PIMCO Funds: Pacific Investment Management Series
Supplement dated September 1, 2000 to the
Prospectus dated August 1, 2000 for
Institutional and Administrative
Class Shares
Important Information About the PIMCO Strategic Balanced Fund
On or about October 2, 2000, the PIMCO Strategic Balanced Fund (the "Fund") will
become a "fund of funds," which is a term used to describe mutual funds that
pursue their investment objectives by investing in other mutual funds. The Fund
will seek to achieve its investment objective by normally investing between 45%
and 75% of its assets in the StocksPLUS Fund and between 25% and 55% of its
assets in the Total Return Fund (collectively, the "Underlying Funds"). The Fund
will invest all of its assets in shares of the Underlying Funds and will not
invest directly in stocks or bonds of other issuers.
The conversion to a fund of funds will be effected by an in-kind sale of
securities held by the Fund to the Underlying Funds, in exchange for
Institutional Class shares of those funds. This transaction will be a taxable
event to the Fund that could result in additional distributions to shareholders.
However, as of August 31, 2000 the Fund had no built-in gains, and as such PIMCO
believes that the tax implications to shareholders will be minimal.
Pro forma expense information is provided in the tables below. By investing in
the Fund, an investor will indirectly bear fees and expenses charged by the
Underlying Funds in addition to the Fund's direct fees and expenses. The use of
a fund of funds structure could affect the timing, amount and character of
distributions and may therefore increase the amount of taxes payable by
shareholders. In addition to the StocksPLUS and Total Return Funds, the Fund may
in the future invest in additional funds in the PIMCO Funds family at the
discretion of PIMCO and without shareholder approval.
The Fund's investment performance will depend upon how its assets are allocated
between the Underlying Funds. A principal risk of investing in the Fund is that
PIMCO's allocation technique will not produce the desired results, and the Fund
may not achieve its investment objective. The value of an investment in the Fund
will be directly related to the investment performance of the Underlying Funds
in which it invests. Therefore, the principal risks of investing in the Fund are
closely related to the principal risks associated with the Underlying Funds and
their investments.
<PAGE>
ProForma
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Institutional Class or Administrative Class shares
of the Fund of the Fund:
Shareholder Fees (fees paid directly from your investment) None
Annual Fund Operating Expenses (expenses that are deducted from Fund assets)
<TABLE>
<S> <C> <C> <C> <C> <C>
Distribution Total Amount
Advisory and/or Service Other Underlying Fund Operating
Share Class Fees (12b-1) Fees Expenses(1) Fund Expenses(2) Expenses
---------------------------------------------------------------------------------------------------------------
Institutional None None 0.05% 0.57% 0.62%
---------------------------------------------------------------------------------------------------------------
Administrative None 0.25% 0.05 0.57 0.87
---------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Other Expenses reflect a 0.05% Administrative Fee paid by the class.
(2) Based on estimated expenses for the current fiscal year. Underlying Fund
Expenses for the Fund are estimated based upon a 65%/35% allocation of the
Fund's assets between the StocksPLUS and Total Return Funds and upon the
total annual operating expenses of Institutional Class shares of these
Underlying Funds. For a listing of the expenses associated with each
Underlying Fund, please see the Fund Summaries of the Underlying Funds.
Total Annual Fund Operating Expenses and the Examples set forth below are
based on estimates of the Underlying Fund Expenses the Fund will incur.
Actual Underlying Fund Expenses for the Fund are expected to vary with
changes in the allocation of the Fund's assets, and may be higher or lower
than those shown above.
Examples. The Examples are intended to help you compare the cost of investing in
Institutional Class or Administrative Class shares of the Fund with the costs of
investing in other mutual funds. The Examples assume that you invest $10,000 in
the noted class of shares for the time periods indicated, and then redeem all
your shares at the end of those periods. The Examples also assume that your
investment has a 5% return each year, the reinvestment of all dividends and
distributions, and that the Fund's operating expenses remain the same. Although
your actual costs may be higher or lower, the Examples show what your costs
would be based on these assumptions.
<TABLE>
<S> <C> <C> <C> <C>
Share Class Year 1 Year 3 Year 5 Year 10
---------------------------------------------------------------------------------------
Institutional $63 $199 $346 $ 774
---------------------------------------------------------------------------------------
Administrative 89 278 482 1,073
---------------------------------------------------------------------------------------
</TABLE>
<PAGE>
PIMCO Funds: Pacific Investment Management Series
Supplement dated September 1, 2000 to the
Prospectus dated August 1, 2000 for
Institutional and Administrative
Class Shares
Important Information About the PIMCO Low Duration Mortgage Fund
On or about October 2, 2000, the PIMCO Low Duration Mortgage Fund (the "Fund")
will change its name to the PIMCO GNMA Fund. At that time, the Fund will seek to
achieve its investment objective by investing under normal circumstances at
least 65% of its assets in a diversified portfolio of securities of varying
maturities issued by the Government National Mortgage Association ("GNMA"). The
duration of the Fund will change from 1-3 years to 1-7 years.
Scott A. Mather will assume the day-to-day portfolio management responsibilities
of managing the Fund. Mr. Mather is an Executive Vice President of PIMCO and a
senior member of PIMCO's portfolio management and strategy groups, and a member
of PIMCO's mortgage team. Mr. Mather joined PIMCO two years ago, having been
previously associated with Goldman Sachs, where he was a trader in the fixed
income division and specialized in trading a broad range of mortgaged backed
securities.
<PAGE>
PIMCO Funds: Pacific Investment Management Series
Supplement dated September 1, 2000 to
the Prospectus dated August 1, 2000
for Class A, B, and C Shares
Important Information About the PIMCO Strategic Balanced Fund
On or about October 2, 2000, the PIMCO Strategic Balanced Fund (the "Fund") will
become a "fund of funds," which is a term used to describe mutual funds that
pursue their investment objectives by investing in other mutual funds. The Fund
will seek to achieve its investment objective by normally investing between 45%
and 75% of its assets in the StocksPLUS Fund and between 25% and 55% of its
assets in the Total Return Fund (collectively, the "Underlying Funds"). The Fund
will invest all of its assets in shares of the Underlying Funds and will not
invest directly in stocks or bonds of other issuers.
The conversion to a fund of funds will be effected by an in-kind sale of
securities held by the Fund to the Underlying Funds, in exchange for
Institutional Class shares of those funds. This transaction will be a taxable
event to the Fund that could result in additional distributions to shareholders.
However, as of August 31, 2000 the Fund had no built-in gains, and as such
PIMCO believes that the tax implications to shareholders will be minimal.
Pro forma expense information is provided in the tables below. The cost of
investing in the Fund will generally be higher than the cost of investing in a
mutual fund that invests directly in individual stocks and bonds. By investing
in the Fund, an investor will indirectly bear fees and expenses charged by the
Underlying Funds in addition to the Fund's direct fees and expenses. The use of
a fund of funds structure could affect the timing, amount and character of
distributions and may therefore increase the amount of taxes payable by
shareholders. In addition to the StocksPLUS and Total Return Funds, the Fund may
in the future invest in additional funds in the PIMCO Funds family at the
discretion of PIMCO and without shareholder approval.
The Fund's investment performance will depend upon how its assets are allocated
between the Underlying Funds. A principal risk of investing in the Fund is that
PIMCO's allocation technique will not produce the desired results, and the Fund
may not achieve its investment objective. The value of an investment in the Fund
will be directly related to the investment performance of the Underlying Funds
in which it invests. Therefore, the principal risks of investing in the Fund are
closely related to the principal risks associated with the Underlying Funds and
their investments.
<PAGE>
ProForma
Fees and These tables describe the fees and expenses you may pay if
Expenses you buy and hold Class A, B or C shares of the Fund:
of the Fund
Shareholder Fees (fees paid directly from your investment)
<TABLE>
<S> <C> <C>
Maximum Sales Charge (Load) Imposed Maximum Contingent Deferred Sales Charge (Load)
on Purchase (as a percentage of offering price) (as a percentage of original purchase price)
---------------------------------------------------------------------------------------------------------------------
Class A 4.5% 1.0%(1)
---------------------------------------------------------------------------------------------------------------------
Class B None 5.0%(2)
---------------------------------------------------------------------------------------------------------------------
Class C None 1.0%(3)
---------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Imposed only in certain circumstances where Class A shares are purchased
without a front-end sales charge at the time of purchase.
(2) The maximum CDSC is imposed on shares redeemed in the first year. For
shares held longer than one year, the CDSC declines according to the
schedule set forth under "Investment Options--Class A, B and C
Shares--Contingent Deferred Sales Charges (CDSCs)--Class B Shares."
(3) The CDSC on Class C shares is imposed only on shares redeemed in the first
year.
Annual Fund Operating Expenses (expenses that are deducted from Fund assets)
<TABLE>
<S> <C> <C> <C> <C> <C>
Distribution Total Annual
Advisory and/or Service Other Underlying Fund Operating
Share Class Fees (12b-1) Fees(1) Expenses(2) Fund Expenses Expenses
---------------------------------------------------------------------------------------------------------------------------
Class A None 0.25% 0.40% 0.57% 1.22%
---------------------------------------------------------------------------------------------------------------------------
Class B None 1.00 0.40 0.57 1.97
---------------------------------------------------------------------------------------------------------------------------
Class C None 1.00 0.40 0.57 1.97
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Due to 12b-1 distribution fee imposed on Class B and Class C shares, a
Class B or Class C shareholder may, depending upon the length of time the
shares are held, pay more than the economic equivalent of the maximum
front-end sales charges permitted by relevant rules of the National
Association of Securities Dealers, Inc.
(2) Other Expenses reflect a 0.40% Administrative Fee paid by the class.
(3) Based on estimated expenses for the current fiscal year. Underlying Fund
Expenses for the Fund are estimated based upon a 65%/35% allocation of the
Fund's assets between the StocksPLUS and Total Return Funds and upon the
total annual operating expenses of Institutional Class shares of these
Underlying funds. Total Annual Fund Operating Expenses and the Examples set
forth below are based on estimates of the Underlying fund Expenses the Fund
will incur. Actual Underlying Fund Expenses for the fund are expected to
vary with changes in the allocation of the Fund's assets, and may be higher
or lower than those shown above.
Examples. The Examples are intended to help you compare the cost of investing in
Class A, B or C shares of the Fund with the costs of investing in other
mutual funds. The Examples assume that you invest $10,000 in the noted class
of shares for the time periods indicated, your investment has a 5% return
each year, the reinvestment of all dividends and distributions, and the
Fund's operating expenses remain the same. Although your actual costs may be
higher or lower, the Examples show what your costs would be based on these
assumptions.
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
----------------------------------------------------------------------------------------------------------------------
Example: Assuming you redeem shares at the end of Example: Assuming you do not redeem your shares
each period
----------------------------------------------------------------------------------------------------------------------
Share Class Year 1 Year 3 Year 5 Year 10 Year 1 Year 3 Year 5 Year 10
----------------------------------------------------------------------------------------------------------------------
Class A $569 $820 $1,090 $1,861 $569 $820 $1,090 $1,861
----------------------------------------------------------------------------------------------------------------------
Class B 700 918 1,262 2,006 200 618 1,062 2,006
----------------------------------------------------------------------------------------------------------------------
Class C 300 618 1,062 2,296 200 618 1,062 2,296
----------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
PIMCO Funds: Pacific Investment Management Series
Supplement dated September 1,
2000 to the Prospectus
dated August 1, 2000
for Class D Shares
Important Information About the PIMCO Strategic Balanced Fund
On or about October 2, 2000, the PIMCO Strategic Balanced Fund (the "Fund") will
become a "fund of funds," which is a term used to describe mutual funds that
pursue their investment objectives by investing in other mutual funds. The Fund
will seek to achieve its investment objective by normally investing between 45%
and 75% of its assets in the StocksPLUS Fund and between 25% and 55% of its
assets in the Total Return Fund (collectively, the "Underlying Funds"). The Fund
will invest all of its assets in shares of the Underlying Funds and will not
invest directly in stocks or bonds of other issuers.
The conversion to a fund of funds will be effected by an in-kind sale of
securities held by the Fund to the Underlying Funds, in exchange for
Institutional Class shares of those funds. This transaction will be a taxable
event to the Fund that could result in additional distributions to shareholders.
However, as of August 31, 2000 the Fund had no built-in gains, and as such
PIMCO believes that the tax implications to shareholders will be minimal.
Pro forma expense information is provided in the tables below. The cost of
investing in the Fund will generally be higher than the cost of investing in a
mutual fund that invests directly in individual stocks and bonds. By investing
in the Fund, an investor will indirectly bear fees and expenses charged by the
Underlying Funds in addition to the Fund's direct fees and expenses. The use of
a fund of funds structure could affect the timing, amount and character of
distributions to shareholders and may therefore increase the amount of taxes
payable by shareholders. In addition to the StocksPLUS and Total Return Funds,
the Fund may in the future invest in additional funds in the PIMCO Funds family
at the discretion of PIMCO and without shareholder approval.
The Fund's investment performance will depend upon how its assets are allocated
between the Underlying Funds. A principal risk of investing in the Fund is that
PIMCO's allocation technique will not produce the desired results, and the Fund
may not achieve its investment objective. The value of an investment in the Fund
will be directly related to the investment performance of the Underlying Funds
in which it invests. Therefore, the principal risks of investing in the Fund are
closely related to the principal risks associated with the Underlying Funds and
their investments.
<PAGE>
ProForma
Fees and These tables describe the fees and expenses you may pay if
Expenses you buy and hold Class D shares of the Fund:
of the Fund
Shareholder Fees (fees paid directly from your investment) None
Annual Fund Operating Expenses (expenses that are deducted from Fund assets)
<TABLE>
<S> <C> <C> <C> <C> <C>
Distribution Total Annual
Advisory and/or Service Other Underlying Fund Operating
Fees (12b-1) Fees(1) Expenses(2) Fund Expenses(3) Expenses
-------------------------------------------------------------------------------------------------------------------------
Class D None 0.25% 0.40% 0.57% 1.22%
-------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The Fund's administration agreement includes a plan for Class D shares that
has been adopted in conformity with the requirements set forth in Rule
12b-1 under the Investment Company Act of 1940. Up to 0.25% per year of the
total fees paid under the administration agreement may be distribution
and/or service (12b-1) fees. The Fund will pay a total of 0.65% per year
under the administration agreement regardless of whether a portion or none
of the 0.25% authorized under the plan is paid under the plan. Please see
"Management of the Funds--Investment Adviser and
Administrator--Administrative Fees" for details. The Fund intends to treat
any fees paid under the plan as "service fees" for purposes of applicable
rules of the National Association of Securities Dealers, Inc. (the "NASD").
To the extent that such fees are deemed not be "service fees," Class D
shareholders may, depending on the length of time the shares are held, pay
more than the economic equivalent of the maximum front-end sales charges
permitted by relevant rules of the NASD.
(2) Other Expenses reflects the portion of the Administrative Fee paid by the
class that is not reflected under Distribution and/or Service (12b-1) Fees.
(3) Based on estimated expenses for the current fiscal year. Underlying Fund
Expenses for the Fund are estimated based upon a 65%/35% allocation of the
Fund's assets between the StocksPLUS and Total Return Funds and upon the
total annual operating expenses of Institutional Class shares of these
Underlying Funds. Total Annual Fund Operating Expenses and the Examples set
forth below are based on estimates of the Underlying Fund Expenses the Fund
will incur. Actual Underlying Fund Expenses for the Fund are expected to
vary with changes in the allocation of the Fund's assets, and may be higher
or lower than those shown above.
Examples. The Examples are intended to help you compare the cost of investing in
Class D shares of the Fund with the costs of investing in other mutual funds.
The Examples assume that you invest $10,000 in the noted class of shares in the
time periods indicated, and then redeem all your shares at the end of those
periods. The Examples also assume that your investment has a 5% return each
year, the reinvestment of all dividends and distributions, and that the Fund's
operating expenses remain the same. Although your actual costs may be higher or
lower, the Examples show what your costs would be based on these assumptions.
Year 1 Year 3 Year 5 Year 10
---------------------------------------------------------------------------
Class D $124 $387 $670 $1,477
---------------------------------------------------------------------------
