<PAGE>
Fund Profile
PIMCO High Yield Fund
Institutional Class Shares
February 8, 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
---------
<PAGE>
WHAT IS THE PIMCO HIGH YIELD 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 Fund's investments.
WHAT IS THE FUND'S PRINCIPAL INVESTMENT STRATEGY?
The Fund normally invests at least 65% of its assets in a diversified
portfolio of high yield fixed income securities rated below investment grade,
i.e., lower than Baa by Moody's or lower than BBB by S&P but rated at least B
by Moody's or S&P (or, if unrated, determined by the Adviser to be of
comparable quality). The remainder of the Fund's assets may be invested in
investment grade fixed income securities. The average portfolio duration of
the Fund will normally vary within a two- to six-year time frame based on the
Adviser's forecast for interest rates. 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 its assets in securities of foreign issuers, but only
those that are U.S. dollar-denominated. The Fund may invest all of its assets
in derivative instruments, such as options, futures contracts or swap
agreements and may also engage in hedging strategies involving equity
options.
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:
. Credit Risk: an issuer of a security, or a counterparty to a derivative
contract, may default, become bankrupt or become unable to meet a
financial obligation thereby decreasing the value of the Fund's holdings.
Risk of default or bankruptcy may be greater in periods of economic
uncertainty or recession. Securities rated below investment grade carry a
high degree of credit risk.
. 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 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.
. Foreign Securities Risk: in addition to the risks described above, adverse
regulatory conditions, foreign taxes, or political or economic uncertainty
may reduce the value of the Fund's holdings in securities of foreign
issuers.
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 past six calendar years since
inception on December 16, 1992. 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
1998 6.54%
1997 13.21%
1996 11.68%
1995 20.68%
1994 2.40%
1993 18.70%
During the six-year period shown in the bar chart, the highest quarterly
return was 6.27% (for the quarter ended March 31, 1993) and the lowest
quarterly return was -1.76% (for the quarter ended September 30, 1998).
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 BB Intermediate Corporate Index. This is a widely recognized,
- --------------------------------------------------------------------------------
PIMCO HIGH YIELD FUND . INSTITUTIONAL CLASS SHARES
- --------------------------------------------------------------------------------
<PAGE>
unmanaged market index comprised of various fixed income securities rated BB.
Average Annual Total Returns
for the years ended December 31, 1998 and most recent calendar quarter
Quarter Ended Since
12/31/98 1 year 5 years Inception/1/
High Yield Fund,
Institutional Class 3.85% 6.54% 10.73% 12.02%
Lehman Brothers BB
Intermediate Corporate
Index 1.73% 5.74% 9.09% 10.00%
Value added vs. Index 1.82% 0.80% 1.84% 2.02%
/1/Calculated as of January 1, 1993, the first full month following the
Fund's Institutional Class inception on December 16, 1992. The Fund returned
11.97% for the period since inception on December 16, 1992 through December
31, 1998.
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/2/ 0.00%
Total annual operating expenses 0.50%
/2/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
High Yield 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 TROSKY APPEARS HERE]
The Fund's portfolio is managed by Benjamin Trosky. A Fixed Income Portfolio
Manager, Mr. Trosky joined PIMCO in 1990 and is a Managing Director. He has
managed the High Yield Fund since its inception on December 16, 1992.
HOW DO I BUY FUND SHARES?
The minimun 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 at 1-800-927-4648 and a Shareholder Service associate will
assist you.
. By sending a fax to our Shareholder Services department at 1-949-760-4456.
(Continued on back).
PIMCO HIGH YIELD FUND . INSTITUTIONAL CLASS SHARES
<PAGE>
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: 1-949-760-4456
PIMCO Infolink Audio Response Network:
1-800-987-4626
Web Site: www.pimco.com
PIMCO HIGH YIELD FUND . INSTITUTIONAL CLASS SHARES
<PAGE>
Fund Profile
PIMCO Foreign Bond Fund
Institutional Class Shares
February 8, 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
---------
<PAGE>
WHAT IS THE PIMCO FOREIGN BOND 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 Fund's investments.
WHAT IS THE FUND'S PRINCIPAL INVESTMENT STRATEGY?
The Fund invests in a portfolio of fixed income securities primarily
denominated in major foreign currencies and baskets of foreign currencies
(such as the euro). The Fund normally invests at least 85% of its assets in
securities of issuers located outside the United States, representing at
least three foreign countries, which may be represented by futures
contracts (including related options) with respect to such securities, and
options on such securities. The average portfolio duration of the Fund will
normally vary within a three- to seven-year time frame based on the
Adviser's forecast for interest rates. The Adviser will select the Fund's
foreign country and currency compositions based on an evaluation of
relative interest rates, exchange rates, monetary and fiscal policies,
trade and current account balances, and any other specific factors the
Adviser believes to be relevant.
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 Moody's or S&P
(or, if unrated, determined by the Adviser to be of comparable quality).
The Fund may invest all of its assets in derivative instruments, such as
options, futures contracts or swap agreements, or in mortgage- or asset-
backed securities.
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.
. 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.
Securities rated below investment grade 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 Fund's 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 past six calendar
years since inception on December 3, 1992. 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
1998 10.03%
1997 9.60%
1996 18.89%
1995 21.22%
1994 -7.30%
1993 16.40%
During the six-year period shown in the bar chart, the highest quarterly
return was 7.23% (for the quarter ended December 31, 1995) and the lowest
quarterly return was -4.22% (for the quarter ended March 31, 1994).
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 J.P.
Morgan Non-U.S. Index (Hedged). This is a widely recognized, unmanaged
market index
PIMCO FOREIGN BOND FUND . INSTITUTIONAL CLASS SHARES
<PAGE>
representative of the total return performance in U.S. dollars of major
non-U.S. bond markets.
Average Annual Total Returns
for the years ended December 31, 1998 and most recent calendar quarter
Quarter Ended Since
12/31/98 1 Year 5 Years Inception/1/
Foreign Bond Fund,
Institutional Class 1.19% 10.03% 10.01% 11.05%
J.P. Morgan Non-U.S.
Index (Hedged) 0.81% 12.09% 9.45% 10.18%
Value added vs. Index 0.38% -2.06% 0.56% 0.87%
/1/ Calculated as of January 1, 1993, the first full month following the
Fund's Institutional Class inception on December 3, 1992. The Fund returned
11.17% for the period since inception on December 3, 1992 through December
31, 1998.
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/2/ 0.80%
Total annual operating expenses 0.50%
/2/ 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
Foreign 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 to not 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 LEE THOMAS APPEARS HERE]
The Fund's portfolio is managed by Lee R. Thomas, III. A Fixed Income
Portfolio Manager, Mr. Thomas is a Managing Director and Senior
International Portfolio Manager. He has managed the Foreign Bond Fund since
July 13, 1995. Prior to joining PIMCO in 1995, Mr. Thomas was associated
with Investcorp as a member of the management committee responsible for
global securities and foreign exchange trading.
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 at 1-800-927-4648 and a Shareholder Services associate will
assist you.
. By sending a fax to our Shareholder Services department at
1-949-760-4456.
(Continued on back)
PIMCO FOREIGN BOND FUND . INSTITUTIONAL CLASS SHARES
<PAGE>
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).
. Accounts 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: 1-949-760-4456
PIMCO Infolink Audio Response Network:
1-800-987-4626
Web Site: www.pimco.com
PIMCO FOREIGN BOND FUND . INSTITUTIONAL CLASS SHARES
<PAGE>
Fund Profile
PIMCO Low Duration Fund
Institutional Class Shares
February 8, 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
---------
<PAGE>
WHAT IS THE PIMCO LOW DURATION 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 Fund's investments.
WHAT IS THE FUND'S PRINCIPAL INVESTMENT STRATEGY?
The Fund normally invests at least 65% of its assets in a diversified
portfolio of fixed income securities of varying maturities. The securities
may be issued by domestic or foreign entities. The Fund may invest all of its
assets in derivative instruments, such as options, futures contracts or swap
agreements. The average portfolio duration of the Fund will normally vary
within a one- to three-year time frame based on the Adviser's forecast for
interest rates. 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 Moody's 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.
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 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. 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
Fund's 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 past ten calendar years. 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
1998 7.16%
1997 8.24%
1996 6.14%
1995 11.93%
1994 0.63%
1993 7.76%
1992 7.69%
1991 13.46%
1990 9.05%
1989 11.60%
During the ten-year period shown in the bar chart, the highest quarterly return
was 5.52% (for the quarter ended June 30, 1989) and the lowest quarterly return
was -0.32% (for the quarter ended March 31, 1994).
The table below shows how the Fund's average annual returns net of fees for one,
five and ten years and the most recent calendar quarter compare to those of the
Fund's
PIMCO LOW DURATION FUND . INSTITUTIONAL CLASS SHARES
<PAGE>
benchmark, the Merrill Lynch 1-3 Year Treasury Index. This is a widely
recognized, unmanaged market index made up of U.S. Treasury issues with
maturities from one to three years.
Average Annual Total Returns
for the years ended December 31, 1998 and most recent calendar quarter
Quarter Ended
12/31/98 1 Year 5 Years 10 Years
Low Duration Fund,
Institutional Class 1.06% 7.16% 6.76% 8.31%
Merrill Lynch 1-3 Year
Treasury Index 0.76% 7.00% 5.99% 7.37%
Value added vs. Index 0.30% 0.16% 0.77% 0.94%
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 0.18%
Distribution (12b-1) and/or service fees None
Other expenses/1/ 0.00%
Total annual operating expenses 0.43%
/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
Low Duration Fund,
Institutional Class $44 $138 $241 $542
Actual expenses may be higher or lower than those shown. Under normal
circumstances, the Fund intends to limit other expenses so as to not 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 William H. Gross. A Fixed Income
Portfolio Manager, Mr. Gross is a Managing Director and one of the founders
of PIMCO. He has managed the Low Duration Fund since its inception on
May 11, 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 at 1-800-927-4648 and a Shareholder Services associate
will assist you.
. By sending a fax to our Shareholder Services department at
1-949-760-4456.
(Continued on back).
PIMCO LOW DURATION FUND . INSTITUTIONAL CLASS SHARES
<PAGE>
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).
. Accounts 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: 1-949-760-4456
PIMCO Infolink Audio Response Network:
1-800-987-4626
Web Site: www.pimco.com
PIMCO LOW DURATION FUND . INSTITUTIONAL CLASS SHARES
<PAGE>
Fund Profile
PIMCO StocksPLUS Fund
Institutional Class Shares
February 8, 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
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F U N D S
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<PAGE>
WHAT IS THE PIMCO STOCKSPLUS FUND'S INVESTMENT OBJECTIVE?
The Fund's investment objective is to achieve a total return which exceeds
the total return performance of the Standard & Poor's 500 Composite Stock
Price Index ("S&P 500"). "Total return" means increases in portfolio value
resulting from capital appreciation plus net income earned on the Fund's
investments.
WHAT IS THE FUND'S PRINCIPAL INVESTMENT STRATEGY?
The Fund normally invests in common stocks, options, futures, options on
futures and swaps. StocksPLUS is the name of 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 expects to normally invest substantially all of its assets
in S&P 500 derivatives, backed by a portfolio of fixed income instruments.
The Adviser will actively manage the fixed income assets serving as cover for
derivatives, as well as any other fixed income assets held by the portfolio,
with a view toward enhancing the portfolio's total return investment
performance, subject to an overall portfolio duration which is normally not
expected to exceed one year.
Assets not invested in equity securities may be invested in a diversified
portfolio of fixed income securities of varying maturities. 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 under-valued. 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 Moody's or S&P (or, if unrated, determined by the Adviser to be of
comparable quality). The Fund may lend its portfolio securities to brokers,
dealers and other financial institutions in order to earn income. The Fund
may invest all of its assets in derivative instruments, such as options,
futures contracts or swap agreements. The Fund may invest up to 20% of its
assets in securities denominated in foreign currencies, may purchase and sell
options and futures on foreign currencies, and may enter into forward
currency contracts.
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
securities it owns. The market value of 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 Fund's holdings may
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. Securities rated below
investment grade 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
Fund's 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 past five calendar years since
inception on May 14, 1993. 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
1998 28.32%
1997 32.85%
1996 23.07%
1995 40.51%
1994 2.92%
1993 8.89%*
* The return for 1993 in the above bar chart reflects performance from the
Fund's inception date on May 14, 1993, and is not annualized.
PIMCO STOCKSPLUS FUND . INSTITUTIONAL CLASS SHARES
<PAGE>
During the five-year period shown in the bar chart, the highest quarterly
return was 21.44% (for the quarter ended December 31, 1997) and the lowest
quarterly return was -9.77% (for the quarter ended September 30, 1998).
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 S&P 500
Index. This is a widely recognized, unmanaged market index generally
considered representative of the stock market as a whole.
Average Annual Total Returns
for the years ended December 31, 1998 and most recent calendar quarter
Quarter Ended Since
12/31/98 1 Year 5 Years Inception/1/
StocksPLUS Fund,
Institutional Class 21.44% 28.32% 24.85% 23.30%
S&P 500 Index 21.30% 28.68% 24.08% 22.42%
Value added vs. Index 0.14% -0.28% 0.79% 0.88%
/1/ Calculated as of June 1, 1993, the first full month following the Fund's
Institutional Class inception on May 14, 1993. The Fund returned 23.61% for
the period since inception on May 14, 1993 through December 31, 1998.
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/2/ 0.00%
Total annual operating expenses 0.65%
/2/ 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
StocksPLUS 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 to not 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 GROSS The Fund's portfolio is managed by a team led by
APPEARS HERE] 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
StocksPLUS 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.
(Continued on back)
PIMCO STOCKSPLUS FUND . INSTITUTIONAL CLASS SHARES
<PAGE>
. Telephone us at 1-800-927-4648 and a Shareholder Services associate will
assist you.
. By sending a fax to our Shareholder Services department at
1-949-760-4456.
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 Shareholders 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
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F U N D S
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840 Newport Center Drive, Suite 300
Newport Beach, CA 92660
Phone: 1-800-927-4648
Fax: 1-949-760-4456
PIMCO Infolink Audio Response Network:
1-800-987-4626
Web Site: www.pimco.com
PIMCO STOCKSPLUS FUND . INSTITUTIONAL CLASS SHARES
<PAGE>
Fund Profile
PIMCO Total Return Fund
Institutional Class Shares
February 8, 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
---------
<PAGE>
WHAT IS THE PIMCO TOTAL RETURN 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 Fund's investments.
WHAT IS THE FUND'S PRINCIPAL INVESTMENT
STRATEGY?
The Fund normally invests at least 65% of its assets in 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. The
Fund may invest all of its assets in derivative instruments, such as options,
futures contracts or swap agreements. The average portfolio duration of the
Fund will normally vary within a three- to six-year time frame based on the
Adviser's forecast for interest rates. 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 Moody's 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.
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 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. 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
Fund's 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 past ten calendar years. 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
1998 9.77%
1997 10.16%
1996 4.69%
1995 19.78%
1994 -3.57%
1993 12.51%
1992 9.74%
1991 19.56%
1990 8.05%
1989 14.24%
During the ten-year period shown in the bar chart, the highest quarterly
return was 8.26% (for the quarter ended June 30, 1989) and the lowest
quarterly return was -2.69% (for the quarter ended March 31, 1994).
The table below shows how the Fund's average annual returns net of fees for
one, five and ten years and the most recent calendar quarter compare to those
of the Fund's benchmark, the Lehman Brothers Aggregate Bond Index. This is a
widely recognized, unmanaged market index representative of the U.S. taxable
fixed income universe.
PIMCO TOTAL RETURN FUND . INSTITUTIONAL CLASS SHARES
<PAGE>
Average Annual Total Returns
for the years ended December 31, 1998 and most recent calendar quarter
Quarter Ended
12/31/98 1 Year 5 Years 10 Years
Total Returns Fund
Institutional Class 0.33% 9.77% 7.88% 10.30%
Lehman Brothers
Aggregate Bond Index 0.34% 8.69% 7.27% 9.26%
Value added vs. Index -0.01% 1.08% 0.62% 1.04%
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 0.18%
Distribution (12b-1) and/or service fees None
Other expenses/1/ 0.00%
Total annual operating expenses 0.43%
/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
Total Return Fund,
Institutional Class $44 $138 $241 $542
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 The Fund's portfolio is managed by William H. Gross. A Fixed Income
WILLIAM H. Portfolio Manager, Mr. Gross is a Managing Director and one of the
GROSS founders of PIMCO. He has managed the Total Return Fund since its
APPEARS inception on May 11, 1987.
HERE]
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 1-949-760-4456.
(Continued on back).
PIMCO TOTAL RETURN FUND . INSTITUTIONAL CLASS SHARES
<PAGE>
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: 1-949-760-4456
PIMCO Infolink Audio Response Network:
1-800-987-4626
Web Site: www.pimco.com
PIMCO TOTAL RETURN FUND . INSTITUTIONAL CLASS SHARES
