Fund Profile
PIMCO Strategic Balanced Fund
Institutional Class Shares
May 15, 1999
This profile summarizes key information about the Fund that
is included in the Fund's Prospectus. The Fund's Prospectus includes
additional information about the Fund, including a more detailed
description of the risks associated with investing in the Fund that you
may want to consider before you invest. You may obtain the
Prospectus and other information about the Fund at no cost by
calling us at 1-800-927-4648. See the back cover for additional
phone numbers and our address.
P I M C O
F U N D S
WHAT IS THE PIMCO STRATEGIC BALANCED FUND'S
INVESTMENT OBJECTIVE?
The Fund's investment objective is to maximize total return,
consistent with preservation of capital and prudent investment
management. Total return means increases in portfolio value
resulting from capital appreciation plus net income earned on the
Funds investments.
WHAT IS THE FUND'S PRINCIPAL INVESTMENT
STRATEGY?
The Fund invests in securities eligible for purchase by the PIMCO
StocksPLUS and Total Return Funds. The percentage of the Funds
assets invested in equity or fixed income exposure will vary in
accordance with a methodology developed by the Adviser. The
methodology is based upon the Advisers long-standing process of
economic forecasting of business cycle stages and consideration of
the risk and reward potential of equity and fixed income securities.
The Funds equity exposure may vary between 45% and 75% of
assets, and its fixed income exposure may vary between 25% and
55%. There can be no assurance that the Advisers methodology for
selecting the optimal blend of equity and fixed income exposure will
be successful.
The Funds equity exposure will normally consist of S&P 500
derivatives, backed by a portfolio of fixed income instruments.
StocksPLUS is a proprietary portfolio management strategy which
uses S&P 500 derivatives in addition to or in place of S&P 500
stocks to attempt to equal or exceed the performance of the S&P 500.
The Adviser will actively manage the fixed income assets serving as
cover for derivatives with a view toward enhancing the portfolio's
total return investment performance.
The Funds fixed income exposure will normally consist of a
diversified portfolio of bonds and other types of fixed income
instruments of varying maturities. The securities may be issued by
domestic or foreign entities. Investment selections will be made
primarily in areas of the bond market (based on quality, sector,
coupon or maturity) which the Adviser believes to be relatively
undervalued.
The Fund may invest up to 10% of its assets in fixed income
securities that are rated below investment grade but rated B or higher
by Moodys or S&P (or, if unrated, determined by the Adviser to be
of comparable quality). The Fund may invest up to 20% of its assets
in securities denominated in foreign currencies, and may invest
beyond this limit in U.S. dollar denominated securities of foreign
issuers. The Fund may invest all of its assets in derivative
instruments, such as options, futures contracts or swap agreements.
Additional information about the Fund's investments is available in
the Fund's annual and semi-annual reports to shareholders. In the
Fund's annual report, you will find a discussion of the market
conditions and investment strategies that significantly affected the
Fund's performance during its past fiscal year. You may obtain these
reports at no cost by calling us.
WHAT ARE THE PRINCIPAL RISKS OF INVESTING
IN THE FUND?
You could lose money on an investment in the Fund. The principal
risks of investing in the Fund are:
Market Risk: the value of the Fund's shares is based on the value of
the bonds and other securities it owns. Bond values fluctuate based
on changes in interest rates, market conditions, investor confidence
and announcements of economic, political or financial information.
The market value of equity securities or derivatives on equity
securities may move up and down, sometimes rapidly and
unpredictably. The value of S&P 500 derivatives will fluctuate with
changes in the market value of S&P 500 stocks. The Fund could
experience greater losses than would be the case if it were to invest
directly in a portfolio of S&P 500 stocks.
Interest Rate Risk: if rates rise, the value of the fixed income
securities held by the Fund will generally decrease. Derivative
instruments may be particularly sensitive to changes in interest rates.
Credit Risk: an issuer of a security, or a counterparty to a derivative
contract, may default or become unable to meet a financial
obligation, thereby decreasing the value of the Fund's holdings.
Below investment grade bonds carry a high degree of credit risk.
Foreign Securities Risk: in addition to the risks described above,
foreign currency exchange rate fluctuations, adverse regulatory
conditions, foreign taxes, or political or economic uncertainty may
reduce the value of the Funds holdings in foreign securities.
HOW HAS THE FUND PERFORMED?
The bar chart below shows the actual performance of the Fund's
Institutional Class shares net of fees for the calendar years shown. It
indicates the variability of the Fund's historical returns from year to
year. The Fund's past performance does not necessarily indicate how
the Fund will perform in the future.
[BAR CHART APPEARS HERE]
CALENDAR YEAR-BY-YEAR RETURNS NET OF FEES
1998 19.66%
1997 24.17%
1996 10.23%*
* The return for 1996 in the above bar chart reflects performance
from the Funds inception date on June 29, 1996, and is not
annualized.
During the two-year period shown in the bar chart, the highest
quarterly return was 12.23% (for the quarter ended June 30, 1997) and
the lowest quarterly return was -4.60% (for the quarter ended September 30,
1998). As of March 31, 1999, the end of the most recent calendar
quarter, the Funds year-to-date return was 2.34%.
PIMCO STRATEGIC BALANCED FUND . INSTITUTIONAL
CLASS SHARES
The table below shows how the Fund's average annual returns net of
fees for the periods indicated compare to those of the Fund's
benchmark, the Lipper Balanced Index. This is a widely recognized,
unmanaged index of the 30 largest equal weighted balanced funds as
compiled by Lipper Analytical Inc.
Average Annual Total Returns net of fees for the periods ended
March 31, 1999
1 Year Since Inception/1/
Strategic Balanced Fund,
Institutional Class 12.36% 20.66%
Lipper Balanced Index 8.32% 16.43%
/1/ Calculated as of July 1, 1996, the first full month following
the Fund's Institutional Class inception on June 28, 1996. The
average annual return for the period from actual inception on
June 18, 1996 through March 31, 1999 was 20.66%.
WHAT ARE THE FUND'S FEES AND EXPENSES?
Shareholder Fees
The Fund features an all-inclusive fixed fee structure for advisory and
administrative services but not for extraordinary expenses. There are
no sales loads, fees or other charges to purchase the Fund's
Institutional Class shares, to reinvest dividends in additional shares,
or to redeem your shares.
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
Advisory fee 0.40%
Administrative fee 0.25%
Distribution (12b-1) and/or service fees None
Other expenses/1/ 0.00%
Total annual operating expenses 0.65%
/1/ Other expenses, which may include expenses such as fees and
expenses of the Fund's independent trustees, interest expenses, and
extraordinary expenses, such as costs of litigation and
indemnification, were less than 0.005% for the most recent fiscal
year.
Example
An investor would pay the following expenses on a $10,000
investment in the Fund, assuming (1) a hypothetical 5% annual
return, (2) redemption at the end of each time period and (3) the
Fund's operating expenses remain the same:
1 year 3 years 5 years 10 years
Strategic Balanced Fund,
Institutional Class $66 $208 $362 $810
Actual expenses may be higher or lower than those shown. Under
normal circumstances, the Fund intends to limit other expenses so as
not to affect the total annual operating expenses.
WHO IS THE FUND'S INVESTMENT ADVISER?
Pacific Investment Management Company ("PIMCO"), a subsidiary
of PIMCO Advisors L.P., serves as investment adviser to the Fund.
PIMCO is an investment management company founded in 1971, and
had over $157 billion in assets under management as of December
31, 1998. PIMCO manages the investment and reinvestment of the
assets of the Fund and is responsible for placing orders for the
purchase and sale of the Fund's investments.
[PHOTO OF WILLIAM H. GROSS APPEARS HERE]
The Fund's portfolio is managed by a team led by William H. Gross.
A Fixed Income Portfolio Manager, Mr. Gross is a Managing
Director and one of the founders of PIMCO. He has led the team
managing the Strategic Balanced Fund since January 6, 1998 and has
managed various PIMCO Funds since 1987.
HOW DO I BUY FUND SHARES?
The minimum initial investment to open an account directly with the
Fund is $5 million. The minimum initial investment for a registered
investment adviser purchasing Institutional Class shares for its clients
through omnibus accounts is $250,000. You may purchase Fund
shares in one of the following ways:
. Opening an account by completing and signing a Client
Registration
Application, mailing it to us, and wiring funds.
. Exchanging Institutional Class shares in any amount from another
PIMCO
Funds account.
. Additional purchases in any amount can be made by calling us at
1-800-927-4648 and wiring funds.
HOW DO I SELL FUND SHARES?
You may sell all or part of your Fund shares to the Fund on any
business day. You may sell by:
Sending a written request by mail to PIMCO Funds.
Telephone us a 1-800-927-4648 and a Shareholder Services associate
will assist you.
By sending a fax to our Shareholder Services department at 1-949-
725-6830.
(Continued on back).
PIMCO STRATEGIC BALANCED FUND . INSTITUTIONAL
CLASS SHARES
HOW ARE FUND DISTRIBUTIONS
MADE AND TAXED?
The Fund pays dividends to shareholders monthly and pays realized
capital gains, if any, annually. Dividend and capital gain distributions
will be reinvested in additional shares of the Fund unless you elect to
have them paid in cash. Distributions may be taxable as ordinary
income, capital gains, or a combination of the two. The rate you pay
on capital gains distributions may vary depending on how long the
Fund held the securities that generated the gains. The Fund will
advise shareholders annually of the amount and nature of the
dividends paid to them.
Shareholders should also bear in mind that the sale or exchange of
shares may give rise to a taxable event.
WHAT OTHER SERVICES ARE AVAILABLE
FROM THE FUND?
The Fund and PIMCO's Shareholder Services offer several programs
to investors:
The ability to exchange shares of the Fund for the same class of
shares of any other PIMCO Fund (except PIMCO International Bond
and Emerging Markets Bond II Funds).
Account and Fund information is available 24 hours every day
through Infolink, PIMCO Funds' audio response system, by calling 1-
800-987-4626.
Information about PIMCO Funds can be obtained on PIMCO's
Institutional Web site at www.pimco.com.
P I M C O
F U N D S
840 Newport Center Drive, Suite 300
Newport Beach, CA 92660
Phone: 1-800-927-4648
Fax: 1-949-725-6830
PIMCO Infolink Audio Response Network:
1-800-987-4626
Web Site: www.pimco.com
PIMCO STRATEGIC BALANCED FUND . INSTITUTIONAL
CLASS SHARES
<page break>
Fund Profile
PIMCO Real Return Bond Fund
Institutional Class Shares
May 15, 1999
This profile summarizes key information about the Fund that
is included in the Fund's Prospectus. The Fund's Prospectus includes
additional information about the Fund, including a more detailed
description of the risks associated with investing in the Fund that you
may want to consider before you invest. You may obtain the
Prospectus and other information about the Fund at no cost by
calling us at 1-800-927-4648. See the back cover for additional
phone numbers and our address.
P I M C O
F U N D S
WHAT IS THE PIMCO REAL RETURN BOND FUND'S
INVESTMENT OBJECTIVE?
The Fund's investment objective is to realize maximum real return,
consistent with preservation of real capital and prudent investment
management. Real Return as referenced in the Funds name and
investment objective, is a measure of the change in purchasing power
of money invested in a particular instrument after adjusting for
inflation.
WHAT IS THE FUND'S PRINCIPAL INVESTMENT
STRATEGY?
The Fund normally invests at least 65% of its assets in inflation-
indexed bonds issued by the U.S. and non-U.S. governments, their
agencies or instrumentalities. Inflation-indexed bonds are fixed
income securities whose principal value is periodically adjusted
according to the rate of inflation. Such bonds generally are issued at
an interest rate lower than non-inflation related bonds, but are
expected to retain their value against inflation over time. It is
expected that the average modified real duration of the Fund will
normally vary approximately within the range of the average
modified real duration of all inflation-indexed bonds issued by the
U.S. Treasury in the aggregate.
The Fund may invest up to 10% of its assets in fixed income
securities that are rated below investment grade but rated B or higher
by Moodys or S&P (or, if unrated, determined by the Adviser to be
of comparable quality). The Fund may invest up to 35% of its assets
in other types of fixed income instruments, including securities
denominated in foreign currencies, and may invest beyond this limit
in U.S. dollar denominated securities of foreign issuers. The Fund
may invest all of its assets in derivative instruments, such as options,
futures contracts or swap agreements.
Additional information about the Fund's investments is available in
the Fund's annual and semi-annual reports to shareholders. In the
Fund's annual report, you will find a discussion of the market
conditions and investment strategies that significantly affected the
Fund's performance during its past fiscal year. You may obtain these
reports at no cost by calling us.
WHAT ARE THE PRINCIPAL RISKS OF INVESTING
IN THE FUND?
You could lose money on an investment in the Fund. The principal
risks of investing in the Fund are:
Market Risk: the value of the Fund's shares is based on the value of
the bonds and other securities it owns. Bond values fluctuate based
on changes in interest rates, market conditions, investor confidence
and announcements of economic, political or financial information.
Because it is non-diversified, the portfolio may be more susceptible
to risks associated with a single economic, political or regulatory
occurrence than a diversified portfolio might be. The value of a
derivative instrument may fluctuate with changes in the market value
of the underlying security.
Inflation Risk: if the periodic adjustment rate measuring inflation
falls, the principal value of inflation-indexed bonds will be adjusted
downward, and consequently the interest payable on these securities
will be reduced. While inflation-indexed bonds are expected to be
protected from long-term inflationary trends, short-term increases in
inflation may lead to a decline in value.
Interest Rate Risk: if interest rates rise due to reasons other than
inflation, investors in the Fund may not be protected to the extent that
the increase is not reflected in the bonds inflation measure. If interest
rates rise, the value of the Fund's other fixed income holdings will
generally decrease. Derivative instruments may be particularly
sensitive to changes in interest rates.
Credit Risk: an issuer of a security, or a counterparty to a derivative
contract, may default or become unable to meet a financial obligation
thereby decreasing the value of the Fund's holdings. Below
investment grade bonds carry a high degree of credit risk.
Foreign Securities Risk: in addition to the risks described above,
foreign currency exchange rate fluctuations, adverse regulatory
conditions, foreign taxes, or political or economic uncertainty may
reduce the value of the Funds holdings in foreign securities.
HOW HAS THE FUND PERFORMED?
The bar chart below shows the actual performance of the Fund's
Institutional Class shares net of fees for each of the calendar years
shown. It indicates the variability of the Fund's historical returns
from year to year. The Fund's past performance does not necessarily
indicate how the Fund will perform in the future.
[BAR CHART APPEARS HERE]
CALENDAR YEAR-BY-YEAR RETURNS NET OF FEES
1998 5.21%
1997 4.06%*
* The return for 1997 in the above bar chart reflects performance
from the Funds inception date on January 29, 1997, and is not
annualized.
During the two-year period shown in the bar chart, the highest
quarterly return was 3.19% (for the quarter ended September 30, 1998) and
the lowest quarterly return was -0.04% (for the quarter ended December 31,
1998). As of March 31, 1999, the end of the most recent calendar
quarter, the Funds year-to-date return was 1.84%.
PIMCO REAL RETURN BOND FUND . INSTITUTIONAL CLASS
SHARES
The table below shows how the Fund's average annual returns net of
fees for the periods indicated compare to those of the Fund's
benchmark, the Lehman Brothers Inflation Linked Treasury Index.
This is a widely recognized, unmanaged market index comprised of
all U.S. inflation linked Treasuries.
Average Annual Total Returns net of fees for the period ended March
31, 1999
1 Year Since Inception/1/
Real Return Bond Fund,
Institutional Class 6.41% 4.84%
Lehman Brothers
Inflation Linked Treasury Index 4.01% 3.12%
/1/ Calculated as of February 1, 1997, the first full month following
the Fund's Institutional Class inception on January 29, 1997. The
average annual return for the period from actual inception on
January 29, 1997 through March 31, 1999 was 5.15%.
WHAT ARE THE FUND'S FEES AND EXPENSES?
Shareholder Fees
The Fund features an all-inclusive fixed fee structure for advisory and
administrative services but not for extraordinary expenses. There are
no sales loads, fees or other charges to purchase the Fund's
Institutional Class shares, to reinvest dividends in additional shares,
or to redeem your shares.
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
Advisory fee 0.25%
Administrative fee 0.25%
Distribution (12b-1) and/or service fees None
Other expenses/1/ 0.00%
Total annual operating expenses 0.50%
/1/ Other expenses, which may include expenses such as fees and
expenses of the Fund's independent trustees, interest expenses, and
extraordinary expenses, such as costs of litigation and
indemnification, were less than 0.005% for the most recent fiscal
year.
Example
An investor would pay the following expenses on a $10,000
investment in the Fund, assuming (1) a hypothetical 5% annual
return, (2) redemption at the end of each time period and (3) the
Fund's operating expenses remain the same:
1 year 3 years 5 years 10 years
Real Return Bond Fund,
Institutional Class $51 $160 $280 $628
Actual expenses may be higher or lower than those shown. Under
normal circumstances, the Fund intends to limit other expenses so as
not to affect the total annual operating expenses.
WHO IS THE FUND'S INVESTMENT ADVISER?
Pacific Investment Management Company ("PIMCO"), a subsidiary
of PIMCO Advisors L.P., serves as investment adviser to the Fund.
PIMCO is an investment management company founded in 1971, and
had over $157 billion in assets under management as of December
31, 1998. PIMCO manages the investment and reinvestment of the
assets of the Fund and is responsible for placing orders for the
purchase and sale of the Fund's investments.
[PHOTO OF JOHN BRYNJOLFSSON APPEARS HERE]
The Fund's portfolio is managed by John Brynjolfsson. As a Fixed
Income Portfolio Manager for PIMCO since 1989, Mr. Brynjolfsson
has managed assets for various institutional accounts, and has
managed the Real Return Bond Fund since its inception on January
29, 1997.
HOW DO I BUY FUND SHARES?
The minimum initial investment to open an account directly with the
Fund is $5 million. The minimum initial investment for a registered
investment adviser purchasing Institutional Class shares for its clients
through omnibus accounts is $250,000. You may purchase Fund
shares in one of the following ways:
. Opening an account by completing and signing a Client
Registration
Application, mailing it to us, and wiring funds.
. Exchanging Institutional Class shares in any amount from another
PIMCO
Funds account.
. Additional purchases in any amount can be made by calling us at
1-800-927-4648 and wiring funds.
HOW DO I SELL FUND SHARES?
You may sell all or part of your Fund shares to the Fund on any
business day. You may sell by:
Sending a written request by mail to PIMCO Funds.
Telephone us a 1-800-927-4648 and a Shareholder Services associate
will assist you.
By sending a fax to our Shareholder Services department at 1-949-
725-6830.
(Continued on back).
PIMCO REAL RETURN BOND FUND . INSTITUTIONAL CLASS
SHARES
HOW ARE FUND DISTRIBUTIONS
MADE AND TAXED?
The Fund pays dividends to shareholders monthly and pays realized
capital gains, if any, annually. Dividend and capital gain distributions
will be reinvested in additional shares of the Fund unless you elect to
have them paid in cash. Distributions may be taxable as ordinary
income, capital gains, or a combination of the two. The rate you pay
on capital gains distributions may vary depending on how long the
Fund held the securities that generated the gains. The Fund will
advise shareholders annually of the amount and nature of the
dividends paid to them.
Investors should carefully consider the possible tax consequences
from investing in the Fund. Periodic adjustments for inflation to the
principal value of inflation-indexed bonds held by the Fund may give
rise to original issue discounts, which would be included in the
Funds gross income, regardless of whether the Fund receives cash
payments.. Accordingly, the Fund may be required to make annual
distributions to shareholders in excess of the cash received by the
Fund in a given period from those investments.
Shareholders should also bear in mind that the sale or exchange of
shares may give rise to a taxable event.
WHAT OTHER SERVICES ARE AVAILABLE
FROM THE FUND?
The Fund and PIMCO's Shareholder Services offer several programs
to investors:
The ability to exchange shares of the Fund for the same class of
shares of any other PIMCO Fund (except PIMCO International Bond
and Emerging Markets Bond II Funds).
Account and Fund information is available 24 hours every day
through Infolink, PIMCO Funds' audio response system, by calling 1-
800-987-4626.
Information about PIMCO Funds can be obtained on PIMCO's
Institutional Web site at www.pimco.com.
P I M C O
F U N D S
840 Newport Center Drive, Suite 300
Newport Beach, CA 92660
Phone: 1-800-927-4648
Fax: 1-949-725-6830
PIMCO Infolink Audio Response Network:
1-800-987-4626
Web Site: www.pimco.com
PIMCO REAL RETURN BOND FUND . INSTITUTIONAL CLASS
SHARES
<page break>
Fund Profile
PIMCO Municipal Bond Fund
Institutional Class Shares
May 15, 1999
This profile summarizes key information about the Fund that
is included in the Fund's Prospectus. The Fund's Prospectus includes
additional information about the Fund, including a more detailed
description of the risks associated with investing in the Fund that you
may want to consider before you invest. You may obtain the
Prospectus and other information about the Fund at no cost by
calling us at 1-800-927-4648. See the back cover for additional
phone numbers and our address.
P I M C O
F U N D S
WHAT IS THE PIMCO MUNICIPAL BOND FUND'S
INVESTMENT OBJECTIVE?
The Fund's investment objective is to seek high current income
exempt from federal income tax, consistent with preservation of
capital. Capital appreciation is a secondary objective of the Fund.
WHAT IS THE FUND'S PRINCIPAL INVESTMENT
STRATEGY?
The Fund normally invests at least 80% of its assets in debt securities
whose interest is, in the opinion of bond counsel for the issuer at the
time of issuance, exempt from federal income tax (Municipal
Bonds). Municipal Bonds generally are issued by states and local
governments and their agencies, authorities and other
instrumentalities. The Fund may invest up to 20% of its assets in U.S.
Government securities, money market instruments and/or private
activity bonds. The average portfolio duration of the Fund will
normally vary within a three- to ten-year time frame based on the
Adviser's forecast for interest rates.
The Fund may invest up to 10% of its assets in Municipal Bonds or
private activity bonds that are rated below investment grade but
rated at least Ba by Moodys or BB by S&P (or, if unrated,
determined by the Adviser to be of comparable quality). The Fund
may seek to reduce fluctuations in its net asset value by engaging in
portfolio strategies involving options, futures contracts, and options
on futures contracts on U.S. Government securities, Municipal bonds
and indexes.
Additional information about the Fund's investments is available in
the Fund's annual and semi-annual reports to shareholders. In the
Fund's annual report, you will find a discussion of the market
conditions and investment strategies that significantly affected the
Fund's performance during its past fiscal year. You may obtain these
reports at no cost by calling us.
WHAT ARE THE PRINCIPAL RISKS OF INVESTING
IN THE FUND?
You could lose money on an investment in the Fund. The principal
risks of investing in the Fund are:
Market Risk: the value of the Fund's shares is based on the value of
the bonds and other securities it owns. Bond values fluctuate based
on changes in interest rates, market conditions, investor confidence
and announcements of economic, political or financial information.
Lower rated Municipal Bonds are subject to greater market risk than
higher quality Municipal Bonds. The value of a derivative instrument
may fluctuate with changes in the market value of the underlying
security.
Interest Rate Risk: if rates rise, the value of the Fund's holdings will
generally decrease. Derivative instruments may be particularly
sensitive to changes in interest rates.
Credit Risk: an issuer of a security, or a counterparty to a derivative
contract, may default or become unable to meet a financial obligation
thereby decreasing the value of the Fund's holdings. The ability to
make payments on a municipal bond could be affected by litigation,
legislation or other political events or the bankruptcy of the issuer.
Below investment grade bonds carry a high degree of credit risk.
HOW HAS THE FUND PERFORMED?
The bar chart below shows the actual performance of the Fund's
Institutional Class shares net of fees for the calendar year shown. It
indicates the variability of the Fund's historical returns from year to
year. The Fund's past performance does not necessarily indicate how
the Fund will perform in the future.
[BAR CHART APPEARS HERE]
CALENDAR YEAR-BY-YEAR RETURNS NET OF FEES
1998 6.06%
During the one-year period shown in the bar chart, the highest
quarterly return was 3.33% (for the quarter ended September 30, 1998)
and the lowest quarterly return was 0.77% (for the quarter ended March 31,
1999). As of March 31, 1999, the end of the most recent calendar
quarter, the Funds year-to-date return was 0.77%.
PIMCO MUNICIPAL BOND FUND . INSTITUTIONAL CLASS
SHARES
The table below shows how the Fund's average annual returns net of
fees for the periods indicated compare to those of the Fund's
benchmark, the Lehman Brothers General Municipal Bond Index.
This is a widely recognized, unmanaged market index representative
of the U.S. tax-exempt bond market. The Index is made up of all
investment grade municipal bonds issued after December 31, 1990
having a remaining maturity of at least one year.
Average Annual Total Returns net of fees for the years ended March
31, 1999
1 Year Since Inception
Municipal Bond Fund,
Institutional Class 6.04% 6.88%
Lehman Brothers
General Municipal Bond Index 6.20% 5.90%
WHAT ARE THE FUND'S FEES AND EXPENSES?
Shareholder Fees
The Fund features an all-inclusive fixed fee structure for advisory and
administrative services but not for extraordinary expenses. There are
no sales loads, fees or other charges to purchase the Fund's
Institutional Class shares, to reinvest dividends in additional shares,
or to redeem your shares.
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
Advisory fee 0.25%
Administrative fee 0.25%
Distribution (12b-1) and/or service fees None
Other expenses/1/ 0.00%
Total annual operating expenses 0.50%
/1/ Other expenses, which may include expenses such as fees and
expenses of the Fund's independent trustees, interest expenses, and
extraordinary expenses, such as costs of litigation and
indemnification, were less than 0.005% for the most recent fiscal
year.
Example
An investor would pay the following expenses on a $10,000
investment in the Fund, assuming (1) a hypothetical 5% annual
return, (2) redemption at the end of each time period and (3) the
Fund's operating expenses remain the same:
1 year 3 years 5 years 10 years
Municipal Bond Fund,
Institutional Class $51 $160 $280 $628
Actual expenses may be higher or lower than those shown. Under
normal circumstances, the Fund intends to limit other expenses so as
not to affect the total annual operating expenses.
WHO IS THE FUND'S INVESTMENT ADVISER?
Pacific Investment Management Company ("PIMCO"), a subsidiary
of PIMCO Advisors L.P., serves as investment adviser to the Fund.
PIMCO is an investment management company founded in 1971, and
had over $157 billion in assets under management as of December
31, 1998. PIMCO manages the investment and reinvestment of the
assets of the Fund and is responsible for placing orders for the
purchase and sale of the Fund's investments.
[PHOTO OF BENJAMIN EHLERT APPEARS HERE]
The Fund's portfolio is managed by Benjamin Ehlert. Mr. Ehlert is an
Executive Vice President and has been associated with PIMCO for
over 23 years. As a Fixed Income Portfolio Manager for PIMCO
since 1986, Mr. Ehlert has managed assets for various institutional
accounts, and has managed the Municipal Bond Fund since its
inception on December 31, 1997.
HOW DO I BUY FUND SHARES?
The minimum initial investment to open an account directly with the
Fund is $5 million. The minimum initial investment for a registered
investment adviser purchasing Institutional Class shares for its clients
through omnibus accounts is $250,000. You may purchase Fund
shares in one of the following ways:
. Opening an account by completing and signing a Client
Registration
Application, mailing it to us, and wiring funds.
. Exchanging Institutional Class shares in any amount from another
PIMCO
Funds account.
. Additional purchases in any amount can be made by calling us at
1-800-927-4648 and wiring funds.
HOW DO I SELL FUND SHARES?
You may sell all or part of your Fund shares to the Fund on any
business day. You may sell by:
Sending a written request by mail to PIMCO Funds.
Telephone us a 1-800-927-4648 and a Shareholder Services associate
will assist you.
By sending a fax to our Shareholder Services department at 1-949-
725-6830.
(Continued on back).
PIMCO MUNICIPAL BOND FUND . INSTITUTIONAL CLASS
SHARES
HOW ARE FUND DISTRIBUTIONS
MADE AND TAXED?
The Fund pays dividends to shareholders monthly and pays realized
capital gains, if any, annually. Dividend and capital gain distributions
will be reinvested in additional shares of the Fund unless you elect to
have them paid in cash. Shareholders generally may exclude
dividends derived from interest on Municipal Bonds from gross
income for federal income tax purposes. Certain exempt-interest
dividends could cause certain shareholders to become subject to the
alternative minimum tax. Dividends derived from taxable interest or
from capital gains will be subject to federal income tax. The Fund
will advise shareholders annually of the amount and nature of the
dividends paid to them.
Shareholders should also bear in mind that the sale or exchange of
shares may give rise to a taxable event.
WHAT OTHER SERVICES ARE AVAILABLE
FROM THE FUND?
The Fund and PIMCO's Shareholder Services offer several programs
to investors:
The ability to exchange shares of the Fund for the same class of
shares of any other PIMCO Fund (except PIMCO International Bond
and Emerging Markets Bond II Funds).
Account and Fund information is available 24 hours every day
through Infolink, PIMCO Funds' audio response system, by calling 1-
800-987-4626.
Information about PIMCO Funds can be obtained on PIMCO's
Institutional Web site at www.pimco.com.
P I M C O
F U N D S
840 Newport Center Drive, Suite 300
Newport Beach, CA 92660
Phone: 1-800-927-4648
Fax: 1-949-725-6830
PIMCO Infolink Audio Response Network:
1-800-987-4626
Web Site: www.pimco.com
PIMCO MUNICIPAL BOND FUND . INSTITUTIONAL CLASS
SHARES
