7.909% due 07/01/22 (d) 1,795 1,854
7.939% due 11/01/23 (d) 976 1,001
7.950% due 10/01/23 (d) 1,213 1,262
7.974% due 10/01/23 (d) 2,007 2,097
7.996% due 01/01/24 (d) 1,137 1,166
8.000% due 10/01/07-06/01/26 (g) 4,510 4,677
8.031% due 07/01/23 (d) 1,355 1,412
8.047% due 08/01/23-07/01/24 (d)(g) 21,060 21,822
8.048% due 11/01/23 (d) 1,424 1,468
8.099% due 09/01/23 (d) 6,934 7,211
8.152% due 08/01/23 (d) 2,894 3,005
8.178% due 08/01/24 (d) 481 498
8.185% due 08/01/23 (d) 1,296 1,336
8.206% due 10/01/23 (d) 4,765 4,947
8.250% due 08/01/07-12/01/09 (g) 216 222
8.500% due 09/01/01-05/13/28 (g) 115,944 121,090
8.750% due 02/01/01-09/01/10 (g) 376 386
8.900% due 11/15/20 29,911 31,523
9.000% due 01/01/02-09/15/20 (g) 1,246 1,303
9.250% due 06/01/09-08/01/09 (g) 133 141
9.500% due 08/01/01-06/01/21 (g) 3,127 3,329
10.000% due 06/01/04-11/15/19 (g) 1,642 1,731
10.250% due 03/15/09-05/01/09 (g) 2,149 2,326
11.000% due 12/01/99-07/01/19 (g) 1,186 1,314
11.250% due 10/01/09-09/01/15 (g) 197 219
11.500% due 03/01/00-05/01/00 (g) 22 24
12.500% due 07/01/99 3 3
13.250% due 10/01/13 84 98
14.000% due 04/01/16 36 41
15.500% due 08/01/11-11/01/11 (g) 19 23
16.250% due 05/01/11-11/01/11 (g) 12 14
------------
2,632,629
============
Federal Housing Administration 0.8%
7.125% due 03/01/34 4,483 4,537
7.211% due 12/01/21 3,347 3,429
7.316% due 05/01/19-11/01/19 (g) 11,760 12,019
7.375% due 03/01/19-01/01/24 (g) 17,551 18,055
7.399% due 02/01/21 2,669 2,746
7.430% due 12/01/16-05/01/25 (g) 86,964 90,401
7.450% due 12/01/21 12,179 12,472
7.650% due 11/01/18 167 173
------------
143,832
============
52 PIMCO Funds See accompanying notes
<PAGE>
Schedule of Investments (Cont.)
Total Return Fund
March 31, 1998
Principal
Amount Value
(000s) (000s)
================================================================================
Federal National Mortgage Association 6.3%
5.450% due 04/08/98 (d) $ 300 $ 300
5.650% due 04/25/05 200 199
6.000% due 11/01/03-03/01/24 (g) 9,330 9,149
6.199% due 05/01/27-05/01/36 (d)(g) 78,054 78,611
6.200% due 02/01/28 (d) 2,418 2,436
6.201% due 05/01/36 (d) 4,997 5,043
6.203% due 08/01/29 (d) 10,180 10,255
6.205% due 05/01/36 (d) 30,376 30,653
6.207% due 02/01/18-03/01/33 (d)(g) 62,588 63,093
6.210% due 05/01/36 (d) 35,161 35,483
6.213% due 04/01/18-11/01/35 (d)(g) 52,241 52,674
6.222% due 11/01/28 (d) 2,602 2,621
6.227% due 04/01/27 (d) 279 280
6.250% due 07/25/07-04/01/19 (d)(g) 1,112 1,124
6.500% due 11/01/03-05/13/28 (g) 543,922 537,671
6.750% due 08/01/03-09/25/22 (g) 1,150 1,158
6.834% due 07/01/03 69 71
6.921% due 11/01/25 (d) 12,874 13,429
6.950% due 03/25/26 300 304
7.000% due 05/25/99-12/20/27 (g) 48,700 49,159
7.250% due 05/01/02-01/01/23 (g) 11,497 11,664
7.251% due 09/01/22 (d) 3,226 3,299
7.285% due 09/01/22 (d) 3,891 3,995
7.337% due 09/01/25 (d) 6,485 6,684
7.500% due 08/01/03-09/01/25 (g) 92,052 94,726
7.690% due 01/01/24 (d) 1,716 1,781
7.725% due 03/01/25 (d) 8,875 9,113
7.728% due 01/01/24 (d) 1,159 1,199
7.730% due 12/01/23 (d) 1,965 2,003
7.737% due 11/01/23 (d) 2,480 2,563
7.744% due 11/01/25 (d) 6,206 6,377
7.750% due 06/01/09-02/01/26 (d)(g) 2,066 2,139
7.755% due 07/01/24 (d) 19,250 19,647
7.783% due 01/01/24 (d) 5,922 6,133
7.785% due 05/01/26 (d) 2,353 2,441
7.795% due 11/01/25 (d) 4,206 4,336
7.817% due 01/01/26 (d) 3,389 3,510
7.832% due 11/01/23 (d) 946 977
7.835% due 10/01/23 (d) 894 929
7.858% due 09/01/23 (d) 6,423 6,733
7.895% due 12/01/23 (d) 3,101 3,212
7.919% due 01/01/24 (d) 318 332
7.920% due 03/01/26 (d) 11,558 12,022
8.000% due 09/01/01-12/01/26 (g) 10,951 11,365
8.004% due 09/01/24 (d) 3,768 3,887
8.061% due 05/01/24 (d) 4,758 4,915
8.250% due 10/01/08-02/01/17 (g) 862 900
8.500% due 07/01/99-05/01/27 (g) 5,771 6,027
9.000% due 01/01/99-04/01/17 (g) 2,381 2,488
9.500% due 12/01/06-07/01/22 (g) 164 178
9.750% due 11/01/08 88 94
10.000% due 03/01/21-05/01/22 (g) 872 954
10.500% due 12/01/16-04/01/22 (g) 995 1,093
12.000% due 05/01/16 20 23
13.000% due 09/01/13 55 64
13.250% due 09/01/11 20 23
14.500% due 11/01/11-01/01/13 (g) 75 91
14.750% due 08/01/12-11/01/12 (g) 288 333
15.500% due 10/01/12-12/01/12 (g) 35 43
15.750% due 12/01/11-08/01/12 (g) 174 208
16.000% due 09/01/12 191 238
-------------
1,132,452
=============
Government National Mortgage Association 16.6%
5.650% due 10/15/12 13 12
6.000% due 10/15/08-01/20/28 (d)(g) 633,162 624,713
6.500% due 10/15/08-04/20/28 (d)(g) 818,779 821,416
7.000% due 07/15/08-09/20/27 (d)(g) 1,151,453 1,179,581
7.375% due 06/20/21-05/20/26 (d)(g) 250,587 257,423
7.500% due 08/15/05-02/15/28 (g) 42,005 43,218
7.875% due 04/20/23 (d) 746 770
8.000% due 08/15/05-04/20/28 (g) 45,612 47,242
8.250% due 08/15/04-07/15/08 (g) 618 648
8.500% due 06/15/01-08/15/16 (g) 274 287
8.750% due 03/15/07-07/15/07 (g) 163 173
9.000% due 09/15/01-07/20/22 (g) 7,877 8,513
9.250% due 10/15/01-03/15/06 (g) 437 454
9.500% due 04/15/01-08/15/23 (g) 8,021 8,778
9.750% due 09/15/02-01/15/21 (g) 337 358
10.000% due 06/20/01-02/15/25 (g) 6,023 6,649
10.250% due 10/15/98-12/15/99 (g) 58 59
10.500% due 06/15/04 137 145
10.750% due 08/15/98-09/15/98 (g) 7 7
11.000% due 05/15/04-06/15/13 (g) 89 95
11.250% due 03/15/01-12/20/15 (g) 63 70
11.500% due 04/15/13-05/15/13 (g) 13 14
12.000% due 03/20/99-03/15/15 (g) 97 110
12.500% due 01/15/11 1 2
13.000% due 12/15/12-10/15/14 (g) 40 47
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) 114 137
-------------
3,000,984
=============
Other Mortgage-Backed Securities 0.8%
Aames Mortgage Trust
7.275% due 05/15/20 405 411
Bank of America
9.000% due 03/01/08 85 85
Citibank, N.A.
8.000% due 07/25/18 91 91
Daiwa Mortgage
7.500% due 09/25/06 (d) 130 131
DBL Mortgage Funding
9.500% due 08/01/19 23 24
First Interstate Bancorp
9.125% due 01/01/09 (k) 15 16
General Electric Credit Corp.
8.000% due 03/01/02 (k) 100 102
German American Capital Corp.
8.360% due 09/30/02 3,737 3,830
6.581% due 07/01/18 (d) 9,490 9,365
Great Western Savings & Loan
6.060% due 08/01/17 (d) 203 199
Guardian
6.887% due 12/25/18 (d) 398 345
Home Savings of America
8.464% due 08/01/06 97 97
5.873% due 05/25/27 (d) 3,801 3,715
6.386% due 08/25/29 (d) 14,872 14,945
Imperial Savings & Loan
10.000% due 09/01/16 (k) 233 246
8.235% due 01/25/17 (d) 108 108
8.840% due 07/25/17 (d) 389 388
LTC Commercial Corp.
7.100% due 11/28/12 3,915 3,970
Manufacturers Mortgage Housing
13.250% due 01/15/99 237 252
MDC Mortgage Funding
8.841% due 01/25/25 (d) 993 1,019
Merrill Lynch Mortgage
9.250% due 12/15/09 27 27
7.495% due 06/15/21 (d) 1,775 1,830
Mid-State Trust
8.330% due 04/01/30 74,150 80,256
Morgan Stanley Mortgage
8.150% due 07/20/21 13 13
Resolution Trust Corp.
7.775% due 05/25/29 (d) 6,215 6,333
Ryland Acceptance Corp.
7.644% due 11/28/22 (d) 749 761
Salomon Brothers Mortgage Securities
11.500% due 09/01/15 1,632 1,775
Sears Mortgage
12.000% due 02/25/14 1,238 1,316
6.855% due 06/25/22 (d) 903 913
7.588% due 10/25/22 (d) 4,713 4,859
Structured Asset Securities Corp.
5.890% due 01/25/00 (d) 14,397 14,397
1998 Annual Report See accompanying notes 53
<PAGE>
Schedule of Investments (Cont.)
Total Return Fund
March 31, 1998
Principal
Amount Value
(000s) (000s)
================================================================================
Western Federal Savings & Loan
6.614% due 11/25/18 (d) $ 296 $ 296
6.664% due 03/25/19 (d) 2,092 2,100
--------------
154,215
==============
Stripped Mortgage-Backed Securities 0.1%
Federal Home Loan Mortgage Corp. (IO)
10.038% due 09/15/05 32 3
6.500% due 11/15/06 2,573 195
6.500% due 03/15/07 3,516 260
5.750% due 09/15/07 (d) 12,960 1,040
5.428% due 02/15/08 (d) 940 103
11.651% due 01/15/16 32 3
6.500% due 08/15/16 3,644 264
7.000% due 04/15/18 3,531 289
9.993% due 11/15/18 224 28
8.845% due 01/15/21 469 92
9.000% due 05/15/22 240 45
Federal Home Loan Mortgage Corp. (PO)
0.000% due 06/15/21 4,380 4,173
Federal National Mortgage Assn. (IO)
6.750% due 09/25/04 79 4
7.000% due 06/25/05 6 0
10.458% due 07/25/05 (d) 968 93
6.500% due 07/25/06 5,715 440
6.500% due 02/25/07 4,582 434
6.500% due 07/25/07 1,411 109
6.500% due 09/25/07 6,863 589
6.500% due 10/25/07 2,354 206
0.950% due 03/25/09 (d) 51,708 1,218
7.000% due 08/25/15 3,792 215
7.000% due 08/25/16 946 63
6.500% due 08/25/20 2,666 555
10.070% due 01/25/21 158 35
9.032% due 08/25/21 2,208 471
0.950% due 11/25/21 (d) 50,615 899
6.500% due 01/25/23 5,364 902
Federal National Mortgage Assn. (PO)
0.000% due 09/01/07 1,250 1,007
0.000% due 02/25/21 5,355 4,905
0.000% due 06/25/22 3,209 2,873
0.000% due 08/25/23 489 342
PaineWebber (IO)
13.595% due 08/01/19 280 90
Vendee Mortgage (IO)
0.542% due 06/15/23 (d) 216,368 4,626
--------------
26,571
--------------
Total Mortgage-Backed Securities 9,249,192
(Cost $9,179,484) ==============
================================================================================
ASSET-BACKED SECURITIES 5.8%
================================================================================
AFC Home Equity Loan Trust
7.402% due 10/25/26 (d) 9,544 9,689
6.550% due 01/25/27 (d) 3,529 3,528
Allied Waste Industries, Inc
7.125% due 12/05/03 5,880 5,880
Arcadia Automobile Receivables Trust
6.300% due 07/16/01 9,000 9,048
Associates Manufactured Housing
7.000% due 03/15/27 900 923
Auto Receivables Trust
6.500% due 04/16/03 34,352 34,352
California Infrastructure
5.940% due 09/25/00 16,158 16,159
5.970% due 12/25/00 6,187 6,193
5.980% due 12/26/00 28,495 28,540
6.010% due 06/25/01 99,300 99,486
Case Equipment Loan Trust
6.150% due 09/15/02 2,474 2,484
Chase Manhattan Grantor Trust
6.000% due 09/17/01 3,568 3,576
5.900% due 11/15/01 9,971 9,988
6.610% due 09/15/02 5,340 5,387
Conti Mortgage Home Equity Loan Trust
5.588% due 10/15/12 (d) 38,000 38,006
6.990% due 03/15/21 350 356
Copelco Capital Funding Corp
6.340% due 07/20/04 68 69
CSXT Trade Receivables
5.050% due 09/25/99 500 499
Daimler-Benz
6.050% due 03/20/05 12,339 12,333
Daimler-Benz Vehicle Trust
5.850% due 07/20/03 24,239 24,224
Delta Air Lines Equipment Trust
9.230% due 07/02/02 12,862 13,680
10.500% due 01/02/07 (k) 7,412 8,924
10.570% due 01/02/07 (k) 15,881 20,017
9.550% due 01/02/08 (k) 7,773 8,773
10.000% due 06/05/13 (k) 10,828 13,675
Discover Card Trust
6.062% due 10/16/13 (d) 400 408
EQCC Home Equity Loan Trust
6.100% due 10/15/03 5,463 5,472
6.710% due 07/15/11 330 335
Equivantage Home Equity Loan Trust
6.550% due 04/01/27 200 201
Federal-Mogul Corp
7.690% due 06/30/99 813 812
7.750% due 06/30/99 3,049 3,043
7.914% due 06/30/99 (d) 14,638 14,610
7.940% due 12/31/05 1,319 1,316
8.000% due 12/31/05 (d) 4,945 4,935
8.164% due 12/31/05 (d) 23,737 23,691
First Omni Bank
6.650% due 09/15/03 (d) 1,500 1,532
First Security Auto Grantor Trust
6.100% due 04/15/03 3,767 3,766
First Union Master Credit Card Trust
5.858% due 09/15/03 88,750 89,006
Flag Limited
9.400% due 12/15/04 (d) 15,000 15,000
Ford Credit Grantor Trust
6.750% due 09/15/00 1,250 1,264
5.900% due 10/15/00 10,464 10,478
Ford Motor Credit Corp
5.500% due 02/15/03 5,300 5,232
Fred Meyer, Inc
8.750% due 03/19/03 (d) 110,000 108,350
General Motors Acceptance Corp
6.500% due 04/15/02 43,011 43,253
Green Tree Financial Group
7.150% due 07/15/27 1,025 1,051
Green Tree Home Improvement Loan Trust
6.100% due 01/15/28 3,845 3,850
IMC Home Equity Loan Trust
5.765% due 05/21/12 (d) 47,110 47,111
7.429% due 07/25/26 (d) 1,475 1,499
Integrated Health Services
7.625% due 09/16/04 (d) 15,000 14,858
MBNA Master Credit Card Trust
6.050% due 11/15/02 245 246
Metlife Capital Equipment Loan Trust
6.850% due 05/20/08 (d) 320 330
National Medical Care
6.969% due 09/30/03 (d) 41,250 41,095
NationsBank Auto Owner Trust
6.375% due 07/15/00 1,700 1,707
NationsBank Corp
5.850% due 06/15/02 349 350
Newcourt Receivable Asset Trust
6.240% due 12/20/04 35 35
Olympic Automobile Receivables Trust
5.700% due 04/15/00 1,802 1,804
5.650% due 01/15/01 818 819
OSCC Home Equity
6.950% due 05/15/07 92 93
Premiere Auto Trust
6.575% due 10/06/00 1,975 1,992
Saxon Asset Securities Trust
6.475% due 11/25/20 350 351
54 PIMCO Funds See accompanying notes
<PAGE>
Schedule of Investments (Cont.)
Total Return Fund
March 31, 1998
Principal
Amount Value
(000s) (000s)
================================================================================
Sears Credit Account Master Trust
6.050% due 01/16/08 $ 500 $ 502
Standard Credit Card Master Trust
6.750% due 06/07/00 290 291
The Money Store Home Equity Trust
6.815% due 07/15/06 24,545 24,676
6.520% due 08/15/09 45,879 45,958
6.205% due 03/15/12 25,000 25,000
7.550% due 02/15/20 500 519
Total Renal Care
7.504% due 10/22/07 (d) 33,000 33,083
UCFC Home Equity Loan
6.381% due 07/15/10 250 250
United Air Lines Equipment Trust
9.200% due 03/22/08 4,309 4,877
10.360% due 11/13/12 7,000 9,097
10.020% due 03/22/14 4,500 5,572
10.850% due 07/05/14 34,111 44,611
10.125% due 03/22/15 14,300 18,386
9.060% due 06/17/15 5,000 5,486
9.210% due 01/21/17 2,000 2,369
WFS Financial Owner Trust
6.650% due 08/20/00 2,516 2,529
6.050% due 07/20/01 3,000 2,997
6.500% due 09/20/01 11,000 11,100
--------------
Total Asset-Backed Securities 1,062,987
(Cost $984,857) ==============
================================================================================
SOVEREIGN ISSUES 3.0%
================================================================================
Banco Nacional de Obra y Servicios
6.875% due 10/01/98 19,500 19,159
City of Buenos Aires
11.250% due 04/11/07 5,000 5,350
Hydro Quebec
5.594% due 04/15/99 (d) 10,000 9,985
9.400% due 02/01/21 500 650
9.500% due 11/15/30 2,370 3,178
Kingdom of Sweden
10.250% due 11/01/15 500 665
Providence of Newfoundland
9.000% due 06/01/19 500 620
Province of Nova Scotia
9.375% due 07/15/02 1,000 1,115
Province of Ontario
6.125% due 06/28/00 50 50
7.750% due 06/04/02 200 213
7.625% due 06/22/04 1,000 1,079
7.000% due 08/04/05 1,000 1,054
Province of Quebec
5.960% due 06/21/99 (d) 50,000 50,201
7.500% due 07/15/02 6,000 6,275
Republic of Argentina
5.719% due 04/01/00 (d) 21,611 21,140
5.615% due 04/01/01 (d) 15,365 14,805
6.688% due 03/31/05 (d) 369,408 340,778
8.726% due 04/10/05 (d) 25,600 25,600
Republic of Philippines
6.656% due 01/05/05 (d) 7,467 7,065
Republic of Poland
6.688% due 10/27/24 (d) 35,000 34,346
--------------
Total Sovereign Issues 543,328
(Cost $502,717) ==============
================================================================================
FOREIGN CURRENCY-DENOMINATED ISSUES (c)(f) 2.3%
================================================================================
City of Montreal
11.500% due 09/20/00 C$ 7,000 5,611
Commonwealth of Australia
8.750% due 01/15/01 A$ 4,235 3,069
9.750% due 03/15/02 3,665 2,811
10.000% due 10/15/02 6,940 5,450
10.000% due 02/15/06 1,600 1,349
10.000% due 10/15/07 98,000 84,937
Commonwealth of Canada
6.500% due 06/01/04 C$ 1,000 750
4.250% due 12/01/26 (h) 120,542 87,938
Commonwealth of New Zealand
6.500% due 02/15/00 N$ 160,000 86,289
8.000% due 02/15/01 8,890 4,949
10.000% due 03/15/02 107,500 64,334
8.000% due 04/15/04 7,000 3,996
4.500% due 02/15/16 (h) 23,000 12,119
Petroleos Mexicanos
7.750% due 09/30/98 FF 5,000 818
Province of Saskatchewan
9.125% due 02/15/21 C$ 3,000 3,866
Republic of Argentina
2.976% due 04/01/01 (d) AP 45,927 43,164
Reynolds, R.J
6.875% due 11/22/00 DM 9,500 5,271
--------------
Total Foreign Currency-Denominated Issues 416,721
(Cost $455,678) ==============
================================================================================
PREFERRED STOCK 0.4%
================================================================================
Shares
Banco Bilbao Vizcaya International 266,217 7,288
Barclays Bank 215,500 6,182
California Federal Bank 50,000 5,669
Sanwa International 7,494,000,000 55,428
Time Warner, Inc 0 1
Unocal Capital Trust 402 22
--------------
Total Preferred Stock 74,590
(Cost $77,347) ==============
================================================================================
SHORT-TERM INSTRUMENTS 18.1%
================================================================================
Principal
Amount
(000s)
Certificates of Deposit 5.5%
Bank of Tokyo
6.010% due 05/11/98 $ 55,000 55,000
6.040% due 05/11/98 95,000 94,991
6.050% due 05/13/98 5,000 5,000
6.470% due 06/18/98 20,000 20,000
Bankers Trust
5.900% due 07/07/98 120,000 119,953
5.900% due 07/14/98 39,500 39,500
5.970% due 08/28/98 10,000 9,996
Deutsche Bank
5.930% due 06/16/98 250,000 250,000
5.950% due 06/16/98 10,000 10,000
Landesbank Hessen-Thueringen
5.930% due 06/30/98 210,000 210,000
Sanwa Bank Limited
6.160% due 05/11/98 155,000 155,000
6.530% due 06/22/98 30,000 30,042
--------------
999,482
==============
Commercial Paper 9.7%
Abbott Laboratories
5.500% due 04/21/98 5,000 4,985
5.520% due 04/21/98 900 897
American Express Credit
5.540% due 04/03/98 15,000 14,995
5.520% due 04/15/98 3,400 3,393
5.520% due 04/27/98 1,700 1,693
AT&T Capital Corp
5.856% due 05/05/98 16,000 15,912
5.875% due 05/05/98 3,000 2,983
5.900% due 06/05/98 30,000 29,697
Australian Wheat Board
5.460% due 04/06/98 9,600 9,593
5.450% due 04/23/98 2,200 2,193
5.530% due 04/23/98 100 100
1998 Annual Report See accompanying notes 55
<PAGE>
Schedule of Investments (Cont.)
Total Return Fund
March 31, 1998
Principal
Amount Value
(000s) (000s)
================================================================================
BellSouth Telecommunications, Inc.
5.510% due 04/22/98 $ 100 $ 100
5.520% due 04/28/98 400 398
5.490% due 05/08/98 11,800 11,733
Caisse d'Amortissement
5.520% due 04/27/98 1,700 1,693
5.510% due 05/04/98 1,300 1,293
5.560% due 06/12/98 70,000 69,217
5.640% due 06/12/98 30,000 29,665
Campbell Soup Co.
5.500% due 05/01/98 1,600 1,593
5.540% due 06/12/98 50,000 49,441
E.I. Du Pont de Nemours
5.510% due 04/06/98 2,800 2,798
5.510% due 04/07/98 22,500 22,479
5.440% due 04/09/98 7,500 7,491
5.540% due 04/28/98 12,600 12,548
5.530% due 05/04/98 18,300 18,207
5.520% due 06/03/98 50,000 49,510
5.530% due 06/05/98 50,000 49,495
Emerson Electric Co.
5.510% due 04/27/98 1,000 996
5.500% due 04/30/98 7,900 7,865
Export Development Corp.
5.430% due 04/09/98 8,800 8,789
5.520% due 04/22/98 2,000 1,994
Federal Farm Credit Bank
5.500% due 04/02/98 5,300 5,299
Federal Home Loan Mortgage Corp.
5.485% due 04/21/98 15,300 15,253
5.510% due 04/23/98 100 100
Federal National Mortgage Assn.
5.490% due 04/30/98 7,000 6,969
Florida Power Corp.
5.520% due 04/21/98 3,600 3,589
5.500% due 06/09/98 1,200 1,187
Ford Motor Credit Corp.
5.550% due 04/03/98 10,300 10,297
5.480% due 04/06/98 6,000 5,995
5.520% due 04/08/98 90,200 90,103
5.480% due 04/09/98 3,000 2,996
5.540% due 04/16/98 2,200 2,195
General Electric Capital Corp.
5.560% due 04/03/98 4,100 4,099
5.550% due 04/06/98 65,000 64,950
5.470% due 04/08/98 72,900 72,822
5.520% due 04/09/98 9,000 8,989
5.550% due 04/16/98 5,700 5,687
5.470% due 04/20/98 1,600 1,595
5.530% due 04/28/98 20,000 19,917
5.520% due 06/05/98 500 495
5.560% due 06/09/98 128,000 126,628
5.560% due 06/11/98 70,000 69,229
5.660% due 06/11/98 14,000 13,846
General Motors Acceptance Corp.
5.530% due 04/08/98 23,000 22,975
5.570% due 04/08/98 36,300 36,261
5.580% due 04/24/98 1,200 1,196
5.540% due 04/29/98 2,000 1,991
5.580% due 06/10/98 82,000 81,109
IBM Credit Corp.
5.490% due 04/08/98 500 499
5.530% due 04/16/98 7,100 7,084
Kellogg Co.
5.530% due 04/17/98 200 200
KFW International Finance, Inc.
5.520% due 04/03/98 100 100
5.510% due 04/07/98 25,000 24,977
5.520% due 04/16/98 100 100
5.530% due 04/16/98 700 698
5.530% due 05/05/98 80,000 79,582
Kingdom of Sweden
5.410% due 04/02/98 7,450 7,449
Motorola, Inc.
5.490% due 05/11/98 $ 4,500 $ 4,473
5.490% due 05/12/98 100 99
National Rural Utilities Cooperative
5.460% due 04/07/98 1,300 1,299
5.430% due 04/09/98 28,800 28,765
5.490% due 05/07/98 600 597
5.500% due 05/21/98 600 595
5.500% due 06/11/98 1,000 989
5.510% due 06/12/98 1,300 1,285
5.480% due 06/16/98 1,700 1,680
5.500% due 06/16/98 2,000 1,976
5.500% due 07/10/98 49,000 48,251
New Center Asset Trust
5.490% due 04/07/98 79,000 78,928
5.450% due 04/08/98 42,800 42,755
5.540% due 04/09/98 3,000 2,996
5.530% due 04/22/98 6,500 6,479
5.570% due 05/13/98 3,900 3,875
5.530% due 05/20/98 30,000 29,774
Oesterreichische
5.500% due 04/20/98 1,000 997
5.570% due 04/22/98 15,000 14,951
Ontario Hydro
5.520% due 04/06/98 16,000 15,988
5.500% due 05/21/98 9,000 8,931
Pfizer, Inc.
5.500% due 05/08/98 50,000 49,717
Procter & Gamble Co.
5.510% due 04/14/98 3,100 3,094
5.500% due 04/15/98 3,000 2,994
5.510% due 05/14/98 59,800 59,406
Shell Oil Co.
5.490% due 04/29/98 1,600 1,593
5.540% due 04/29/98 50,000 49,785
Southwestern Public Service Co.
5.530% due 05/08/98 800 795
TCI Communications, Inc.
6.062% due 05/08/98 50,000 49,688
Wisconsin Electric Power & Light
5.500% due 04/10/98 700 699
Wool International
5.490% due 05/29/98 5,000 4,956
---------------
1,748,617
===============
Repurchase Agreements 2.4%
State Street Bank
5.000% due 04/01/98 32,569 32,569
(Dated 03/31/98. Collateralized by U.S.
Treasury Note 6.125% 05/15/98 valued at
$33,221,025. Repurchase proceeds are
$32,573,523.)
Daiwa Securities America
5.800% due 04/01/98 288,000 288,000
(Dated 03/31/98. Collateralized by U.S.
Treasury Note 6.250% 04/30/01 valued at
$14,568,824. and U.S. Treasury Note 6.000%
06/30/99 valued at $25,935,030 and U.S.
Treasury Note 5.625% 12/31/99 valued at
$250,077,500. Repurchase proceeds are
$288,046,400.)
First Boston
5.800% due 04/01/98 106,300 106,300
(Dated 03/31/98. Collateralized by U.S.
Treasury Note 6.375% 05/15/99 valued
at $106,562,365. Repurchase proceeds are
$106,317,126.)
---------------
426,869
===============
U.S. Treasury Bills (b)(g) 0.5%
5.040% due 04/16/98-12/10/98 95,715 94,667
---------------
Total Short-Term Instruments 3,269,635
(Cost $3,269,580) ===============
56 PIMCO Funds See accompanying notes
<PAGE>
Value
(000s)
================================================================================
Total Investments (a) 120.2% $21,746,274
(Cost $21,634,433)
Written Options (e) (0.0%) (1,459)
(Premiums $3,653)
Other Assets and Liabilities (Net) (20.2%) (3,653,104)
------------
Net Assets 100.0% $18,091,711
============
Notes to Schedule of Investments (amounts in thousands):
(a) At March 31, 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. $ 204,637
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (94,860)
------------
Unrealized appreciation-net $ 109,777
============
(b) Securities with an aggregate market value of $94,667
have been segregated with the custodian to cover margin
requirements for the following open future contracts at
March 31, 1998:
Unrealized
Type Contracts Depreciation
- --------------------------------------------------------------------------------
Eurodollar June Futures (06/98) 240 $ (108)
U.S. Treasury 2 Year Note (06/98) 28 (3)
U.S. Treasury 5 Year Note (06/98) 6,455 (1,565)
U.S. Treasury 10 Year Note (06/98) 30,605 (124)
U.S. Treasury 30 Year Bond (06/98) 24,388 (1,645)
United Kingdom 90 Day Libor (06/98) 5,772 (1,410)
-----------
$ (4,855)
===========
(c) Foreign forward currency contracts outstanding at March 31, 1998:
Principal
Amount Unrealized
Covered Expiration Appreciation/
Type by Contract Month (Depreciation)
- --------------------------------------------------------------------------------
Buy C$ 55,203 04/98 $ 343
Sell 192,964 06/98 (334)
Buy DM 5,724 05/98 (70)
Sell 14,199 05/98 162
Buy BP 18,789 04/98 (34)
Sell 38,587 04/98 (923)
Sell JY 7,507,000 06/98 2,584
Sell N$ 22,362 04/98 293
-----------
$ 2,021
===========
(d) Variable rate security. The rate listed is as of March 31, 1998.
(e) Premiums received on written options:
Type Par Premium Value
- --------------------------------------------------------------------------------
Call - CBOT U.S. Treasury 30 Year Bond (06/98)
Strike @ 130.00 Exp. 05/16/98 $ 2,300 $ 959 $ 36
Put - CME Eurodollar June Futures (06/98)
Strike @ 94.00 Exp. 06/15/98 2,500 370 38
Call - CBOT U.S. Treasury 30 Year Bond (09/98)
Strike @ 132.00 Exp. 08/22/98 6,000 1,187 656
Call - OTC Sanwa Communications
Strike @ 1,270.00 Exp. 02/26/99 465 1,137 728
------------------------
$ 3,653 $ 1,459
========================
(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) Swap agreements outstanding at March 31, 1998:
Fixed Notional Unrealized
Type Rate (%) 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. 04/11/02 .3625 $125,000 $ 719
Broker: Merrill Lynch
Exp. 04/11/02 .3650 187,500 1,060
Broker: Merrill Lynch
Exp. 04/18/02 .3700 88,000 480
Broker: Merrill Lynch
Exp. 04/23/02 .3700 131,000 714
Broker: Merrill Lynch
Exp. 05/02/02 .3700 120,000 654
Broker: Merrill Lynch
Exp. 05/30/02 .3700 230,000 1,254
Broker: Merrill Lynch
Exp. 06/05/02 .3575 193,000 1,149
Broker: Deutsche Bank AG New York
Exp. 06/06/02 .3650 100,000 565
Broker: J.P. Morgan
Exp. 11/28/02 .4600 59,400 108
-----------
$ 6,703
===========
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 $ 2,189
Receive floating rate based on 6 month
JY-LIBOR and pay fixed rate equal to
2.34%.
Broker: Deutsche Bank AG New York
Exp. 10/08/07 JY 24,500,000 (2,712)
-----------
$ (523)
===========
(k) Restricted security.
1998 Annual Report See accompanying notes 57
<PAGE>
Schedule of Investments
Total Return Fund II
March 31, 1998
<TABLE>
<CAPTION>
Principal
Amount Value
(000s) (000s)
- ---------------------------------------------------------------------------------
CORPORATE BONDS AND NOTES 26.4%
- ---------------------------------------------------------------------------------
<S> <C> <C>
Banking and Finance 19.8%
American General Finance
8.500% due 08/15/98 $ 30 $ 30
8.500% due 06/15/99 125 129
AT&T Capital Corp.
5.858% due 01/15/99 (d) 20,000 20,083
BankAmerica Corp.
5.700% due 03/05/01 (d) 15,000 15,006
Beneficial Corp.
9.720% due 01/19/99 200 206
Commercial Credit Co.
5.550% due 02/15/01 30 30
Ford Motor Credit Corp.
6.375% due 09/15/99 35 35
5.792% due 02/03/03 (d) 10,000 10,008
General Motors Acceptance Corp.
8.400% due 10/15/99 225 233
Goldman Sachs & Co.
5.805% due 01/25/01 (d) 15,000 15,000
5.867% due 03/19/03 (d) 5,000 5,002
Heller Financial
5.869% due 10/08/99 (d) 10,000 10,021
J.P. Morgan & Co.
0.000% due 04/01/98 160 160
Lehman Brothers, Inc.
8.875% due 11/01/98 500 508
5.938% due 01/18/00 (d) 20,000 20,071
Merrill Lynch & Co.
6.475% due 03/01/00 300 303
Salomon, Inc.
5.794% due 10/20/98 (d) 10,000 9,998
Textron Financial Corp.
5.725% due 11/24/99 (d) 10,000 9,994
--------------
116,817
==============
Industrials 5.2%
AMR Corp.
9.430% due 05/10/01 1,000 1,089
8.900% due 02/26/07 6,450 7,415
Time Warner, Inc.
7.975% due 08/15/04 3,345 3,573
8.110% due 08/15/06 6,690 7,286
8.180% due 08/15/07 6,690 7,375
Union Pacific Co.
6.250% due 03/15/99 4,095 4,100
--------------
30,838
==============
Utilities 1.4%
Long Island Lighting Co.
9.000% due 11/01/22 7,250 8,291
--------------
Total Corporate Bonds and Notes 155,946
(Cost $151,051) ==============
- ---------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCIES 0.2%
- ---------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp.
7.410% due 05/18/05 530 530
Federal National Mortgage Assn.
8.500% due 02/01/05 500 519
--------------
Total U.S. Government Agencies 1,049
(Cost $1,049) ==============
- ---------------------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS 0.0%
- ---------------------------------------------------------------------------------
U.S. Treasury Strips
0.000% due 05/15/08 200 111
--------------
Total U.S. Treasury Obligations 111
(Cost $114) ==============
- ---------------------------------------------------------------------------------
MORTGAGE-BACKED SECURITIES 66.8%
- ---------------------------------------------------------------------------------
Collateralized Mortgage Obligations 7.1%
American Southwest Financial
8.450% due 09/01/17 243 241
Dime Savings
7.178% due 11/01/18 (d) 152 139
Donaldson, Lufkin & Jenrette
11.000% due 08/01/19 305 346
Federal Home Loan Mortgage Corp.
5.950% due 07/15/03 130 129
7.000% due 04/25/15 78 78
8.800% due 12/01/15 247 278
9.250% due 11/15/19 61 65
9.000% due 12/15/20 2,750 2,874
7.000% due 07/15/22 14,283 14,406
Federal National Mortgage Assn.
6.000% due 06/25/01 89 89
9.000% due 06/25/18 39 41
6.000% due 09/25/18 76 76
9.000% due 09/25/18 699 708
9.250% due 07/25/19 4,881 5,208
7.000% due 09/25/20 100 101
Guaranteed Mortgage Corp.
9.300% due 07/20/19 911 967
Independent National Mortgage Corp.
8.278% due 11/25/24 (d) 4,136 4,242
8.304% due 11/25/24 (d) 3,423 3,533
Norwest Mortgage
12.375% due 01/01/14 323 335
Ryland Acceptance Corp.
8.000% due 09/25/22 2,502 2,508
Saxon Mortgage
7.851% due 01/25/23 (d) 2,903 2,912
Sears Mortgage
8.457% due 05/25/32 (d) 2,657 2,648
--------------
41,924
==============
Federal Home Loan Mortgage Corporation 14.5%
6.000% due 04/13/28 13,000 12,557
6.500% due 04/13/28-05/13/28 (e) 59,750 59,103
7.000% due 03/01/07 42 42
7.250% due 03/01/06 305 310
7.500% due 08/01/09 25 26
7.630% due 02/01/23 (d) 1,019 1,050
8.027% due 12/01/22 (d) 11,388 11,807
8.250% due 03/01/08-05/01/08 (e) 179 185
8.500% due 12/01/01 4 4
9.500% due 02/01/11 81 86
10.000% due 06/01/11 19 21
10.500% due 04/01/11 62 66
15.500% due 06/01/11 2 3
--------------
85,260
==============
Federal Housing Administration 0.2%
5.596% due 10/01/19 376 379
8.829% due 05/01/19 509 541
--------------
920
==============
Federal National Mortgage Association 6.7%
6.500% due 04/13/28 5,000 4,944
7.000% due 08/01/09 329 333
7.251% due 02/01/23 (d) 4,808 4,940
7.500% due 04/01/24 13,942 14,333
7.743% due 07/01/20 (d) 1,429 1,487
7.750% due 10/01/07 390 402
7.783% due 01/01/24 (d) 2,961 3,067
7.802% due 12/01/23 (d) 1,155 1,195
7.874% due 04/01/24 (d) 2,594 2,681
8.000% due 10/01/05 393 407
8.500% due 12/01/01-04/01/17 (e) 3,739 3,879
9.000% due 12/01/01-06/01/10 (e) 1,268 1,323
11.000% due 09/01/10 285 316
13.750% due 10/01/10-12/01/14 (e) 110 130
14.500% due 03/01/13 5 7
14.750% due 10/01/12-11/01/12 (e) 26 31
--------------
39,475
==============
Government National Mortgage Association 38.2%
6.500% due 01/15/24-04/20/28 (e) 56,139 55,578
6.500% due 01/20/26 (d) 39,956 40,868
7.000% due 01/20/24-07/20/27 (d)(e) 72,482 74,241
7.375% due 06/20/23 (d) 4,903 5,045
7.500% due 03/15/24 342 352
8.000% due 06/15/24-12/15/26 (e) 47,442 49,190
12.000% due 10/15/12-10/15/15 (e) 45 53
--------------
225,327
==============
</TABLE>
58 PIMCO Funds See accompanying notes
<PAGE>
Schedule of Investments
Total Return Fund II
March 31, 1998
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
Other Mortgage-Backed Securities 0.1%
Bank of America
9.000% due 03/01/08 $ 70 $ 70
Federal Home Loan Mortgage Corp
11.875% due 06/15/13 228 250
Security Pacific National Bank
8.500% due 03/01/17 76 78
Western Federal Savings & Loan
6.664% due 03/25/19 (d) 452 454
-------------
852
-------------
Total Mortgage-Backed Securities 393,758
(Cost $391,655) =============
================================================================================
ASSET-BACKED SECURITIES 5.7%
================================================================================
AFC Home Equity Loan Trust
7.402% due 10/25/26 (d) 2,386 2,422
Banc One Auto Grantor Trust
6.270% due 11/20/03 14,780 14,845
Conti Mortgage Home Equity Loan Trust
6.190% due 10/15/11 (d) 3,719 3,714
EQCC Home Equity Loan Trust
6.100% due 10/15/03 4,606 4,614
United Air Lines Equipment Trust
9.190% due 12/24/13 7,213 7,783
-------------
Total Asset-Backed Securities 33,378
(Cost $33,415) =============
================================================================================
SHORT-TERM INSTRUMENTS 21.4%
================================================================================
Certificates of Deposit 5.9%
Bankers Trust
5.900% due 07/07/98 20,000 19,992
5.900% due 07/14/98 15,000 15,000
-------------
34,992
=============
Commercial Paper 13.9%
Abbott Laboratories
5.510% due 04/02/98 3,200 3,200
5.520% due 04/03/98 18,200 18,194
American Express Credit
5.520% due 04/15/98 15,000 14,968
E.I. Du Pont de Nemours
5.510% due 04/06/98 8,700 8,693
5.450% due 04/08/98 1,900 1,898
5.500% due 04/28/98 600 598
Emerson Electric Co
5.500% due 04/23/98 2,600 2,591
Florida Power Corp
5.470% due 04/08/98 1,900 1,898
Ford Motor Credit Corp
5.480% due 04/22/98 10,000 9,968
General Electric Capital Corp
5.470% due 04/20/98 400 399
General Motors Acceptance Corp
5.460% due 04/08/98 7,200 7,192
National Rural Utilities Cooperative
5.470% due 04/07/98 2,800 2,797
5.510% due 06/12/98 3,100 3,065
New Center Asset Trust
5.490% due 04/07/98 5,500 5,495
Southwestern Public Service Co
5.510% due 04/24/98 900 897
-------------
81,853
=============
Repurchase Agreement 1.0%
State Street Bank
5.000% due 04/01/98 6,150 6,150
(Dated 03/31/98. Collateralized by U.S -------------
Treasury Note 6.125% 05/15/98 valued at
$6,273,038 Repurchase proceeds are $6,150,854.)
U.S. Treasury Bills (b)(e) 0.6%
4.998% due 04/16/98-07/23/98 3,700 3,649
-------------
Total Short-Term Instruments 126,644
(Cost $126,651) =============
Total Investments (a) 120.5% $ 710,886
(Cost $703,935)
Other Assets and Liabilities (Net) (20.5%) (121,127)
-------------
Net Assets 100.0% $ 589,759
=============
Notes to Schedule of Investments (amounts in thousands):
(a) At March 31, 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 $ 7,655
Aggregate gross unrealized depreciation for all investments
in which there was an excess of tax cost over value (704)
-------------
Unrealized appreciation-net $ 6,951
=============
(b) Securities with an aggregate market value of $3,649
have been segregated with the custodian to cover margin
requirements for the following open future contracts at
March 31, 1998:
Unrealized
Appreciation/
Type Contracts (Depreciation)
- --------------------------------------------------------------------------------
U.S. Treasury 5 Year Note (06/98) 561 $ (207)
U.S. Treasury 10 Year Note (06/98) 462 189
U.S. Treasury 30 Year Bond (06/98) 1,274 (1,054)
-------------
$ (1,072)
=============
(c) Swap agreements outstanding at March 31, 1998:
Fixed Notional Unrealized
Type Rate (%) 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. 04/11/02 .3625 $ 5,000 $ 29
Broker: Merrill Lynch
Exp. 04/11/02 .3650 7,500 42
Broker: Merrill Lynch
Exp. 04/18/02 .3700 2,000 11
Broker: Merrill Lynch
Exp. 04/23/02 .3700 5,000 27
Broker: Merrill Lynch
Exp. 05/30/02 .3700 12,000 65
Broker: Deutsche Bank AG New York
Exp. 06/06/02 .3650 15,000 85
Broker: Merrill Lynch
Exp. 06/05/02 .3575 7,000 42
-------------
$ 301
=============
(d) Variable rate security. The rate listed is as of March 31, 1998.
(e) Securities are grouped by coupon and represent a range of maturities.
1998 Annual Report See accompanying notes 59
<PAGE>
Schedule of Investments
Total Return Fund III
March 31, 1998
Principal
Amount Value
(000s) (000s)
================================================================================
CORPORATE BONDS AND NOTES 34.3%
================================================================================
Banking and Finance 18.1%
AT&T Capital Corp.
5.858% due 01/15/99 (d) $ 10,000 $ 10,041
Bear Stearns
5.560% due 08/25/00 (d) 10,000 10,040
Ford Motor Credit Corp.
5.792% due 02/03/03 (d) 10,000 10,008
Goldman Sachs & Co.
5.805% due 01/25/01 (d) 10,000 10,000
Lehman Brothers, Inc.
7.625% due 08/01/98 4,100 4,120
5.938% due 01/18/00 (d) 10,000 10,036
Salomon, Inc.
5.794% due 10/20/98 (d) 5,000 4,999
Spieker Properties
6.950% due 12/15/02 2,000 2,022
Textron Financial Corp.
5.725% due 11/24/99 (d) 5,000 4,997
-------------
66,263
=============
Industrials 10.5%
Fleet Financial Group
6.000% due 10/26/98 2,300 2,301
Imperial Chemical
6.000% due 09/05/98 (d) 10,000 9,996
PDV America, Inc.
7.250% due 08/01/98 10,580 10,621
TCI Communications, Inc.
6.375% due 09/15/99 5,000 5,017
6.185% due 09/11/00 (d) 5,000 4,971
WMX Technologies
6.700% due 05/01/01 5,500 5,537
-------------
38,443
=============
Utilities 5.7%
California Energy
10.250% due 01/15/04 4,000 4,315
Cleveland Electric Illuminating Co.
8.750% due 11/15/05 3,500 3,525
Connecticut Light & Power
7.250% due 07/01/99 990 989
Long Island Lighting Co.
7.300% due 07/15/99 5,000 5,072
8.900% due 07/15/19 3,000 3,195
North Atlantic Energy
9.050% due 06/01/02 583 599
Ohio Power Co.
8.250% due 03/15/02 2,000 2,150
Public Service of New Hampshire
9.170% due 05/15/98 800 803
-------------
20,648
-------------
Total Corporate Bonds and Notes 125,354
(Cost $124,971) =============
================================================================================
U.S. GOVERNMENT AGENCIES 7.8%
================================================================================
Federal Home Loan Bank
6.550% due 09/19/03 325 325
Federal Home Loan Mortgage Corp.
5.950% due 06/19/98 5,000 5,002
7.500% due 07/01/11 790 813
8.000% due 01/01/12 399 412
8.000% due 09/01/25 1,807 1,874
Federal National Mortgage Assn.
9.150% due 04/10/98 300 300
5.870% due 10/15/03 50 49
7.930% due 09/20/06 1,250 1,286
Government Trust Certificate - Greece
8.000% due 05/15/98 26 26
Student Loan Marketing Assn.
6.000% due 06/30/98 10,000 10,009
5.578% due 10/25/05 (d) 8,322 8,314
-------------
Total U.S. Government Agencies 28,410
(Cost $28,340) =============
================================================================================
U.S. TREASURY OBLIGATIONS 0.0%
================================================================================
U.S. Treasury Bonds
10.375% due 11/15/09 $ 200 $ 250
-------------
Total U.S. Treasury Obligations 250
(Cost $246) =============
================================================================================
MORTGAGE-BACKED SECURITIES 49.8%
================================================================================
Collateralized Mortgage Obligations 9.2%
Chase Mortgage Financial Corp.
9.500% due 04/25/24 49 49
CMC Securities Corp.
7.679% due 04/25/25 (d) 2,076 2,137
Collateralized Mortgage Obligation Trust
8.000% due 01/01/17 4,031 4,066
Federal Home Loan Mortgage Corp.
8.000% due 05/15/00 97 99
8.000% due 02/15/15 1,462 1,484
6.324% due 08/15/32 (d) 10,000 10,026
Federal National Mortgage Assn.
7.750% due 07/25/19 199 202
7.000% due 09/25/21 5,466 5,495
Greenwich
8.886% due 11/25/24 (d) 343 352
Prudential Home
8.217% due 11/25/23 (d) 1,169 1,201
Residential Accredit Loans, Inc.
7.050% due 01/25/26 2,000 1,999
7.250% due 01/25/26 3,000 3,012
Resolution Trust Corp.
8.835% due 12/25/23 2,500 2,660
Sears Mortgage
8.457% due 05/25/32 (d) 797 794
-------------
33,576
=============
Federal Home Loan Mortgage Corporation 4.1%
6.500% due 04/13/28-05/13/28 (g) 12,830 12,692
8.000% due 02/01/06 265 274
8.027% due 12/01/22 (d) 1,834 1,901
-------------
14,867
=============
Federal National Mortgage Association 11.5%
6.199% due 02/01/31 (d) 100 101
6.203% due 08/01/29 (d) 2,223 2,240
6.205% due 05/01/36 (d) 7,268 7,335
6.207% due 03/01/33 (d) 1,929 1,943
6.213% due 08/01/18-11/01/35 (d)(g) 12,751 12,849
6.500% due 04/13/28 8,500 8,404
7.500% due 04/01/24 3,485 3,583
8.000% due 07/01/23-07/01/26 (g) 4,594 4,773
8.250% due 07/01/17 125 131
8.500% due 02/01/07 565 584
9.000% due 07/01/05 39 40
-------------
41,983
=============
Government National Mortgage Association 24.0%
6.500% due 01/20/26-08/20/27 (d)(g) 6,224 6,370
6.500% due 09/15/23-04/20/28 (g) 42,003 41,650
7.000% due 09/20/23-12/20/26 (d)(g) 35,220 36,079
7.375% due 06/20/22 (d) 3,044 3,138
10.250% due 02/15/17 647 702
12.750% due 02/20/15-03/20/15 (g) 5 6
-------------
87,945
=============
Other Mortgage-Backed Securities 0.6%
Resolution Trust Corp.
7.775% due 05/25/29 (d) 2,136 2,176
-------------
Stripped Mortgage-Backed Securities 0.4%
Federal Home Loan Mortgage Corp. (IO)
6.500% due 04/15/22 4,710 586
Resolution Trust Corp. (PO)
0.000% due 09/25/00 804 735
-------------
1,321
-------------
Total Mortgage-Backed Securities 181,868
(Cost $180,269) =============
60 PIMCO Funds See accompanying notes
<PAGE>
Schedule of Investments
Total Return Fund III
March 31, 1998
Principal
Amount Value
(000s) (000s)
================================================================================
ASSET-BACKED SECURITIES 0.6%
================================================================================
EQCC Home Equity Loan Trust
6.100% due 10/15/03 $ 2,303 $ 2,307
-----------
Total Asset-Backed Securities 2,307
(Cost $2,303) ===========
================================================================================
SOVEREIGN ISSUES 1.7%
================================================================================
Province of Quebec
8.800% due 04/15/03 1,000 1,109
Republic of Argentina
6.688% due 03/31/05 (d) 5,700 5,258
-----------
Total Sovereign Issues 6,367
(Cost $14,018) ===========
================================================================================
FOREIGN CURRENCY-DENOMINATED ISSUES (c)(f) 3.3%
================================================================================
Commonwealth of Australia
10.000% due 10/15/07 A$ 10,000 8,667
Commonwealth of Canada
8.500% due 04/01/02 C$ 2,000 1,576
Province of Saskatchewan
11.000% due 01/09/01 2,000 1,615
-----------
Total Foreign Currency-Denominated Issues 11,858
(Cost $3,209) ===========
================================================================================
SHORT-TERM INSTRUMENTS 19.2%
================================================================================
Certificates of Deposit 4.1%
Bankers Trust
5.900% due 07/14/98 $ 8,000 8,000
Sanwa Bank Limited
6.160% due 05/11/98 7,000 7,000
-----------
15,000
===========
Commercial Paper 13.2%
E.I. Du Pont de Nemours
5.500% due 04/23/98 10,800 10,764
Emerson Electric Co.
5.510% due 04/27/98 1,600 1,594
Federal Home Loan Mortgage Corp.
5.485% due 04/21/98 1,300 1,296
Federal National Mortgage Assn.
5.490% due 04/30/98 300 299
Ford Motor Credit Corp.
5.550% due 04/02/98 1,200 1,200
5.490% due 04/03/98 5,000 4,998
5.480% due 04/06/98 5,000 4,996
5.520% due 04/08/98 1,400 1,398
General Electric Capital Corp.
5.550% due 04/16/98 11,400 11,374
5.560% due 06/11/98 1,000 989
KFW International Finance, Inc.
5.510% due 04/17/98 4,400 4,389
5.500% due 05/08/98 400 398
National Rural Utilities Cooperative
5.430% due 04/09/98 3,000 2,996
5.500% due 05/21/98 200 198
5.520% due 06/12/98 1,500 1,483
-----------
48,372
===========
Repurchase Agreement 1.1%
State Street Bank
5.000% due 04/01/98 3,866 3,866
-----------
(Dated 03/31/98. Collateralized by U.S. Treasury
Note 6.125% 05/15/98 valued at $3,946,850.
Repurchase proceeds are $3,866,537.)
U.S. Treasury Bills (b)(g) 0.8%
5.092% due 04/16/98-07/23/98 2,815 2,790
-----------
Total Short-Term Instruments 70,028
(Cost $70,028) ===========
Total Investments (a) 116.7% $ 426,442
(Cost $423,384)
Written Options (e) 0.0% (109)
(Premium $198)
Other Assets and Liabilities (Net) (16.7%) (60,906)
-----------
Net Assets 100.0% $ 365,427
===========
Notes to Schedule of Investments (amounts in thousands):
(a) At March 31, 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. $ 3,392
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax
cost over value. (219)
-----------
Unrealized appreciation-net $ 3,173
===========
(b) Securities with an aggregate market value of
$2,790 have been segregated with the custodian
to cover margin requirements for the following
open future contracts at
March 31, 1998: Unrealized
Appreciation/
Type Contracts (Depreciation)
- --------------------------------------------------------------------------------
U.S. Treasury 5 Year Note (06/98) 120 $ (35)
U.S. Treasury 10 Year Note (06/98) 858 (311)
U.S. Treasury 30 Year Bond (06/98) 600 444
-----------
$ 98
===========
(c) Foreign forward currency contracts outstanding at March 31, 1998:
Principal
Amount
Covered Expiration Unrealized
Type by Contract Month Appreciation
- --------------------------------------------------------------------------------
Sell C$ 4,325 06/98 $ 11
(d) Variable rate security. The rate listed is as of March 31, 1998.
(e) Premiums received on written options:
Premiums
Type Par Received Value
- --------------------------------------------------------------------------------
Call - CBOT U.S. Treasury 30 Year Bond (09/98) $ 100,000 $ 198 $ (109)
Strike @ 132.00 Exp. 08/22/98
(f) Principal amount denoted in indicated currency:
A$ - Australian Dollar
C$ - Canadian Dollar
(g) Securities are grouped by coupon and represent a range of maturities.
1998 Annual Report See accompanying notes 61
<PAGE>
Schedule of Investments (Cont.)
Total Return Fund III
March 31, 1998
================================================================================
(h) Swap agreements outstanding at March 31, 1998:
Fixed Notional Unrealized
Type Rate (%) 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. 04/18/02 .3700 $ 6,000 $ 33
Broker: Merrill Lynch
Exp. 04/23/02 .3700 2,000 11
Broker: Merrill Lynch
Exp. 05/30/02 .3700 4,000 22
Broker: Merrill Lynch
Exp. 06/05/02 .3575 3,000 18
Broker: Deutsche Bank AG New York
Exp. 06/06/02 .3650 6,000 34
Broker: J.P. Morgan
Exp. 11/28/02 .4600 5,800 10
----------
$ 128
==========
62 PIMCO Funds See accompanying notes
<PAGE>
Schedule of Investments
Total Return Mortgage Fund
March 31, 1998
Principal
Amount Value
(000s) (000s)
================================================================================
U.S. TREASURY OBLIGATIONS 16.8%
================================================================================
U.S. Treasury Notes
5.750% due 11/15/00 $ 600 $ 602
--------------
Total U.S. Treasury Obligations 602
(Cost $602) ==============
================================================================================
MORTGAGE-BACKED SECURITIES 95.2%
================================================================================
Collateralized Mortgage Obligations 35.0%
Countrywide Home Loans
6.750% due 11/25/27 70 71
Donaldson, Lufkin & Jenrette
6.500% due 04/25/24 27 27
Federal Home Loan Mortgage Corp.
5.500% due 06/15/13 111 111
4.500% due 03/15/21 128 120
3.500% due 12/15/22 25 20
6.500% due 05/15/23 96 90
6.500% due 03/15/24 91 85
8.000% due 06/15/26 23 25
Federal National Mortgage Assn.
5.600% due 07/25/14 69 69
5.600% due 11/25/16 250 249
5.000% due 04/25/20 125 123
7.500% due 11/25/20 80 81
7.500% due 03/25/23 80 84
6.656% due 04/25/23 (b) 25 26
6.500% due 09/25/23 31 30
6.750% due 09/25/23 45 43
--------------
1,254
==============
Federal Home Loan Mortgage Corporation 24.6%
7.000% due 02/01/27 682 690
6.000% due 04/13/28 200 193
--------------
883
==============
Federal National Mortgage Association 2.1%
6.745% due 11/01/18 (b) 74 75
--------------
Government National Mortgage Association 32.8%
6.500% due 03/20/27 (b) 29 30
7.000% due 03/20/16-11/20/26 (b)(c) 499 514
7.500% due 05/15/27-08/15/27 (c) 617 634
--------------
1,178
==============
Stripped Mortgage-Backed Securities 0.7%
Federal National Mortgage Assn. (IO)
7.000% due 12/25/16 420 26
--------------
Total Mortgage-Backed Securities 3,416
(Cost $3,357) ==============
================================================================================
SHORT-TERM INSTRUMENTS 11.1%
================================================================================
Commercial Paper 8.3%
Caisse d'Amortissement
5.480% due 05/26/98 100 99
E.I. Du Pont de Nemours
5.450% due 04/08/98 100 100
IBM Credit Corp.
5.520% due 04/15/98 100 100
--------------
299
==============
Repurchase Agreement 2.8%
State Street Bank
5.000% due 04/01/98 99 99
(Dated 03/31/98. Collateralized by U.S. --------------
Treasury Note 6.000% 08/15/99 valued at
$101,250. Repurchase proceeds are $99,016.)
Total Short-Term Instruments 398
(Cost $398) ==============
Total Investments (a) 123.1% $ 4,416
(Cost $4,357)
Other Assets and Liabilities (Net) (23.1%) (828)
--------------
Net Assets 100.0% $ 3,588
==============
Notes to Schedule of Investments (amounts in thousands):
(a) At March 31, 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. $ 58
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (1)
--------------
Unrealized appreciation-net $ 57
==============
(b) Variable rate security. The rate listed is as of March 31, 1998.
(c) Securities are grouped by coupon and represent a range of maturities.
1998 Annual Report See accompanying notes 63
<PAGE>
Schedule of Investments
Moderate Duration Fund
March 31, 1998
Principal
Amount Value
(000s) (000s)
================================================================================
CORPORATE BONDS AND NOTES 20.4%
================================================================================
Banking and Finance 10.8%
AT&T Capital Corp.
6.690% due 04/17/98 $ 800 $ 800
5.900% due 06/05/98 1,500 1,485
6.390% due 01/22/99 1,500 1,503
Bear Stearns
5.860% due 08/29/00 (d) 2,300 2,314
Capital One Bank
6.730% due 06/04/98 550 551
Citicorp
6.650% due 05/15/00 (d) 2,000 2,019
Ford Motor Credit
5.626% due 02/13/03 (d) 8,000 8,009
Korean Export-Import Bank
6.500% due 10/06/99 1,580 1,509
Lehman Brothers, Inc
7.410% due 05/25/99 500 507
Okobank
7.312% due 09/27/49 (d) 1,150 1,173
PSE & G Capital Corp
6.740% due 10/23/01 1,100 1,122
Salomon, Inc
9.480% due 04/01/98 800 800
6.456% due 06/27/01 (d) 1,250 1,251
6.133% due 07/23/01 (d) 1,000 1,003
Transamerica Financial
7.400% due 07/29/99 2,000 2,038
--------------
26,084
==============
Industrials 7.4%
Amerco, Inc
6.890% due 10/15/00 2,400 2,407
7.230% due 01/21/27 500 529
Building Materials Corp
0.000% due 07/01/04 (h) 250 235
Donnelley R.R. & Sons
6.030% due 06/22/98 3,000 3,002
News America Holdings Corp
7.450% due 06/01/00 3,000 3,077
RJR Nabisco
8.625% due 12/01/02 480 505
TCI Communications, Inc
6.185% due 09/11/00 (d) 2,000 1,988
6.546% due 04/03/02 (d) 250 251
7.550% due 09/02/03 500 524
6.690% due 03/31/06 1,200 1,211
WMX Technologies
6.000% due 11/02/98 3,900 3,897
--------------
17,626
==============
Utilities 2.2%
Beaver Valley Funding Corp
8.250% due 06/01/03 432 443
8.625% due 06/01/07 700 752
CMS Energy
8.125% due 05/15/02 750 771
System Energy Resources
7.710% due 08/01/01 2,900 2,996
Texas-New Mexico Power
12.500% due 01/15/99 200 209
--------------
5,171
--------------
Total Corporate Bonds and Notes 48,881
(Cost $48,739) ==============
================================================================================
U.S. GOVERNMENT AGENCIES 4.1%
================================================================================
Student Loan Marketing Assn
6.080% due 06/30/00 (d) 3,400 3,406
5.674% due 10/25/04 (d) 6,448 6,452
--------------
Total U.S. Government Agencies 9,858
(Cost $9,824) ==============
================================================================================
U.S. TREASURY OBLIGATIONS 5.2%
================================================================================
Treasury Inflation Protected Securities
3.625% due 07/15/02 (g) $ 3,027 $ 2,999
3.375% due 01/15/07 (g) 2,040 1,979
U.S. Treasury Bonds
6.000% due 02/15/26 1,700 1,697
U.S. Treasury Notes
6.250% due 06/30/02 5,600 5,719
-------------
Total U.S. Treasury Obligations 12,394
(Cost $12,279) =============
================================================================================
MORTGAGE-BACKED SECURITIES 52.2%
================================================================================
Collateralized Mortgage Obligations 19.3%
American Southwest Financial
9.000% due 06/04/13 6,699 7,385
Federal Home Loan Mortgage Corp
7.000% due 05/15/04 1,000 1,017
6.000% due 12/15/08 5,759 5,646
5.500% due 12/15/13 594 594
5.500% due 02/15/14 1,263 1,262
5.500% due 11/15/15 978 977
6.500% due 10/15/23 1,245 1,184
8.500% due 04/15/25 1,920 2,109
8.000% due 02/15/27 379 414
Federal National Mortgage Assn
7.000% due 12/25/99 409 411
6.000% due 03/25/09 1,270 1,207
6.500% due 05/18/13 2,617 2,623
6.700% due 09/25/15 2,543 2,544
6.500% due 01/18/19 4,300 4,338
7.000% due 09/25/21 2,691 2,705
6.500% due 03/25/23 2,000 1,960
General Electric Capital Mortgage
6.000% due 02/25/24 482 478
Government National Mortgage Assn
7.500% due 04/20/27 2,142 2,199
Residential Funding
7.500% due 11/25/25 764 769
7.500% due 06/25/27 1,204 1,217
7.000% due 08/25/27 3,355 3,376
Resolution Trust Corp
9.400% due 05/25/24 1,300 1,302
Securitized Asset Sales, Inc
7.410% due 09/25/24 506 507
-------------
46,224
=============
Federal Home Loan Mortgage Corporation 11.0%
6.500% due 05/13/28 25,000 24,726
7.500% due 05/13/28 1,500 1,537
-------------
26,263
=============
Federal Housing Administration 5.0%
7.430% due 04/01/22-06/01/23 (f) 11,529 11,884
7.450% due 03/31/27 29 30
-------------
11,914
=============
Federal National Mortgage Association 6.6%
6.190% due 09/01/17 (d) 1,196 1,210
6.199% due 08/01/27-12/01/27 (d)(f) 608 613
6.200% due 08/01/29 (d) 978 985
6.201% due 03/01/29-05/01/36 (d)(f) 2,104 2,123
6.207% due 03/01/33 (d) 999 1,006
6.210% due 05/01/36 (d) 5,891 5,945
6.213% due 08/01/18-11/01/35 (d)(f) 2,215 2,235
6.230% due 08/01/18 (d) 1,296 1,312
6.237% due 06/01/18 (d) 432 437
-------------
15,866
=============
Government National Mortgage Association 9.1%
6.000% due 01/20/28-02/20/28 (d)(f) 5,032 5,102
7.000% due 11/20/17-11/20/26 (d)(f) 3,975 4,066
8.000% due 04/20/28 10,000 10,353
9.000% due 06/15/09 2,047 2,189
-------------
21,710
=============
Other Mortgage-Backed Securities 1.2%
Paine Webber Mortgage
7.500% due 07/25/23 2,778 2,808
-------------
Total Mortgage-Backed Securities 124,785
(Cost $123,899) =============
64 PIMCO Funds See accompanying notes
<PAGE>
Schedule of Investments
Moderate Duration Fund
March 31, 1998
Principal
Amount Value
(000s) (000s)
================================================================================
ASSET-BACKED SECURITIES 1.9%
================================================================================
Caterpillar Financial Asset Trust
6.450% due 05/25/03 $ 2,500 $ 2,521
EQCC Home Equity Loan Trust
6.700% due 09/15/08 929 936
IMC Home Equity Loan Trust
5.508% due 03/25/27 (d) 297 297
LIBOR-Index Certificates
7.406% due 12/16/01 (d) 800 800
--------------
Total Asset-Backed Securities 4,554
(Cost $4,556) ==============
================================================================================
SOVEREIGN ISSUES 6.6%
================================================================================
Commonwealth of Canada
6.500% due 05/30/00 2,500 2,534
Hydro Quebec
7.620% due 04/02/01 1,000 1,043
Republic of Argentina
6.688% due 03/31/05 (d) 5,795 5,346
8.726% due 04/10/05 (d) 3,000 3,000
United Mexican States
6.250% due 12/31/19 4,500 3,819
--------------
Total Sovereign Issues 15,742
(Cost $15,508) ==============
================================================================================
FOREIGN CURRENCY-DENOMINATED ISSUES (c)(e).8.2%
================================================================================
Commonwealth of New Zealand
4.500% due 02/15/16 (g) N$ 800 422
United Kingdom Gilt
7.000% due 06/07/02 BP 11,100 19,089
--------------
Total Foreign Currency-Denominated Issues 19,511
(Cost $19,403) ==============
================================================================================
PREFERRED STOCK 0.5%
================================================================================
Shares
El Paso Electric Co. 10,879 1,210
--------------
Total Preferred Stock 1,210
(Cost $1,232) ==============
================================================================================
SHORT-TERM INSTRUMENTS 24.3%
================================================================================
Principal
Amount
(000s)
Certificates of Deposit 2.4%
Banco Latino
6.430% due 05/28/98 $ 700 700
Bank of Tokyo
6.050% due 05/13/98 5,000 5,000
--------------
5,700
==============
Commercial Paper 20.6%
American Express Credit
5.520% due 04/15/98 4,900 4,889
Ameritech Corp.
5.500% due 04/13/98 8,700 8,684
BellSouth Telecommunications, Inc.
5.490% due 05/08/98 1,300 1,293
E.I. Du Pont de Nemours
5.510% due 04/27/98 2,000 1,992
Federal National Mortgage Assn.
5.490% due 04/30/98 300 299
Ford Motor Credit Corp.
5.480% due 04/22/98 300 299
General Electric Capital Corp.
5.530% due 04/22/98 7,500 7,476
General Motors Acceptance Corp.
5.570% due 04/08/98 8,000 7,991
IBM Credit Corp.
5.500% due 05/06/98 1,100 1,094
KFW International Finance, Inc.
5.500% due 05/08/98 1,600 1,591
National Rural Utilities Cooperative
5.500% due 05/21/98 700 695
New Center Asset Trust
5.570% due 05/13/98 2,800 2,782
Oesterreichische
5.500% due 04/20/98 10,000 9,971
TCI Communications, Inc.
6.062% due 05/08/98 400 398
--------------
49,454
==============
Repurchase Agreement 1.0%
State Street Bank
5.000% due 04/01/98 2,330 2,330
(Dated 03/31/98. Collateralized by U.S. -------------
Treasury Note 6.250% 03/31/99 valued at
$2,380,150. Repurchase proceeds are
$2,330,324.)
U.S. Treasury Bills (b)(f) 0.3%
4.982% due 04/16/98-07/23/98 735 733
--------------
Total Short-Term Instruments 58,217
(Cost $58,217) ==============
Total Investments (a) 123.4% $ 295,152
(Cost $293,657)
Other Assets and Liabilities (Net) (23.4%) (56,000)
--------------
Net Assets 100.0% $ 239,152
==============
Notes to Schedule of Investments (amounts in thousands):
(a) At March 31, 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. $ 1,862
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (367)
--------------
Unrealized appreciation-net $ 1,495
==============
(b) Securities with an aggregate market value of
$733 have been segregated with the custodian to cover
margin requirements for the following open future
contracts at March 31, 1998:
Unrealized
Type Contracts Depreciation
- --------------------------------------------------------------------------------
U.S. Treasury 5 Year Note (06/98) 194 $ (15)
U.S. Treasury 10 Year Note (06/98) 300 (208)
United Kingdom 90 Day LIBOR Future (06/98) 200 (20)
--------------
$ (243)
==============
(c) Foreign forward currency contracts outstanding at March 31, 1998:
Principal
Amount
Covered Expiration Unrealized
Type by Contract Month Appreciation
- --------------------------------------------------------------------------------
Sell N$ 763 05/98 $ 28
(d) Variable rate security. The rate listed is as of March 31, 1998.
(e) Principal amount denoted in indicated currency:
BP- British Pound
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.
1998 Annual Report See accompanying notes 65
<PAGE>
Schedule of Investments (Cont.)
Moderate Duration Fund
March 31, 1998
================================================================================
(h) Security becomes interest bearing at a future date.
(i) Swap agreements outstanding at March 31, 1998:
Fixed Notional Unrealized
Type Rate (%) 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. 04/23/02 .3700 $ 1,000 $ 6
Broker: J.P. Morgan
Exp. 11/28/02 .4600 14,000 25
------------
$ 31
============
66 PIMCO Funds See accompanying notes
<PAGE>
Schedule of Investments
Low Duration Fund
March 31, 1998
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
CORPORATE BONDS AND NOTES 14.1%
- --------------------------------------------------------------------------------
Banking and Finance 5.3%
Associates Corp. of North America
7.250% due 05/15/98 $ 500 $ 501
7.500% due 05/15/99 1,000 1,016
AT&T Capital Corp.
6.260% due 04/30/98 30,000 30,011
5.950% due 02/16/99 50,000 49,904
6.490% due 05/17/99 10,000 10,025
Banc One Corp.
7.250% due 08/01/02 500 519
Bancomer
8.000% due 07/07/98 4,000 4,000
BankAmerica Corp.
7.200% due 09/15/02 100 104
7.875% due 12/01/02 100 107
Chrysler Financial Corp.
6.280% due 07/17/98 3,000 3,004
Citicorp
9.750% due 08/01/99 100 105
Comercia Bank
6.750% due 05/12/98 500 500
Commercial Credit Co.
5.500% due 05/15/98 1,000 999
Ford Motor Credit Corp.
5.460% due 04/05/99 (d) 1,000 994
7.500% due 11/15/99 100 102
Kansallis-Osake
7.830% due 09/30/43 (d) 13,500 13,534
Kemper Corp.
8.800% due 11/01/98 100 102
Lehman Brothers, Inc.
0.000% due 05/16/98 2,000 1,986
6.120% due 05/14/99 (d) 5,000 4,998
7.625% due 07/15/99 (d) 50 51
Okobank
7.028% due 10/29/49 (d) 750 761
PaineWebber
7.000% due 03/01/00 50 51
Salomon, Inc.
6.360% due 04/01/98 1,725 1,725
9.375% due 04/15/98 550 551
6.700% due 12/01/98 1,250 1,256
7.125% due 08/01/99 1,050 1,065
Salomon, Smith Barney Holdings
7.875% due 10/01/99 100 103
SGE Associates
8.070% due 07/20/00 (i) 15,032 15,477
Signet Bank Corp.
5.875% due 04/15/98 (d) 2,865 2,865
Toyota Motor Credit Corp.
6.969% due 02/15/02 (g) 11,600 11,173
Transamerica Financial
6.940% due 04/27/98 700 701
------------
158,290
------------
Industrials 7.0%
Amerco, Inc.
6.850% due 09/18/98 7,000 7,020
American Home Products
7.700% due 02/15/00 100 103
AMR Corp.
9.500% due 07/15/98 1,000 1,010
9.270% due 08/13/98 2,000 2,024
8.100% due 11/01/98 2,000 2,027
8.730% due 11/02/98 3,000 3,046
9.750% due 03/15/00 5,000 5,333
9.910% due 03/01/01 2,500 2,750
9.440% due 05/15/01 5,000 5,462
9.125% due 10/24/01 1,000 1,093
Delta Air Lines
7.790% due 12/01/98 4,449 4,499
10.430% due 01/02/11 850 1,059
Enserch Corp.
8.875% due 03/15/01 3,000 3,000
Ford Motor Co.
9.000% due 09/15/01 500 544
Hertz Corp.
6.625% due 07/15/00 100 101
IBM Corp.
6.375% due 06/15/00 100 101
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
Philip Morris Co.
7.500% due 01/15/02 200 207
RJR Nabisco
8.625% due 12/01/02 4,000 4,206
Sears Roebuck & Co.
9.250% due 04/15/98 5,750 5,755
TCI Communications, Inc.
6.606% due 03/11/03 (d) 3,000 3,014
Tenet Healthcare Corp.
7.875% due 01/15/03 2,300 2,369
Time Warner, Inc.
7.975% due 08/15/04 21,247 22,692
8.110% due 08/15/06 42,495 46,283
8.180% due 08/15/07 42,495 46,849
Yorkshire Power
6.154% due 02/25/03 40,000 39,738
------------
211,496
------------
Utilities 1.8%
Alabama Power
7.250% due 08/01/07 100 103
Bell Atlantic Financial
6.000% due 06/01/98 500 500
Central Maine Power Co.
6.380% due 02/24/00 10,000 10,043
Cleveland Electric Illuminating Co.
8.330% due 10/30/98 1,500 1,518
8.170% due 11/30/98 1,000 1,012
9.300% due 07/26/99 1,500 1,554
Consolidated Natural Gas Co.
8.750% due 06/01/99 400 413
El Paso Electric Co.
7.250% due 02/01/99 1,000 1,005
Flag Limited
8.250% due 01/30/08 2,000 2,055
Gulf States Utilities
9.720% due 07/01/98 166 167
Long Island Lighting Co.
7.625% due 04/15/98 3,000 3,001
7.300% due 07/15/99 4,500 4,565
6.250% due 07/15/01 3,275 3,298
Louisiana Power & Light Co.
7.740% due 07/01/02 10,500 10,736
Mississippi Power & Light
8.800% due 04/01/05 1,000 1,001
Niagara Mohawk Power
9.500% due 03/01/21 1,725 1,834
North Atlantic Energy
9.050% due 06/01/02 5,288 5,431
Texas Utilities Co.
5.750% due 07/01/98 1,300 1,299
Toledo Edison Co.
9.300% due 04/01/98 5,000 5,000
------------
54,535
------------
Total Corporate Bonds and Notes 424,321
(Cost $413,955) ============
- --------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCIES 2.4%
- --------------------------------------------------------------------------------
Federal Farm Credit Bank
5.630% due 05/26/98 1,945 1,944
Federal Home Loan Bank
5.090% due 05/11/98 2,000 2,000
4.780% due 04/19/99 (d) 3,000 2,975
Federal National Mortgage Assn.
5.350% due 04/01/98 5,930 5,931
5.200% due 07/10/98 1,500 1,498
4.875% due 10/15/98 1,000 996
5.720% due 02/16/99 (d) 5,000 5,003
5.720% due 01/29/01 2,000 1,984
1998 Annual Report See accompanying notes 67
<PAGE>
Schedule of Investments (Cont.)
Low Duration Fund
March 31, 1998
Principal
Amount Value
(000s) (000s)
================================================================================
Small Business Administration
7.750% due 01/25/13 (d) $ 1,031 $ 1,065
7.250% due 02/25/14 (d) 1,256 1,306
Student Loan Marketing Assn.
6.080% due 06/30/00 (d) 46,000 46,079
Tennessee Valley Authority
0.000% due 10/15/98 1,000 971
--------------
Total U.S. Government Agencies 71,752
(Cost $71,491) ==============
================================================================================
MORTGAGE-BACKED SECURITIES 109.7%
================================================================================
Collateralized Mortgage Obligations 9.4%
American Southwest Financial
5.100% due 06/02/99 9,863 9,826
Bear Stearns
8.200% due 09/25/22 132 132
Capstead Mortgage Corp.
7.500% due 02/25/23 2,149 2,167
Chase Mortgage Financial Corp.
10.000% due 11/25/09 951 983
7.500% due 10/25/24 15 15
Citicorp Mortgage Securities, Inc.
9.500% due 10/25/15 643 649
Collateralized Mortgage Obligation Trust
6.187% due 01/20/03 (d) 21 21
7.985% due 05/01/17 15,388 15,534
9.500% due 06/25/20 609 639
Countrywide
6.500% due 03/25/24 856 856
6.250% due 01/25/35 (d) 12,805 12,854
Dime Savings
7.178% due 11/01/18 (d) 3,001 2,752
Donaldson, Lufkin & Jenrette
11.000% due 08/01/19 1,648 1,872
7.411% due 05/25/24 (d) 3,481 3,527
Federal Home Loan Mortgage Corp.
9.000% due 12/15/05 158 158
10.000% due 09/15/09 14 15
12.500% due 09/30/13 1,139 1,245
6.250% due 07/15/14 5,217 5,221
5.400% due 08/15/14 1,392 1,390
7.000% due 04/25/15 1,044 1,046
11.000% due 11/30/15 7,229 8,426
10.000% due 07/15/19 525 576
8.500% due 09/15/19 212 212
5.650% due 11/15/19 878 878
9.000% due 11/15/19 2,334 2,432
7.950% due 02/15/20 822 824
8.250% due 03/15/20 91 91
7.500% due 04/15/20 2,900 2,981
8.000% due 04/15/20 2,500 2,559
10.000% due 05/15/20 350 381
7.500% due 12/15/20 2,000 2,053
9.000% due 12/15/20 8,275 8,649
9.500% due 01/15/21 2,478 2,659
8.000% due 04/15/21 2,979 3,078
9.000% due 05/15/21 479 506
Federal National Mortgage Assn.
8.950% due 05/25/03 96 100
9.000% due 07/25/03 711 735
9.400% due 07/25/03 153 159
5.750% due 02/25/05 3,960 3,950
6.875% due 06/25/09 3,526 3,551
5.750% due 04/25/16 3,023 3,003
8.750% due 05/25/19 132 137
9.300% due 05/25/19 53 55
9.000% due 07/25/19 531 546
9.500% due 03/25/20 2,921 3,492
9.500% due 05/25/20 1,450 1,661
8.000% due 07/25/20 4,272 4,309
9.000% due 03/25/21 7,622 8,117
9.000% due 04/25/21 269 284
8.000% due 03/25/22 162 167
5.000% due 01/25/24 386 380
8.500% due 04/01/25 8,861 9,282
8.500% due 03/18/27 3,288 3,394
Fleet Mortgage
7.200% due 10/25/23 868 864
General Electric Capital Mortgage
7.750% due 04/25/07 1,062 1,078
6.350% due 03/25/17 16,815 16,812
6.500% due 07/25/18 218 218
Glendale Federal Savings & Loan
7.308% due 03/25/30 (d) 2,652 2,686
Greenwich
8.886% due 11/25/24 (d) 1,919 1,973
Homestead Mortgage Acceptance Corp.
11.450% due 09/01/15 1,326 1,431
Housing Securities, Inc.
6.750% due 02/25/21 6,158 6,153
Independent National Mortgage Corp.
8.304% due 11/25/24 (d) 4,564 4,710
Nomura Asset Securities Corp.
6.625% due 01/25/09 3,994 4,006
Norwest Mortgage
12.375% due 01/01/14 215 223
12.500% due 02/01/14 609 651
12.250% due 04/01/14 378 391
Prudential Bache
6.213% due 09/01/18 (d) 47 47
8.400% due 03/20/21 7,741 8,030
Prudential Home
6.500% due 02/25/00 22 22
7.500% due 09/25/07 878 906
7.000% due 11/25/07 1,550 1,558
7.000% due 06/25/23 3,014 2,978
6.750% due 01/25/24 308 308
Prudential Securities
8.000% due 12/25/20 734 743
Residential Accredit Loans, Inc.
7.300% due 12/25/26 1,314 1,318
Residential Asset Securitization Trust
7.050% due 07/25/26 3,822 3,815
Residential Funding
5.899% due 07/01/19 (d) 1,339 1,300
7.042% due 09/01/19 (d) 250 246
Resolution Trust Corp.
6.817% due 09/25/19 (d) 2,346 2,337
6.043% due 01/25/21 (d) 211 209
6.884% due 07/25/21 (d) 13 13
6.309% due 09/25/21 (d) 1,100 1,092
6.970% due 10/25/21 (d) 1,339 1,343
8.625% due 10/25/21 24,000 24,292
7.019% due 03/25/22 (d) 2,805 2,808
10.000% due 05/25/22 145 146
7.250% due 10/25/23 60 59
6.900% due 02/25/27 6,236 6,039
6.113% due 09/27/27 (d) 2,580 2,543
9.000% due 09/25/28 273 282
Ryland Acceptance Corp.
8.000% due 03/01/18 2,728 2,779
Salomon Brothers Mortgage Securities
7.096% due 12/25/17 (d) 2,599 2,602
6.741% due 01/25/18 (d) 13 13
9.549% due 10/25/18 (d) 5,829 6,033
8.245% due 03/25/24 (d) 3,395 3,513
Sears Mortgage
7.882% due 08/25/23 (d) 807 826
8.457% due 05/25/32 (d) 664 662
Securitized Asset Sales, Inc.
6.750% due 08/25/25 10,849 10,894
7.500% due 10/25/25 3,928 3,928
Shearson Lehman
9.600% due 03/25/21 1,056 1,054
Westam Mortgage Financial Corp.
6.500% due10/02/17 5,428 5,435
--------------
281,898
==============
68 PIMCO Funds See accompanying notes
<PAGE>
Schedule of Investments (Cont.)
Low Duration Fund
March 31, 1998
Principal
Amount Value
(000s) (000s)
================================================================================
Federal Home Loan Mortgage Corporation 20.7%
5.500% due 05/01/98-04/01/07 (f) $ 10 $ 10
6.000% due 03/01/11-04/13/28 (f) 15,932 15,393
6.199% due 11/01/14-08/01/19 (d)(f) 2,537 2,557
6.207% due 01/01/30-12/01/30 (d)(f) 4,188 4,219
6.210% due 01/01/17-06/01/17 (d)(f) 944 951
6.213% due 09/01/15-06/01/30 (d)(f) 5,567 5,607
6.229% due 02/01/16-10/01/30 (d)(f) 591 595
6.250% due 01/01/20 (d) 293 295
6.500% due 01/01/02-05/13/28 (f) 250,031 247,298
7.000% due 01/01/17 (d) 81 83
7.125% due 03/01/17 (d) 347 354
7.250% due 07/01/07 12 12
7.500% due 09/01/06 141 142
7.581% due 02/01/20 (d) 4,318 4,490
7.714% due 11/01/22 (d) 3,163 3,238
7.742% due 11/01/23 (d) 2,125 2,193
7.747% due 10/01/23 (d) 3,367 3,476
7.834% due 01/01/24 (d) 3,783 3,908
7.842% due 03/01/24 (d) 251 261
7.870% due 06/01/24 (d) 1,797 1,845
7.995% due 07/01/18 (d) 581 605
7.996% due 01/01/24 (d) 2,269 2,327
7.997% due 09/01/23 (d) 730 758
8.000% due 07/01/06-04/13/28 (f) 224,917 233,068
8.027% due 12/01/22 (d) 1,834 1,901
8.250% due 10/01/07-11/01/07 (f) 54 56
8.500% due 07/01/01-04/13/28 (f) 80,786 84,525
8.750% due 02/01/01-04/01/02 (f) 91 93
9.000% due 05/01/02-07/01/04 (f) 66 68
9.250% due 07/01/01 6 6
9.500% due 03/01/01-12/01/04 (f) 135 141
9.750% due 03/01/01-11/01/08 (f) 1,190 1,269
10.000% due 04/01/01 7 7
10.500% due 07/01/00-02/01/16 (f) 106 110
10.750% due 10/01/00-08/01/11 (f) 595 649
11.250% due 10/01/14 7 8
11.500% due 10/01/15 2 2
11.750% due 11/01/10-08/01/15 (f) 18 22
14.000% due 09/01/12-12/01/12 (f) 6 8
---------------
622,550
===============
Federal Housing Administration 0.5%
5.871% due 11/01/19 717 738
6.950% due 04/01/14 1,748 1,828
7.430% due 10/01/19-12/01/21 (f) 11,890 12,232
9.680% due 02/01/24 381 428
---------------
15,226
===============
Federal National Mortgage Association 19.4%
6.000% due 05/01/11-12/25/18 (f) 378 375
6.135% due 04/01/18 (d) 8,246 8,282
6.199% due 04/23/28 (d) 45,000 45,295
6.256% due 04/25/22 (d) 435 439
6.500% due 06/01/08-04/13/28 (f) 2,033 2,011
6.875% due 01/01/21 (d) 834 846
7.000% due 04/01/02-09/01/07 (f) 282 285
7.150% due 11/01/17 (d) 603 616
7.232% due 11/01/18 (d) 389 407
7.290% due 07/01/17 (d) 954 987
7.500% due 04/01/24-05/01/24 (f) 17,550 18,043
7.788% due 10/01/24 (d) 10,565 10,983
7.801% due 04/01/24 (d) 4,656 4,824
7.894% due 01/01/24 (d) 5,828 6,059
8.000% due 03/01/04-12/01/25 (f) 14,838 15,451
8.008% due 07/01/23 (d) 3,580 3,746
8.500% due 03/01/08-08/01/26 (f) 437,861 458,940
9.000% due 08/01/98 90 90
10.000% due 02/01/04-06/01/19 (f) 2,639 2,847
10.500% due 06/01/05-11/01/05 (f) 417 442
11.000% due 10/01/98-09/01/00 (f) 14 15
11.250% due 12/01/10-10/01/15 (f) 271 299
12.000% due 01/01/15-10/01/15 (f) 10 11
12.750% due 02/01/14-11/01/14 (f) 108 125
13.000% due 07/01/15 9 10
13.250% due 09/01/11 22 25
13.500% due 04/01/14 9 11
15.500% due 10/01/12-12/01/12 (f) 81 100
15.750% due 12/01/11 45 54
16.000% due 09/01/12-12/01/12 (f) 25 32
---------------
581,650
===============
Government National Mortgage Association 57.3%
6.000% due 01/20/26-08/20/26 (d)(f) 18,663 19,049
6.500% due 05/15/23-04/20/28 (d)(f) 85,054 86,972
7.000% due 03/15/11-09/20/26 (d)(f) 218,604 224,203
7.375% due 05/20/22-06/20/25 (d)(f) 40,496 41,649
7.500% due 02/15/22-04/20/28 (f) 209,735 215,498
8.000% due 07/15/04-04/20/28 (f) 1,093,212 1,133,027
8.500% due 04/15/22 19 21
9.750% due 07/15/13-02/15/20 (f) 1,192 1,306
10.750% due 10/15/98 5 5
11.750% due 07/15/13-08/15/15 (f) 141 158
12.000% due 06/20/15 22 25
13.500% due 05/15/11-11/15/12 (f) 35 42
16.500% due 12/15/11 1 1
---------------
1,721,956
===============
Other Mortgage-Backed Securities 1.2%
First Boston Mortgage Securities Corp.
8.300% due 08/20/09 292 297
Glendale Federal Savings & Loan
11.000% due 03/01/10 24 25
Great Western Savings & Loan
6.250% due 12/01/17 (d) 511 504
Home Savings of America
5.873% due 05/25/27 (d) 2,139 2,090
5.982% due 09/25/28 (d) 1,454 1,437
Imperial Savings & Loan
8.840% due 07/25/17 (d) 54 54
9.900% due 02/25/18 607 643
MDC Mortgage Funding
8.841% due 01/25/25 (d) 1,041 1,068
Resolution Trust Corp.
6.463% due 05/25/19 (d) 7,301 7,248
7.300% due 08/25/19 (d) 5,844 5,844
10.334% due 08/25/21 (d) 1,028 1,075
9.500% due 05/25/24 275 275
6.259% due 10/25/28 (d) 3,060 3,127
7.307% due 05/25/29 (d) 3,286 3,357
Ryland Acceptance Corp.
7.644% due 11/28/22 (d) 1,077 1,095
Salomon Brothers Mortgage Securities
11.500% due 09/01/15 816 888
8.046% due 12/25/17 (d) 403 395
Sears Mortgage
12.000% due 02/25/14 126 134
7.588% due 10/25/22 (d) 4,524 4,664
Western Federal Savings & Loan
6.514% due 06/25/18 (d) 33 32
6.614% due 11/25/18 (d) 237 237
10.069% due 02/01/20 (d)(i) 63 66
---------------
34,555
===============
Stripped Mortgage-Backed Securities 1.2%
Federal Home Loan Mortgage Corp. (IO)
7.000% due 07/15/04 726 21
6.250% due 09/15/04 3,743 161
6.000% due 02/15/06 5,493 269
9.982% due 07/15/06 63 763
10.195% due 08/15/06 16 237
11.944% due 12/15/06 33 612
6.000% due 10/15/07 2,542 194
6.000% due 02/15/08 7,262 610
6.500% due 02/25/13 2,140 35
6.500% due 08/25/13 5,235 166
7.000% due 08/15/18 7,321 1,317
7.500% due 12/15/18 5,181 519
7.000% due 04/15/19 5,284 317
6.500% due 05/15/19 13,054 1,392
6.500% due 06/15/19 12,487 1,077
10.496% due 04/15/21 31 573
6.500% due 04/15/22 7,803 972
7.000% due 05/15/23 775 116
4.000% due 01/15/24 20,919 5,138
1998 Annual Report See accompanying notes 69
<PAGE>
Schedule of Investments (Cont.)
Low Duration Fund
March 31, 1998
Principal
Amount Value
(000s) (000s)
===============================================================================
Federal National Mortgage Assn. (IO)
6.000% due 07/25/05 $ 2,473 $ 130
7.272% due 09/25/06 61 974
6.000% due 02/25/08 8,962 810
256.000% due 11/01/08 45 244
0.100% due 03/25/09 (d) 34,644 816
6.500% due 03/25/09 11,411 1,786
8.815% due 06/25/16 68 538
9.987% due 12/25/18 16 126
7.500% due 03/25/19 7,006 860
6.500% due 05/25/19 10,000 1,977
6.500% due 04/25/20 24,326 2,466
7.000% due 05/25/21 13,037 1,489
8.598% due 02/25/22 50 862
6.500% due 03/25/23 8,117 1,149
4.875% due 03/25/24 (d) 14,602 971
Federal National Mortgage Assn. (PO)
0.000% due 07/25/22 4,510 4,214
0.000% due 09/25/22 79 67
Prudential Home (IO)
0.300% due 04/25/09 (d) 86,887 715
Resolution Trust Corp. (PO)
0.000% due 09/25/00 619 566
-------------
35,249
-------------
Total Mortgage-Backed Securities 3,293,084
(Cost $3,280,417) =============
================================================================================
ASSET-BACKED SECURITIES 0.1%
================================================================================
Delta Air Lines Equipment Trust
10.430% due 01/02/11 960 1,197
SCFC Boat Loan Trust
7.050% due 04/15/07 49 49
United Air Lines Equipment Trust
10.850% due 02/19/15 1,500 1,944
-------------
Total Asset-Backed Securities 3,190
(Cost $3,000) =============
================================================================================
SOVEREIGN ISSUES 3.1%
================================================================================
Banco Nacional de Obra y Servicios
6.875% due 10/01/98 10,000 9,825
Nacional Financiera
6.250% due 12/03/98 (d) 1,500 1,470
10.625% due 11/22/01 7,500 8,055
Province of Quebec
5.563% due 10/26/01 (d) 250 248
Republic of Argentina
5.719% due 04/01/00 (d) 1,086 1,062
6.688% due 03/31/05 (d) 68,495 63,187
United Mexican States
5.820% due 06/28/01 10,000 9,510
-------------
Total Sovereign Issues 93,357
(Cost $91,617) =============
================================================================================
FOREIGN CURRENCY-DENOMINATED ISSUES (c)(e) 1.4%
================================================================================
Banco Nacional de Comercio Exterior
8.000% due 05/06/98 DM 3,500 1,897
Commonwealth of Canada
8.750% due 12/01/05 C$ 1,150 982
4.250% due 12/01/26 (g) 51,514 37,580
-------------
Total Foreign Currency-Denominated Issues 40,459
(Cost $42,943) =============
================================================================================
PREFERRED STOCK 0.1%
================================================================================
Shares
Home Ownership Funding 3,000 2,873
-------------
Total Preferred Stock 2,873
(Cost $2,878) =============
================================================================================
SHORT-TERM INSTRUMENTS 6.7%
================================================================================
Commercial Paper 6.4%
E.I. Du Pont de Nemours
5.510% due 04/27/98 $ 2,000 $ 1,992
Federal Home Loan Mortgage Corp.
5.485% due 04/21/98 3,400 3,390
Ford Motor Credit Corp.
5.480% due 04/06/98 5,000 4,996
5.520% due 04/08/98 4,000 3,996
5.520% due 05/07/98 13,400 13,326
General Electric Capital Corp.
5.530% due 04/22/98 25,000 24,919
KFW International Finance, Inc.
5.510% due 05/19/98 27,000 26,802
National Rural Utilities Cooperative
5.500% due 05/21/98 1,700 1,687
New Center Asset Trust
5.530% due 04/22/98 40,000 39,871
5.530% due 05/20/98 49,000 48,631
Pfizer, Inc.
5.490% due 04/28/98 19,700 19,619
Procter & Gamble Co.
5.510% due 04/14/98 1,200 1,198
5.500% due 04/15/98 1,000 998
-------------
191,425
=============
Repurchase Agreement 0.2%
State Street Bank
5.000% due 04/01/98 7,143 7,143
(Dated 03/31/98. Collateralized by U.S. Treasury -------------
Note 6.125% 05/15/98 valued at $7,290,425.
Repurchase proceeds are $7,143,992.)
U.S. Treasury Bills (b)(f) 0.1%
4.961% due 04/16/98-07/23/98 1,625 1,619
-------------
Total Short-Term Instruments 200,187
(Cost $200,188) =============
Total Investments (a) 137.6% $ 4,129,223
(Cost $4,106,489)
Other Assets and Liabilities (Net) (37.6%) (1,127,585)
-------------
Net Assets 100.0% $ 3,001,638
=============
Notes to Schedule of Investments (amounts in thousands):
(a) At March 31, 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. $ 33,608
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (12,502)
-------------
Unrealized appreciation-net $ 21,106
=============
(b) Securities with an aggregate market value of $1,619 have been segregated
with the custodian to cover margin requirements for the following open future
contracts at March 31, 1998:
Unrealized
Type Contracts Depreciation
- --------------------------------------------------------------------------------
U.S. Treasury 10 Year Note (06/98) 1,400 $ (534)
70 PIMCO Funds See accompanying notes
<PAGE>
================================================================================
(c) Foreign forward currency contracts outstanding at March 31, 1998:
Principal
Amount
Covered Expiration Unrealized
Type by Contract Month Appreciation
- --------------------------------------------------------------------------------
Sell C$ 53,696 06/98 $ 61
Sell DM 3,544 05/98 41
-------------
$ 102
=============
(d) Variable rate security. The rate listed is as of March 31, 1998.
(e) Principal amount denoted in indicated currency:
C$- Canadian Dollar
DM- German Mark
(f) Securities are grouped by coupon and represent a range of maturities.
(g) Principal amount of the security is adjusted for inflation.
(h) Swap agreements outstanding at March 31, 1998:
Fixed Notional Unrealized
Type Rate (%) 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. 04/11/02 .3625 $ 30,000 $ 173
Broker: Merrill Lynch
Exp. 04/11/02 .3650 45,000 254
Broker: Merrill Lynch
Exp. 04/18/02 .3700 13,000 71
Broker: Merrill Lynch
Exp. 04/23/02 .3700 29,000 158
Broker: Merrill Lynch
Exp. 05/02/02 .3700 24,000 131
Broker: Merrill Lynch
Exp. 05/30/02 .3700 53,000 289
Broker: Merrill Lynch
Exp. 06/05/02 .3575 42,000 250
Broker: Deutsche Bank AG New York
Exp. 06/06/02 .3650 88,000 497
-------------
$ 1,823
=============
(i) Restricted security.
1998 Annual Report See accompanying notes 71
<PAGE>
Schedule of Investments
Low Duration Fund II
March 31, 1998
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
CORPORATE BONDS AND NOTES 8.2%
- --------------------------------------------------------------------------------
Banking and Finance 8.2%
Bear Stearns
5.560% due 08/25/00 (c) $ 10,000 $ 10,040
Golden West Financial Corp.
8.625% due 08/30/98 3,000 3,032
Goldman Sachs & Co.
5.805% due 01/25/01 (c) 10,000 10,000
Lehman Brothers, Inc.
5.938% due 01/18/00 (c) 10,000 10,036
-------------
Total Corporate Bonds and Notes 33,108
(Cost $32,997) =============
- --------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCIES 0.2%
- --------------------------------------------------------------------------------
Federal National Mortgage Assn.
6.150% due 12/14/01 475 473
7.500% due 02/11/02 175 185
-----------
Total U.S. Government Agencies 658
(Cost $656) ===========
- --------------------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS 0.7%
- --------------------------------------------------------------------------------
U.S. Treasury Notes
6.250% due 06/30/02 2,700 2,757
-----------
Total U.S. Treasury Obligations 2,757
(Cost $2,769) ===========
- --------------------------------------------------------------------------------
MORTGAGE-BACKED SECURITIES 134.0%
- --------------------------------------------------------------------------------
Collateralized Mortgage Obligations 9.6%
American Southwest Financial
7.500% due 10/01/18 1,000 1,008
Capstead Mortgage Corp.
7.500% due 02/25/23 2,076 2,094
Citicorp Mortgage Securities, Inc.
9.500% due 10/25/15 482 487
CMC Securities Corp.
7.679% due 04/25/25 (c) 4,153 4,273
Collateralized Mortgage Securities Corp.
11.880% due 04/01/15 239 251
Donaldson, Lufkin & Jenrette
7.411% due 05/25/24 (c) 1,758 1,781
Federal Home Loan Mortgage Corp.
12.900% due 05/01/14 313 328
9.250% due 10/25/18 149 160
7.000% due 08/25/22 1,000 1,002
Federal National Mortgage Assn.
8.000% due 11/25/23 9,406 9,666
Kidder Peabody Acceptance Corp.
7.150% due 04/25/25 1,309 1,320
Lomas & Nettleton
12.000% due 03/17/14 140 148
Prudential Home
7.500% due 06/25/25 1,600 1,606
Residential Asset Securitization Trust
9.000% due 07/25/26 3,506 3,542
Residential Funding
7.500% due 10/25/22 1,845 1,858
Resolution Trust Corp.
6.970% due 10/25/21 (c) 335 336
8.021% due 10/25/28 (c) 4,906 5,001
Ryland Acceptance Corp.
14.000% due 11/25/31 163 181
Salomon Brothers Mortgage Securities
7.605% due 11/25/22 (c) 2,469 2,518
Sears Mortgage
8.457% due 05/25/32 (c) 930 927
UBS Mortgage
8.000% due 07/25/20 185 185
-----------
38,672
===========
Federal Home Loan Mortgage Corporation 43.2%
6.500% due 05/13/28 $ 30,000 $ 29,672
8.000% due 07/01/24-04/13/28 (d) 35,087 36,341
8.270% due 07/01/23 (c) 2,625 2,713
8.500% due 05/13/28 100,000 104,438
10.500% due 09/01/15-12/01/18 (d) 93 104
-----------
173,268
===========
Federal National Mortgage Association 21.1%
6.199% due 04/23/28 (c) 51,800 52,140
7.625% due 01/01/24 (c) 1,850 1,922
8.500% due 06/01/98-06/01/26 (d) 27,749 29,225
9.000% due 06/01/98 17 17
10.500% due 05/01/12 1,365 1,505
-----------
84,809
===========
Government National Mortgage Association 59.1%
6.000% due 04/20/27 (c) 14,111 14,390
6.500% due 08/15/23-04/20/28 (d) 2,060 2,042
7.000% due 07/20/23-10/20/25 (c)(d) 41,239 42,260
7.375% due 04/20/22-06/20-25 (c)(d) 11,397 11,696
7.500% due 02/15/22-04/20/28 (d) 13,812 14,196
8.000% due 03/15/23-04/20/28 (d) 146,102 151,297
9.000% due 07/20/16-12/20/17 (d) 1,055 1,138
-----------
237,019
===========
Other Mortgage-Backed Securities 1.0%
Guardian
8.034% due 07/25/19 (c) 141 139
Resolution Trust Corp.
6.463% due 05/25/19 (c) 1,587 1,576
Sears Mortgage
6.500% due 03/25/17 162 159
7.588% due 10/25/22 (c) 1,885 1,943
-----------
3,817
===========
Stripped Mortgage-Backed Securities 0.0%
Volvo Car Finance Grantor Trust (PO)
0.000% due 08/12/98 9 9
-----------
Total Mortgage-Backed Securities 537,594
(Cost $536,029) ===========
- --------------------------------------------------------------------------------
ASSET-BACKED SECURITIES 1.5%
- --------------------------------------------------------------------------------
Conti Mortgage Home Equity Loan Trust
6.190% due 10/15/11 (c) 3,719 3,713
EQCC Home Equity Loan Trust
6.100% due 10/15/03 2,303 2,307
-----------
Total Asset-Backed Securities 6,020
(Cost $6,022) ===========
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 45.7%
- --------------------------------------------------------------------------------
Certificates of Deposit 2.5%
Bankers Trust
5.900% due 07/14/98 10,000 10,000
-----------
Commercial Paper 42.7%
American Express Credit
5.530% due 04/22/98 10,600 10,566
Campbell Soup Co.
5.500% due 05/01/98 8,500 8,461
5.500% due 05/29/98 9,800 9,713
E.I. Du Pont de Nemours
5.510% due 04/07/98 7,700 7,693
5.530% due 04/21/98 10,000 9,969
Emerson Electric Co.
5.500% due 04/23/98 1,000 997
5.500% due 04/24/98 900 897
Federal Home Loan Mortgage Corp.
5.485% due 04/21/98 13,000 12,960
Federal National Mortgage Assn.
5.490% due 04/30/98 13,700 13,639
Florida Power Corp.
5.490% due 05/27/98 3,500 3,470
Ford Motor Credit Corp.
5.520% due 04/08/98 15,000 14,984
72 PIMCO Funds See accompanying notes
<PAGE>
Schedule of Investments
Low Duration Fund II
March 31, 1998
Principal
Amount Value
(000s) (000s)
================================================================================
General Electric Capital Corp.
5.530% due 04/09/98 $ 15,000 $ 14,982
General Motors Acceptance Corp.
5.540% due 04/15/98 11,600 11,575
5.740% due 06/10/98 1,000 989
Motorola, Inc.
5.500% due 04/09/98 7,000 6,991
5.510% due 04/23/98 5,000 4,983
National Rural Utilities Cooperative
5.430% due 04/09/98 1,000 999
5.510% due 06/12/98 2,300 2,274
New Center Asset Trust
5.490% due 04/07/98 1,700 1,698
5.450% due 04/08/98 5,000 4,995
Pitney Bowes Credit Corp.
5.510% due 04/23/98 10,800 10,764
Procter & Gamble Co.
5.450% due 04/09/98 10,700 10,687
5.510% due 04/14/98 5,000 4,990
Wisconsin Electric Power & Light
5.530% due 04/07/98 1,700 1,698
5.500% due 04/10/98 200 200
-----------
171,174
===========
Repurchase Agreement 0.4%
State Street Bank
5.000% due 04/01/98 1,752 1,752
-----------
(Dated 03/31/98. Collateralized by U.S. Treasury
Note 6.250% 03/31/99 valued at $1,791,403.
Repurchase proceeds are $1,752,243.)
U.S. Treasury Bills (b)(d) 0.1%
4.928% due 04/16/98-07/23/98 470 466
-----------
Total Short-Term Instruments 183,392
(Cost $183,392) ===========
Total Investments (a) 190.3% $ 763,529
(Cost $761,865)
Other Assets and Liabilities (Net) (90.3%) (362,269)
-----------
Net Assets 100.0% $ 401,260
===========
Notes to Schedule of Investments (amounts in thousands):
(a) At March 31, 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. $ 2,254
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (786)
-----------
Unrealized appreciation-net $ 1,468
===========
(b) Securities with an aggregate market value of $466
have been segregated with the custodian to cover margin
requirements for the following open future contracts at
March 31, 1998:
Unrealized
Appreciation/
Type Contracts (Depreciation)
- --------------------------------------------------------------------------------
U.S. Treasury 5 Year Note (06/98) 184 $ (36)
U.S. Treasury 10 Year Note (06/98) 226 2
-----------
$ (34)
===========
(c) Variable rate security. The rate listed is as of March 31, 1998.
(d) Securities are grouped by coupon and represent a range of maturities.
(e) Swap agreements outstanding at March 31, 1998:
Fixed Notional Unrealized
Type Rate (%) 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. 04/11/02 .3625 $ 5,000 $ 29
Broker: Merrill Lynch
Exp. 04/11/02 .3650 7,500 42
Broker: Merrill Lynch
Exp. 04/23/02 .3700 1,000 5
Broker: Merrill Lynch
Exp. 05/30/02 .3700 10,000 55
Broker: Merrill Lynch
Exp. 06/05/02 .3575 4,000 24
Broker: Deutsche Morgan Grenfell
Exp. 06/06/02 .3650 10,000 56
-----------
$ 211
===========
1998 Annual Report See accompanying notes 73
<PAGE>
Schedule of Investments
Low Duration Fund III
March 31, 1998
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
CORPORATE BONDS AND NOTES 6.0%
- --------------------------------------------------------------------------------
Banking and Finance 2.1%
Heller Financial
5.755% due 08/25/00 (d) $ 500 $ 501
--------------
Industrials 1.8%
Teleport Communications
0.000% due 07/01/07 (e) 500 433
--------------
Utilities 2.1%
Commonwealth Edison
5.748% due 06/15/02 (d) 500 499
--------------
Total Corporate Bonds and Notes 1,433
(Cost $1,435) ==============
- --------------------------------------------------------------------------------
MORTGAGE-BACKED SECURITIES 79.3%
- --------------------------------------------------------------------------------
Collateralized Mortgage Obligations 4.0%
Federal Home Loan Mortgage Corp.
8.500% due 10/15/24 935 947
--------------
Federal Home Loan Mortgage Corporation 6.1%
8.000% due 04/13/28 1,000 1,035
8.750% due 10/01/01 426 433
--------------
1,468
==============
Federal National Mortgage Association 30.2%
6.175% due 01/01/23 (d) 327 331
6.199% due 11/01/16 (d) 15 15
6.210% due 09/01/16-11/01/26 (c)(d) 1,163 1,177
6.213% due 08/01/20-03/01/27 (c)(d) 2,193 2,216
6.230% due 10/01/16-02/01/17 (c)(d) 1,133 1,148
6.237% due 02/01/21 (d) 120 121
8.500% due 03/01/25-05/01/25 (c)(d) 2,105 2,208
--------------
7,216
==============
Government National Mortgage Association 39.0%
6.500% due 06/20/27 (d) 2,012 2,059
8.000% due 07/15/26-04/20/28 (c) 7,000 7,251
--------------
9,310
--------------
Total Mortgage-Backed Securities 18,941
(Cost $18,878) ==============
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 40.3%
- --------------------------------------------------------------------------------
Certificates of Deposit 2.1%
Bankers Trust
5.900% due 07/14/98 500 500
--------------
Commercial Paper 37.1%
BellSouth Telecommunications, Inc.
5.510% due 04/21/98 1,000 997
E.I. Du Pont de Nemours
5.450% due 04/09/98 400 400
5.510% due 04/22/98 600 598
Electricite de France
5.500% due 04/13/98 200 200
Emerson Electric Co.
5.500% due 04/24/98 1,000 996
Federal National Mortgage Assn.
5.430% due 04/29/98 1,600 1,593
5.490% due 04/30/98 100 100
Ford Motor Credit Corp.
5.550% due 04/02/98 500 500
General Electric Capital Corp.
5.540% due 04/07/98 700 699
5.540% due 04/15/98 400 399
General Motors Acceptance Corp.
5.470% due 04/08/98 600 599
National Rural Utilities Cooperative
5.500% due 06/24/98 500 493
New Center Asset Trust
5.490% due 04/07/98 400 400
Southwestern Public Service Co.
5.510% due 04/24/98 400 398
5.540% due 04/24/98 100 100
Wisconsin Electric Power & Light
5.530% due 04/07/98 400 400
--------------
8,872
==============
Repurchase Agreement 0.9%
State Street Bank
5.000% due 04/01/98 220 220
(Dated 03/31/98. Collateralized by U.S. Treasury
Note 6.250% 06/30/98 valued at $228,918.
Repurchase proceeds are $220,031.)
U.S. Treasury Bills (b)(c) 0.2%
5.009% due 04/16/98-07/23/98 45 45
--------------
Total Short-Term Instruments 9,637
(Cost $9,637) ==============
Total Investments (a) 125.6% $ 30,011
(Cost $29,950)
Other Assets and Liabilities (Net) (25.6%) (6,115)
--------------
Net Assets 100.0% $ 23,896
==============
Notes to Schedule of Investments (amounts in thousands):
(a) At March 31, 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. $ 83
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (22)
--------------
Unrealized appreciation-net $ 61
==============
(b) Securities with an aggregate market value of $45
have been segregated with the custodian to cover margin
requirements for the following open future contracts at
March 31, 1998:
Unrealized
Type Contracts Depreciation
- -------------------------------------------------------------------------------
U.S. Treasury 10 Year Note (06/98) 35 $ (14)
(c) Securities are grouped by coupon and represent a range of maturities.
(d) Variable rate security. The rate listed is as of March 31, 1998
(e) Security becomes interest bearing at a future date.
(f) Swap agreements outstanding at March 31, 1998:
Fixed Notional Unrealized
Type Rate (%) 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. 05/30/02 .3700 $ 1,000 $ 5
74 PIMCO Funds See accompanying notes
<PAGE>
Schedule of Investments
Low Duration Mortgage Fund
March 31, 1998
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
CORPORATE BONDS AND NOTES 2.7%
- --------------------------------------------------------------------------------
Banking and Finance 2.7%
Heller Financial
6.250% due 12/15/98 $ 100 $ 100
-------------
Total Corporate Bonds and Notes 100
=============
(Cost $100)
- --------------------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS 2.6%
- --------------------------------------------------------------------------------
Treasury Inflation Protected Securities
3.625% due 07/15/02 (d) 100 99
-------------
Total U.S. Treasury Obligations 99
=============
(Cost $100)
- --------------------------------------------------------------------------------
MORTGAGE-BACKED SECURITIES 152.3%
- --------------------------------------------------------------------------------
Collateralized Mortgage Obligations 22.7%
Federal Home Loan Mortgage Corp.
8.000% due 11/15/26 222 241
Federal National Mortgage Assn.
8.000% due 07/25/22 570 609
-------------
850
=============
Federal Housing Administration 4.7%
7.430% due 03/01/22 173 177
-------------
Federal National Mortgage Association 6.5%
6.203% due 08/01/29 (b) 242 243
-------------
Government National Mortgage Association 118.4%
7.000% due 12/20/17-08/20/25 (b)(c)(e) 1,934 1,984
7.375% due 05/20/16-06/20/25 (b)(c)(e) 1,405 1,441
7.500% due 04/20/28 850 872
11.250% due 07/20/15 125 141
-------------
4,438
-------------
Total Mortgage-Backed Securities 5,708
=============
(Cost $5,679)
- --------------------------------------------------------------------------------
ASSET-BACKED SECURITIES 2.7%
- --------------------------------------------------------------------------------
The Money Store Home Equity Trust
6.345% due 11/15/21 100 100
-------------
Total Asset-Backed Securities 100
-------------
(Cost $100)
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 7.7%
- --------------------------------------------------------------------------------
Commercial Paper 2.7%
Caisse d'Amortissement
5.520% due 04/27/98 100 100
-------------
Repurchase Agreement 5.0%
State Street Bank
5.000% due 04/01/98 188 188
-------------
(Dated 03/31/98. Collateralized by U.S. Treasury
Note 5.750% 12/31/98 valued at $193,088.
Repurchase proceeds are $188,026.)
Total Short-Term Instruments 288
=============
(Cost $288)
Total Investments (a) 168.0% $ 6,295
(Cost $6,267)
Other Assets and Liabilities (Net) (68.0%) (2,547)
-------------
Net Assets 100.0% $ 3,748
=============
- --------------------------------------------------------------------------------
Schedule of Investments (amounts in thousands):
(a) At March 31, 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. $ 31
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (4)
-------------
Unrealized appreciation-net $ 27
=============
(b) Variable rate security. The rate listed is as of March 31, 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 January 22, 1998 for
maturity April 23, 1998 paying interest at 5.54%. The following securities were
segregated with collateral for reverse repurchase agreements:
Type Maturity Value
- --------------------------------------------------------------------------------
Government National Mortgage Assn. 7.375% 04/20/25 $ 167
Government National Mortgage Assn. 7.375% 05/20/25 694
Government National Mortgage Assn. 7.000% 08/20/25 559
-------------
$ 1,420
=============
1998 Annual Report See accompanying notes 75
<PAGE>
Schedule of Investments
Short-Term Fund
March 31, 1998
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
CORPORATE BONDS AND NOTES 40.8%
- --------------------------------------------------------------------------------
Banking and Finance 23.5%
Ahmanson (H.F.) & Co.
6.330% due 04/15/98 $ 5,800 $ 5,800
Associates Corp. of North America
8.800% due 08/01/98 646 652
6.375% due 08/15/98 1,600 1,602
AT&T Capital Corp.
5.900% due 07/10/98 100 100
5.870% due 08/28/98 500 500
5.850% due 01/05/99 3,585 3,579
6.160% due 12/03/99 1,000 998
Banco Latino
6.600% due 04/17/98 300 300
Capital One Bank
6.740% due 05/31/99 875 879
Caterpillar Financial
5.460% due 04/01/99 (d) 2,000 2,002
Chrysler Financial Corp.
5.625% due 01/15/99 570 568
Dean Witter Discover
5.875% due 02/13/01 (d) 5,000 5,014
Donaldson, Lufkin & Jenrette
6.438% due 05/25/26 (d) 838 837
Edison Funding
6.000% due 12/20/99 5,000 4,999
Ford Motor Credit Corp.
5.400% due 11/09/98 (d) 2,600 2,607
5.500% due 03/23/99 (d) 1,000 998
5.460% due 04/05/99 (d) 1,500 1,492
General Motors Acceptance Corp.
6.000% due 12/30/98 1,575 1,576
Kansallis-Osake
7.830% due 09/30/43 (d) 5,000 5,013
Lehman Brothers, Inc.
6.840% due 09/25/98 1,000 1,004
5.550% due 09/01/99 (d) 3,000 2,992
Residential Funding
7.526% due 12/01/18 (d) 2,045 2,086
Salomon, Inc.
6.000% due 07/28/98 250 250
6.030% due 02/11/99 500 500
Salomon, Smith Barney Holdings
3.650% due 02/14/02 (g) 3,057 2,950
---------------
49,298
===============
Industrials 12.6%
Air Canada
6.425% due 07/31/05 (d) 2,000 1,890
Amerco, Inc.
6.850% due 09/18/98 1,000 1,003
6.890% due 10/15/00 5,000 5,014
COFIRI International, Inc.
6.112% due 10/27/00 (d) 2,000 1,995
Neodata Services
12.000% due 05/01/03 5,000 5,475
Occidental Petroleum
5.900% due 11/09/98 1,100 1,100
RJR Nabisco
8.750% due 04/15/04 4,800 5,076
Sears Roebuck & Co.
5.643% due 03/10/99 (d) 3,000 2,994
USX Corp.
6.375% due 07/15/98 2,000 2,002
---------------
26,549
===============
Utilities 4.7%
Beaver Valley Funding Corp.
8.250% due 06/01/03 944 969
Delmarva Power & Light
5.690% due 06/24/98 1,000 1,000
Gulf States Utilities
9.720% due 07/01/98 1,200 1,210
Niagara Mohawk Power
9.990% due 05/11/04 1,500 1,530
System Energy Resources
7.625% due 04/01/99 $ 2,500 $ 2,531
7.710% due 08/01/01 2,500 2,583
---------------
9,823
---------------
Total Corporate Bonds and Notes 85,670
(Cost $85,495) ===============
- --------------------------------------------------------------------------------
MORTGAGE-BACKED SECURITIES 26.3%
- --------------------------------------------------------------------------------
Collateralized Mortgage Obligations 4.7%
Dime Savings
7.178% due 11/01/18 (d) 468 429
Donaldson, Lufkin & Jenrette
6.150% due 10/17/20 (d) 1,202 1,237
7.829% due 09/01/21 (d) 73 75
7.233% due 06/25/22 (d) 418 421
7.649% due 05/25/23 (d) 607 616
Federal Home Loan Mortgage Corp.
5.750% due 10/15/16 225 224
Federal National Mortgage Assn.
5.800% due 08/25/15 2,079 2,072
5.875% due 03/25/18 378 378
5.000% due 02/25/22 402 394
Greenwich
7.678% due 04/25/22 (d) 184 188
7.319% due 10/25/22 (d) 150 152
Manufacturers Hanover Corp.
7.536% due 12/16/25 (d) 2,291 2,298
Prudential Bache
6.213% due 09/01/18 (d) 47 47
Prudential Home
6.750% due 01/25/24 617 615
Resolution Trust Corp.
8.907% due 12/25/20 (d) 158 160
6.884% due 07/25/21 (d) 7 7
7.024% due 06/25/24 (d) 589 591
---------------
9,904
===============
Federal National Mortgage Association 11.7%
6.199% due 05/01/36 (d) 6,174 6,231
6.203% due 08/01/29 (d) 988 996
6.205% due 05/01/36 (d) 16,719 16,871
6.210% due 05/01/36 (d) 588 594
---------------
24,692
===============
Government National Mortgage Association 7.6%
6.000% due 02/20/26-01/20/27 (d)(f) 10,816 11,019
7.000% due 09/20/23-08/20/25 (d)(f) 4,920 5,043
---------------
16,062
===============
Other Mortgage-Backed Securities 0.9%
Federal National Mortgage Assn.
1.000% due 06/25/23 317 309
First Nationwide Trust
6.722% due 10/25/18 (d) 38 38
Resolution Trust Corp.
8.625% due 10/25/21 424 425
6.681% due 05/25/29 (d) 1,047 1,054
---------------
1,826
===============
Stripped Mortgage-Backed Securities 1.4%
Federal Home Loan Mortgage Corp. (IO)
7.000% due 06/15/19 8,000 1,192
Federal National Mortgage Assn. (IO)
6.000% due 10/25/03 211 1
7.000% due 07/25/06 2,617 327
6.500% due 12/25/06 6,968 592
7.000% due 05/25/13 424 4
6.500% due 06/25/17 3,988 331
6.500% due 10/25/23 2,738 419
---------------
2,866
---------------
Total Mortgage-Backed Securities 55,350
(Cost $55,003) ===============
76 PIMCO Funds See accompanying notes
<PAGE>
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
ASSET-BACKED SECURITIES 7.2%
- --------------------------------------------------------------------------------
Community Trust Bancorp, Inc.
6.500% due 09/15/03 $ 3,900 $ 3,913
Green Tree Financial Group
6.420% due 04/15/28 8,207 8,245
LIBOR-Index Certificates
9.040% due 10/01/03 (d) 1,000 1,000
9.277% due 10/01/03 (d) 2,000 2,000
--------------
Total Asset-Backed Securities 15,158
(Cost $15,123) ==============
- --------------------------------------------------------------------------------
SOVEREIGN ISSUES 3.3%
- --------------------------------------------------------------------------------
Government of Malaysia
5.875% due 10/19/05 (d) 1,250 1,187
Nafinsa Finance Trust II
8.356% due 03/31/99 (d) 34 30
Republic of Argentina
6.688% due 03/31/05 (d) 6,175 5,696
--------------
Total Sovereign Issues 6,913
(Cost $6,505) ==============
- --------------------------------------------------------------------------------
FOREIGN CURRENCY-DENOMINATED ISSUES (c)(e) 2.1%
- --------------------------------------------------------------------------------
Commonwealth of Canada
4.250% due 12/01/26 (g) C$ 2,267 1,654
Commonwealth of New Zealand
4.500% due 02/15/16 (g) N$ 5,400 2,845
--------------
Total Foreign Currency-Denominated Issues 4,499
(Cost $5,214) ==============
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 21.6%
- --------------------------------------------------------------------------------
Certificates of Deposit 2.6%
Banco Latino
6.550% due 04/14/98 $ 1,500 1,500
Bank of Tokyo
6.050% due 05/13/98 4,000 4,000
--------------
5,500
==============
Commercial Paper 18.6%
Abbott Laboratories
5.520% due 04/21/98 900 897
Caisse d'Amortissement
5.520% due 04/27/98 7,000 6,972
E.I. Du Pont de Nemours
5.450% due 04/09/98 500 499
5.540% due 04/28/98 1,500 1,494
Emerson Electric Co.
5.500% due 04/23/98 2,500 2,492
General Electric Capital Corp.
5.500% due 05/20/98 10,000 9,925
General Motors Acceptance Corp.
5.740% due 06/10/98 1,000 989
KFW International Finance, Inc.
5.520% due 04/01/98 3,900 3,900
5.520% due 04/03/98 2,700 2,699
5.510% due 04/24/98 400 399
National Rural Utilities Cooperative
5.500% due 05/21/98 200 198
New Center Asset Trust
5.510% due 06/03/98 2,200 2,178
Southwestern Public Service Co.
5.530% due 05/08/98 1,100 1,094
TCI Communications, Inc.
6.062% due 05/08/98 2,200 2,186
Wisconsin Electric Power & Light
5.530% due 04/07/98 3,200 3,197
--------------
39,119
==============
Repurchase Agreement 0.4%
State Street Bank
5.000% due 04/01/98 807 807
--------------
(Dated 03/31/98. Collateralized by U.S.
Treasury Note 6.250% 06/30/98 Valued at $824,105.
Repurchase proceeds are $807,112.)
U.S. Treasury Bills (b)(f) 0.0%
4.977% due 04/16/98-06/25/98 $ 20 $ 20
--------------
Total Short-Term Instruments 45,446
(Cost $45,447) ==============
Total Investments (a) 101.3% $ 213,036
(Cost $212,787)
Other Assets and Liabilities (Net) (1.3%) (2,840)
--------------
Net Assets 100.0% $ 210,196
==============
Notes to Schedule of Investments (amounts in thousands):
(a) At March 31, 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. $ 1,992
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (1,162)
--------------
Unrealized appreciation-net $ 830
==============
(b) Securities with an aggregate market value of
$20 have been segregated with the custodian to
cover margin requirements for the following open
future contracts at March 31, 1998:
Unrealized
Type Contracts Depreciation
- --------------------------------------------------------------------------------
United Kingdom 90 Day LIBOR 10 $ (1)
U.S. Treasury 2 Year Note (06/98) 11 (1)
--------------
$ (2)
==============
(c) Foreign forward currency contracts outstanding at March 31, 1998:
Principal
Amount Unrealized
Covered Expiration Appreciation/
Type by Contract Month (Depreciation)
- --------------------------------------------------------------------------------
Sell C$ 2,390 06/24/98 $ (9)
Sell N$ 4,940 04/15/98 71
Sell 381 05/05/98 14
--------------
$ 76
==============
(d) Variable rate security. The rate listed is as of March 31, 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.
1998 Annual Report See accompanying notes 77
<PAGE>
Schedule of Investments
Long-Term U.S. Government Fund
March 31, 1998
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCIES 8.2%
- --------------------------------------------------------------------------------
Student Loan Marketing Assn.
6.080% due 06/30/00 (b) $ 1,000 $ 1,002
5.735% due 07/25/04 (b) 708 708
5.795% due 10/25/05 (b) 4,385 4,384
-----------
Total U.S. Government Agencies 6,094
(Cost $6,074) ===========
- --------------------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS 71.2%
- --------------------------------------------------------------------------------
Treasury Inflation Protected Securities
3.625% due 07/15/02 (c) 2,522 2,499
U.S. Treasury Bonds
9.125% due 05/15/18 9,100 12,382
8.875% due 02/15/19 1,800 2,406
8.125% due 05/15/21 2,150 2,708
6.875% due 08/15/25 6,750 7,524
6.000% due 02/15/26 13,600 13,579
6.500% due 11/15/26 3,100 3,307
6.625% due 02/15/27 1,250 1,356
6.125% due 11/15/27 2,500 2,564
U.S. Treasury Notes
5.750% due 11/15/00 3,100 3,106
6.625% due 03/31/02 1,500 1,550
-----------
Total U.S. Treasury Obligations 52,981
(Cost $52,884) ===========
- --------------------------------------------------------------------------------
MORTGAGE-BACKED SECURITIES 64.5%
- --------------------------------------------------------------------------------
Collateralized Mortgage Obligations 34.3%
Bear Stearns
7.100% due 06/25/24 385 385
California Federal Bank
6.593% due 08/25/30 (b) 1,329 1,333
Federal Home Loan Mortgage Corp.
9.500% due 01/15/05 98 102
6.750% due 07/15/05 1,146 1,152
6.000% due 03/15/07 150 150
5.500% due 05/15/07 100 99
8.000% due 02/15/15 274 287
7.000% due 03/25/15 1,200 1,206
7.000% due 07/15/22 931 939
6.500% due 05/15/23 123 116
7.000% due 05/15/23 918 927
7.000% due 08/15/23 186 182
7.000% due 09/15/23 68 68
6.500% due 11/15/23 408 391
6.500% due 11/25/23 146 137
6.500% due 12/15/23 476 460
6.500% due 02/15/24 13 13
6.500% due 03/15/24 305 285
8.000% due 12/15/24 1,000 1,028
Federal Housing Administration
7.430% due 11/01/23 1,548 1,592
7.430% due 01/01/24 407 421
Federal National Mortgage Assn.
7.500% due 04/25/99 1,007 1,014
5.750% due 06/25/06 590 588
5.600% due 07/25/06 400 397
4.950% due 06/25/10 497 496
7.000% due 03/25/13 872 876
6.250% due 12/25/13 68 64
5.500% due 04/25/14 232 231
5.750% due 12/25/16 250 249
8.750% due 08/25/20 204 209
8.000% due 03/25/22 41 42
7.000% due 04/25/22 738 738
7.000% due 06/25/22 356 345
7.000% due 10/25/22 639 655
7.800% due 10/25/22 762 787
6.900% due 05/25/23 119 116
7.000% due 05/25/23 548 544
7.000% due 06/25/23 362 362
6.500% due 12/25/23 171 158
6.500% due 01/25/24 178 166
7.000% due 05/18/27 1,344 1,336
First Boston Mortgage Securities Corp.
7.300% due 07/25/23 1,246 1,252
General Electric Capital Mortgage
7.500% due 03/25/19 56 57
Independent National Mortgage Corp.
8.474% due 01/25/25 (b) 326 335
Prudential Home
6.500% due 12/25/22 22 22
6.950% due 09/25/23 59 58
6.500% due 01/25/24 1,158 1,054
Residential Funding
8.290% due 03/25/25 (b) 256 262
Resolution Trust Corp.
6.950% due 06/25/23 (b) 112 112
Vendee Mortgage
6.500% due 06/15/24 1,913 1,753
-----------
25,551
===========
Federal Home Loan Mortgage Corporation 0.4%
7.642% due 05/01/22 (b) 163 168
7.850% due 06/01/22 (b) 143 149
-----------
317
===========
Federal Housing Administration 6.3%
5.871% due 11/01/19 163 168
7.430% due 12/28/17-12/01/23 (d) 4,361 4,493
-----------
4,661
===========
Federal National Mortgage Association 7.3%
6.199% due 04/23/28 (b) 1,500 1,510
6.213% due 11/01/35 (b) 433 436
8.006% due 10/01/24 (b) 316 327
8.500% due 09/01/27 3,000 3,143
-----------
5,416
===========
Government National Mortgage Association 11.3%
7.000% due 02/20/24-11/20/26 (b)(d) 6,973 7,132
7.375% due 06/20/23-04/20/26 (b)(d) 1,291 1,325
-----------
8,457
===========
Other Mortgage-Backed Securities 3.8%
Norwest Asset Securities Corp.
6.500% due 02/25/12 1,293 1,296
Resolution Trust Corp.
6.681% due 05/25/29 (b) 1,396 1,405
Ryland Acceptance Corp.
7.644% due 11/28/22 (b) 107 109
-----------
2,810
===========
Stripped Mortgage-Backed Securities 1.1%
Federal Home Loan Mortgage Corp. (IO)
7.000% due 09/15/99 138 7
7.000% due 03/15/03 1,715 272
7.000% due 07/15/04 218 6
6.500% due 08/15/06 252 19
6.500% due 10/15/06 394 39
6.500% due 11/15/06 515 39
6.000% due 10/15/07 464 38
7.000% due 02/15/26 223 19
Federal National Mortgage Assn. (IO)
6.500% due 02/25/07 264 25
6.500% due 08/25/20 861 79
6.500% due 09/25/21 898 129
7.000% due 12/25/21 500 70
Federal National Mortgage Assn. (PO)
0.000% due 09/25/23 60 59
-----------
801
-----------
Total Mortgage-Backed Securities 48,013
(Cost $46,705) ===========
- --------------------------------------------------------------------------------
ASSET-BACKED SECURITIES 4.1%
- --------------------------------------------------------------------------------
Conti Mortgage Home Equity Loan Trust
6.190% due 10/15/11 (b) 744 743
5.794% due 10/15/12 (b) 1,000 1,000
General Electric Capital Mortgage
6.555% due 08/25/07 1,315 1,313
-----------
Total Asset-Backed Securities 3,056
(Cost $3,053) ===========
78 PIMCO Funds See accompanying notes
<PAGE>
Schedule of Investments
Long-Term U.S. Government Fund
March 31, 1998
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 8.1%
- --------------------------------------------------------------------------------
Repurchase Agreements 8.1%
State Street Bank
5.000% due 04/01/98 $ 129 $ 129
(Dated 03/31/98. Collateralized by U.S.
Treasury Note 5.500% 11/15/98 valued at
$132,600. Repurchase proceeds are $129,018.)
Daiwa Securities America
5.800% due 04/01/98 5,900 5,900
(Dated 03/31/98. Collateralized by U.S.
Treasury Note 6.500% 08/15/05 valued at
$5,988,163. Repurchase proceeds are
$5,900,951.)
-----------
Total Short-Term Instruments 6,029
(Cost $6,029) ===========
Total Investments (a) 156.1% $ 116,173
(Cost $114,745)
Other Assets and Liabilities (Net) (56.1%) (41,734)
-----------
Net Assets 100.0% $ 74,439
===========
Notes to Schedule of Investments (amounts in thousands):
(a) At March 31, 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. $ 1,736
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (272)
-----------
Unrealized appreciation-net $ 1,464
===========
(b) Variable rate security. The rate listed is as of
March 31, 1998.
(c) Principal amount of the security is adjusted for
inflation.
(d) Securities are grouped by coupon and represent a
range of maturities.
1998 Annual Report See accompanying notes 79
<PAGE>
Schedule of Investments
Real Return Bond Fund
March 31, 1998
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
CORPORATE BONDS AND NOTES 16.6%
- --------------------------------------------------------------------------------
Banking and Finance 16.6%
Ford Motor Credit
5.626% due 02/13/03 (d) $ 350 $ 350
J.P. Morgan & Co.
6.189% due 02/15/12 (f) 350 325
Salomon, Smith Barney Holdings
3.650% due 02/14/02 (f) 255 246
Toyota Motor Credit Corp.
4.816% due 02/15/02 (f) 400 385
-------------
Total Corporate Bonds and Notes 1,306
=============
(Cost $1,331)
================================================================================
U.S. GOVERNMENT AGENCIES 10.3%
================================================================================
Federal Home Loan Bank
4.121% due 02/15/02 (d) 350 340
Student Loan Marketing Assn.
5.089% due 02/20/00 (d) 250 246
5.674% due 10/25/04 (d) 226 226
-------------
Total U.S. Government Agencies 812
=============
(Cost $811)
================================================================================
U.S. TREASURY OBLIGATIONS 119.5%
================================================================================
Treasury Inflation Protected Securities
3.625% due 07/15/02 (f) 6,000 6,054
3.625% due 07/15/02 (f) 404 400
3.375% due 01/15/07 (f) 3,060 2,968
-------------
Total U.S. Treasury Obligations 9,422
=============
(Cost $9,526)
================================================================================
ASSET-BACKED SECURITIES 19.1%
================================================================================
Capital Equipment Receivables Trust
6.030% due 02/15/00 250 251
First Plus Home Loan Trust
5.796% due 10/10/06 (d) 209 208
IMC Home Equity Loan Trust
5.765% due 05/21/12 (d) 262 262
NationsBank Auto Owner Trust
6.375% due 07/15/00 250 251
Pacific Southwest Bank
6.060% due 06/15/02 116 116
Premiere Auto Trust
6.150% due 03/06/00 250 251
The Money Store Home Equity Trust
6.815% due 07/15/06 164 164
-------------
Total Asset-Backed Securities 1,503
=============
(Cost $1,500)
================================================================================
FOREIGN CURRENCY-DENOMINATED ISSUES (b)(c) 3.2%
================================================================================
Commonwealth of Canada
4.250% due 12/01/26 (f) C$ 201 147
Commonwealth of New Zealand
4.500% due 02/15/16 (f) N$ 200 105
-------------
Total Foreign Currency-Denominated Issues 252
=============
(Cost $271)
================================================================================
PREFERRED STOCK 4.2%
================================================================================
Shares
Sanwa International 45,000 333
-------------
Total Preferred Stock 333
=============
(Cost $355)
================================================================================
SHORT-TERM INSTRUMENTS 4.2%
================================================================================
Principal
Amount
(000s)
Commercial Paper 2.5%
BellSouth Telecommunications, Inc.
5.510% due 04/22/98 $ 100 $ 100
5.490% due 05/20/98 100 99
-------------
199
=============
Repurchase Agreement 1.7%
State Street Bank
5.000% due 04/01/98 131 131
-------------
(Dated 03/31/98. Collateralized by U.S. Treasury
Note 5.250% 01/31/01 valued at $134,552.
Repurchase proceeds are $131,018.)
Total Short-Term Instruments 330
=============
(Cost $330)
Total Investments (a) 177.1% $ 13,958
(Cost $14,124)
Written Options (e) (0.7%) (55)
(Premiums $88)
Other Assets and Liabilities (Net) (76.4%) (6,021)
-------------
Net Assets 100.0% $ 7,882
=============
Notes to Schedule of Investments (amounts in thousands):
(a) At March 31, 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. $ 10
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (179)
-------------
Unrealized depreciation-net $ (169)
=============
(b) Foreign forward currency contracts outstanding at March 31, 1998:
Principal
Amount Unrealized
Covered Expiration Appreciation/
Type by Contract Month (Depreciation)
- --------------------------------------------------------------------------------
Buy C$ 465 04/98 $ (5)
Sell 599 04/98 (1)
Sell 70 06/98 0
Sell JY 45,000 06/98 16
Sell N$ 199 04/98 3
-------------
$ 13
=============
(c) Principal amount denoted in indicated currency:
C$ - Canadian Dollar
JY - Japanese Yen
N$ - New Zealand Dollar
(d) Variable rate security. The rate listed is as of March 31, 1998.
(e) Premiums received on written options:
Premiums
Type Par Received Value
- --------------------------------------------------------------------------------
Call - OTC Sanwa Communications
Strike @ 1,270 Exp. 02/26/99 $ 35 $ 88 $ 55
(f) Principal amount of the security is adjusted for inflation.
80 PIMCO Funds See accompanying notes
<PAGE>
Schedule of Investments
Foreign Bond Fund
March 31, 1998
Principal
Amount Value
(000s) (000s)
================================================================================
ARGENTINA (e) 2.0%
================================================================================
Republic of Argentina
2.976% due 04/01/01 (d) AP 4,578 $ 4,302
8.726% due 04/10/05 (d) $ 4,424 4,424
------------
Total Argentina 8,726
============
(Cost $8,334)
================================================================================
AUSTRALIA (c)(e) 6.4%
================================================================================
Australian Wheat Board
5.460% due 04/23/98 7,100 7,076
5.450% due 04/23/98 3,500 3,488
Commonwealth of Australia
9.500% due 08/15/03 A$ 500 393
10.000% due 02/15/06 2,070 1,745
8.750% due 08/15/08 3,800 3,088
7.500% due 09/15/09 15,630 11,769
------------
Total Australia 27,559
============
(Cost $28,390)
================================================================================
AUSTRIA 0.2%
================================================================================
Oesterreichische
5.500% due 04/20/98 $ 1,000 997
------------
Total Austria 997
============
(Cost $997)
================================================================================
BELGIUM (c)(e) 1.2%
================================================================================
Kingdom of Belgium
9.000% due 03/28/03 BF 200 6
5.100% due 11/21/04 (d) 183,200 5,284
------------
Total Belgium 5,290
============
(Cost $6,087)
================================================================================
CANADA (c)(e) 3.2%
================================================================================
Commonwealth of Canada
6.000% due 04/02/98 C$ 7,840 5,523
8.000% due 06/01/23 6,152 5,638
Rogers Cantel, Inc.
10.500% due 06/01/06 2,500 1,962
Sears Canada
11.700% due 07/10/00 1,000 793
------------
Total Canada 13,916
============
(Cost $13,734)
================================================================================
COLOMBIA (c)(e) 0.3%
================================================================================
Republic of Columbia
3.000% due 12/22/00 JY 150,000 1,141
------------
Total Colombia 1,141
============
(Cost $1,166)
================================================================================
CROATIA 1.0%
================================================================================
Republic of Croatia
6.500% due 07/31/06 (d) $ 2,293 2,103
6.500% due 07/31/10 (d) 2,250 1,997
------------
Total Croatia 4,100
============
(Cost $4,311)
================================================================================
DENMARK (c)(e) 1.5%
================================================================================
Kingdom of Denmark
8.000% due 05/15/03 DK 29,500 4,796
8.000% due 03/15/06 8,840 1,494
------------
Total Denmark 6,290
============
(Cost $6,865)
================================================================================
FINLAND (c)(e) 5.8%
================================================================================
Republic of Finland
7.378% due 08/14/98 FM 46,000 $ 8,090
7.250% due 04/18/06 68,000 14,015
6.000% due 04/25/08 3,000 576
8.250% due 10/15/10 10,000 2,274
------------
Total Finland 24,955
============
(Cost $25,043)
================================================================================
FRANCE (c)(e) 5.7%
================================================================================
Caisse d'Amortissement
5.460% due 04/14/98 $ 2,300 2,295
5.520% due 04/27/98 9,100 9,064
Republic of France
7.750% due 10/25/05 FF 17,000 3,255
5.250% due 04/25/08 60,000 9,912
------------
Total France 24,526
============
(Cost $24,653)
================================================================================
GERMANY (c)(e) 14.0%
================================================================================
KFW International Finance, Inc.
5.530% due 04/16/98 $ 14,600 14,566
Republic of Germany
5.000% due 11/12/02 DM 1,300 718
7.125% due 12/20/02 500 300
6.500% due 07/04/27 38,345 23,778
Treuhandanstalt
7.375% due 12/02/02 34,000 20,561
6.875% due 06/11/03 240 143
------------
Total Germany 60,066
============
(Cost $59,196)
================================================================================
GREECE (c)(e) 6.1%
================================================================================
Hellenic Republic
11.200% due 05/19/03 (d) GD 100,000 311
11.100% due 06/17/03 (d) 107,400 339
11.000% due 10/23/03 (d) 376,000 1,188
8.800% due 06/19/07 7,501,700 24,470
------------
Total Greece 26,308
============
(Cost $28,198)
================================================================================
ITALY (c)(e) 6.6%
================================================================================
Republic of Italy
6.000% due 01/01/00 IL36,440,000 20,499
7.250% due 11/01/26 11,515,000 7,759
------------
Total Italy 28,258
============
(Cost $28,720)
================================================================================
JAPAN (c)(e) 7.8%
================================================================================
Bank of Tokyo
6.000% due 05/11/98 $ 900 900
6.040% due 05/11/98 1,000 1,000
6.430% due 06/19/98 8,000 8,000
Government of Japan
6.400% due 03/20/00 JY 1,174,600 9,812
4.500% due 06/20/03 265,000 2,311
2.600% due 09/20/07 1,055,000 8,458
Sanwa Bank Limited
6.160% due 05/11/98 $ 2,940 2,940
------------
Total Japan 33,421
============
(Cost $34,655)
1998 Annual Report See accompanying notes 81
<PAGE>
Schedule of Investments (Cont.)
Foreign Bond Fund
March 31, 1998
Principal
Amount Value
(000s) (000s)
================================================================================
MEXICO (c)(e) 3.9%
================================================================================
Banco Nacional de Comercio Exterior
8.000% due 05/06/98 DM 13,000 $ 7,046
Bancomer
8.000% due 07/07/98 $ 2,000 2,000
Petroleos Mexicanos
7.750% due 09/30/98 FF 22,000 3,600
United Mexican States
7.000% due 06/02/03 C$ 6,250 4,188
------------
Total Mexico 16,834
============
(Cost $17,625)
================================================================================
NETHERLANDS (c)(e) 1.5%
================================================================================
Kingdom of Netherlands
6.250% due 07/15/98 DG 7,500 $ 3,627
5.750% due 01/15/04 4,880 2,473
8.250% due 02/15/07 400 237
------------
Total Netherlands 6,337
============
(Cost $7,173)
================================================================================
NEW ZEALAND (c)(e) 2.5%
================================================================================
Commonwealth of New Zealand
8.000% due 04/15/04 N$ 9,350 5,337
4.500% due 02/15/16 (g) 10,000 5,269
------------
Total New Zealand 10,606
============
(Cost $12,727)
================================================================================
SPAIN (c)(e) 1.8%
================================================================================
Kingdom of Spain
10.000% due 02/28/05 SP 947,100 7,809
------------
Total Spain 7,809
============
(Cost $8,242)
================================================================================
SUPRANATIONAL (c)(e) 0.4%
================================================================================
European Bank for Reconstruction & Development
9.000% due 04/22/98 PP 49,000 1,271
World Bank
10.250% due 04/11/02 31,000 614
------------
Total Supranational 1,885
============
(Cost $3,039)
================================================================================
SWEDEN (c)(e) 8.8%
================================================================================
Kingdom of Sweden
5.490% due 06/11/98 $ 3,500 3,462
10.250% due 05/05/00 SK 186,100 25,648
13.000% due 06/15/01 11,200 1,723
8.000% due 08/15/07 12,100 1,809
9.000% due 04/20/09 32,000 5,193
------------
Total Sweden 37,835
============
(Cost $39,532)
================================================================================
UNITED KINGDOM (c)(e) 12.5%
================================================================================
United Kingdom Gilt
8.000% due 12/07/00 BP 1,000 1,734
6.750% due 11/26/04 190 330
8.500% due 12/07/05 16,051 30,879
7.250% due 12/07/07 11,404 20,919
------------
Total United Kingdom 53,862
============
(Cost $50,110)
================================================================================
UNITED STATES 18.1%
================================================================================
Corporate Bonds and Notes 2.5%
J.P. Morgan & Co.
6.189% due 02/15/12 (g) $ 5,000 4,645
Salomon, Smith Barney Holdings
3.650% due 02/14/02 (g) 5,094 4,917
Tokai Capital Corp.
9.980% due 12/31/49 (d) 1,000 1,017
------------
10,579
============
================================================================================
Mortgage-Backed Securities 6.0%
Collateralized Mortgage Obligation Trust
9.000% due 05/01/14 $ 26 $ 26
Federal Home Loan Mortgage Corp.
9.050% due 06/15/19 138 147
Government National Mortgage Assn.
7.000% due 11/20/21-09/20/25 (d)(f) 14,386 14,740
7.375% due 05/20/22-05/20/23 (d)(f) 1,103 1,135
Independent National Mortgage Corp.
8.304% due 11/25/24 (d) 228 236
Morgan Stanley Mortgage
8.150% due 07/20/21 4 4
PaineWebber Mortgage
7.000% due 10/25/23 768 769
Resolution Trust Corp.
10.261% due 05/25/24 (d) 116 117
7.750% due 04/25/28 1,970 1,968
Sears Mortgage
6.855% due 06/25/22 (d) 181 183
Structured Asset Securities Corp.
5.890% due 01/25/00 (d) 6,260 6,260
------------
25,585
============
U.S. Government Agencies 3.3%
Federal Home Loan Bank
4.121% due 02/15/02 (d) 14,000 13,581
Student Loan Marketing Assn.
5.693% due 04/25/04 (d) 793 793
------------
14,374
============
U.S. Treasury Obligations 6.3%
Treasury Inflation Protected Securities
3.625% due 07/15/02 (g) 26,233 25,987
U.S. Treasury Bonds
6.000% due 02/15/26 1,150 1,148
------------
27,135
------------
Total United States 77,673
============
(Cost $77,944)
================================================================================
SHORT-TERM INSTRUMENTS 45.3%
================================================================================
Commercial Paper 44.6%
Abbott Laboratories
5.520% due 04/03/98 6,000 5,999
5.500% due 04/14/98 7,300 7,286
American Express Credit
5.530% due 04/22/98 12,200 12,161
Ameritech Corp.
5.500% due 04/13/98 8,000 7,985
E.I. Du Pont de Nemours
5.510% due 04/07/98 8,600 8,592
5.450% due 04/08/98 2,800 2,797
5.510% due 04/28/98 6,400 6,374
Emerson Electric Co.
5.440% due 04/03/98 6,100 6,098
5.510% due 04/27/98 2,000 1,992
Federal National Mortgage Assn.
5.490% due 04/30/98 9,000 8,960
Florida Power Corp.
5.520% due 04/22/98 4,000 3,987
Ford Motor Credit Corp.
5.490% due 04/03/98 2,700 2,699
5.420% due 04/10/98 2,500 2,497
5.460% due 04/10/98 10,000 9,986
5.550% due 04/17/98 1,400 1,397
General Electric Capital Corp.
5.520% due 04/09/98 8,000 7,990
5.500% due 05/20/98 9,800 9,727
General Motors Acceptance Corp.
5.470% due 04/08/98 6,800 6,793
IBM Credit Corp.
5.530% due 04/09/98 4,400 4,395
Motorola, Inc.
5.500% due 04/09/98 12,000 11,985
National Rural Utilities Cooperative
5.500% due 04/07/98 5,000 4,995
5.430% due 04/09/98 1,600 1,598
5.510% due 06/15/98 10,000 9,884
82 PIMCO Funds See accompanying notes
<PAGE>
Principal
Amount Value
(000s) (000s)
================================================================================
New Center Asset Trust
5.540% due 04/09/98 $ 12,000 $ 11,985
5.570% due 05/13/98 4,500 4,471
Procter & Gamble Co.
5.450% due 04/09/98 1,500 1,498
5.510% due 05/14/98 3,000 2,980
Shell Oil Co.
5.490% due 04/30/98 19,000 18,916
Tampa Electric
5.470% due 04/03/98 1,300 1,300
Wisconsin Electric Power & Light
5.500% due 04/10/98 4,600 4,594
------------
191,921
============
Repurchase Agreement 0.4%
State Street Bank
5.000% due 04/01/98 1,537 1,537
------------
(Dated 03/31/98. Collateralized by U.S. Treasury
Note 6.250% 03/31/99 valued at $1,569,993.
Repurchase proceeds are $1,537,213.)
U.S. Treasury Bills (b)(f) 0.3%
4.998% due 04/16/98-07/23/98 1,335 1,326
------------
Total Short-Term Instruments 194,784
============
(Cost $194,785)
Total Investments (a) 156.6% $ 673,178
(Cost $681,526)
Other Assets and Liabilities (Net) (56.6%) (243,372)
------------
Net Assets 100.0% $ 429,806
============
Notes to Schedule of Investments (amounts in thousands):
(a) At March 31, 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. $ 4,928
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (13,556)
------------
Unrealized depreciation-net $ (8,628)
============
(b) Securities with an aggregate market value of $1,326
have been segregated with the custodian to cover margin
requirements for the following open future contracts at
March 31, 1998:
Unrealized
Appreciation/
Type Contracts (Depreciation)
- --------------------------------------------------------------------------------
Commonwealth of Australia 3 Year Note (06/98) 218 $ 141
Government of Japan 10 Year Note (06/98) 25 96
Kingdom of Spain 10 Year Note (06/98) 45 22
Republic of France 10 Year Note (06/98) 64 33
U.S. Treasury 10 Year Note (06/98) 342 (12)
------------
$ 280
============
================================================================================
(c) Foreign forward currency contracts outstanding at March 31, 1998:
Principal
Amount Unrealized
Covered Expiration Appreciation/
Type by Contract Month (Depreciation)
- --------------------------------------------------------------------------------
Sell A$ 2,448 04/98 $ (12)
Buy BF 1,490 05/98 (1)
Sell 207,169 05/98 84
Buy BP 6,265 04/98 334
Buy 479 06/98 (2)
Sell 12,663 04/98 (544)
Sell 35 06/98 0
Buy C$ 39,183 06/98 85
Sell 22,583 04/98 (35)
Sell 5,439 06/98 7
Buy DG 1,140 05/98 (11)
Sell 1,935 05/98 15
Sell 4,898 06/98 19
Sell DK 11,788 04/98 34
Buy DM 48,287 04/98 (445)
Buy 2,303 05/98 (28)
Sell 1,694 04/98 2
Sell 2,349 05/98 27
Buy EC 2,346 04/98 2
Sell 2,346 04/98 35
Sell FF 45,422 05/98 148
Buy FM 16,428 04/98 (30)
Sell 67,596 04/98 274
Sell 44,402 05/98 99
Sell GD 552,751 04/98 190
Sell 327,723 05/98 0
Buy IL 1,030,308 04/98 (8)
Sell 1,680,336 04/98 1
Sell JY 495,228 05/98 167
Sell 758,191 06/98 132
Sell N$ 12,458 04/98 180
Sell 7,181 05/98 264
Buy NK 26,272 04/98 (50)
Buy 19,681 05/98 (30)
Buy 61,022 06/98 (73)
Sell SF 81,294 06/98 1,467
Sell SK 3,671 04/98 5
Buy SP 1,094,147 04/98 (113)
Sell 1,130,520 04/98 87
------------
$ 2,276
============
(d) Variable rate security. The rate listed is as of March 31, 1998.
(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
EC - European Currency Unit
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
SF - Swiss Franc
SK - Swedish Krona
SP - Spanish Peseta
1998 Annual Report See accompanying notes 83
<PAGE>
Schedule of Investments (Cont.)
Foreign Bond Fund
March 31, 1998
================================================================================
(f) Securities are grouped by coupon and represent a range of maturities.
(g) Principal amount of the security is adjusted for inflation.
(h) Swap agreements outstanding at March 31, 1998:
Fixed Notional Unrealized
Type Rate (%) 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. 04/18/02 .3700 $ 7,000 $ 38
Broker: Merrill Lynch
Exp. 04/23/02 .3700 3,000 16
Broker: Merrill Lynch
Exp. 05/30/02 .3700 6,000 33
Broker: Merrill Lynch
Exp. 06/05/02 .3575 3,000 18
Broker: Deutsche Bank AG New York
Exp. 06/06/02 .3650 7,000 40
-------------
$ 145
=============
Notional Unrealized
Type Amount Depreciation
- --------------------------------------------------------------------------------
Receive floating rate based on 6 month
Drachma/ATHIMID and pay fixed rate.
Broker: Merrill Lynch
Exp. 03/13/00 GD 5,258,759 $ (794)
84 PIMCO Funds See accompanying notes
<PAGE>
Schedule of Investments
Global Bond Fund
March 31, 1998
Principal
Amount Value
(000s) (000s)
================================================================================
ARGENTINA (e) 2.2%
================================================================================
Republic of Argentina
2.976% due 04/01/01 (d) AP 3,313 $ 3,114
8.726% due 04/10/05 (d) $ 2,610 2,610
-------------
Total Argentina 5,724
(Cost $5,442) =============
================================================================================
AUSTRALIA (c)(e) 5.4%
================================================================================
Commonwealth of Australia
8.750% due 08/15/08 A$ 3,600 2,925
7.500% due 09/15/09 14,510 10,926
-------------
Total Australia 13,851
(Cost $14,487) =============
================================================================================
BELGIUM (c)(e) 1.1%
================================================================================
Kingdom of Belgium
5.100% due 11/21/04 (d) BF 95,900 2,766
-------------
Total Belgium 2,766
(Cost $3,171) =============
================================================================================
CANADA (c)(e) 5.9%
================================================================================
Commonwealth of Canada
6.000% due 04/02/98 C$ 7,160 5,044
9.000% due 12/01/04 355 302
8.000% due 06/01/23 360 330
4.250% due 12/01/26 (g) 6,522 4,758
Rogers Cantel, Inc.
10.500% due 06/01/06 6,000 4,708
-------------
Total Canada 15,142
(Cost $15,076) =============
================================================================================
COLOMBIA (e) 0.3%
================================================================================
Republic of Columbia
3.000% due 12/22/00 JY 100,000 761
-------------
Total Colombia 761
(Cost $777) =============
================================================================================
CROATIA 1.0%
================================================================================
Republic of Croatia
6.500% due 07/31/06 (d) $ 1,525 1,399
6.500% due 07/31/10 (d) 1,440 1,278
-------------
Total Croatia 2,677
(Cost $2,860) =============
================================================================================
DENMARK (c)(e) 1.2%
================================================================================
Kingdom of Denmark
8.000% due 05/15/03 DK 16,400 2,666
8.000% due 03/15/06 3,300 558
-------------
Total Denmark 3,224
(Cost $3,595) =============
================================================================================
FINLAND (c)(e) 10.5%
================================================================================
Republic of Finland
7.378% due 08/14/98 FM 41,000 7,211
7.250% due 04/18/06 87,000 17,931
8.250% due 10/15/10 9,000 2,047
-------------
Total Finland 27,189
(Cost $27,466) =============
================================================================================
FRANCE (c)(e) 3.2%
================================================================================
Republic of France
5.250% due 04/25/08 FF 50,400 8,326
-------------
Total France 8,326
(Cost $8,433) =============
================================================================================
GERMANY (c)(e) 3.4%
================================================================================
KFW International Finance, Inc.
5.520% due 04/01/98 $ 8,000 $ 8,000
Republic of Germany
5.000% due 11/12/02 DM 1,400 773
-------------
Total Germany 8,773
(Cost $8,783) =============
================================================================================
GREECE (c)(e) 7.7%
================================================================================
Hellenic Republic
11.200% due 05/19/03 (d) GD 100,000 311
11.100% due 06/17/03 (d) 69,100 218
11.000% due 10/23/03 (d) 344,000 1,087
8.800% due 06/19/07 5,603,300 18,277
-------------
Total Greece 19,893
(Cost $21,435) =============
================================================================================
ITALY (c)(e) 3.4%
================================================================================
Republic of Italy
6.000% due 01/01/00 IL 15,580,000 8,764
-------------
Total Italy 8,764
(Cost $9,258) =============
================================================================================
JAPAN (c)(e) 8.6%
================================================================================
Bank of Tokyo
6.430% due 06/19/98 $ 10,000 10,000
Sanwa Bank Limited
6.160% due 05/11/98 2,100 2,100
6.530% due 06/22/98 10,000 10,014
-------------
Total Japan 22,114
(Cost $22,100) =============
================================================================================
MEXICO (c)(e) 1.1%
================================================================================
Banco Nacional de Comercio Exterior
8.000% due 05/06/98 DM 500 271
United Mexican States
7.000% due 06/02/03 C$ 4,000 2,680
-------------
Total Mexico 2,951
(Cost $3,107) =============
================================================================================
NETHERLANDS (c)(e) 0.3%
================================================================================
Kingdom of Netherlands
8.250% due 02/15/07 DG 1,400 831
-------------
Total Netherlands 831
(Cost $806) =============
================================================================================
NEW ZEALAND (c)(e) 2.8%
================================================================================
Commonwealth of New Zealand
8.000% due 04/15/04 N$ 8,050 4,595
4.500% due 02/15/16 (f) 5,000 2,635
-------------
Total New Zealand 7,230
(Cost $8,760) =============
================================================================================
SPAIN (c)(e) 1.8%
================================================================================
Kingdom of Spain
10.000% due 02/28/05 SP 562,800 4,641
-------------
Total Spain 4,641
(Cost $5,061) =============
================================================================================
SUPRANATIONAL (e) 0.7%
================================================================================
European Bank for Reconstruction & Development
9.000% due 04/22/98 PP 46,000 1,194
World Bank
10.250% due 04/11/02 29,000 574
-------------
Total Supranational 1,768
(Cost $2,849) =============
1998 Annual Report See accompanying notes 85
<PAGE>
Schedule of Investments (Cont.)
Global Bond Fund
March 31, 1998
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
SWEDEN (c)(e) 1.2%
- --------------------------------------------------------------------------------
Kingdom of Sweden
13.000% due 06/15/01 SK 10,300 $ 1,584
8.000% due 08/15/07 9,800 1,465
-----------
Total Sweden 3,049
(Cost $3,047) ===========
- --------------------------------------------------------------------------------
UNITED KINGDOM (c)(e) 12.1%
- --------------------------------------------------------------------------------
Equitable
8.000% due 08/29/49 (d) BP 6,100 10,839
United Kingdom Gilt
6.750% due 11/26/04 570 990
8.500% due 12/07/05 8,596 16,537
7.250% due 12/07/07 1,459 2,676
-----------
Total United Kingdom 31,042
(Cost $28,736) ===========
- --------------------------------------------------------------------------------
UNITED STATES (e) 36.7%
- --------------------------------------------------------------------------------
Corporate Bonds and Notes 7.0%
Dean Witter Discover
5.867% due 02/01/99 (d) $ 1,000 1,001
5.867% due 02/05/99 (d) 1,000 1,001
Hewlett-Packard Finance
5.625% due 11/20/00 DM 1,300 721
Kansallis-Osake
7.830% due 09/30/43 (d) $ 5,000 5,012
Salomon, Smith Barney Holdings
3.650% due 02/14/02 (g) 6,113 5,901
TCI Communications, Inc.
6.359% due 04/01/02 (d) 2,700 2,719
Tokai Capital Corp.
9.980% due 12/31/49 (d) 1,000 1,017
United Air Lines
10.670% due 05/01/04 500 604
-----------
17,976
===========
U.S. Government Agencies 0.3%
Student Loan Marketing Assn.
5.693% due 04/25/04 (d) 793 793
-----------
U.S. Treasury Obligations 20.6%
Treasury Inflation Protected Securities
3.625% due 07/15/02 (g) 32,287 31,984
U.S. Treasury Bonds
6.000% due 02/15/26 1,400 1,398
U.S. Treasury Notes
6.625% due 03/31/02 19,000 19,629
-----------
53,011
===========
Mortgage-Backed Securities 8.1%
Federal Home Loan Mortgage Corp.
7.795% due 05/01/23 (d) 883 914
Federal Housing Administration
7.399% due 02/01/21 1,601 1,647
Federal National Mortgage Assn.
6.500% due 04/01/09 672 676
7.500% due 11/01/01-01/01/02 (f) 858 871
7.750% due 03/01/24 (d) 349 359
7.878% due 11/01/23 (d) 558 573
Government National Mortgage Assn.
7.000% due 07/20/22-09/20/25 (d)(f) 8,894 9,109
7.375% due 05/20/23-06/20/23 (d)(f) 1,086 1,118
Independent National Mortgage Corp.
8.304% due 11/25/24 (d) 114 118
Residential Funding
8.290% due 03/25/25 (d) 1,278 1,311
Resolution Trust Corp.
8.000% due 04/25/25 1,000 1,033
Structured Asset Securities Corp.
5.890% due 01/25/00 (d) 3,130 3,130
-----------
20,859
===========
Asset-Backed Securities 0.7%
Pacific Southwest Bank
6.06% due 06/15/02 1,857 1,850
-----------
Total United States 94,489
(Cost $94,640) ===========
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 23.6%
- --------------------------------------------------------------------------------
Commercial Paper 22.2%
E.I. Du Pont de Nemours
5.450% due 04/09/98 $ 400 $ 400
Emerson Electric Co.
5.500% due 04/24/98 3,000 2,989
5.500% due 04/30/98 4,100 4,082
Federal Home Loan Mortgage Corp.
5.485% due 04/21/98 2,400 2,393
Ford Motor Credit Corp.
5.550% due 04/02/98 6,300 6,299
5.480% due 04/06/98 3,000 2,998
General Electric Capital Corp.
5.540% due 04/15/98 4,300 4,291
5.470% due 04/20/98 2,700 2,692
General Motors Acceptance Corp.
5.530% due 04/08/98 1,600 1,598
IBM Credit Corp.
5.500% due 05/06/98 3,900 3,879
Motorola, Inc.
5.500% due 04/06/98 7,000 6,995
National Rural Utilities Cooperative
5.510% due 06/15/98 7,400 7,314
New Center Asset Trust
5.530% due 04/22/98 2,900 2,891
5.530% due 05/20/98 5,200 5,161
Southwestern Public Service Co.
5.510% due 04/24/98 3,200 3,189
-----------
57,171
===========
Repurchase Agreement 0.8%
State Street Bank
5.000% due 04/01/98 2,146 2,146
-----------
(Dated 03/31/98. Collateralized by U.S.
Treasury Note 6.250% 03/31/99 valued at
$2,188,933. Repurchase proceeds are
$2,146,298.)
U.S. Treasury Bills (b)(f) 0.6%
5.011% due 04/16/98-07/23/98 1,555 1,539
-----------
Total Short-Term Instruments 60,856
(Cost $60,857) ===========
Total Investments (a) 134.2% $ 346,061
(Cost $350,746) ===========
Other Assets and Liabilities (Net) (34.2%) (88,240)
-----------
Net Assets 100.0% $ 257,821
===========
Notes to Schedule of Investments (amounts in thousands):
(a) At March 31, 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. $ 2,341
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (7,031)
-----------
Unrealized depreciation-net $ (4,690)
===========
86 PIMCO Funds See accompanying notes
<PAGE>
Schedule of Investments (Cont.)
Global Bond Fund
March 31, 1998
(b) Securities with an aggregate market value of $1,539 have been segregated
with the custodian to cover margin requirements for the following open future
contracts at March 31, 1998:
Unrealized
Appreciation/
Type Contracts (Depreciation)
Government of Japan 10 Year Note (06/98) 2 $ 8
Italian Lira 10 Year Future (06/98) 45 23
Kingdom of Spain 10 Year Note (06/98) 30 15
U.S. Treasury 10 Year Note (06/98) 618 65
U.S. Treasury 30 Year Bond (06/98) 158 (52)
----------------
$ 59
================
(c) Foreign forward currency contracts outstanding at March 31, 1998:
Principal
Amount Unrealized
Covered Expiration Appreciation/
Type by Contract Month (Depreciation)
- --------------------------------------------------------------------------------
Buy A$ 4,202 04/98 $ 28
Sell 1,208 04/98 13
Buy BF 281,950 05/98 (124)
Sell 5,908 05/98 0
Buy BP 4,263 04/98 184
Buy 811 06/98 (3)
Sell 184 04/98 (10)
Sell 902 06/98 0
Buy C$ 20,454 06/98 11
Sell 14,611 04/98 22
Sell 977 06/98 0
Buy DG 1,720 05/98 (17)
Buy 13,600 06/98 (54)
Sell 268 05/98 0
Buy DK 24,609 04/98 (71)
Sell 1,636 04/98 0
Buy DM 42,528 04/98 (368)
Buy 35,885 05/98 (418)
Sell 13,201 04/98 12
Sell 3,299 05/98 41
Buy EC 2,173 04/98 2
Sell 2,173 04/98 33
Buy FF 137,414 05/98 (472)
Sell 5,112 05/98 2
Buy FM 15,736 04/98 (28)
Sell 78,345 04/98 323
Sell 54,687 05/98 192
Sell GD 482,081 04/98 158
Sell 265,633 05/98 (21)
Buy IL 27,274,511 04/98 (162)
Buy JY 5,005,532 05/98 (2084)
Sell 122,050 05/98 34
Sell 154,135 06/98 28
Sell N$ 8,123 04/98 117
Sell 5,271 05/98 194
Buy NK 25,861 04/98 (49)
Buy 176,183 06/98 (209)
Sell SF 62,097 06/98 1083
Buy SK 61,094 04/98 (27)
Sell 29,344 04/98 9
Buy SP 1,634,505 04/98 (169)
Sell 303,814 04/98 23
---------------
$ (1,777)
===============
(d) Variable rate security. The rate listed is as of March 31, 1998.
(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
EC- European Currency Unit
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
SF- Swiss Franc
SK- Swedish Krona
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) Swap agreements outstanding at March 31, 1998:
Fixed Notional Unrealized
Type Rate (%) 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. 04/18/02 .3700 $ 6,000 $ 33
Broker: Merrill Lynch
Exp. 04/23/02 .3700 2,000 11
Broker: Merrill Lynch
Exp. 05/30/02 .3700 6,000 33
Broker: Merrill Lynch
Exp. 06/05/02 .3575 3,000 18
Broker: Deutsche Bank AG New York
Exp. 06/06/02 .3650 6,000 34
------------
$ 129
============
Notional Unrealized
Type Amount Depreciation
- --------------------------------------------------------------------------------
Receive floating rate based on 6 month
Drachma/ATHIMID and pay fixed rate.
Broker: Merrill Lynch
Exp. 03/13/00 GD 4,165,791 $ (629)
1998 Annual Report See accompanying notes 87
<PAGE>
Schedule of Investments
Global Bond Fund II
March 31, 1998
Principal
Amount Value
(000s) (000s)
================================================================================
ARGENTINA (e) 1.7%
================================================================================
Republic of Argentina
2.976% due 04/01/01 (d) AP 314 $ 295
8.726% due 04/10/05 (d) $ 410 410
--------------
Total Argentina 705
(Cost $694) ==============
================================================================================
AUSTRALIA (c)(e) 1.1%
================================================================================
Commonwealth of Australia
9.500% due 08/15/03 A$ 100 79
10.000% due 02/15/06 50 42
10.000% due 10/15/07 220 191
8.750% due 08/15/08 200 163
--------------
Total Australia 475
(Cost $485) ==============
================================================================================
BELGIUM (c)(e) 0.4%
================================================================================
Kingdom of Belgium
5.100% due 11/21/04 (d) BF 5,800 167
--------------
Total Belgium 167
(Cost $192) ==============
================================================================================
CANADA (c)(e) 2.0%
================================================================================
Commonwealth of Canada
6.000% due 04/02/98 C$ 560 395
8.000% due 06/01/23 75 69
4.250% due 12/01/26 (g) 175 128
Rogers Cantel, Inc.
10.500% due 06/01/06 320 251
--------------
Total Canada 843
(Cost $832) ==============
================================================================================
CROATIA 0.8%
================================================================================
Republic of Croatia
6.500% due 07/31/06 (d) $ 185 170
6.500% due 07/31/10 (d) 180 160
--------------
Total Croatia 330
(Cost $344) ==============
================================================================================
DENMARK (c)(e) 0.6%
================================================================================
Kingdom of Denmark
8.000% due 05/15/03 DK 1,600 260
--------------
Total Denmark 260
(Cost $292) ==============
================================================================================
FINLAND (c)(e) 1.8%
================================================================================
Republic of Finland
7.378% due 08/14/98 FM 3,000 528
8.250% due 10/15/10 1,000 227
--------------
Total Finland 755
(Cost $768) ==============
================================================================================
FRANCE (c)(e) 9.7%
================================================================================
Caisse d'Amortissement
5.520% due 04/27/98 $ 1,500 1,494
Republic of France
5.250% due 04/25/08 FF 15,500 2,561
--------------
Total France 4,055
(Cost $4,092) ==============
================================================================================
GERMANY (c)(e) 4.4%
================================================================================
KFW International Finance, Inc.
5.520% due 04/01/98 $ 700 $ 700
5.520% due 04/03/98 800 800
Republic of Germany
5.000% due 11/12/02 DM 600 331
--------------
Total Germany 1,831
(Cost $1,836) ==============
================================================================================
GREECE (c)(e) 3.8%
================================================================================
Hellenic Republic
11.100% due 06/17/03 (d) GD 7,400 23
11.000% due 10/23/03 (d) 33,600 106
8.800% due 06/19/07 445,500 1,453
--------------
Total Greece 1,582
(Cost $1,691) ==============
================================================================================
ITALY (c)(e) 2.8%
================================================================================
Republic of Italy
6.000% due 01/01/00 IL 1,735,000 976
7.250% due 11/01/26 310,000 209
--------------
Total Italy 1,185
(Cost $1,234) ==============
================================================================================
JAPAN (c)(e) 0.6%
================================================================================
Government of Japan
4.500% due 06/20/03 JY 15,000 131
Sanwa Bank Limited
6.160% due 05/11/98 130 130
--------------
Total Japan 261
(Cost $264) ==============
================================================================================
MEXICO (e) 0.8%
================================================================================
United Mexican States
7.000% due 06/02/03 C$ 500 335
--------------
Total Mexico 335
(Cost $357) ==============
================================================================================
NETHERLANDS (c)(e) 0.7%
================================================================================
Kingdom of Netherlands
6.250% due 07/15/98 DG 500 242
8.250% due 02/15/07 100 59
--------------
Total Netherlands 301
(Cost $354) ==============
================================================================================
NEW ZEALAND (c)(e) 0.9%
================================================================================
Commonwealth of New Zealand
10.000% due 03/15/02 N$ 30 18
8.000% due 04/15/04 600 342
--------------
Total New Zealand 360
(Cost $442) ==============
================================================================================
SPAIN (c)(e) 2.3%
================================================================================
Kingdom of Spain
10.250% due 11/30/98 SP 90,000 596
10.000% due 02/28/05 25,300 209
6.000% due 01/31/08 24,800 169
--------------
Total Spain 974
(Cost $1,111) ==============
================================================================================
SUPRANATIONAL (e) 0.3%
================================================================================
European Bank for Reconstruction & Development
9.000% due 04/22/98 PP 4,000 104
World Bank
10.250% due 04/11/02 2,000 40
--------------
Total Supranational 144
(Cost $228) ==============
88 PIMCO Funds See accompanying notes
<PAGE>
Schedule of Investments
Global Bond Fund II
March 31, 1998
Principal
Amount Value
(000s) (000s)
================================================================================
SWEDEN (c)(e) 12.8%
================================================================================
Kingdom of Sweden
5.520% due 04/02/98 $ 1,400 $ 1,400
10.250% due 05/05/00 SK 10,300 1,420
13.000% due 06/15/01 900 138
8.000% due 08/15/07 16,000 2,392
-------------
Total Sweden 5,350
(Cost $5,416) =============
================================================================================
UNITED KINGDOM (c)(e) 22.8%
================================================================================
Equitable
8.000% due 08/29/49 (d) BP 700 1,244
United Kingdom Gilt
8.000% due 12/07/00 3,600 6,244
8.500% due 12/07/05 768 1,477
7.250% due 12/07/07 325 596
-------------
Total United Kingdom 9,561
(Cost $9,339) =============
================================================================================
UNITED STATES (e) 18.1%
================================================================================
Corporate Bonds and Notes 3.9%
Dean Witter Discover
5.867% due 02/01/99 (d) $ 250 250
Hewlett-Packard Finance
5.625% due 11/20/00 DM 100 55
TCI Communications, Inc.
6.359% due 04/01/02 (d) $ 300 302
Tokai Capital Corp.
9.980% due 12/31/49 (d) 1,000 1,017
-------------
1,624
=============
U.S. Government Agencies 2.1%
Student Loan Marketing Assn.
6.010% due 10/25/07 (d) 900 900
-------------
U.S. Treasury Obligations 6.0%
Treasury Inflation Protected Securities
3.625% due 07/15/02 (g) 2,321 2,299
U.S. Treasury Bonds
6.000% due 02/15/26 200 200
-------------
2,499
=============
Mortgage-Backed Securities 5.9%
Government National Mortgage Assn.
7.000% due 11/20/21-11/20/26 (d)(f) 2,393 2,452
-------------
Asset-Backed Securities 0.2%
Daimler-Benz Vehicle Trust
5.850% due 07/20/03 89 89
-------------
Total United States 7,564
(Cost $7,550) =============
================================================================================
SHORT-TERM INSTRUMENTS 55.2%
================================================================================
Commercial Paper 53.7%
Abbott Laboratories
5.520% due 04/03/98 $ 1,500 1,499
BellSouth Telecommunications, Inc.
5.510% due 04/14/98 200 200
5.510% due 04/22/98 600 598
5.490% due 05/20/98 700 695
Campbell Soup Co.
5.500% due 05/01/98 1,500 1,493
E.I. Du Pont de Nemours
5.500% due 04/28/98 800 797
Federal Home Loan Mortgage Corp.
5.530% due 04/21/98 4,000 3,988
Federal National Mortgage Assn.
5.430% due 04/29/98 300 299
Florida Power & Light Co.
5.490% due 05/27/98 1,000 991
Ford Motor Credit Corp.
5.550% due 04/02/98 600 600
5.540% due 04/08/98 800 799
General Electric Capital Corp.
5.530% due 04/09/98 800 799
5.540% due 04/15/98 700 698
IBM Credit Corp.
5.530% due 04/09/98 600 599
5.530% due 04/09/98 200 200
National Rural Utilities Cooperative
5.500% due 05/21/98 400 397
5.500% due 06/24/98 1,500 1,481
New Center Asset Trust
5.530% due 04/22/98 1,500 1,495
Pfizer, Inc.
5.490% due 04/28/98 1,500 1,494
Procter & Gamble Co.
5.510% due 04/14/98 1,000 998
5.520% due 05/13/98 800 795
Wisconsin Electric Power & Light
5.510% due 04/07/98 800 799
5.530% due 04/07/98 800 799
-------------
22,513
=============
Repurchase Agreement 0.8%
State Street Bank
5.000% due 04/01/98 317 317
-------------
(Dated 03/31/98. Collateralized by U.S. Treasury
Note 6.250% 06/30/98 valued at $325,572.
Repurchase proceeds are $317,044.)
U.S. Treasury Bills (b)(f) 0.7%
5.047% due 04/16/98-07/23/98 295 292
-------------
Total Short-Term Instruments 23,122
(Cost $23,123) =============
Total Investments (a) 143.6% $ 60,160
(Cost $60,644)
Other Assets and Liabilities (Net) (43.6%) (18,258)
-------------
Net Assets 100.0% $ 41,902
=============
Notes to Schedule of Investments (amounts in thousands):
(a) At March 31, 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. $ 172
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (656)
-------------
Unrealized depreciation-net $ (484)
=============
(b) Securities with an aggregate market value of
$292 have been segregated with the custodian to
cover margin requirements for the following open
future contracts at March 31, 1998:
Unrealized
Appreciation/
Type Contracts (Depreciation)
- --------------------------------------------------------------------------------
Commonwealth of Australia 3 Year Note (06/98) 48 $ 31
Government of Japan 10 Year Note (06/98) 1 5
Kingdom of Spain 10 Year Note (06/98) 5 3
U.S. Treasury 10 Year Note (06/98) 143 20
U.S. Treasury 30 Year Bond (06/98) 9 (2)
-------------
$ 57
=============
1998 Annual Report See accompanying notes 89
<PAGE>
Schedule of Investments (Cont.)
Global Bond Fund II
March 31, 1998
================================================================================
(c) Foreign forward currency contracts outstanding at March 31, 1998:
Principal
Amount Unrealized
Covered Expiration Appreciation/
Type by Contract Month (Depreciation)
- --------------------------------------------------------------------------------
Buy A$ 30 04/98 $ 0
Sell 356 04/98 1
Buy BP 8 04/98 0
Buy 17 06/98 0
Sell 1,513 04/98 (76)
Sell 32 06/98 0
Buy C$ 725 06/98 1
Sell 497 04/98 (3)
Sell DG 39 05/98 0
Sell 94 06/98 0
Sell DK 275 04/98 1
Buy DM 1,887 04/98 (18)
Buy 3,225 05/98 (37)
Sell 2,060 04/98 14
Buy EC 190 04/98 0
Sell 190 04/98 3
Buy FF 70 05/98 0
Sell 131 05/98 0
Buy FM 4,585 04/98 (24)
Buy 2,400 05/98 (12)
Sell 3,238 04/98 13
Sell 5,076 05/98 17
Sell GD 39,012 04/98 13
Sell 17,102 05/98 (1)
Buy IL 58,842 04/98 0
Sell 81,419 04/98 0
Sell JY 47,018 06/98 8
Sell N$ 459 04/98 7
Sell 171 05/98 6
Buy NK 3,324 06/98 (4)
Buy SF 506 06/98 (15)
Sell 4,384 06/98 47
Sell SK 422 04/98 1
Buy SP 15,266 04/98 (1)
Sell 118,541 04/98 12
----------------
$ (47)
================
(d) Variable rate security. The rate listed is as of March 31, 1998.
(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
EC - European Currency Unit
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
SF - Swiss Franc
SK - Swedish Krona
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) Swap agreements outstanding at March 31, 1998:
Fixed Notional Unrealized
Type Rate (%) 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. 04/18/02 .3700 $ 1,000 $ 5
Notional Unrealized
Type Amount Depreciation
- --------------------------------------------------------------------------------
Receive floating rate based on 6 month
Drachma/ATHIMID and pay fixed rate.
Broker: Merrill Lynch
Exp. 03/12/00 GD 285,826 $ (43)
90 PIMCO Funds See accompanying notes
<PAGE>
<PAGE>
Schedule of Investments
Emerging Markets Bond Fund
March 31, 1998
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
ARGENTINA (e) 15.7%
- --------------------------------------------------------------------------------
Republic of Argentina
11.750% due 02/12/07 AP 400 $ 413
11.375% due 01/30/17 $ 250 282
-----------
Total Argentina 695
(Cost $637) ===========
- --------------------------------------------------------------------------------
BRAZIL 21.6%
- --------------------------------------------------------------------------------
Government of Brazil
8.000% due 04/15/14 1,140 959
-----------
Total Brazil 959
(Cost $981) ===========
- --------------------------------------------------------------------------------
BULGARIA 4.4%
- --------------------------------------------------------------------------------
Government of Bulgaria
6.563% due 07/28/11 (d) 250 195
-----------
Total Bulgaria 195
(Cost $186) ===========
- --------------------------------------------------------------------------------
COLOMBIA 3.8%
- --------------------------------------------------------------------------------
Republic of Columbia
7.125% due 05/11/98 170 170
-----------
Total Colombia 170
(Cost $170) ===========
- --------------------------------------------------------------------------------
CROATIA 5.0%
- --------------------------------------------------------------------------------
Republic of Croatia
6.500% due 07/31/10 (d) 250 222
-----------
Total Croatia 222
(Cost $223) ===========
- --------------------------------------------------------------------------------
ECUADOR 3.1%
- --------------------------------------------------------------------------------
Government of Ecuador
3.500% due 02/28/25 (d) 250 137
-----------
Total Ecuador 137
(Cost $136) ===========
- --------------------------------------------------------------------------------
MEXICO 11.4%
- --------------------------------------------------------------------------------
United Mexican States
11.375% due 09/15/16 250 293
6.250% due 12/31/19 250 212
-----------
Total Mexico 505
(Cost $497) ===========
- --------------------------------------------------------------------------------
PERU 3.9%
- --------------------------------------------------------------------------------
Government of Peru
4.000% due 03/07/17 (d) 250 171
-----------
Total Peru 171
(Cost $166) ===========
- --------------------------------------------------------------------------------
PHILIPPINES 5.0%
- --------------------------------------------------------------------------------
Republic of Philippines
6.656% due 01/05/05 (d) 233 221
-----------
Total Philippines 221
(Cost $225) ===========
- --------------------------------------------------------------------------------
RUSSIA 10.7%
- --------------------------------------------------------------------------------
Republic of Russia
6.719% due 12/15/15 (d) 400 283
6.719% due 12/15/20 (d) 300 191
-----------
Total Russia 474
(Cost $447) ===========
- --------------------------------------------------------------------------------
UNITED STATES 13.3%
- --------------------------------------------------------------------------------
Corporate Bonds and Notes 6.0%
Korea Development Bank
6.625% due 11/21/03 $ 300 $ 266
-----------
Asset-Backed Securities 7.3%
IMC Home Equity Loan Trust
5.765% due 05/21/12 (d) 174 174
NationsBank Auto Owner Trust
6.375% due 07/15/00 150 151
-----------
325
-----------
Total United States 591
(Cost $590) ===========
- --------------------------------------------------------------------------------
VENEZUELA 4.4%
- --------------------------------------------------------------------------------
Government of Venezuela
6.750% due 03/31/07 (d) 214 195
-----------
Total Venezuela 195
(Cost $191) ===========
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 15.9%
- --------------------------------------------------------------------------------
Commercial Paper 13.5%
E.I. Du Pont de Nemours
5.450% due 04/09/98 100 100
Ford Motor Credit Corp.
5.460% due 04/10/98 100 100
National Rural Utilities Cooperative
5.500% due 05/26/98 200 198
Southwestern Public Service Co.
5.540% due 04/24/98 100 100
Wisconsin Electric Power & Light
5.500% due 04/10/98 100 100
-----------
598
===========
Repurchase Agreement 2.0%
State Street Bank
5.000% due 04/01/98 88 88
-----------
(Dated 03/31/98. Collateralized by U.S. Treasury
Note 6.375% 04/30/99 valued at $93,096.
Repurchase proceeds are $88,012.)
U.S. Treasury Bills (b)(f) 0.4%
4.998% due 04/16/98-06/25/98 20 20
-----------
Total Short-Term Instruments 706
(Cost $706) ===========
Total Investments (a) 118.2% $ 5,241
(Cost $5,155)
Other Assets and Liabilities (Net) (18.2%) (808
-----------
Net Assets 100.0% $ 4,433
===========
Notes to Schedule of Investments (amounts in thousands):
(a) At March 31, 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. $ 103
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (49)
-----------
Unrealized appreciation-net $ 54
===========
1998 Annual Report See accompanying notes 91
<PAGE>
Schedule of Investments (Cont.)
Emerging Markets Bond Fund
March 31, 1998
================================================================================
(b) Securities with an aggregate market value of $20
have been segregated with the custodian to cover margin
requirements for the following open future contracts at
March 31, 1998:
Unrealized
Type Contracts Appreciation
- --------------------------------------------------------------------------------
U.S. Treasury 5 Year Note (06/98) 2 $ 1
(c) Foreign forward currency contracts outstanding at March 31, 1998:
Principal
Amount Unrealized
Covered Expiration Appreciation/
Type by Contract Month (Depreciation)
- --------------------------------------------------------------------------------
Buy DM 266 08/98 $ (2)
Sell DM 266 08/98 3
---------------
$ 1
===============
(d) Variable rate security. The rate listed is as of March 31, 1998.
(e) Principal amount denoted in indicated currency:
AP - Argentine Peso
DM - German Mark
(f) Securities are grouped by coupon and represent a range of maturities.
92 PIMCO Funds See accompanying notes
<PAGE>
Schedule of Investments
High Yield Fund
March 31, 1998
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
CORPORATE BONDS AND NOTES 80.9%
- --------------------------------------------------------------------------------
Banking and Finance 6.7%
Americo Life, Inc.
9.250% due 06/01/05 $ 2,000 $ 2,070
Arvin Capital
9.500% due 02/01/27 19,000 21,422
Bay View Capital Corp.
9.125% due 08/15/07 8,000 8,360
First Nationwide Holdings
12.500% due 04/15/03 5,000 5,738
10.625% due 10/01/03 4,350 4,883
Forest City Enterprises
8.500% due 03/15/08 14,350 14,458
Fuji Bank
9.870% due 12/31/49 (b) 21,200 21,108
Helicon Group
11.000% due 11/01/03 (b) 2,000 2,165
Nextel Communications, Inc.
0.000% due 02/15/08 (c) 38,750 24,838
Polysindo International Finance
9.375% due 07/30/07 8,555 5,240
Reliance Group Holdings
9.000% due 11/15/00 13,800 14,443
SB Treasury Co. LLC
9.400% due 12/29/49 (b) 20,000 20,791
Trizec Finance Limited
10.875% due 10/15/05 2,441 2,703
-----------
148,219
===========
Industrials 61.4%
Abbey Healthcare Group
9.500% due 11/01/02 12,220 12,832
Advanced Lighting
8.000% due 03/15/08 5,200 5,246
AEI Holding Co.
10.000% due 11/15/07 9,580 10,131
Albritton Communications
9.750% due 11/30/07 5,500 5,830
American Airlines
10.610% due 03/04/10 650 860
American Standard
7.375% due 02/01/08 17,350 17,220
9.250% due 12/01/16 7,388 7,674
Amerigas Partners LP
10.125% due 04/15/07 4,200 4,505
Ameriserv Food Co.
8.875% due 10/15/06 1,000 1,035
10.125% due 07/15/07 16,550 17,936
Ametek, Inc.
9.750% due 03/15/04 6,350 6,763
Amphenol Corp.
9.875% due 05/15/07 6,500 7,036
Archibald Candy Corp.
10.250% due 07/01/04 1,000 1,060
Benedek Broadcasting Corp.
11.875% due 03/01/05 21,315 24,086
Benedek Communications
0.000% due 05/15/06 (c) 1,500 1,200
Beverly Enterprises, Inc.
9.000% due 02/15/06 12,700 13,303
Building Materials Corp.
0.000% due 07/01/04 (c) 17,400 16,334
8.625% due 12/15/06 500 521
8.000% due 10/15/07 3,750 3,816
Canadian Forest Oil Limited
8.750% due 09/15/07 5,000 5,125
Century Communications Corp.
8.750% due 10/01/07 5,000 5,213
CF Cable TV, Inc.
9.125% due 07/15/07 9,000 9,891
Chattem, Inc.
8.875% due 04/01/08 4,300 4,370
Clark R&M Holdings
8.375% due 11/15/07 5,000 5,063
Coleman
7.100% due 06/13/06 (d) 6,750 6,218
7.250% due 06/13/08 (d) 2,000 1,825
Columbus McKinnon
8.500% due 04/01/08 7,850 7,909
Comcast Cellular
9.500% due 05/01/07 20,125 21,232
Cross Timbers Oil Co.
8.750% due 11/01/09 5,500 5,665
CSC Holdings, Inc.
8.125% due 08/15/09 7,000 7,350
9.875% due 02/15/13 2,000 2,215
10.500% due 05/15/16 11,000 12,898
7.875% due 02/15/18 10,000 9,925
9.875% due 04/01/23 9,000 10,013
Cumberland Farms
10.500% due 10/01/03 5,577 5,521
Dailey International, Inc.
9.500% due 02/15/08 2,250 2,278
Delta Air Lines
10.790% due 03/26/14 2,264 2,973
Dialog Corp. PLC
11.000% due 11/15/07 3,350 3,702
Dimon, Inc.
8.875% due 06/01/06 1,700 1,764
Doane Products Co.
10.625% due 03/01/06 2,000 2,210
Echostar Communications
0.000% due 06/01/04 (c) 27,090 26,210
Envirosource, Inc.
9.750% due 06/15/03 12,068 12,370
Extended Stay America
9.150% due 03/15/08 11,500 11,658
Extendicare Health Services
9.350% due 12/15/07 5,400 5,630
EZ Communication, Inc.
9.750% due 12/01/05 2,500 2,769
Falcon Cable
0.000% due 04/15/10 (c) 11,700 7,409
8.375% due 04/15/10 7,150 7,131
Falcon Drilling, Inc.
9.750% due 01/15/01 6,500 6,939
Ferrellgas Partners LP
10.000% due 08/01/01 11,600 12,325
9.375% due 06/15/06 11,375 12,058
Fisher Scientific
7.125% due 12/15/05 6,500 6,143
9.000% due 02/01/08 18,900 19,207
Foamex LP
9.875% due 06/15/07 1,700 1,743
Foodmaker, Inc.
9.750% due 06/01/02 5,000 5,175
Forcenergy, Inc.
9.500% due 11/01/06 4,300 4,483
8.500% due 02/15/07 2,300 2,271
Garden State Newspapers
8.750% due 10/01/09 17,250 17,681
Globalstar LP
11.375% due 02/15/04 8,350 8,788
11.250% due 06/15/04 5,500 5,789
10.750% due 11/01/04 3,106 3,203
Goss Graphic Systems, Inc.
12.000% due 10/15/06 6,000 6,840
Grand Casinos, Inc.
9.000% due 10/15/04 5,000 5,163
Granite Broadcasting Corp.
10.375% due 05/15/05 5,250 5,644
Grant Geophysical
9.750% due 02/15/08 2,000 1,980
Gruma SA de CV
7.625% due 10/15/07 3,750 3,714
GST Equipment Funding
13.250% due 05/01/07 5,000 5,938
Gulf Canada Resources
9.250% due 01/15/04 12,575 13,201
HMH Properties, Inc.
9.500% due 05/15/05 12,750 13,579
8.875% due 07/15/07 8,500 8,957
1998 Annual Report See accompanying notes 93
<PAGE>
Schedule of Investments (Cont.)
High Yield Fund
March 31, 1998
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
Hollinger International Publishing
8.625% due 03/15/05 $ 4,750 $ 4,999
9.250% due 02/01/06 7,800 8,327
Holmes Products
9.875% due 11/15/07 5,000 5,200
Houston Exploration Co.
8.625% due 01/01/08 7,000 6,983
Huntsman Packaging Corp.
9.125% due 10/01/07 6,250 6,469
Integrated Health Services
10.250% due 04/30/06 770 835
9.500% due 09/15/07 7,000 7,473
9.250% due 01/15/08 6,900 7,301
Intermedia Communications, Inc.
0.000% due 05/15/06 (c) 27,835 23,103
8.500% due 01/15/08 4,950 5,210
ISP Holdings, Inc.
9.000% due 10/15/03 23,370 24,597
ITC Deltacom, Inc.
11.000% due 06/01/07 5,000 5,700
J. Ray McDermott
9.375% due 07/15/06 10,400 11,232
J.Q. Hammons Hotels
8.875% due 02/15/04 11,500 11,744
Jones Intercable, Inc.
8.875% due 04/01/07 10,060 10,714
K Mart Corp.
9.350% due 01/02/20 15,125 16,250
9.780% due 01/05/20 9,575 10,531
K-III Communications Co.
8.500% due 02/01/06 18,190 18,690
L-3 Communications Corp.
10.375% due 05/01/07 2,250 2,503
Lenfest Communications
8.375% due 11/01/05 13,650 14,213
Lin Holdings Corp.
0.000% due 03/01/08 (c) 18,750 11,859
Lin Television Corp.
8.375% due 03/01/08 8,800 8,888
Magnum Hunter Resources, Inc.
10.000% due 06/01/07 7,000 6,860
Marcus Cable
0.000% due 08/01/04 (c) 11,400 10,887
Market Hub Partners
8.250% due 03/01/08 3,400 3,489
Marsh Supermarkets, Inc.
8.875% due 08/01/07 7,250 7,549
Moog, Inc.
10.000% due 05/01/06 3,250 3,543
Newpark Resources, Inc.
8.625% due 12/15/07 4,350 4,470
Newsquest Capital
11.000% due 05/01/06 2,550 2,875
NL Industries
0.000% due 10/15/05 (c) 12,000 12,300
Nuevo Energy Co.
9.500% due 04/15/06 5,000 5,363
Orion Network Systems, Inc.
0.000% due 01/15/07 (c) 11,000 8,635
11.250% due 01/15/07 15,875 18,336
Owens & Minor
10.875% due 06/01/06 5,850 6,559
Pacific Lumber
10.500% due 03/01/03 9,750 10,091
Perkins Family Restaurants
10.125% due 12/15/07 3,450 3,640
Perry-Judd
10.625% due 12/15/07 4,850 5,165
Phar-Mor, Inc.
11.720% due 09/11/02 10,000 10,650
Pharmerica, Inc.
8.375% due 04/01/08 6,300 6,332
Physician Sales and Service, Inc.
8.500% due 10/01/07 5,415 5,665
Plainwell, Inc.
11.000% due 03/01/08 500 516
Polymer Group
8.750% due 03/01/08 6,000 6,135
Polymer Group, Inc.
9.000% due 07/01/07 14,955 15,516
Pool Energy Services
8.625% due 04/01/08 4,000 4,030
Primedia, Inc.
7.625% due 04/01/08 8,250 8,126
Printpack, Inc.
9.875% due 08/15/04 6,450 6,982
Purina Mills, Inc.
9.000% due 03/15/10 3,000 3,113
Revlon Consumer Products Corp.
9.375% due 04/01/01 7,500 7,838
8.125% due 02/01/06 26,750 26,951
Riviera Holdings Corp.
10.000% due 08/15/04 4,350 4,394
RJR Nabisco
8.000% due 07/15/01 2,000 2,057
8.625% due 12/01/02 5,500 5,783
Rogers Cablesystems, Inc.
10.000% due 03/15/05 7,500 8,391
Rogers Cantel Mobile
9.375% due 06/01/08 15,500 16,508
Rogers Cantel, Inc.
8.300% due 10/01/07 12,385 12,416
Salem Communications
9.500% due 10/01/07 4,850 5,080
Satelites Mexicanos
9.391% due 06/30/04 (b) 10,000 10,100
SC International Services, Inc.
9.250% due 09/01/07 8,200 8,641
Scotsman Group, Inc.
8.625% due 12/15/07 4,000 4,110
Sea Containers
9.500% due 07/01/03 (b) 750 783
Showboat, Inc.
9.250% due 05/01/08 9,750 10,433
Silgan Holdings, Inc.
9.000% due 06/01/09 20,760 21,798
Smith's Food & Drug Centers, Inc.
8.640% due 07/02/12 9,575 10,437
9.200% due 07/02/18 9,000 10,197
Smithfield Foods
7.625% due 02/15/08 5,900 5,900
Stater Brothers Holdings
11.000% due 03/01/01 8,720 9,548
Station Casinos
9.625% due 06/01/03 3,150 3,276
Stevens, JP & Co.
9.000% due 03/01/17 9,500 9,928
Stone Container
11.500% due 10/01/04 2,000 2,155
Synthetic Industries, Inc.
9.250% due 02/15/07 7,150 7,508
Teleport Communications
0.000% due 07/01/07 (c) 18,150 15,700
Telewest Communications
9.625% due 10/01/06 12,750 13,515
Tenet Healthcare Corp.
8.625% due 12/01/03 1,050 1,118
8.000% due 01/15/05 2,000 2,065
10.125% due 03/01/05 13,800 15,249
8.625% due 01/15/07 3,500 3,644
Trans-Resources
10.750% due 03/15/08 15,650 16,159
Transamerican Energy
11.500% due 06/15/02 1,525 1,517
Unisys Corp.
12.000% due 04/15/03 14,900 16,912
11.750% due 10/15/04 5,000 5,800
7.875% due 04/01/08 6,500 6,516
United Defense Industries, Inc.
8.750% due 11/15/07 3,500 3,592
94 PIMCO Funds See accompanying notes
<PAGE>
Principal
Amount Value
(000s) (000s)
================================================================================
US Air, Inc.
10.000% due 07/01/03 $ 10,000 $ 10,613
9.625% due 09/01/03 16,083 17,490
9.330% due 01/01/06 5,362 5,730
US Can Corp.
10.125% due 10/15/06 600 641
Vencor, Inc.
8.625% due 07/15/07 2,900 3,277
Vintage Petroleum
9.000% due 12/15/05 10,490 11,015
West Point Stevens
8.750% due 12/15/01 2,000 2,090
9.375% due 12/15/05 10,000 10,663
Wheeling-Pittsburgh Corp.
9.250% due 11/15/07 5,600 5,733
World Color Press, Inc.
9.125% due 03/15/03 23,085 23,778
WorldCom, Inc.
9.375% due 01/15/04 10,000 10,600
Young Broadcasting, Inc.
9.000% due 01/15/06 11,000 11,523
8.750% due 06/15/07 4,000 4,100
-----------
1,357,666
===========
Utilities 12.8%
AES Corp.
10.250% due 07/15/06 14,235 15,730
8.500% due 11/01/07 2,500 2,594
Beaver Valley Funding Corp.
9.000% due 06/01/17 37,000 41,708
California Energy
9.875% due 06/30/03 5,000 5,352
10.250% due 01/15/04 17,815 19,218
9.500% due 09/15/06 5,000 5,444
Calpine Corp.
9.250% due 02/01/04 10,500 10,920
8.750% due 07/15/07 14,650 15,236
7.875% due 04/01/08 10,000 10,088
CMS Energy
8.125% due 05/15/02 9,500 9,763
7.000% due 01/15/05 12,000 11,532
Coho Energy, Inc.
8.875% due 10/15/07 7,500 7,069
Dial Call Communications
0.000% due 04/15/04 (c) 19,000 19,000
Espirito Santo Centrais
10.000% due 07/15/07 2,450 2,395
First PV Funding
10.150% due 01/15/16 808 854
Flag Limited
8.250% due 01/30/08 38,750 39,816
ITC Deltacom, Inc.
8.875% due 03/01/08 12,300 12,792
Long Island Lighting Co.
8.900% due 07/15/19 5,000 5,359
Mastec, Inc.
7.750% due 02/01/08 5,500 5,473
Niagara Mohawk Power
9.990% due 05/11/04 2,500 2,550
7.750% due 05/15/06 1,100 1,172
9.500% due 03/01/21 2,500 2,658
7.875% due 04/01/24 7,500 7,740
North Atlantic Energy
9.050% due 06/01/02 7,795 8,006
Philippine Long Distance Telephone Co.
10.625% due 06/02/04 1,000 1,063
9.250% due 06/30/06 2,000 1,985
7.850% due 03/06/07 4,450 4,172
8.350% due 03/06/17 5,000 4,506
Public Service of New Hampshire
9.170% due 05/15/98 1,000 1,004
Wilmington Trust Co. - Tucson Electric
10.211% due 01/01/09 (d) 500 548
10.732% due 01/01/13 (d) 6,993 7,877
-----------
283,624
-----------
Total Corporate Bonds and Notes 1,789,509
(Cost $1,720,628) ===========
- --------------------------------------------------------------------------------
MORTGAGE-BACKED SECURITIES 2.0%
- --------------------------------------------------------------------------------
Collateralized Mortgage Obligations 1.5%
Asset Securitization Corp.
7.384% due 08/13/29 $ 1,500 $ 1,485
Federal Deposit Insurance Corp.
6.875% due 11/25/26 (b) 400 428
Manufacturers Hanover Corp.
7.536% due 12/16/25 (b) 809 811
9.182% due 12/16/25 (b) 3,598 3,428
NationsBanc Mortgage Capital Corp.
8.122% due 05/25/28 (b) 3,835 2,709
Red Mountain Funding Corp.
9.150% due 11/28/27 5,727 5,904
Resolution Trust Corp.
9.250% due 06/25/23 3,332 3,348
9.050% due 08/25/23 774 777
6.900% due 02/25/27 8,437 8,170
7.000% due 05/25/27 6,133 6,001
-----------
33,061
===========
Other Mortgage-Backed Securities 0.3%
LTC Commercial Corp.
9.200% due 08/04/23 3,235 3,586
Resolution Trust Corp.
7.261% due 09/25/20 (b) 677 567
9.500% due 05/25/24 69 69
Structured Asset Securities Corp.
7.050% due 11/25/02 4,000 3,510
-----------
7,732
===========
Stripped Mortgage-Backed Securities 0.2%
Federal National Mortgage Assn. (IO)
6.000% due 07/25/05 1,912 101
7.000% due 07/25/08 6,033 867
6.500% due 06/25/17 2,219 184
7.000% due 04/25/19 12,000 2,316
7.000% due 12/25/21 10,000 1,391
Fund America (IO)
9.590% due 10/20/21 1,500 61
-----------
4,920
-----------
Total Mortgage-Backed Securities 45,713
(Cost $45,221) ===========
- --------------------------------------------------------------------------------
ASSET-BACKED SECURITIES 5.4%
- --------------------------------------------------------------------------------
Airplanes Pass Through Trust
10.875% due 03/15/19 26,570 29,626
Arena Brands, Inc.
9.156% due 06/01/02 (b) 2,758 2,765
9.625% due 06/01/02 (b) 53 53
9.656% due 06/01/02 (b) 4,969 4,981
Decision One
9.750% due 08/07/03 11,000 10,918
Federal-Mogul Corp.
10.190% due 12/31/98 (b) 25,000 24,904
Huntsman Corp.
9.250% due 03/20/07 (b) 6,500 6,598
Integrated Health Services
7.625% due 09/16/04 (b) 3,500 3,467
8.125% due 12/31/05 (b) 3,500 3,496
Morgan Stanley Aircraft Finance
8.700% due 03/15/23 18,000 17,945
Paragon Health Network, Inc.
8.125% due 04/29/05 (b) 5,000 5,028
8.563% due 04/29/06 (b) 5,000 5,028
TFM SA de CV
9.690% due 06/30/03 (b) 4,000 4,000
-----------
Total Asset-Backed Securities 118,809
(Cost $118,457) ===========
- --------------------------------------------------------------------------------
SOVEREIGN ISSUES 0.8%
- --------------------------------------------------------------------------------
Republic of Argentina
6.688% due 03/31/05 (b) 5,771 5,324
5.500% due 03/31/23 (b) 9,000 6,897
Republic of Croatia
6.500% due 07/31/06 (b) 5,616 5,151
-----------
Total Sovereign Issues 17,372
(Cost $14,862) ===========
1998 Annual Report See accompanying notes 95
<PAGE>
Schedule of Investments (Cont.)
High Yield Fund
March 31, 1998
Value
Shares (000s)
- --------------------------------------------------------------------------------
PREFERRED STOCK 4.5%
- --------------------------------------------------------------------------------
California Federal Bank 16,500 $ 1,871
Fresenius Medical Care 44,195 45,565
Long Island Lighting Co. 30,000 3,135
Newscorp Overseas Limited 133,200 3,322
Primedia, Inc. 120,000 12,183
Sig Capital Trust 7,000 7,182
Time Warner, Inc. 22,900 25,648
-----------
Total Preferred Stock 98,906
(Cost $95,795) ===========
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 5.2%
- --------------------------------------------------------------------------------
Principal
Amount
(000s)
Commercial Paper 5.0%
Australian Wheat Board
5.460% due 04/23/98 $ 13,000 12,957
Caisse d'Amortissement
5.460% due 04/14/98 3,800 3,793
E.I. Du Pont de Nemours
5.510% due 04/06/98 5,900 5,895
5.450% due 04/08/98 17,700 17,681
Ford Motor Credit Corp.
5.470% due 04/03/98 600 600
5.480% due 04/06/98 9,000 8,993
General Electric Capital Corp.
5.520% due 04/09/98 11,000 10,987
General Motors Acceptance Corp.
5.470% due 04/08/98 13,600 13,586
5.530% due 04/08/98 5,400 5,394
5.570% due 04/08/98 10,000 9,989
KFW International Finance, Inc.
5.520% due 04/03/98 6,600 6,598
New Center Asset Trust
5.450% due 04/08/98 5,000 4,995
Procter & Gamble Co.
5.510% due 04/14/98 5,400 5,389
Wisconsin Electric Power & Light
5.510% due 04/07/98 4,500 4,496
-----------
111,353
===========
Repurchase Agreement 0.2%
State Street Bank
5.000% due 04/01/98 3,519 3,519
-----------
(Dated 03/31/98. Collateralized by U.S. Treasury
Note 5.750% 12/31/98 valued at $3,593,100.
Repurchase proceeds are $3,519,489.)
Total Short-Term Instruments 114,872
(Cost $114,872) ===========
Total Investments (a) 98.8% $ 2,185,181
(Cost $2,109,835)
Other Assets and Liabilities (Net) 1.2% 25,479
------------
Net Assets 100.0% $ 2,210,660
============
Notes to Schedule of Investments (amounts in thousands):
(a) At March 31, 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. $ 81,956
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (6,217)
------------
Unrealized appreciation-net $ 75,739
============
(b) Variable rate security. The rate listed is as of March 31, 1998.
(c) Security becomes interest bearing at a future date.
(d) Restricted security.
96 PIMCO Funds See accompanying notes
<PAGE>
Schedule of Investments
Money Market Fund
March 31, 1998
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 125.3%
- --------------------------------------------------------------------------------
Commercial Paper 99.4%
Abbott Laboratories
5.500% due 04/03/98 $ 8,000 $ 7,998
Air Products & Chemicals
5.480% due 06/26/98 9,000 8,882
American Greetings
5.570% due 04/20/98 3,950 3,938
BellSouth Telecommunications, Inc.
5.490% due 04/23/98 8,500 8,471
E.I. Du Pont de Nemours
5.420% due 05/12/98 6,000 5,963
Eastman Kodak Co.
5.510% due 06/02/98 5,000 4,953
Emerson Electric Co.
5.500% due 04/24/98 6,500 6,477
Federal National Mortgage Assn.
5.520% due 04/13/98 37,789 37,719
Ford Motor Credit Corp.
5.460% due 04/24/98 5,800 5,780
Franklin Resources
5.510% due 06/09/98 8,000 7,916
General Electric Capital Corp.
5.530% due 04/22/98 6,000 5,981
Goldman Sachs & Co.
5.450% due 04/27/98 6,000 5,976
Hershey Foods Corp.
5.450% due 04/03/98 6,000 5,998
Motorola, Inc.
5.510% due 04/07/98 8,000 7,993
National Rural Utilities Cooperative
5.500% due 06/16/98 8,000 7,907
Procter & Gamble Co.
5.490% due 04/15/98 6,039 6,026
Times Mirror Co.
5.460% due 04/23/98 8,000 7,973
USAA Capital Corp.
5.400% due 06/17/98 3,200 3,163
Xerox Corp.
5.420% due 04/29/98 6,000 5,975
------------
155,089
============
Repurchase Agreements 25.9%
Goldman Sachs
5.700% due 04/01/98 39,200 39,200
(Dated 03/31/98. Collateralized by U.S.
Treasury Bond 6.500% 11/15/26 valued at
$39,297,495. Repurchase proceeds are
$39,206,206).
State Street Bank
5.000% due 04/01/98 1,286 1,286
(Dated 03/31/98. Collateralized by U.S.
Treasury Note 5.875% 04/30/98 valued at
$1,316,691. Repurchase proceeds are
$1,286,179.)
------------
40,486
------------
Total Short-Term Instruments 195,575
------------
(Cost $195,575)
Total Investments (a) 125.3% $ 195,575
(Cost $195,575)
Other Assets and Liabilities (Net) (25.3%) (39,483)
------------
Net Assets 100.0% $ 156,092
============
1998 Annual Report See accompanying notes 97
<PAGE>
Schedule of Investments
StocksPLUS Fund
March 31, 1998
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
CORPORATE BONDS AND NOTES 25.7%
- --------------------------------------------------------------------------------
Banking and Finance 18.4%
Advanta National Bank
6.097% due 01/15/99 (d) $ 2,000 $ 1,971
AT&T Capital Corp.
6.260% due 02/18/99 10,000 10,006
6.920% due 04/29/99 5,725 5,764
Capital One Bank
6.730% due 06/04/98 2,000 2,002
6.163% due 08/13/98 (d) 7,500 7,507
Caterpillar Financial
5.460% due 04/01/99 (d) 2,000 2,002
Columbia HCA Healthcare Corp.
6.410% due 06/15/00 5,000 4,855
Den Danske Bank
6.000% due 06/30/00 (d) 450 450
Edison Funding
6.000% due 09/20/99 15,000 14,985
Ford Motor Credit Corp.
5.400% due 11/09/98 (d) 500 501
5.340% due 03/30/99 (d) 250 250
5.460% due 04/05/99 (d) 340 338
5.470% due 08/14/00 (d) 17,000 17,048
General Motors Acceptance Corp.
5.530% due 03/16/99 (d) 2,000 2,011
Goldman Sachs & Co.
5.805% due 01/25/01 (d) 10,000 10,000
Heller Financial
6.250% due 12/15/98 15,500 15,509
Kansallis-Osake
7.830% due 09/30/43 (d) 1,500 1,504
Lehman Brothers, Inc.
6.250% due 06/29/98 2,000 2,002
8.875% due 11/01/98 1,685 1,711
5.610% due 08/11/00 (d) 9,400 9,432
Merrill Lynch & Co.
5.938% due 10/10/00 (d) 3,000 3,020
Residential Reinsurance
11.494% due 12/15/08 (d) 2,500 2,525
Salomon, Inc.
5.740% due 04/05/99 (d) 500 498
6.456% due 06/27/01 (d) 6,800 6,807
Salomon, Smith Barney Holdings
3.650% due 02/14/02 (g) 2,038 1,967
------------
124,665
============
Industrials 5.9%
Air Canada
6.425% due 07/31/05 (d) 12,000 11,340
Amerco, Inc.
6.800% due 09/18/98 6,000 6,018
Centerior Fuel Corp.
9.200% due 08/02/98 (i) 1,000 1,005
COFIRI International, Inc.
6.112% due 10/27/00 (d) 2,000 1,995
Falcon Drilling, Inc.
9.750% due 01/15/01 2,000 2,135
Merita
6.073% due 12/01/05 (d) 1,000 991
RJR Nabisco
8.000% due 07/15/01 500 514
TCI Communications, Inc.
6.546% due 04/03/02 (d) 11,600 11,669
6.606% due 03/11/03 (d) 4,000 4,018
------------
39,685
============
Utilities 1.4%
Beaver Valley Funding Corp.
8.250% due 06/01/03 2,759 2,832
Cleveland Electric Illuminating Co.
8.170% due 11/30/98 1,000 1,012
El Paso Electric Co.
7.250% due 02/01/99 1,000 1,005
Gulf States Utilities
9.720% due 07/01/98 3,059 3,085
North Atlantic Energy
9.050% due 06/01/02 1,308 1,343
------------
9,277
------------
Total Corporate Bonds and Notes 173,627
(Cost $173,042) ============
- --------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCIES 2.5%
- --------------------------------------------------------------------------------
Student Loan Marketing Assn.
5.795% due 10/25/05 (d) 16,731 16,731
------------
Total U.S. Government Agencies 16,731
(Cost $16,670) ============
- --------------------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS 3.1%
- --------------------------------------------------------------------------------
Treasury Inflation Protected Securities
3.625% due 07/15/02 (g) 21,491 21,289
------------
Total U.S. Treasury Obligations 21,289
(Cost $21,398) ============
- --------------------------------------------------------------------------------
MORTGAGE-BACKED SECURITIES 20.1%
- --------------------------------------------------------------------------------
Collateralized Mortgage Obligations 3.9%
Bank Mart
7.504% due03/01/19 (d)(i) 8,736 9,017
Citicorp Mortgage Securities, Inc.
7.586% due 09/25/18 (d) 82 82
Countrywide
6.500% due 02/25/24 122 121
Donaldson, Lufkin & Jenrette
6.150% due 10/17/20 (d) 341 351
Federal National Mortgage Assn.
6.924% due 04/25/20 (d) 346 349
Greenwich
7.319% due 10/25/22 (d) 38 38
Manufacturers Hanover Corp.
7.536% due 12/16/25 (d) 2,224 2,230
PaineWebber Mortgage
6.532% due 02/25/01 (d) 1,690 1,680
Prudential Home
7.050% due 05/25/24 1,274 1,277
Red Mountain Funding Corp.
6.450% due 11/28/27 171 170
Residential Funding
6.174% due 03/25/18 (d) 3,728 3,694
Resolution Trust Corp.
7.650% due 01/25/20 (d) 840 855
7.164% due 05/25/21 (d) 65 65
6.309% due 09/25/21 (d) 1,283 1,274
8.000% due 07/25/24 3,246 3,279
6.650% due 05/25/29 (d) 605 607
Sears Mortgage
8.457% due 05/25/32 (d) 32 32
Structured Asset Securities Corp.
7.750% due 02/25/28 1,209 1,236
------------
26,357
============
Federal Home Loan Mortgage Corporation 9.4%
6.712% due 07/01/19 (d) 2,163 2,210
7.710% due 12/01/22 (d) 1,194 1,244
7.896% due 06/01/22 (d) 841 869
8.500% due 06/01/12-06/01/25 (f) 57,157 59,280
------------
63,603
============
Federal National Mortgage Association 2.8%
6.190% due 05/01/17 (d) 438 443
6.199% due 11/01/18-05/01/36 (d)(f) 4,157 4,192
6.207% due 07/01/18 (d) 713 722
6.210% due 05/01/36 (d) 7,766 7,837
6.213% due 04/01/18-11/01/35 (d)(f) 5,064 5,102
7.452% due 05/01/22 (d) 743 767
9.000% due 01/01/99 11 11
------------
19,074
============
Government National Mortgage Association 3.2%
6.000% due 02/20/26-02/20/28 (d)(f) 18,777 19,075
7.000% due 09/20/22 (d) 2,570 2,642
------------
21,717
============
98 PIMCO Funds See accompanying notes
<PAGE>
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
Other Mortgage-Backed Securities 0.5%
California Federal Savings & Loan
6.644% due 01/01/19 (d) $ 61 $ 61
Fund America
7.605% due 06/25/23 (d) 212 219
Great Western Savings & Loan
6.458% due 01/25/18 (d) 90 90
J.P. Morgan & Co.
6.999% due 01/25/18 (d) 784 783
Resolution Trust Corp.
7.043% due 12/25/23 (d) 39 39
Structured Asset Securities Corp.
6.854% due 09/25/36 (d) 1,516 1,550
Western Federal Savings & Loan
6.414% due 10/25/18 (d) 354 354
6.953% due 03/25/19 (d) 61 61
6.630% due 06/25/19 (d) 507 508
------------
3,665
============
Stripped Mortgage-Backed Securities 0.3%
Federal Home Loan Mortgage Corp. (IO)
7.000% due 08/15/13 34 0
92.576% due 07/15/16 71 648
Federal National Mortgage Assn. (IO)
6.000% due 11/25/00 831 58
7.000% due 07/25/06 523 65
6.500% due 02/25/21 (d) 6,444 670
7.000% due 07/25/21 1,224 207
Prudential Home (IO)
4.299% due 02/25/22 2 3
------------
1,651
------------
Total Mortgage-Backed Securities 136,067
============
(Cost $135,569)
- --------------------------------------------------------------------------------
ASSET-BACKED SECURITIES 7.3%
- --------------------------------------------------------------------------------
Community Trust Bancorp, Inc.
6.500% due 09/15/03 4,550 4,565
Green Tree Financial Group
6.420% due 04/15/28 4,559 4,581
6.220% due 02/15/29 17,627 17,685
LIBOR-Index Certificates
6.479% due 08/31/98 (d) 3,000 3,000
9.277% due 10/01/03 (d) 2,500 2,500
Standard Credit Card Master Trust
8.875% due 09/07/99 17,300 17,470
------------
Total Asset-Backed Securities 49,801
============
(Cost $49,848)
- --------------------------------------------------------------------------------
SOVEREIGN ISSUES 4.4%
- --------------------------------------------------------------------------------
Republic of Argentina
6.688% due 03/31/05 (d) 17,195 15,862
8.726% due 04/10/05 (d) 5,000 5,000
Republic of Poland
6.688% due 10/27/24 (d) 9,400 9,224
------------
Total Sovereign Issues 30,086
============
(Cost $29,654)
- --------------------------------------------------------------------------------
FOREIGN CURRENCY-DENOMINATED ISSUES (c)(e) 1.3%
- --------------------------------------------------------------------------------
Commonwealth of Canada
4.250% due 12/01/26 (g) C$ 5,151 3,758
Commonwealth of New Zealand
4.500% due 02/15/16 (g) N$ 9,750 5,137
Kingdom of Sweden
10.250% due 05/05/00 SK 1,000 138
------------
Total Foreign Currency-Denominated Issues 9,033
============
(Cost $10,455)
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 33.7%
- --------------------------------------------------------------------------------
Certificates of Deposit 3.5%
Banco Latino
6.550% due 04/14/98 $ 6,200 6,199
6.430% due 05/28/98 1,900 1,900
Bank of Tokyo
6.470% due 06/18/98 $ 15,500 $ 15,500
------------
23,599
============
Commercial Paper 25.2%
Abbott Laboratories
5.500% due 04/03/98 3,400 3,399
American Express Credit
5.520% due 04/15/98 20,600 20,556
Ameritech Corp.
5.510% due 04/06/98 12,300 12,291
AT&T Capital Corp.
5.856% due 05/05/98 10,900 10,840
BellSouth Telecommunications, Inc.
5.510% due 04/14/98 3,000 2,994
5.520% due 04/14/98 1,000 998
E.I. Du Pont de Nemours
5.450% due 04/08/98 4,000 3,996
5.440% due 04/09/98 6,100 6,093
5.450% due 04/09/98 1,600 1,598
5.540% due 04/28/98 1,400 1,394
Emerson Electric Co.
5.500% due 04/24/98 2,700 2,691
5.500% due 04/30/98 3,300 3,285
Federal Home Loan Mortgage Corp.
5.485% due 04/21/98 7,800 7,776
5.530% due 04/21/98 7,200 7,178
General Electric Capital Corp.
5.520% due 04/09/98 5,000 4,994
5.470% due 04/20/98 5,000 4,986
5.530% due 04/22/98 5,700 5,682
5.530% due 05/06/98 3,600 3,581
General Motors Acceptance Corp.
5.740% due 06/10/98 7,000 6,924
IBM Credit Corp.
5.490% due 04/08/98 4,200 4,196
KFW International Finance, Inc.
5.550% due 04/16/98 900 898
5.510% due 04/17/98 10,000 9,975
Motorola, Inc.
5.490% due 05/12/98 4,500 4,472
New Center Asset Trust
5.540% due 04/09/98 5,800 5,793
5.530% due 04/22/98 3,600 3,588
5.510% due 06/03/98 5,700 5,644
Pitney Bowes Credit Corp.
5.482% due 05/18/98 10,000 9,928
Procter & Gamble Co.
5.510% due 04/14/98 3,500 3,493
Shell Oil Co.
5.490% due 04/30/98 7,000 6,969
TCI Communications, Inc.
6.062% due 05/08/98 2,300 2,286
Wisconsin Electric Power & Light
5.510% due 04/07/98 2,300 2,298
------------
170,796
============
Repurchase Agreements 1.7%
State Street Bank
5.000% due 04/01/98 3,566 3,566
(Dated 03/31/98. Collateralized by U.S.
Treasury Note 6.125% 05/15/98 valued at
$3,640,100. Repurchase proceeds are
$3,566,495.)
Daiwa Securities America
5.800% due 04/01/98 8,000 8,000
(Dated 03/31/98. Collateralized by Treasury
Inflation Protected Security 3.375% 01/15/07
valued at $8,115,335. Repurchase proceeds are
$8,001,289).
------------
11,566
============
U.S. Treasury Bills (b)(f) 3.3%
5.018% due 04/16/98-07/23/98 22,230 22,042
------------
Total Short-Term Instruments 228,003
============
(Cost $228,003)
1998 Annual Report See accompanying notes 99
<PAGE>
Schedule of Investments (Cont.)
StocksPLUS Fund
March 31, 1998
Value
(000s)
- --------------------------------------------------------------------------------
Total Investments (a) 98.1% $ 664,637
(Cost $664,639)
Other Assets and Liabilities (Net) 1.9% 13,075
------------
Net Assets 100.0% $ 677,712
============
Notes to Schedule of Investments (amounts in thousands):
(a) At March 31, 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. $ 2,546
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost (2,396)
over value. ------------
Unrealized appreciation-net $ 150
============
(b) Securities with an aggregate market value of $22,042
have been segregated with the custodian to cover margin
requirements for the following open future contracts
at March 31, 1998:
Unrealized
Appreciation/
Type Contracts (Depreciation)
- --------------------------------------------------------------------------------
S&P 500 Index (06/98) 1,989 $ 10,480
United Kingdom 90 Day LIBOR Future (06/98) 300 (30)
------------
$ 10,450
============
(c) Foreign forward currency contracts outstanding at March 31, 1998:
Principal
Amount Unrealized
Covered Expiration Appreciation/
Type by Contract Month (Depreciation)
- --------------------------------------------------------------------------------
Sell C$ 2,128 04/98 $ (13)
Sell 3,317 06/98 (13)
Sell N$ 7,905 04/98 115
Sell 1,668 05/98 61
Sell SK 1,843 04/98 1
------------
$ 151
============
(d) Variable rate security. The rate listed is as of March 31, 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) Swap agreements outstanding at March 31, 1998:
Fixed Notional Unrealized
Type Rate(%) 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. 04/18/02 .3700 $ 8,000 $ 43
Broker: Merrill Lynch
Exp. 04/23/02 .3700 3,000 16
Broker: Merrill Lynch
Exp. 05/30/02 .3700 6,000 33
Broker: Merrill Lynch
Exp. 06/05/02 .3575 4,000 24
Broker: Deutsche Morgan Grenfell
Exp. 06/05/02 .3650 8,000 45
Broker: J.P. Morgan
Exp. 11/28/02 .4600 20,800 38
------------
$ 199
============
Notional Unrealized
Type Amount Appreciation
- --------------------------------------------------------------------------------
Receive total return on S&P 500 Index and
pay floating rate based on 1 month LIBOR.
Broker: Deutsche Morgan Grenfell
Exp. 06/30/98 $ 50,595 $ 0
Broker: Morgan Stanley
Exp. 09/30/98 59,258 0
------------
$ 0
============
(i) Restricted security.
100 PIMCO Funds See accompanying notes
<PAGE>
Schedule of Investments
Strategic Balanced Fund
March 31, 1998
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
CORPORATE BONDS AND NOTES 16.8%
- --------------------------------------------------------------------------------
Banking and Finance 7.7%
Advanta National Bank
6.097% due 01/15/99 (d) $ 400 $ 394
Lehman Brothers, Inc.
5.740% due 01/12/99 (d) 342 341
NationsBank Corp.
7.033% due 02/18/02 (d) 100 97
Okobank
7.312% due 09/27/49 (d) 500 510
Republic New York Corp.
5.799% due 10/28/02 (d) 100 98
Salomon, Smith Barney Holdings
3.650% due 02/14/02 (f) 1,100 1,062
Sparbanken Sverige AB
7.664% due 10/29/49 (d) 500 502
------------
3,004
============
Industrials 3.4%
Gulf Canada Resources
9.000% due 08/15/99 300 310
Imperial Chemical
6.000% due 12/05/98 (d) 500 500
RJR Nabisco
8.625% due 12/01/02 100 105
Sequa Corp.
9.625% due 10/15/99 300 311
Telecommunications, Inc.
9.875% due 04/01/98 100 100
------------
1,326
============
Utilities 5.7%
Cleveland Electric/Toledo Edison
7.190% due 07/01/00 500 508
Gulf States Utilities
9.720% due 07/01/98 20 20
Long Island Lighting Co.
7.625% due 04/15/98 300 300
System Energy Resources
7.710% due 08/01/01 650 672
Western Massachusetts Electric
6.875% due 01/01/00 700 698
------------
2,198
------------
Total Corporate Bonds and Notes 6,528
============
(Cost $6,537)
- --------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCIES 2.3%
- --------------------------------------------------------------------------------
Student Loan Marketing Assn.
6.080% due 06/30/00 (d) 900 902
------------
Total U.S. Government Agencies 902
============
(Cost $899)
- --------------------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS 8.3%
- --------------------------------------------------------------------------------
Treasury Inflation Protected Securities
3.625% due 07/15/02 (f) 2,220 2,199
U.S. Treasury Notes
5.750% due 10/31/02 1,000 1,003
------------
Total U.S. Treasury Obligations 3,202
============
(Cost $3,234)
- --------------------------------------------------------------------------------
MORTGAGE-BACKED SECURITIES 31.4%
- --------------------------------------------------------------------------------
Collateralized Mortgage Obligations 18.1%
Federal Home Loan Mortgage Corp.
6.500% due 11/15/00 494 497
6.600% due 12/15/03 248 248
6.500% due 01/15/04 708 711
5.500% due 07/15/05 733 730
6.750% due 03/15/17 780 785
7.000% due 05/15/23 133 134
6.500% due 08/15/23 187 188
6.500% due 03/15/24 272 254
Federal National Mortgage Assn.
6.500% due 10/25/04 761 764
5.750% due 02/25/15 200 200
8.000% due 07/25/20 719 731
6.500% due 06/25/21 192 189
4.000% due 01/25/22 126 107
5.000% due 04/25/22 48 42
7.000% due 06/25/23 237 237
6.500% due 12/25/23 132 123
Residential Funding
6.750% due 01/25/06 766 768
7.500% due 06/25/27 120 122
Resolution Trust Corp.
7.500% due 08/25/23 122 122
Ryland Acceptance Corp.
8.500% due 12/01/12 81 81
------------
7,033
============
Federal National Mortgage Association 1.2%
6.210% due 03/01/29 (d) 473 477
------------
Government National Mortgage Association 10.5%
7.000% due 07/20/23 (d) 163 167
7.000% due 08/20/26 (d) 987 1,010
7.000% due 01/20/27 (d) 82 84
6.500% due 06/20/27 (d) 1,729 1,770
6.000% due 01/20/28 (d) 1,004 1,018
------------
4,049
============
Stripped Mortgage-Backed Securities 1.6%
Collateralized Mortgage Obligation Trust (PO)
0.000% due 04/23/17 25 21
Federal Home Loan Mortgage Corp. (IO)
7.000% due 05/15/04 761 39
7.000% due 02/15/17 1,130 74
Federal National Mortgage Assn. (IO)
6.500% due 05/25/05 1,247 195
6.500% due 09/25/08 844 91
Federal National Mortgage Assn. (PO)
0.000% due 11/25/22 225 215
------------
635
------------
Total Mortgage-Backed Securities 12,194
============
(Cost $12,018)
- --------------------------------------------------------------------------------
ASSET-BACKED SECURITIES 11.8%
- --------------------------------------------------------------------------------
Conti Mortgage Home Equity Loan Trust
5.588% due 10/15/12 (d) 1,400 1,400
First Deposit Master Trust
5.750% due 06/15/01 200 200
Ford Credit Grantor Trust
5.900% due 05/15/00 164 164
Ford Motor Credit Corp.
6.500% due 11/15/99 941 944
Green Tree Financial Group
6.420% due 04/15/28 274 275
6.220% due 02/15/29 308 309
Premiere Auto Trust
8.050% due 04/04/00 1,294 1,298
------------
Total Asset-Backed Securities 4,590
============
(Cost $4,596)
- --------------------------------------------------------------------------------
SOVEREIGN ISSUES 4.3%
- --------------------------------------------------------------------------------
Hydro Quebec
5.813% due 09/29/49 (d) 200 177
Republic of Argentina
6.688% due 03/31/05 (d) 1,615 1,490
------------
Total Sovereign Issues 1,667
============
(Cost $1,646)
- --------------------------------------------------------------------------------
FOREIGN CURRENCY-DENOMINATED ISSUES (c)(e) 0.2%
- --------------------------------------------------------------------------------
Commonwealth of Canada
4.250% due 12/01/26 (f) C$ 103 75
------------
Total Foreign Currency-Denominated Issues 75
============
(Cost $69)
1998 Annual Report See accompanying notes 101
<PAGE>
Schedule of Investments (Cont.)
Strategic Balanced Fund
March 31, 1998
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 23.0%
- --------------------------------------------------------------------------------
Certificates of Deposit 3.9%
Banco Latino
6.160% due 09/25/98 $ 1,100 $ 1,099
Bank of Tokyo
6.470% due 06/18/98 400 400
------------
1,499
============
Commercial Paper 13.9%
BellSouth Telecommunications, Inc.
5.490% due 05/20/98 400 397
E.I. Du Pont de Nemours
5.450% due 04/08/98 200 200
Emerson Electric Co.
5.510% due 04/27/98 200 199
Florida Power Corp.
5.510% due 04/28/98 400 398
Ford Motor Credit Corp.
5.550% due 04/02/98 500 500
5.540% due 04/16/98 700 698
General Motors Acceptance Corp.
5.530% due 04/08/98 200 200
KFW International Finance, Inc.
5.510% due 04/24/98 900 897
National Rural Utilities Cooperative
5.500% due 05/21/98 600 595
5.510% due 06/12/98 200 198
Southwestern Public Service Co.
5.510% due 04/24/98 800 797
5.540% due 04/24/98 300 299
------------
5,378
============
Repurchase Agreements 2.8%
State Street Bank
5.000% due 04/01/98 687 687
(Dated 03/31/98. Collateralized by U.S.
Treasury Note 6.250% 06/30/98 valued at
$702,016. Repurchase proceeds are $687,095.)
Daiwa Securities America
5.800% due 04/01/98 400 400
(Dated 03/31/98. Collateralized by U.S.
Treasury Note 5.875% 08/31/99 valued at
$406,393. Repurchase proceeds are $400,064).
------------
1,087
============
U.S. Treasury Bills (b)(g) 2.4%
5.013% due 04/16/98-07/23/98 955 950
------------
Total Short-Term Instruments 8,914
(Cost $8,915) ============
Total Investments (a) 98.1% $ 38,072
(Cost $37,914)
Other Assets and Liabilities (Net) 1.9% 734
------------
Net Assets 100.0% $ 38,806
============
================================================================================
Notes to Schedule of Investments (amounts in thousands):
(a) At March 31, 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. $ 274
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (89)
------------
Unrealized appreciation-net $ 185
============
(b) Securities with an aggregate market value of $950
have been segregated with the custodian to cover margin
requirements for the following open future contracts
at March 31, 1998:
Unrealized
Appreciation/
Type Contracts (Depreciation)
- --------------------------------------------------------------------------------
S&P 500 Index (06/98) 67 $ 344
U.S. Treasury 5 Year Note (06/98) 61 (64)
U.S. Treasury 10 Year Note (06/98) 61 (31)
United Kingdom 90 Day LIBOR (06/98) 10 (1)
------------
$ 248
============
(c) Foreign forward currency contracts outstanding at March 31, 1998:
Principal
Amount
Covered Expiration Unrealized
Type by Contract Month Depreciation
- --------------------------------------------------------------------------------
Sell C$ 109 06/98 $ (1)
(d) Variable rate security. The rate listed is as of March 31, 1998.
(e) Principal amount denoted in indicated currency:
C$ - Canadian Dollar
(f) Principal amount of the security is adjusted for inflation.
(g) Securities are grouped by coupon and represent a range of maturities.
(h) Swap agreements outstanding at March 31, 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. 07/31/98 $ 5,897 $ 1
102 PIMCO Funds See accompanying notes
<PAGE>
Notes to Financial Statements
March 31, 1998
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
for certain Funds. 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). Financial statements for the
International and Municipal Bond Funds are provided separately. The Commercial
Mortgage Securities, Emerging Markets Bond II and StocksPLUS Short Strategy
Funds had not commenced operations as of March 31, 1998. As used in the
financial statements, "Institutional Classes" refers to the Institutional and
Administrative Classes and "Retail Classes" refers to the A, B, C, and D Classes
of the Trust.
2. Significant Accounting Policies
The following is a summary of significant accounting policies consistently
followed by the Trust in preparation of its financial statements. These policies
are 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.
1998 Annual Report 103
<PAGE>
Notes to Financial Statements (Cont.)
March 31, 1998
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 Statement 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. 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
counterparty 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 $610,266,695, $37,376,009, $18,766,752, $985,680, $35,777,922,
$6,014,338, $284,512,443, $114,599,261, $22,596,434 and $139,408 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 and
StocksPLUS Funds, respectively, related to these financing transactions.
104 PIMCO Funds
<PAGE>
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
qoutations 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 bankrupcy 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
1998 Annual Report 105
<PAGE>
Notes to Financial Statements (Cont.)
March 31, 1998
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.
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 maket value of the security sold
by the Fund may decline below the repurchase price of the security.
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 Retail Classes is charged at an annual rate of 0.35%
for the Short-Term and Money Market Funds, 0.45% for the Foreign Bond and Global
Bond II Funds, 0.55% for the Emerging Markets Bond Fund and 0.40% for all other
Funds.
106 PIMCO Funds
<PAGE>
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 1998.
Pursuant to the Distribution and Servicing Plans adopted by the Retail
Classes of the Trust, the Trust compensates PFD 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 Retail Classes. The Trust pays 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 Funds, Long-Term U.S. Gov't,
Foreign Bond, Global Bond II
Emerging Markets Bond and High Yield 0.75 0.25 0.75 0.25
Low Duration Fund 0.50 0.25 0.50 0.25
Real Return 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
</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 March 31,
1998, the Funds were informed that PFD received $3,220,441 representing
commissions (sales charges) and contingent deferred sales charges related to the
Retail Classes.
1998 Annual Report 107
<PAGE>
Notes to Financial Statements (Cont.)
March 31, 1998
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 costs 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 Multiclass 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, 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 March 31, 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 $ 30,659,485 $ 27,541,592 $ 8,211,135 $ 3,429,448
Total Return Fund II 1,588,789 1,555,447 171,107 79,083
Total Return Fund III 438,905 376,265 219,576 72,966
Total Return Mortgage Fund 14,163 11,330 8,703 7,324
Moderate Duration Fund 173,562 83,074 160,170 20,822
Low Duration Fund 11,277,496 9,399,379 286,925 480,145
Low Duration Fund II 1,508,120 1,121,784 30,492 26,100
Low Duration Fund III 47,717 36,449 1,427 0
Low Duration Mortgage Fund 30,594 20,690 3,818 6,700
Short-Term Fund 55,931 34,614 97,694 53,391
Long-Term U.S. Gov't Fund 169,248 100,758 18,050 419
Real Return Bond Fund 79,685 74,873 25,079 22,060
Foreign Bond Fund 112,168 64,477 1,117,065 1,106,425
Global Bond Fund 129,577 73,472 1,046,067 1,117,861
Global Bond Fund II 16,102 16,290 90,463 80,854
Emerging Markets Bond Fund 10,130 10,143 21,072 16,442
High Yield Fund 0 0 1,543,696 516,227
StocksPLUS Fund 145,322 44,353 271,673 68,671
Strategic Balanced Fund 11,903 4,119 29,200 13,046
</TABLE>
108 PIMCO Funds
<PAGE>
5. Transactions in Written Call and Put Options
Transactions in written call and put options were as follows (amounts in
thousands):
<TABLE>
<CAPTION>
Total Return Total Return II Total Return III Low Duration
- ---------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------- Premium -----------------------------------------
<S> <C> <C> <C> <C>
Balance at 3/31/97 $ 30,218 $ 1,531 $ 1,073 $ 3,711
Sales 14,996 169 198 0
Closing Buys 0 0 0 0
Expirations (36,693) (1,700) (1,073) (3,711)
Exercised (4,868) 0 0 0
- ---------------------------------------------------------------------------------------------------------------------------
Balance at 3/31/98 $ 3,653 $ 0 $ 198 $ 0
===========================================================================================================================
<CAPTION>
Long-Term Real
Low Duration II U.S. Gov't Return Bond Foreign Bond
- ---------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------- Premium -----------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance at 3/31/97 $ 287 $ 34 $ 0 $ 0
Sales 0 0 88 19
Closing Buys 0 (34) 0 0
Expirations (287) 0 0 (19)
Exercised 0 0 0 0
- ---------------------------------------------------------------------------------------------------------------------------
Balance at 3/31/98 $ 0 $ 0 $ 88 $ 0
===========================================================================================================================
<CAPTION>
Emerging Strategic
Global Bond Markets Bond Balanced
- --------------------------------------------------------------------------------------------------
- ------------------------------------------------------------ Premium -----------------------------
<S> <C> <C> <C> <C> <C>
Balance at 3/31/97 $ 0 $ 0 $ 0
Sales 12 65 3
Closing Buys 0 0 (1)
Expirations (12) (65) 0
Exercised 0 0 (2)
- --------------------------------------------------------------------------------------------------
Balance at 3/31/98 $ 0 $ 0 $ 0
==================================================================================================
</TABLE>
1998 Annual Report 109
<PAGE>
Notes to Financial Statements (Cont.)
March 31, 1998
6. 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
(amounts in thousands):
<TABLE>
<CAPTION>
Total Return Fund Total Return Fund II
------------------------------------------- -----------------------------------------
Year Ended 3/31/98 Year Ended 3/31/97 Year Ended 3/31/98 Year Ended 3/31/97
Shares Amount Shares Amount Shares Amount Shares Amount
-------------------- --------------------- -----------------------------------------
Receipts for shares sold
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Institutional Class................... 569,689 $6,060,910 358,561 $3,709,839 33,950 $ 347,509 8,952 $ 88,832
Administrative Class.................. 39,423 420,992 12,842 132,504 1,005 10,297 184 1,824
Class A............................... 43,181 460,620 3,360 35,013 0 0 0 0
Class B............................... 11,221 119,773 1,002 10,459 0 0 0 0
Class C............................... 14,063 149,964 1,329 13,775 0 0 0 0
Shares issued in reorganization
Class A............................... 0 0 8,630 90,184 0 0 0 0
Class B............................... 0 0 6,410 66,992 0 0 0 0
Class C............................... 0 0 32,743 342,162 0 0 0 0
Issued as reinvestment of distributions
Institutional Class................... 97,133 1,031,930 58,681 606,425 2,944 30,055 2,871 28,378
Administrative Class.................. 2,241 23,828 820 8,479 60 610 28 273
Class A............................... 1,979 21,051 88 900 0 0 0 0
Class B............................... 613 6,517 49 513 0 0 0 0
Class C............................... 1,747 18,558 223 2,316 0 0 0 0
Cost of shares redeemed
Institutional Class................... (333,872) (3,556,685) (193,748) (2,001,935) (29,485) (299,345) (9,278) (90,902)
Administrative Class.................. (11,009) (117,585) (9,113) (94,080) (124) (1,264) (9) (93)
Class A............................... (6,141) (65,456) (810) (8,458) 0 0 0 0
Class B............................... (1,444) (15,356) (244) (2,564) 0 0 0 0
Class C............................... (9,698) (102,973) (2,256) (23,590) 0 0 0 0
Net increase (decrease) resulting from
Fund share transactions............... 419,126 $4,456,088 278,567 $2,888,934 8,350 $ 87,862 2,748 $ 28,312
========================================= ============================================ =================== ===================
<CAPTION>
Total Return Fund III
-----------------------------------------
Year Ended 3/31/98 Year Ended 3/31/97
Shares Amount Shares Amount
-----------------------------------------
Receipts for shares sold
<S> <C> <C> <C> <C>
Institutional Class...................... 16,851 $ 160,414 6,069 $ 56,444
Administrative Class..................... 23 211 0 0
Class A.................................. 0 0 0 0
Class B.................................. 0 0 0 0
Class C.................................. 0 0 0 0
Shares issued in reorganization
Class A.................................. 0 0 0 0
Class B.................................. 0 0 0 0
Class C.................................. 0 0 0 0
Issued as reinvestment of distributions
Institutional Class...................... 2,151 20,471 1,127 10,374
Administrative Class..................... 0 1 0 0
Class A.................................. 0 0 0 0
Class B.................................. 0 0 0 0
Class C.................................. 0 0 0 0
Cost of shares redeemed
Institutional Class...................... (1,903) (17,962) (1,649) (15,338)
Administrative Class..................... (4) (39) 0 0
Class A.................................. 0 0 0 0
Class B.................................. 0 0 0 0
Class C.................................. 0 0 0 0
Net increase (decrease) resulting from
Fund share transactions.................. 17,118 $ 163,096 5,547 $ 51,480
============================================ ===========================================
</TABLE>
<TABLE>
<CAPTION>
Low Duration
Low Duration Fund III Mortgage Fund
----------------------------------------- --------------------
Year Ended 3/31/98 Period Ended 3/31/97 Period Ended 3/31/98
Shares Amount Shares Amount Shares Amount
----------------------------------------- --------------------
Receipts for shares sold
<S> <C> <C> <C> <C> <C> <C>
Institutional Class......................... 1,281 $ 12,870 1,000 $ 10,000 355 $ 3,553
Administrative Class........................ 0 0 0 0 0 0
Class A..................................... 0 0 0 0 0 0
Class B..................................... 0 0 0 0 0 0
Class C..................................... 0 0 0 0 0 0
Shares issued in reorganization
Class A..................................... 0 0 0 0 0 0
Class B..................................... 0 0 0 0 0 0
Class C..................................... 0 0 0 0 0 0
Issued as reinvestment of distributions
Institutional Class......................... 81 816 15 149 16 159
Administrative Class........................ 0 0 0 0 0 0
Class A..................................... 0 0 0 0 0 0
Class B..................................... 0 0 0 0 0 0
Class C..................................... 0 0 0 0 0 0
Cost of shares redeemed
Institutional Class......................... 0 (1) 0 0 (1) (7)
Administrative Class........................ 0 0 0 0 0 0
Class A..................................... 0 0 0 0 0 0
Class B..................................... 0 0 0 0 0 0
Class C..................................... 0 0 0 0 0 0
Net increase (decrease) resulting from
Fund share transactions..................... 1,362 $ 13,685 1,015 $ 10,149 370 $ 3,705
=============================================== =========================================== ==================
<CAPTION>
Short-Term Fund
-----------------------------------------
Year Ended 3/31/98 Year Ended 3/31/97
Shares Amount Shares Amount
-----------------------------------------
Receipts for shares sold
<S> <C> <C> <C> <C>
Institutional Class........................ 30,985 $ 311,342 18,060 $ 180,257
Administrative Class....................... 458 4,605 867 8,640
Class A.................................... 3,832 38,492 441 4,435
Class B.................................... 610 6,129 19 197
Class C.................................... 991 9,964 140 1,403
Shares issued in reorganization
Class A.................................... 0 0 0 0
Class B.................................... 0 0 0 0
Class C.................................... 0 0 0 0
Issued as reinvestment of distributions
Institutional Class........................ 904 9,089 625 6,243
Administrative Class....................... 3 35 1 15
Class A.................................... 47 474 1 5
Class B.................................... 1 14 0 1
Class C.................................... 19 193 0 4
Cost of shares redeemed
Institutional Class........................ (30,360) (305,111) (13,294) (132,676)
Administrative Class....................... (401) (4,023) (820) (8,162)
Class A.................................... (1,729) (17,369) (189) (1,898)
Class B.................................... (497) (4,998) (8) (83)
Class C.................................... (474) (4,767) (4) (44)
Net increase (decrease) resulting from
Fund share transactions.................... 4,389 $ 44,069 5,839 $ 58,337
============================================== =============================================
</TABLE>
110 PIMCO Funds
<PAGE>
<TABLE>
<CAPTION>
Total Return
Mortgage Fund Moderate Duration Fund
------------------- -------------------------------------------
Year Ended 3/31/98 Year Ended 3/31/98 Year Ended 3/31/97
Shares Amount Shares Amount Shares Amount
------------------- -------------------------------------------
Receipts for shares sold
<S> <C> <C> <C> <C> <C> <C>
Institutional Class.................... 336 $ 3,365 22,490 $ 226,998 1,374 $ 13,681
Administrative Class................... 0 0 0 0 0 0
Class A................................ 0 0 0 0 0 0
Class B................................ 0 0 0 0 0 0
Class C................................ 0 0 0 0 0 0
Shares issued in reorganization
Class A................................ 0 0 0 0 0 0
Class B................................ 0 0 0 0 0 0
Class C................................ 0 0 0 0 0 0
Issued as reinvestment of distributions
Institutional Class.................... 14 142 602 6,096 16 159
Administrative Class................... 0 0 0 0 0 0
Class A................................ 0 0 0 0 0 0
Class B................................ 0 0 0 0 0 0
Class C................................ 0 0 0 0 0 0
Cost of shares redeemed
Institutional Class.................... 0 0 (881) (8,890) (21) (207)
Administrative Class................... 0 0 0 0 0 0
Class A................................ 0 0 0 0 0 0
Class B................................ 0 0 0 0 0 0
Class C................................ 0 0 0 0 0 0
Net increase (decrease) resulting from
Fund share transactions................ 350 $ 3,507 22,211 $ 224,204 1,369 $ 13,633
========================================== ================= ==================== =====================
<CAPTION>
Low Duration Fund Low Duration Fund II
----------------------------------------- -----------------------------------------
Year Ended 3/31/98 Year Ended 3/31/97 Year Ended 3/31/98 Year Ended 3/31/97
Shares Amount Shares Amount Shares Amount Shares Amount
----------------------------------------- -----------------------------------------
Receipts for shares sold
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Institutional Class................... 144,295 $1,467,244 139,451 $1,394,715 17,716 $ 177,099 14,219 $ 139,963
Administrative Class.................. 3,319 33,741 2,251 22,564 7 72 0 0
Class A............................... 34,531 351,735 2,135 21,468 0 0 0 0
Class B............................... 1,705 17,368 178 1,783 0 0 0 0
Class C............................... 5,739 58,311 1,581 15,897 0 0 0 0
Shares issued in reorganization
Class A............................... 0 0 5,364 53,912 0 0 0 0
Class B............................... 0 0 454 4,564 0 0 0 0
Class C............................... 0 0 6,149 61,795 0 0 0 0
Issued as reinvestment of distributions
Institutional Class................... 15,257 155,141 15,036 149,996 2,014 20,086 1,612 15,824
Administrative Class.................. 182 1,852 52 518 0 0 0 0
Class A............................... 448 4,564 61 615 0 0 0 0
Class B............................... 38 384 3 33 0 0 0 0
Class C............................... 271 2,754 49 495 0 0 0 0
Cost of shares redeemed
Institutional Class................... (168,625) (1,713,570) (143,424)(1,432,178) (14,185) (141,508) (7,059) (69,105)
Administrative Class.................. (1,324) (13,425) (197) (1,971) (2) (16) 0 0
Class A............................... (30,163) (307,185) (1,615) (16,266) 0 0 0 0
Class B............................... (542) (5,522) (104) (1,047) 0 0 0 0
Class C............................... (5,625) (57,029) (1,407) (14,179) 0 0 0 0
Net increase (decrease) resulting from
Fund share transactions............... (494) $ (3,637) 26,017 $ 262,714 5,550 $ 55,733 8,772 $ 86,682
========================================= ===================== =================== =========================================
<CAPTION>
Long-Term U.S. Gov't Fund Real Return Bond Fund
------------------------------------------- -------------------------------------------
Year Ended 3/31/98 Year Ended 3/31/97 Year Ended 3/31/98 Period Ended 3/31/97
Shares Amount Shares Amount Shares Amount Shares Amount
------------------------------------------- -------------------------------------------
Receipts for shares sold
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Institutional Class................... 4,747 $ 48,113 712 $ 6,985 465 $ 4,626 564 $ 5,636
Administrative Class.................. 478 4,924 0 0 0 0 0 0
Class A............................... 597 6,175 128 1,237 118 1,170 0 0
Class B............................... 769 8,001 48 469 131 1,292 51 514
Class C............................... 817 8,501 29 281 114 1,136 15 149
Shares issued in reorganization
Class A............................... 0 0 0 0 0 0 0 0
Class B............................... 0 0 0 0 0 0 0 0
Class C............................... 0 0 0 0 0 0 0 0
Issued as reinvestment of distributions
Institutional Class................... 194 1,998 215 2,113 34 333 4 45
Administrative Class.................. 9 97 0 0 0 0 0 0
Class A............................... 11 116 0 1 2 24 0 0
Class B............................... 12 121 0 1 3 34 0 1
Class C............................... 11 116 0 1 3 33 0 0
Cost of shares redeemed
Institutional Class................... (2,479) (25,182) (2,062) (20,121) (501) (5,016) 0 0
Administrative Class.................. (18) (191) 0 0 0 0 0 0
Class A............................... (154) (1,612) 0 0 (83) (818) 0 0
Class B............................... (118) (1,248) 0 0 (32) (323) 0 0
Class C............................... (171) (1,794) 0 (1) (82) (812) 0 0
Net increase (decrease) resulting from
Fund share transactions............... 4,705 $ 48,135 (930) $ (9,034) 172 $ 1,679 634 $ 6,345
========================================= ========================================== ===========================================
</TABLE>
<TABLE>
<CAPTION>
Foreign Bond Fund Global Bond Fund
------------------------------------------- -------------------------------------------
Year Ended 3/31/98 Year Ended 3/31/97 Year Ended 3/31/98 Year Ended 3/31/97
Shares Amount Shares Amount Shares Amount Shares Amount
------------------------------------------- -------------------------------------------
Receipts for shares sold
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Institutional Class.................. 21,531 $ 230,125 14,462 $ 155,503 9,748 $ 97,041 8,566 $ 87,843
Administrative Class................. 28 298 3 30 1,869 18,488 60 632
Class A.............................. 855 9,138 69 715 0 0 0 0
Class B.............................. 896 9,586 117 1,236 0 0 0 0
Class C.............................. 1,458 15,595 172 1,809 0 0 0 0
Shares issued in reorganization
Class A.............................. 0 0 0 0 0 0 0 0
Class B.............................. 0 0 0 0 0 0 0 0
Class C.............................. 0 0 0 0 0 0 0 0
Issued as reinvestment of distributions
Institutional Class.................. 2,017 21,425 2,246 23,548 1,552 15,183 1,227 12,695
Administrative Class................. 2 21 0 0 16 163 2 17
Class A.............................. 35 373 0 1 0 0 0 0
Class B.............................. 43 455 0 2 0 0 0 0
Class C.............................. 73 771 0 3 0 0 0 0
Cost of shares redeemed
Institutional Class.................. (9,581) (102,060) (18,761) (205,567) (6,739) (66,343) (1,227) (12,625)
Administrative Class................. (4) (38) 0 0 (1,761) (17,243) (27) (273)
Class A.............................. (66) (703) (1) (6) 0 0 0 0
Class B.............................. (66) (702) 0 0 0 0 0 0
Class C.............................. (112) (1,194) 0 (2) 0 0 0 0
Net increase (decrease) resulting from
Fund share transactions.............. 17,109 $ 183,090 (1,693) $ (22,728) 4,685 $ 47,289 8,601 $ 88,289
======================================== ========================================== ===========================================
</TABLE>
1998 Annual Report 111
<PAGE>
Notes to Financial Statements (Cont.)
March 31, 1998
<TABLE>
<CAPTION>
Emerging Markets
Global Bond Fund II Bond Fund
--------------------------------------------------- ---------------------
Year Ended 3/31/98 Year Ended 3/31/97 Period Ended 3/31/98
Shares Amount Shares Amount Shares Amount
--------------------------------------------------- ---------------------
<S> <C> <C> <C> <C> <C> <C>
Receipts for shares sold
Institutional Class.................... 2,462 $ 24,247 0 $ 0 395 $ 3,907
Administrative Class................... 0 0 0 0 0 0
Class A................................ 499 5,409 136 1,518 37 353
Class B................................ 117 1,255 70 778 31 294
Class C................................ 158 1,717 177 1,967 14 132
Shares issued in reorganization
Class A................................ 0 0 0 0 0 0
Class B................................ 0 0 0 0 0 0
Class C................................ 0 0 0 0 0 0
Issued as reinvestment of distributions
Institutional Class.................... 10 100 0 0 22 212
Administrative Class................... 0 0 0 0 0 0
Class A................................ 105 1,055 16 171 1 9
Class B................................ 58 578 13 138 1 7
Class C................................ 94 942 19 215 1 6
Cost of shares redeemed
Institutional Class.................... 0 0 0 0 (37) (350)
Administrative Class................... 0 0 0 0 0 0
Class A................................ (623) (6,982) (118) (1,285) (6) (54)
Class B................................ (88) (940) (16) (178) 0 0
Class C................................ (128) (1,407) (21) (236) 0 (3)
Net increase (decrease) resulting from
Fund share transactions 2,664 $ 25,974 276 $ 3,088 459 $ 4,513
=========================================== =================================================== =====================
<CAPTION>
High Yield Fund
------------------------------------------------------
Year Ended 3/31/98 Year Ended 3/31/97
Shares Amount Shares Amount
------------------------------------------------------
<S> <C> <C> <C> <C>
Receipts for shares sold
Institutional Class.................... 85,745 $ 991,624 37,480 $ 414,058
Administrative Class................... 5,481 63,673 1,323 14,665
Class A................................ 5,603 64,633 480 5,390
Class B................................ 8,820 101,900 1,083 12,160
Class C................................ 11,386 131,535 1,380 15,420
Shares issued in reorganization
Class A................................ 0 0 2,634 29,527
Class B................................ 0 0 4,447 49,852
Class C................................ 0 0 18,228 204,339
Issued as reinvestment of distributions
Institutional Class.................... 7,846 90,586 6,306 69,870
Administrative Class................... 123 1,429 31 353
Class A................................ 236 2,723 25 271
Class B................................ 381 4,397 37 412
Class C................................ 1,066 12,300 163 1,819
Cost of shares redeemed
Institutional Class.................... (20,969) (238,595) (25,767) (286,865)
Administrative Class................... (546) (6,334) (506) (5,554)
Class A................................ (2,364) (27,260) (537) (6,044)
Class B................................ (1,243) (14,335) (136) (1,524)
Class C................................ (6,522) (75,236) (1,272) (14,308)
Net increase (decrease) resulting from
Fund share transactions 95,043 $ 1,103,040 45,399 $ 503,841
=========================================== ======================================================
<CAPTION>
Money Market Fund StocksPLUS Fund
-------------------------------------------------------- ------------------------
Year Ended 3/31/98 Year Ended 3/31/97 Year Ended 3/31/98
Shares Amount Shares Amount Shares Amount
-------------------------------------------------------- ------------------------
<S> <C> <C> <C> <C> <C> <C>
Receipts for shares sold
Institutional Class.................... 126,866 $ 126,866 48,817 $ 48,817 16,854 $ 225,911
Administrative Class................... 1,317 1,317 8 8 98 1,303
Class A................................ 1,983,452 1,983,452 303,692 303,692 5,189 70,046
Class B................................ 14,945 14,945 3,657 3,657 6,014 81,066
Class C................................ 1,189,852 1,189,852 262,815 262,815 6,158 82,851
Shares issued in reorganization
Class A................................ 0 0 14,653 14,653 0 0
Class B................................ 0 0 2,499 2,499 0 0
Class C................................ 0 0 52,050 52,050 0 0
Issued as reinvestment of distributions
Institutional Class.................... 1,408 1,408 1,077 1,077 4,247 54,317
Administrative Class................... 15 15 1 1 17 211
Class A................................ 1,226 1,226 192 192 531 6,748
Class B................................ 94 94 15 15 731 9,234
Class C................................ 2,314 2,314 605 605 816 10,335
Cost of shares redeemed
Institutional Class.................... (96,437) (96,437) (52,332) (52,332) (12,110) (165,345)
Administrative Class................... (594) (594) (7) (7) (22) (291)
Class A................................ (1,986,890) (1,986,890) (274,948) (274,948) (1,748) (23,650)
Class B................................ (15,245) (15,245) (3,028) (3,028) (400) (5,397)
Class C................................ (1,221,867) (1,221,867) (230,072) (230,072) (1,049) (14,121)
Net increase (decrease) resulting from
Fund share transactions 456 $ 456 129,694 $ 129,694 25,326 $ 333,218
======================================= ======================================================== ========================
<CAPTION>
StocksPLUS Fund Strategic Balanced Fund
------------------------- ---------------------------------------------------
Year Ended 3/31/97 Year Ended 3/31/98 Period Ended 3/31/97
Shares Amount Shares Amount Shares Amount
------------------------- ---------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Receipts for shares sold
Institutional Class.................... 7,685 $ 91,156 2,472 $ 29,336 1,003 $ 10,032
Administrative Class................... 64 746 0 0 0 0
Class A................................ 515 6,245 0 0 0 0
Class B................................ 720 8,743 0 0 0 0
Class C................................ 1,276 15,506 0 0 0 0
Shares issued in reorganization
Class A................................ 0 0 0 0 0 0
Class B................................ 0 0 0 0 0 0
Class C................................ 0 0 0 0 0 0
Issued as reinvestment of distributions
Institutional Class.................... 2,419 28,060 53 617 0 3
Administrative Class................... 1 8 0 0 0 0
Class A................................ 5 64 0 0 0 0
Class B................................ 7 86 0 0 0 0
Class C................................ 13 156 0 0 0 0
Cost of shares redeemed
Institutional Class.................... (3,137) 36,460 448 (5,202) 0 0
Administrative Class................... (5) (58) 0 0 0 0
Class A................................ (15) (182) 0 0 0 0
Class B................................ (3) (33) 0 0 0 0
Class C................................ (306) (3,565) 0 0 0 0
Net increase (decrease) resulting from
Fund share transactions 9,239 $ 110,472 2,077 $ 24,751 1,003 $ 10,035
======================================= ========================= ===================================================
</TABLE>
112 PIMCO Funds
<PAGE>
7. 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 $ -- $ 988 03/31/04
-- 8,185 03/31/02
High Yield Fund -- 50,541 03/31/02
-- 5,495 03/31/01
</TABLE>
8. Reorganization
Each 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>
Value of Total
Shares Shares Total Net Total Net Net Assets Acquired
Issued by Issued by Assets of Assets of of Acquiring Fund(s)
Acquiring Acquiring Acquired Acquiring Fund After Unrealized
Acquiring Fund Acquired Fund(s) Date Fund Fund Fund(s) Fund Acquisition Appreciation
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PIMCO PIMCO Advisors
Total Return Fund Total Return Income
Fund and PIMCO Advisors
U.S. Government Fund 01/17/97 47,783 $ 499,338 $ 499,338 $ 12,445,156 $ 12,944,494 $ 5,236
PIMCO PIMCO Advisors
Low Duration Fund Short-Intermediate
Fund 01/17/97 11,967 $ 120,271 $ 120,271 $ 2,829,201 $ 2,949,472 $ 448
PIMCO PIMCO Advisors
High Yield Fund High Income Fund 01/17/97 25,309 $ 283,718 $ 283,718 $ 791,932 $ 1,075,650 $ 12,610
PIMCO PIMCO Advisors
Money Market Fund Money Market Fund 01/17/97 69,202 $ 69,202 $ 69,202 $ 25,027 $ 94,229 $ --
</TABLE>
On January 17, 1997 the Global Bond Fund II, previously known as the Global
Income Fund, a portfolio in the PIMCO Advisors Funds, was reorganized as a
portfolio of the PIMCO Funds: Pacific Investment Management Series pursuant to
an agreement and plan of reorganization approved by the Fund's shareholders. In
connection with the reorganization the year end date of the Fund was changed
from September 30 to March 31.
1998 Annual Report 113
<PAGE>
Notes to Financial Statements (Cont.)
March 31, 1998
9. Retail Class Summaries
The following amounts relate to items accumulated in the Statement of Assets and
Liabilities, the Statement of Operations and the Statement of Changes in Net
Assets (amounts in thousands):
<TABLE>
<CAPTION>
Long-Term U.S.
Total Return Fund Low Duration Fund Short-Term Fund Gov't Fund
--------------------- --------------------- --------------------- ---------------------
Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended
3/31/98 3/31/97 3/31/98 3/31/97 3/31/98 3/31/97 3/31/98 3/31/97
--------------------- --------------------- --------------------- ---------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares Issued and Outstanding:
Class A................... 50,287 11,268 10,761 5,945 2,403 253 583 128
Class B................... 17,607 7,217 1,732 531 125 11 711 48
Class C................... 38,151 32,039 6,756 6,372 672 136 686 29
106,045 50,524 19,249 12,848 3,200 400 1,980 205
Distribution and Servicing Fees:
Class A................... $ 679 $ 47 $ 193 $ 28 $ 23 $ 1 $ 8 $ 0
Class B................... 1,153 140 96 9 8 0 28 0
Class C................... 3,511 667 461 93 22 0 27 0
$ 5,343 $ 854 $ 750 $ 130 $ 53 $ 1 $ 63 $ 0
Distributions to Shareholders:
From net investment income
Class A................... $ 14,462 $ 1,116 $ 4,396 $ 618 $ 498 $ 10 $ 183 $ 10
Class B................... 5,314 717 474 48 37 1 133 2
Class C................... 16,492 3,419 3,236 636 216 4 127 1
In excess of net investment income
Class A................... 397 28 154 18 9 0 0 0
Class B................... 146 18 16 1 1 0 0 0
Class C................... 453 85 113 19 3 0 0 0
From net realized capital gains
Class A................... 8,102 0 280 0 15 0 27 0
Class B................... 3,479 0 34 0 1 0 25 0
Class C................... 9,011 0 182 0 9 0 26 0
In excess of net realized capital gains
Class A................... 0 0 0 0 0 0 0 0
Class B................... 0 0 0 0 0 0 0 0
Class C................... 0 0 0 0 0 0 0 0
Tax basis return of capital
Class A................... 0 0 0 0 0 0 0 0
Class B................... 0 0 0 0 0 0 0 0
Class C................... 0 0 0 0 0 0 0 0
$ 57,856 $ 5,383 $ 8,885 $ 1,340 $ 789 $ 15 $ 521 $ 13
<CAPTION>
Real Return
Bond Fund Foreign Bond Fund
---------------------- -----------------------
Period from
Year Ended 1/29/97 Year Ended Year Ended
3/31/98 to 3/31/97 3/31/98 3/31/97
---------------------- -----------------------
<S> <C> <C> <C> <C>
Shares Issued and Outstanding:
Class A................... 38 0 892 68
Class B................... 153 51 990 117
Class C................... 50 15 1,591 172
241 66 3,473 357
Distribution and Servicing Fees:
Class A................... $ 1 $ 0 $ 10 $ 0
Class B................... 10 0 58 1
Class C................... 4 0 91 1
$ 15 $ 0 $ 159 $ 2
Distributions to Shareholders:
From net investment income
Class A................... $ 18 $ 0 $ 249 $ 1
Class B................... 32 1 311 2
Class C................... 21 0 485 3
In excess of net investment income
Class A................... 1 0 0 0
Class B................... 2 0 0 0
Class C................... 2 0 0 0
From net realized capital gains
Class A................... 6 0 161 0
Class B................... 14 0 238 0
Class C................... 11 0 362 0
In excess of net realized capital gains
Class A................... 0 0 0 0
Class B................... 0 0 0 0
Class C................... 0 0 0 0
Tax basis return of capital
Class A................... 0 0 0 0
Class B................... 0 0 0 0
Class C................... 0 0 0 0
$ 107 $ 1 $ 1,806 $ 6
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Emerging
Market
Global Bond Bond
Fund II Fund High Yield Fund Money Market Fund
--------------------- ----------- ---------------------- -----------------------
Six Months Period from
Year Ended Ended 7/31/97 Year Ended Year Ended Year Ended Year Ended
3/31/98 3/31/97 to 3/31/98 3/31/98 3/31/97 3/31/98 3/31/97
--------------------- ----------- ---------------------- -----------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Shares Issued and Outstanding:
Class A......................... 688 706 34 6,077 2,602 41,376 43,589
Class B......................... 449 362 31 13,388 5,431 2,937 3,143
Class C......................... 616 491 14 24,429 18,499 55,697 85,398
1,753 1,559 79 43,894 26,532 100,010 132,130
=================================== ===================== =========== ====================== =======================
Distribution and Servicing Fees:
Class A......................... $ 21 $ 10 $ 0 $ 122 $ 15 $ 38 $ 5
Class B......................... 43 19 1 1,013 111 28 4
Class C......................... 57 23 1 2,416 412 59 12
$ 121 $ 52 $ 2 $ 3,551 $ 538 $ 125 $ 21
=================================== ===================== =========== ====================== =======================
Distributions to Shareholders:
From net investment income
Class A......................... $ 411 $ 151 $ 9 $ 3,926 $ 502 $ 1,970 $ 263
Class B......................... 182 56 6 7,402 820 115 16
Class C......................... 240 69 4 17,859 3,086 3,020 617
In excess of net investment income
Class A......................... 0 0 0 0 0 1 0
Class B......................... 0 0 0 0 0 0 0
Class C......................... 0 0 0 0 0 1 0
From net realized capital gains
Class A......................... 856 302 3 0 0 0 0
Class B......................... 598 133 4 0 0 0 0
Class C......................... 783 165 2 0 0 0 0
In excess of net realized capital gains
Class A......................... 0 0 0 500 0 0 0
Class B......................... 0 0 0 944 0 0 0
Class C......................... 0 0 0 1,935 0 0 0
Tax basis return of capital
Class A......................... 0 0 0 0 0 0 0
Class B......................... 0 0 0 0 0 0 0
Class C......................... 0 0 0 0 0 0 0
$ 3,070 $ 876 $ 28 $ 32,566 $ 4,408 $ 5,107 $ 896
=================================== ===================== =========== ====================== =======================
<CAPTION>
StocksPLUS Fund
-------------------------
Year Ended Year Ended
3/31/98 3/31/97
-------------------------
<S> <C> <C>
Shares Issued and Outstanding:
Class A......................... 4,478 505
Class B......................... 7,068 724
Class C......................... 6,909 983
18,455 2,212
=================================== =========================
Distribution and Servicing Fees:
Class A......................... $ 84 $ 2
Class B......................... 447 8
Class C......................... 377 11
$ 908 $ 21
=================================== =========================
Distributions to Shareholders:
From net investment income
Class A......................... $ 4,008 $ 70
Class B......................... 5,278 93
Class C......................... 5,834 161
In excess of net investment income
Class A......................... 0 0
Class B......................... 0 0
Class C......................... 0 0
From net realized capital gains
Class A......................... 3,306 0
Class B......................... 4,591 0
Class C......................... 4,963 0
In excess of net realized capital gains
Class A......................... 0 0
Class B......................... 0 0
Class C......................... 0 0
Tax basis return of capital
Class A......................... 0 0
Class B......................... 0 0
Class C......................... 0 0
- ----------------------------------- -------------------------
$ 27,980 $ 324
=================================== =========================
</TABLE>
1998 Annual Report 115
<PAGE>
Notes to Financial Statements (Cont.)
March 31, 1998
10. Financial Highlights - Retail Classes
<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
Class A
03/31/98................... $ 10.27 $ 0.58(a) $ 0.63(a) $ 1.21 $ (0.57) $ (0.02)
01/13/97-03/31/97.......... 10.40 0.12 (0.12) 0.00 (0.13) 0.00
Class B
03/31/98................... 10.27 0.50(a) 0.63(a) 1.13 (0.50) (0.01)
01/13/97-03/31/97.......... 10.40 0.11 (0.12) (0.01) (0.12) 0.00
Class C
03/31/98................... 10.27 0.51(a) 0.63(a) 1.14 (0.51) (0.01)
01/13/97-03/31/97.......... 10.40 0.11 (0.12) (0.01) (0.12) 0.00
Low Duration Fund
Class A
03/31/98................... $ 9.98 $ 0.60(a) $ 0.23(a) $ 0.83 $ (0.58) $ (0.02)
01/13/97-03/31/97.......... 10.02 0.12 (0.03) 0.09 (0.12) (0.01)
Class B
03/31/98................... 9.98 0.53(a) 0.22(a) 0.75 (0.50) (0.02)
01/13/97-03/31/97.......... 10.02 0.10 (0.03) 0.07 (0.11) 0.00
Class C
03/31/98................... 9.98 0.55(a) 0.23(a) 0.78 (0.53) (0.02)
01/13/97-03/31/97.......... 10.02 0.11 (0.03) 0.08 (0.11) (0.01)
Short-Term Fund
Class A
03/31/98................... $ 10.00 $ 0.55(a) $ 0.09(a) $ 0.64 $ (0.56) $ (0.01)
01/20/97-03/31/97.......... 10.04 0.10 (0.03) 0.07 (0.10) (0.01)
Class B
03/31/98................... 10.00 0.50(a) 0.08(a) 0.58 (0.50) (0.01)
01/20/97-03/31/97.......... 10.04 0.09 (0.03) 0.06 (0.10) 0.00
Class C
03/31/98................... 10.00 0.54(a) 0.07(a) 0.61 (0.53) (0.01)
01/20/97-03/31/97.......... 10.04 0.09 (0.03) 0.06 (0.10) 0.00
Long-Term U.S. Government Fund
Class A
03/31/98................... $ 9.39 $ 0.48(a) $ 1.34(a) $ 1.82 $ (0.58) $ 0.00
01/20/97-03/31/97.......... 9.67 0.32 (0.47) (0.15) (0.13) 0.00
Class B
03/31/98................... 9.39 0.39(a) 1.35(a) 1.74 (0.50) 0.00
01/20/97-03/31/97.......... 9.67 0.29 (0.47) (0.18) (0.10) 0.00
Class C
03/31/98................... 9.39 0.39(a) 1.35(a) 1.74 (0.50) 0.00
01/20/97-03/31/97.......... 9.67 0.29 (0.47) (0.18) (0.10) 0.00
</TABLE>
+ Annualized
(a) Per share amounts based on average number of shares outstanding during the
period.
116 PIMCO Funds
<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 Net Assets End
the Year or Period Ended: Capital Gains Capital Gains Capital Distributions of Period Total Return of Period (000s)
------------- ------------- --------- ------------- --------- ------------ ----------------
<S> <C> <C> <C> <C> <C> <C> <C>
Total Return Fund
Class A
03/31/98................ $ (0.27) $ 0.00 $ 0.00 $ (0.86) $ 10.62 12.11% $533,893
01/13/97-03/31/97....... 0.00 0.00 0.00 (0.13) 10.27 0.02 115,742
Class B
03/31/98................ (0.27) 0.00 0.00 (0.78) 10.62 11.26 186,932
01/13/97-03/31/97....... 0.00 0.00 0.00 (0.12) 10.27 (0.10) 74,130
Class C
03/31/98................ (0.27) 0.00 0.00 (0.79) 10.62 11.28 405,037
01/13/97-03/31/97....... 0.00 0.00 0.00 (0.12) 10.27 (0.11) 329,104
Low Duration Fund
Class A
03/31/98................ $ (0.03) $ 0.00 $ 0.00 $ (0.63) $ 10.18 8.49% $109,531
01/13/97-03/31/97....... 0.00 0.00 0.00 (0.13) 9.98 0.85 59,348
Class B
03/31/98................ (0.03) 0.00 0.00 (0.55) 10.18 7.68 17,624
01/13/97-03/31/97....... 0.00 0.00 0.00 (0.11) 9.98 0.68 5,296
Class C
03/31/98................ (0.03) 0.00 0.00 (0.58) 10.18 8.01 68,766
01/13/97-03/31/97....... 0.00 0.00 0.00 (0.12) 9.98 0.75 63,606
Short-Term Fund
Class A
03/31/98................ $ (0.01) $ 0.00 $ 0.00 $ (0.58) $ 10.06 6.64% $ 24,182
01/20/97-03/31/97....... 0.00 0.00 0.00 (0.11) 10.00 0.66 2,533
Class B
03/31/98................ (0.01) 0.00 0.00 (0.52) 10.06 5.96 1,258
01/20/97-03/31/97....... 0.00 0.00 0.00 (0.10) 10.00 0.58 114
Class C
03/31/98................ (0.01) 0.00 0.00 (0.55) 10.06 6.33 6,763
01/20/97-03/31/97....... 0.00 0.00 0.00 (0.10) 10.00 0.63 1,359
Long-Term U.S. Government Fund
Class A
03/31/98................ $ (0.06) $ 0.00 $ 0.00 $ (0.64) $ 10.57 19.78% $ 6,161
01/20/97-03/31/97....... 0.00 0.00 0.00 (0.13) 9.39 (1.72) 1,204
Class B
03/31/98................ (0.06) 0.00 0.00 (0.56) 10.57 18.85 7,516
01/20/97-03/31/97....... 0.00 0.00 0.00 (0.10) 9.39 (1.92) 454
Class C
03/31/98................ (0.06) 0.00 0.00 (0.56) 10.57 18.86 7,258
01/20/97-03/31/97....... 0.00 0.00 0.00 (0.10) 9.39 (1.83) 275
<CAPTION>
Ratio of Net
Ratio of Investment
Expenses to Income to
Selected Per Share Data for Average Net Average Net Portfolio
the Year or Period Ended: Assets Assets Turnover Rate
----------- ----------- -------------
<S> <C> <C> <C>
Total Return Fund
Class A
03/31/98................ 0.90% 5.46% 206%
01/13/97-03/31/97....... 0.91+ 6.08+ 173
Class B
03/31/98................ 1.65 4.74 206
01/13/97-03/31/97....... 1.67+ 5.28+ 173
Class C
03/31/98................ 1.65 4.83 206
01/13/97-03/31/97....... 1.67+ 5.32+ 173
Low Duration Fund
Class A
03/31/98................ 0.90% 5.93% 309%
01/13/97-03/31/97....... 0.91+ 5.84+ 240
Class B
03/31/98................ 1.65 5.16 309
01/13/97-03/31/97....... 1.67+ 5.03+ 240
Class C
03/31/98................ 1.40 5.46 309
01/13/97-03/31/97....... 1.42+ 5.36+ 240
Short-Term Fund
Class A
03/31/98................ 0.85% 5.48% 48%
01/20/97-03/31/97....... 0.86+ 5.07+ 77
Class B
03/31/98................ 1.60 4.97 48
01/20/97-03/31/97....... 1.62+ 4.83+ 77
Class C
03/31/98................ 1.15 5.33 48
01/20/97-03/31/97....... 1.14+ 4.78+ 77
Long-Term U.S. Government Fund
Class A
03/31/98................ 0.91% 4.49% 177%
01/20/97-03/31/97....... 1.12+ 6.91+ 402
Class B
03/31/98................ 1.66 3.77 177
01/20/97-03/31/97....... 1.87+ 4.95+ 402
Class C
03/31/98................ 1.66 3.77 177
01/20/97-03/31/97....... 1.88+ 5.52+ 402
</TABLE>
1998 Annual Report 117
<PAGE>
Notes to Financial Statements (Cont.)
March 31, 1998
<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>
Real Return Bond Fund
Class A
03/31/98............... $ 9.93 $ 0.40(a) $ 0.03(a) $ 0.43 $ (0.42) $ (0.03)
01/29/97-03/31/97...... 10.00 0.11(a) (0.10)(a) 0.01 (0.08) 0.00
Class B
03/31/98............... 9.93 0.33(a) 0.03(a) 0.36 (0.36) (0.02)
01/29/97-03/31/97...... 10.00 0.09 (0.10) (0.01) (0.06) 0.00
Class C
03/31/98............... 9.93 0.35(a) 0.04(a) 0.39 (0.38) (0.03)
01/29/97-03/31/97...... 10.00 0.09 (0.10) (0.01) (0.06) 0.00
Foreign Bond Fund
Class A
03/31/98............... $ 10.41 $ 0.61(a) $ 0.62(a) $ 1.23 $ (0.59) $ 0.00
01/20/97-03/31/97...... 10.59 0.59 (0.72) (0.13) (0.05) 0.00
Class B
03/31/98............... 10.41 0.53(a) 0.61(a) 1.14 (0.50) 0.00
01/20/97-03/31/97...... 10.59 0.58 (0.72) (0.14) (0.04) 0.00
Class C
03/31/98............... 10.41 0.52(a) 0.62(a) 1.14 (0.50) 0.00
01/20/97-03/31/97...... 10.59 0.58 (0.72) (0.14) (0.04) 0.00
Global Bond Fund II
Class A
03/31/98............... $ 10.84 $ 0.64(a) $ 0.51(a) $ 1.15 $ 0.00 $ (0.54)
10/01/96-03/31/97...... 10.96 0.66 (0.16) 0.50 (0.22) 0.00
09/30/96............... 10.00 0.32(b) 0.95 1.27 (0.31) 0.00
Class B
03/31/98............... 10.84 0.66(a) 0.41(a) 1.07 0.00 (0.46)
10/01/96-03/31/97...... 10.96 0.62 (0.16) 0.46 (0.18) 0.00
09/30/96............... 10.00 0.30(b) 0.92 1.22 (0.26) 0.00
Class C
03/31/98............... 10.84 0.55(a) 0.52(a) 1.07 0.00 (0.46)
10/01/96-03/31/97...... 10.96 0.62 (0.16) 0.46 (0.18) 0.00
09/30/96............... 10.00 0.30(b) 0.92 1.22 (0.26) 0.00
Emerging Markets Bond Fund
Class A
07/31/97-03/31/98...... $ 10.00 $ 0.44(a) $ (0.18)(a) $ 0.26 $ (0.44) $ 0.00
Class B
07/31/97-03/31/98...... 10.00 0.40(a) (0.20)(a) 0.20 (0.38) 0.00
Class C
07/31/97-03/31/98...... 10.00 0.38(a) (0.18)(a) 0.20 (0.38) 0.00
High Yield Fund
Class A
03/31/98............... $ 11.10 $ 0.93(a) $ 0.66(a) $ 1.59 $ (0.94) $ 0.00
01/13/97-03/31/97...... 11.18 0.17 (0.05) 0.12 (0.20) 0.00
Class B
03/31/98............... 11.10 0.84(a) 0.66(a) 1.50 (0.85) 0.00
01/13/97-03/31/97...... 11.18 0.15 (0.05) 0.10 (0.18) 0.00
Class C
03/31/98............... 11.10 0.85(a) 0.65(a) 1.50 (0.85) 0.00
01/13/97-03/31/97...... 11.18 0.15 (0.05) 0.10 (0.18) 0.00
</TABLE>
+ Annualized
(a) Per share amounts based on average number of shares outstanding during the
period.
(b) Reflects voluntary waiver of investment advisory fee of $12,041 (.01
per share) by the Advisor.
(c) The Ratio of Expenses to Average Net Assets without the waiver would have
been 1.57%.
(d) The Ratio of Net Investment Income to Average Net Assets without the waiver
would have been 4.58%.
118 PIMCO Funds
<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 Total Return
-------------- -------------- ---------- -------------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C>
Real Return Bond Fund
Class A
03/31/98................ $ (0.14) $ 0.00 $ 0.00 $ (0.59) $ 9.77 4.12%
01/29/97-03/31/97....... 0.00 0.00 0.00 (0.08) 9.93 0.15
Class B
03/31/98................ (0.14) 0.00 0.00 (0.52) 9.77 3.50
01/29/97-03/31/97....... 0.00 0.00 0.00 (0.06) 9.93 (0.08)
Class C
03/31/98................ (0.14) 0.00 0.00 (0.55) 9.77 3.73
01/29/97-03/31/97....... 0.00 0.00 0.00 (0.06) 9.93 (0.07)
Foreign Bond Fund
Class A
03/31/98................ $ (0.31) $ 0.00 $ 0.00 $ (0.90) $ 10.74 12.14%
01/20/97-03/31/97....... 0.00 0.00 0.00 (0.05) 10.41 (1.21)
Class B
03/31/98................ (0.31) 0.00 0.00 (0.81) 10.74 11.29
01/20/97-03/31/97....... 0.00 0.00 0.00 (0.04) 10.41 (1.34)
Class C
03/31/98................ (0.31) 0.00 0.00 (0.81) 10.74 11.29
01/20/97-03/31/97....... 0.00 0.00 0.00 (0.04) 10.41 (1.32)
Global Bond Fund II
Class A
03/31/98................ $ (1.53) $ 0.00 $ 0.00 $ (2.07) $ 9.92 11.21%
10/01/96-03/31/97....... (0.40) 0.00 0.00 (0.62) 10.84 4.55
09/30/96................ 0.00 0.00 0.00 (0.31) 10.96 15.01
Class B
03/31/98................ (1.53) 0.00 0.00 (1.99) 9.92 10.39
10/01/96-03/31/97....... (0.40) 0.00 0.00 (0.58) 10.84 4.17
09/30/96................ 0.00 0.00 0.00 (0.26) 10.96 14.54
Class C
03/31/98................ (1.53) 0.00 0.00 (1.99) 9.92 10.39
10/01/96-03/31/97....... (0.40) 0.00 0.00 (0.58) 10.84 4.17
09/30/96................ 0.00 0.00 0.00 (0.26) 10.96 14.54
Emerging Markets Bond Fund
Class A
07/31/97-03/31/98....... $ (0.15) $ 0.00 $ 0.00 $ (0.59) $ 9.67 2.84%
Class B
07/31/97-03/31/98....... (0.15) 0.00 0.00 (0.53) 9.67 2.29
Class C
07/31/97-03/31/98....... (0.15) 0.00 0.00 (0.53) 9.67 2.29
High Yield Fund
Class A
03/31/98................ $ 0.00 $ (0.09) $ 0.00 $ (1.03) $ 11.66 14.80%
01/13/97-03/31/97....... 0.00 0.00 0.00 (0.20) 11.10 1.06
Class B
03/31/98................ 0.00 (0.09) 0.00 (0.94) 11.66 13.94
01/13/97-03/31/97....... 0.00 0.00 0.00 (0.18) 11.10 0.86
Class C
03/31/98................ 0.00 (0.09) 0.00 (0.94) 11.66 13.95
01/13/97-03/31/97....... 0.00 0.00 0.00 (0.18) 11.10 0.88
<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: of Period (000s) Assets Assets Turnover Rate
----------------- ------------ ------------- --------------
<S> <C> <C> <C> <C>
Real Return Bond Fund
Class A
03/31/98................. $ 370 0.92% 4.06% 967%
01/29/97-03/31/97........ 1 0.90+ 6.14+ 160
Class B
03/31/98................. 1,496 1.67 3.32 967
01/29/97-03/31/97........ 509 1.59+ 3.43+ 160
Class C
03/31/98................. 490 1.42 3.56 967
01/29/97-03/31/97........ 148 1.62+ 5.13+ 160
Foreign Bond Fund
Class A
03/31/98................. $ 9,582 0.95% 5.88% 280%
01/20/97-03/31/97........ 704 0.97+ 4.95+ 984
Class B
03/31/98................. 10,631 1.70 5.13 280
01/20/97-03/31/97........ 1,221 1.75+ 3.73+ 984
Class C
03/31/98................. 17,080 1.70 5.13 280
01/20/97-03/31/97........ 1,788 1.76+ 4.09+ 984
Global Bond Fund II
Class A
03/31/98................. $ 6,816 0.95% 5.88% 369%
10/01/96-03/31/97........ 7,652 2.05+ 5.60+ 307
09/30/96................. 7,360 1.27(c) 4.88(d) 1,246
Class B
03/31/98................. 4,473 1.70 5.12 369
10/01/96-03/31/97........ 3,925 2.57+ 4.22+ 307
09/30/96................. 3,240 2.49(c) 4.07(d) 1,246
Class C
03/31/98................. 6,096 1.70 5.12 369
10/01/96-03/31/97........ 5,323 2.43+ 4.14+ 307
09/30/96................. 3,459 2.49(c) 4.09(d) 1,246
Emerging Markets Bond Fund
Class A
07/31/97-03/31/98........ $ 317 1.26%+ 6.93%+ 695%
Class B
07/31/97-03/31/98........ 304 2.01+ 6.33+ 695
Class C
07/31/97-03/31/98........ 136 2.01+ 6.11+ 695
High Yield Fund
Class A
03/31/98................. $ 70,858 0.90% 8.02% 37%
01/13/97-03/31/97........ 28,873 0.92+ 8.28+ 67
Class B
03/31/98................. 156,099 1.65 7.27 37
01/13/97-03/31/97........ 60,269 1.67+ 7.52+ 67
Class C
03/31/98................. 284,836 1.65 7.36 37
01/13/97-03/31/97........ 205,297 1.68+ 7.56+ 67
</TABLE>
1998 Annual Report 119
<PAGE>
Notes to Financial Statements (Cont.)
March 31, 1998
<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
Class A
03/31/98................. $ 1.00 $ 0.05(a) $ 0.00(a) $ 0.05 $ (0.05) $ 0.00
01/13/97-03/31/97........ 1.00 0.01 0.00 0.01 (0.01) 0.00
Class B
03/31/98................. 1.00 0.04(a) 0.00(a) 0.04 (0.04) 0.00
01/13/97-03/31/97........ 1.00 0.01 0.00 0.01 (0.01) 0.00
Class C
03/31/98................. 1.00 0.05(a) 0.00(a) 0.05 (0.05) 0.00
01/13/97-03/31/97........ 1.00 0.01 0.00 0.01 (0.01) 0.00
StocksPLUS Fund
Class A
03/31/98................. $ 11.46 $ 1.66(a) $ 3.41(a) $ 5.07 $ (1.38) $ 0.00
01/20/97-03/31/97........ 11.91 (0.10) (0.20) (0.30) (0.15) 0.00
Class B
03/31/98................. 11.44 1.61(a) 3.35(a) 4.96 (1.30) 0.00
01/20/97-03/31/97........ 11.91 (0.13) (0.20) (0.33) (0.14) 0.00
Class C
03/31/98................. 11.45 1.64(a) 3.35(a) 4.99 (1.32) 0.00
01/20/97-03/31/97........ 11.91 (0.12)(a) (0.20)(a) (0.32) (0.14) 0.00
</TABLE>
+ Annualized
(a) Per share amounts based on average number of shares outstanding during the
period.
120 PIMCO Funds
<PAGE>
PIMCO Funds
1998 Annual Report
<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 Total Return
------------- ------------- --------- ------------- --------- ------------
<S> <C> <C> <C> <C> <C> <C>
Money Market Fund
Class A
03/31/98.................... $ 0.00 $ 0.00 $ 0.00 $ (0.05) $ 1.00 5.10%
01/13/97-03/31/97........... 0.00 0.00 0.00 (0.01) 1.00 1.01
Class B
03/31/98.................... 0.00 0.00 0.00 (0.04) 1.00 4.21
01/13/97-03/31/97........... 0.00 0.00 0.00 (0.01) 1.00 0.83
Class C
03/31/98.................... 0.00 0.00 0.00 (0.05) 1.00 5.14
01/13/97-03/31/97........... 0.00 0.00 0.00 (0.01) 1.00 1.02
StocksPLUS Fund
Class A
03/31/98.................... $ (1.09) $ 0.00 $ 0.00 $ (2.47) $ 14.06 47.07%
01/20/97-03/31/97........... 0.00 0.00 0.00 (0.15) 11.46 (2.59)
Class B
03/31/98.................... (1.09) 0.00 0.00 (2.39) 14.01 46.11
01/20/97-03/31/97........... 0.00 0.00 0.00 (0.14) 11.44 (2.81)
Class C
03/31/98.................... (1.09) 0.00 0.00 (2.41) 14.03 46.38
01/20/97-03/31/97........... 0.00 0.00 0.00 (0.14) 11.45 (2.71)
<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: of Period (000s) Assets Assets Turnover Rate
---------------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Money Market Fund
Class A
03/31/98........................ $41,375 0.60% 5.02% N/A
01/13/97-03/31/97............... 43,589 0.57+ 4.44+ N/A
Class B
03/31/98........................ 2,937 1.50 4.15 N/A
01/13/97-03/31/97............... 3,143 1.41+ 3.62+ N/A
Class C
03/31/98........................ 55,696 0.60 5.05 N/A
01/13/97-03/31/97............... 85,398 0.58+ 4.47+ N/A
StocksPLUS Fund
Class A
03/31/98........................ $62,970 1.05% 13.34% 30%
01/20/97-03/31/97............... 5,790 1.10+ (10.69)+ 47
Class B
03/31/98........................ 99,039 1.80 12.60 30
01/20/97-03/31/97............... 8,281 1.88+ (15.13)+ 47
Class C
03/31/98........................ 96,960 1.55 12.85 30
01/20/97-03/31/97............... 11,254 1.65+ (12.79)+ 47
</TABLE>
1998 Annual Report 121
<PAGE>
Report of Independent Accountants
To the Trustees and Shareholders of the PIMCO Funds:
Pacific Investment Management Series
In our opinion, the accompanying statements of assets and liabilities,
including the schedules of investments, and the related statements of operations
and of changes in net assets and of cash flows and the financial highlights
present fairly, in all material respects, the financial position of the Total
Return Fund, Total Return Fund II, Total Return Fund III, Total Return Mortgage
Fund, Moderate Duration Fund, Low Duration Fund, Low Duration Fund II, Low
Duration Fund III, Low Duration Mortgage Fund, Short-Term Fund, Long-Term U.S.
Government Fund, Real Return Bond Fund, Foreign Bond Fund, Global Bond Fund,
Global Bond Fund II, Emerging Markets Bond Fund, High Yield Fund, Money Market
Fund, StocksPLUS Fund and Strategic Balanced Fund (hereafter referred to as the
"Funds") at March 31, 1998, and the results of each of their operations, the
changes in each of their net assets and cash flows for the Low Duration Mortgage
Fund, Long-Term U.S. Government Fund, Real Return Bond Fund, Foreign Bond Fund,
Global Bond Fund and Global Bond Fund II and the financial highlights for each
of the periods indicated, in conformity with generally accepted accounting
principles. These financial statements and the financial highlights (hereafter
referred to as "financial statements") are the responsibility of the Funds'
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at March 31, 1998 by correspondence with the
custodian and brokers and the application of alternative auditing procedures
where confirmations from brokers were not received, provide a reasonable basis
for the opinion expressed above.
Price Waterhouse LLP
Kansas City, Missouri
May 22, 1998
122 PIMCO Funds
<PAGE>
Federal Income Tax Information
(unaudited)
As required by the Internal Revenue Code regulations, shareholders must be
notified within 60 days of the Trust's fiscal year end (March 31,1998) regarding
the status of the dividend received deduction for corporations.
Dividend Received Deduction. Corporate shareholders are generally entitled to
take the dividend received deduction on the portion of a Fund's dividend
distribution that qualifies under tax law. The percentage of the following
Fund's fiscal 1998 ordinary income dividends that qualifies for the corporate
dividend received deduction is set forth below:
Total Return Fund 0.12%
Moderate Duration Fund 2.31%
High Yield Fund 4.03%
Strategic Balanced Fund 0.10%
Shareholders are advised to consult their own tax advisor with respect to the
tax consequences of their investment in the Trust. In January 1999, you will be
advised on IRS form 1099-DIV as to the federal tax status of the dividends and
distributions received by you in calendar year 1998.
1998 Annual Report 123
<PAGE>
Pacific Investment Management Company is responsible for the manangement and
administration of the PIMCO Funds. Founded in 1971, Pacific Investment
Management Company currently manages assets in excess of $118 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 $200 billion. Widely recognized for providing consistent performance
and high-quality client service, the seven affilated 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 Advisor 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
Price Waterhouse LLP
1055 Broadway
Kansas City, Missouri 64105
<PAGE>
PIMCO
840 NEWPORT CENTER DRIVE, SUITE 360
NEWPORT BEACH, CA 92660
800.927.4648
This report is submitted for the general information of the shareholders of the
PIMCO 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.
