<PAGE>
P I M C O
EMERGING MARKETS
. INTERNATIONAL DEVELOPED .
CAPITAL APPRECIATION
. MID CAP GROWTH . MICRO CAP GROWTH .
SMALL CAP GROWTH . CORE EQUITY
. MID CAP EQUITY . EQUITY INCOME .
VALUE . SMALL CAP VALUE
. ENHANCED EQUITY . BALANCED
PIMCO Funds
Annual Report . June 30, 1997
<PAGE>
<TABLE>
<S> <C>
Contents
Chairman's Message 1
Market Review 2
Investment Performance
Emerging Markets Fund 3
International Developed Fund 4
Capital Appreciation Fund 5
Mid Cap Growth Fund 6
Micro Cap Growth Fund 7
Small Cap Growth Fund 8
Core Equity Fund 9
Mid Cap Equity Fund 10
Equity Income Fund 11
Value Fund 12
Small Cap Value Fund 13
Enhanced Equity Fund 14
Balanced Fund 15
Statement of Assets and Liabilities 16
Statement of Operations 18
Statement of Changes in Net Assets 20
Financial Highlights 24
Schedules of Investments
Emerging Markets Fund 32
International Developed Fund 34
Capital Appreciation Fund 36
Mid Cap Growth Fund 37
Micro Cap Growth Fund 39
Small Cap Growth Fund 40
Core Equity Fund 42
Mid Cap Equity Fund 43
Equity Income Fund 44
Value Fund 45
Small Cap Value Fund 46
Enhanced Equity Fund 48
Balanced Fund 50
Notes to Financial Statements 52
Report of Independent Accountants 60
Shareholder Vote 61
Federal Income Tax Information 62
</TABLE>
<PAGE>
Chairman's Message
Dear Shareholder:
Financial markets, particularly the stock market, continued to surprise many
financial experts by posting strong results. For the one-year period ended June
30, 1997, the stock market, as measured by the Standard & Poor's 500 Index of
stocks, rose 34.7%. The overall bond market, as measured by the Lehman Aggregate
Bond Index, posted an 8.2% return.
Volatility Continues While the financial markets posted gains over the last
year, it was anything but a smooth ride. Stock and bond prices often fluctuated
significantly, as investors focused on the latest news regarding economic
growth, inflation, interest rates and corporate earnings.
Earlier in the year it appeared the financial markets' good fortunes could be
coming to an end. Market gyrations were sharpest from mid-March to early May
1997, as both stocks and bonds experienced sharp losses, followed immediately by
strong gains. As such, investors who resisted the urge to react to short-term
events were rewarded for their patience. In fact, practically every sector of
the stock and bond markets posted gains during the second quarter of 1997.
Looking Ahead As I write this letter, there are positive signs for continued
market strength. These include the balanced budget accord, potential tax cuts,
slow but steady economic growth and few signs of increased inflation. Yet,
concerns do exist. The bull market in stocks is nearing an unprecedented seventh
year. Many market observers, including Federal Reserve Chairman Alan Greenspan,
have expressed concerns regarding soaring stock prices.
No matter what the next short-term move in the market is, it is important for
investors to maintain a longer-term perspective with regard to their financial
holdings. We urge shareholders to have realistic expectations for investment
performance, especially in the stock market.
A Stronger Fund Family One final note--in January, 1997, the PIMCO Advisors
Funds consolidated with the institutional PIMCO Funds family. We are now one of
the largest fund families in the U.S., with over $27 billion in assets under
management, and we offer forty-one institutional equity and fixed income mutual
funds to help meet your financial needs.
With the consolidation, we have two separate prospectuses and shareholder
reports for the PIMCO Funds family, one primarily for our stock funds (PIMCO
Funds: Multi-Manager Series), and the second primarily for our bond funds (PIMCO
Funds: Pacific Investment Management Series). Shareholders of the Multi-Manager
Series will receive reports for fiscal periods ending June 30 and December 31.
Shareholders of the Pacific Investment Management Series will receive reports
for fiscal periods ending March 31 and September 30.
We appreciate the trust you have placed in us as we work to help you meet your
financial objectives.
Sincerely,
/s/ William D. Cvengros
William D. Cvengros
Chairman of the Board
July 31, 1997
1997 Annual Report / 1
<PAGE>
Market Review
The Stock Market
The Bull Market Rolls On
As 1997 began, investors flocked to large-capitalization stocks, and the S&P 500
Index surged ahead nearly 9% by the middle of February. While the large-cap gain
was impressive, most other sectors of the stock market did not fare as
well--most notably small-cap and many technology stocks.
But, in mid-March, it appeared the bull market would finally come to a
close. Stock prices fell, as signs of strong economic growth led to fears of
rising inflation and interest rates. These increases typically hurt stock
prices, as they can ultimately take a toll on corporate profits. While all
sectors of the stock market fell, small-cap, mid-cap and technology issues felt
the brunt of the decline.
Then, just as investors were bracing themselves for further adversity, the
stock market displayed amazing resiliency. By the end of June 1997, virtually
every sector of the stock market had rebounded--in many cases dramatically so.
Year-to-date through June 30, 1997, the S&P 500 Index was up nearly 21%. And
small-cap stocks, which had posted negative returns during the first three
months of the year, surged ahead 16% during the second quarter. International
stocks have also turned in strong results, led by emerging market stocks, which
have posted a 16% return during the first half of the year.
Looking ahead, we are cautiously optimistic about the prospects for the
stock market. The optimism lies in the fact that the current environment is
positive, and corporate profits are healthy. However, if inflation and interest
rates move upwards, we could see an acceleration in market volatility. Given
this scenario, it's important for investors to maintain a long-term outlook and
ensure that their portfolios are adequately diversified.
The Bond Market
A Reversal of Fortune?
Over the last year, the bond market has seen its share of ups and downs.
Investors have spent a great deal of time and energy attempting to determine the
direction of the economy and inflation. As a result, short-term news often led
to heightened interest rate volatility.
This calendar year initially looked a lot like the start of 1996, as it
began with a promising outlook for the economy and interest rates. However, in a
repeat performance, the bond market retreated when it appeared that economic
growth was accelerating. Interest rates moved steadily upward from late February
through April, 1997, as a result of stronger-than-expected economic growth.
In an attempt to cool off the economy and make a preemptive strike
against inflation, the Federal Reserve Board raised interest rates 1/4 of a
percentage point in March. This caused long-term interest rates to surge above
7.1% by the end of the first quarter. Since that time, there have been
increasing signs of slower economic growth, as evidenced by the Federal
Reserve's decision not to raise interest rates again in early July. As a result,
the bond market has rallied sharply.
Through the first half of 1997, the best performing sectors of the bond
market were also last year's winners--high yield and currency-hedged foreign
bonds, in particular emerging market bonds. Mortgage-backed bonds have also
fared well, as yields remained in a limited range, lowering the potential of
mortgage prepayments.
Despite this year's volatility, we feel the prospects for the bond market
are bright. With an economic slowdown and stagnant inflation, the gradual
decline in interest rates should continue. By the end of the year or in early
1998 we feel the yield on long-term Treasury bonds could fall as low as 6%.
[LINE GRAPH APPEARS HERE]
657.44
646.19
638.73
635.9
662.49
662.1
665.21
667.03
651.99
655.68
680.54
687.02
686.19
701.46
700.66
710.82
700.92
703.77
730.82
737.62
748.73
757.02
739.6
728.64
748.87
756.79
748.03
759.5
776.17
770.52
786.16
789.56
808.48
801.77
790.82
804.97
793.17
784.1
773.88
757.9
737.65
766.34
765.37
812.97
824.78
829.75
847.03
848.28
858.01
893.27
898.7
887.3
Stocks fought off a near-correction earlier in the year to continue their record
pace.
[LINE GRAPH APPEARS HERE]
7.194
7.032
6.976
7.01
6.745
6.692
6.77
6.957
7.12
7.112
6.95
7.045
6.91
6.743
6.847
6.803
6.817
6.681
6.508
6.459
6.438
6.352
6.513
6.574
6.608
6.564
6.734
6.848
6.825
6.893
6.792
6.706
6.527
6.645
6.805
6.816
6.944
6.971
7.09
7.126
7.169
7.056
7.145
6.877
6.893
6.9
6.989
6.908
6.776
6.726
6.663
6.744
Interest rates fell after surging earlier in the year--benefiting bond
investors.
2 / PIMCO Funds
<PAGE>
Emerging Markets Fund
PORTFOLIO MANAGER:
Blairlogie Capital Management
Edinburgh, Scotland
TOTAL RETURN PERFORMANCE
FOR THE PERIOD ENDED 6/30/97
<TABLE>
<CAPTION>
Since
1 Yr. 3 Yrs.* Inception*
(6/93)
<S> <C> <C> <C>
Emerging
Markets Fund
Inst'l Class (%) 10.85 2.25 11.25
- -----------------------------------------------------------
MSCI Emerging
Markets Free Index (%) 12.80 6.96 14.30
- -----------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Since
1 Yr. 2 Yrs.* Inception*
(11/94)
<S> <C> <C> <C>
Emerging
Markets Fund
Admin. Class (%) 10.45 8.98 (4.02)
- -----------------------------------------------------------
MSCI Emerging
Markets Free Index (%) 12.80 10.62 1.18
- -----------------------------------------------------------
</TABLE>
* Annualized
- --------------------------------------------------
Portfolio Composition
% of Total Investments as of June 30, 1997
- --------------------------------------------------
Top Ten Common Stocks
<TABLE>
<CAPTION>
Company
- --------------------------------------------------
<S> <C>
Telecomunicacoes Brasileiras - ADR 2.9%
- --------------------------------------------------
Centrais Electricas Brasileiras - SA `B' 2.5%
- --------------------------------------------------
Telefonos de Mexico - ADR 2.0%
- --------------------------------------------------
Korea Electric Power Corp. 1.7%
- --------------------------------------------------
Portugal Telecom SA 1.4%
- --------------------------------------------------
Bank International Indonesia 1.4%
- --------------------------------------------------
Compania de Telecomunicaciones
de Chile SA SP - ADR 1.4%
- --------------------------------------------------
YPF Sociedad Anonima - ADR 1.3%
- --------------------------------------------------
Banco Bradesco SA 1.3%
- --------------------------------------------------
Tata Engineering and
Locomotive Co. Limited SP - GDR 1.3%
- --------------------------------------------------
Top Ten Total 17.2%
</TABLE>
Country Classifications
[PIE CHART APPEARS HERE]
<TABLE>
<S> <C>
Brazil 13.7%
Malaysia 9.5%
Mexico 9.4%
India 8.8%
Israel 6.5%
South Africa 6.3%
Chile 6.2%
Turkey 6.0%
Portugal 5.8%
South Korea 5.0%
Other 22.8%
</TABLE>
INVESTMENT OBJECTIVE AND PRIMARY INVESTMENTS:
Seeks long-term growth of capital; invests primarily in common stocks of
companies located in emerging market countries.
- --------------------------------------------------------------------------------
Cumulative Returns Since Inception Through June 30, 1997
- --------------------------------------------------------------------------------
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Emerging Markets Fund MSCI Emerging Markets Free Index
<S> <C>
5,000,000.00 5,000,000.00
5,075,000.00 5,148,160.00
5,230,000.00 5,284,250.00
5,745,000.00 5,730,450.00
5,855,000.00 5,940,000.00
6,276,110.00 6,472,980.00
6,746,690.00 6,759,420.00
7,823,240.00 7,876,640.00
8,325,460.00 8,020,040.00
8,097,650.00 7,877,370.00
7,471,170.00 7,164,490.00
7,258,890.00 7,021,210.00
7,610,960.00 7,261,520.00
7,227,820.00 7,061,360.00
7,636,850.00 7,500,370.00
8,501,500.00 8,431,340.00
8,781,080.00 8,527,140.00
8,558,450.00 8,373,240.00
8,144,250.00 7,937,780.00
7,214,690.00 7,300,450.00
6,254,190.00 6,523,750.00
5,943,120.00 6,356,420.00
5,850,340.00 6,396,700.00
6,150,500.00 6,683,880.00
6,428,830.00 7,039,400.00
6,472,490.00 7,060,510.00
6,581,640.00 7,218,680.00
6,461,570.00 7,048,310.00
6,423,370.00 7,015,230.00
6,185,320.00 6,747,220.00
6,031,650.00 6,627,120.00
6,310,280.00 6,921,380.00
6,838,890.00 7,413,470.00
6,657,180.00 7,295,570.00
6,728,760.00 7,352,450.00
6,954,520.00 7,646,580.00
6,938,000.00 7,612,160.00
6,971,040.00 7,659,390.00
6,387,360.00 7,136,300.00
6,591,100.00 7,319,010.00
6,673,690.00 7,382,710.00
6,431,420.00 7,185,610.00
6,547,050.00 7,306,310.00
6,614,670.00 7,337,560.00
7,096,240.00 7,837,950.00
7,361,930.00 8,173,450.00
7,184,800.00 7,958,530.00
7,112,840.00 7,972,840.00
7,384,070.00 8,200,830.00
7,727,260.00 8,640,160.00
</TABLE>
The line graph above assumes the investment of $5,000,000 on 6/1/93, the Fund's
Institutional Class inception, compared to the Morgan Stanley Capital
International (MSCI) Emerging Markets Free Index, an unmanaged market index. The
performance of the Administrative Class (shown at left) reflects the payment of
a service fee in an amount not to exceed 0.25% on an annualized basis. The
Administrative Class commenced operations on 11/1/94. The performance since
inception (shown at left) begins 11/1/94. The Fund may invest in foreign
securities which involve potentially higher risks including foreign currency
fluctuations and political or economic uncertainty. Past performance is not an
indication of future results.
The Emerging Markets Fund delivered positive results for the year ended
June 30, 1997, as the Fund's shares increased 10.9% and 10.5% for its
Institutional and Administrative Class shares, respectively. However, these
returns were behind that of the Fund's benchmark (the MCSI Emerging Markets Free
Index).
The manager's country allocations added significant value to the Fund
over the past year. In particular, Latin America was very strong over the last
quarter, led by Brazil, which was up 34%, Mexico (+25%) and Chile (+16%). These
countries' economies have been able to continue their growth in an environment
with relatively low inflation, spurred by thriving travel, food exportation and
manufacturing. In addition, Chile's performance was aided by interest rates that
have fallen much faster than anticipated.
One success story for the Fund outside of Latin America was Tata
Engineering (Telco), the largest truck manufacturer in India. This company is
part of the Tata group conglomerate, whose products range from steel to
software. In an expanding economy such as India's, lack of modern transportation
systems is often the most serious impediment to growth. As the lead time to
improve the rail system is long, the increased traffic of goods has to be
accommodated on the roads. Tata Engineering has greatly expanded capacity to
take care of this situation.
Stock selection within other countries detracted from returns.
Specifically, certain holdings in India and Malaysia, including the textile
company Raymond Willens and the gambling firm Resorts World, limited overall
performance. The manager has since sold both of these securities, and expects
better results in these markets in the future.
The Fund's manager continues to prefer the Latin American markets to
those of Asia, as the effects of the 1994 devaluation of the peso still keep the
valuations of Latin American countries relatively inexpensive. Brazil is an
example of a strong Latin American holding, as this country has linked its
currency to the U.S. dollar. As a result, Brazil has experienced very little
inflation and has low interest rates. One Latin American market the manager
plans to avoid is Venezuela, where stock prices have gone up very fast, but
where the fundamentals are believed to be weaker compared to other countries.
Looking ahead, the Fund manager continues to believe that exposure to
emerging market stocks makes sense for aggressive investors looking to diversify
their portfolio.
1997 Annual Report / 3
<PAGE>
International Developed Fund
PORTFOLIO MANAGER:
Blairlogie Capital Management
Edinburgh, Scotland
TOTAL RETURN PERFORMANCE
FOR THE PERIOD ENDED 6/30/97
<TABLE>
<CAPTION>
Since
1 Yr. 3 Yrs.* Inception *
(7/93)
<S> <C> <C> <C>
International
Developed Fund
Inst'l Class (%) 10.07 9.82 12.38
- -----------------------------------------------------------
EAFE Index (%) 13.16 9.44 11.35
- -----------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Since
1 Yr. 2 Yrs.* Inception *
(12/94)
<S> <C> <C> <C>
International
Developed Fund
Inst'l Class (%) 9.77 13.87 12.36
- -----------------------------------------------------------
EAFE Index (%) 13.16 13.39 11.67
- -----------------------------------------------------------
</TABLE>
* Annualized
- -------------------------------------------
Portfolio Composition
% of Total Investments as of June 30, 1997
- -------------------------------------------
Top Ten Common Stocks
<TABLE>
<CAPTION>
Company
<S> <C>
- ------------------------------------------------
Webs-Belgium 3.5%
- ------------------------------------------------
Chase Manhattan Bank 2.4%
- ------------------------------------------------
NEC Corp. 1.8%
- ------------------------------------------------
Fanuc 1.8%
- ------------------------------------------------
Matsushita Electric Works Limited 1.8%
- ------------------------------------------------
Roche Holding AG 1.8%
- ------------------------------------------------
Novartis AG 1.7%
- ------------------------------------------------
Sumitomo Bank Limited 1.7%
- ------------------------------------------------
VEBA AG 1.7%
- ------------------------------------------------
Fujisawa Pharmaceutical 1.6%
- ------------------------------------------------
Top Ten Total 19.8%
</TABLE>
Country Classifications
[PIE CHART APPEARS HERE]
<TABLE>
<S> <C>
Japan 26.1%
Germany 12.0%
United Kingdom 10.9%
France 10.8%
Switzerland 8.9%
Italy 6.7%
Netherlands 4.9%
Finland 4.0%
Belgium 3.5%
Singapore 3.4%
Other 8.8%
</TABLE>
INVESTMENT OBJECTIVE AND PRIMARY INVESTMENTS:
Seeks long-term growth of capital; invests primarily in a diversified portfolio
of international equity securities.
[LINE GRAPH APPEARS HERE]
Cumulative Returns Since Inception Through June 30, 1997
<TABLE>
<CAPTION>
INTERNATIONAL DEVELOPED FUND EAFE INDEX
<S> <C>
5,000,000.00 5,000,000.00
5,201,650.00 5,176,180.00
5,558,430.00 5,456,780.00
5,423,990.00 5,335,140.00
5,553,500.00 5,500,730.00
5,096,340.00 5,021,060.00
5,479,420.00 5,384,760.00
5,959,530.00 5,841,170.00
5,917,780.00 5,826,200.00
5,714,260.00 5,576,500.00
5,959,530.00 5,814,350.00
5,938,650.00 5,782,210.00
6,022,150.00 5,865,220.00
6,147,390.00 5,922,930.00
6,220,450.00 6,064,460.00
6,011,710.00 5,874,780.00
6,203,540.00 6,071,780.00
5,863,550.00 5,781,300.00
5,865,610.00 5,818,870.00
5,675,170.00 5,596,690.00
5,740,470.00 5,582,090.00
6,061,500.00 5,931,810.00
6,279,140.00 6,156,490.00
6,224,730.00 6,084,680.00
6,115,910.00 5,979,590.00
6,551,200.00 6,353,500.00
6,518,560.00 6,112,670.00
6,616,500.00 6,233,640.00
6,438,820.00 6,067,670.00
6,669,170.00 6,238,090.00
6,870,490.00 6,491,040.00
6,934,050.00 6,519,210.00
6,939,830.00 6,542,880.00
7,084,290.00 6,683,490.00
7,361,650.00 6,879,450.00
7,205,630.00 6,754,520.00
7,246,080.00 6,794,160.00
6,991,830.00 6,597,270.00
6,980,270.00 6,613,430.00
7,153,630.00 6,790,800.00
7,101,620.00 6,723,030.00
7,338,530.00 6,992,220.00
7,270,850.00 6,903,980.00
7,045,910.00 6,663,930.00
7,161,420.00 6,774,550.00
7,173,580.00 6,800,770.00
7,270,850.00 6,838,510.00
7,623,450.00 7,285,200.00
7,976,050.00 7,688,590.00
</TABLE>
- --------------------------------------------------------------------------------
The line graph above assumes the investment of $5,000,000 on 7/1/93, the first
full month following the Fund's Institutional Class inception on 6/8/93,
compared to the Morgan Stanley Capital International EAFE Index (Europe,
Australasia, Far East), an unmanaged market index. The performance of the
Administrative Class (shown at left) reflects the payment of a service fee in an
amount not to exceed 0.25% on an annualized basis. The Administrative Class
commenced operations on 11/30/94. The performance since inception (shown at
left) begins 12/1/94. The Fund may invest in foreign securities which involve
potentially higher risks including foreign currency fluctuations and political
or economic uncertainty. Past performance is not an indication of future
results.
For the year ended June 30, 1997, shares of the International Developed
Fund increased 10.1% and 9.8% for its Institutional and Administrative Class
shares, respectively. These returns fell short of the Fund's benchmark (the MSCI
EAFE Index).
The major factor that limited performance for the Fund was the strength of
the U.S. dollar versus many European countries. The value of the German mark and
the French franc declined relative to the dollar, and, as a result, the strong
returns of the stocks from those foreign markets were much lower when measured
in U.S. terms. This was true for Italy as well, where the Milan market's returns
were nearly cut in half when exchanged into U.S. dollars, due to the declining
lira.
However, strong results in the Japanese and Asian markets helped offset
the currency disruptions. A national sales tax in Japan had a less serious
impact than was anticipated, and corporate investors moved additional assets
into the country as opportunities increased. Hong Kong rose almost 20% during
the last three months in anticipation of its transfer back to Chinese rule, with
manufacturing and building companies benefiting from optimism for the future.
The manager raised the Fund's exposure to Singapore, as the country appears safe
from currency worries and has a stable economic outlook.
Turning to specific success stories, Royal Dutch Shell was a significant
contributor to Fund performance and continues to display promising growth
potential. The company has posted strong results thus far in 1997, and the
manager believes this could continue despite the relatively flat outlook for oil
prices. This optimism is driven by several factors, including a successful
cost-reduction program, strong cash flow that has increased the likelihood of
higher dividend payouts, prosperous exploration and attainable financial goals.
Looking ahead, the Fund's manager plans to remain overweight in European
stocks, especially those of Germany and the Scandinavian countries. In Germany,
the recession that began in 1991 after the collapse of the Berlin Wall has
helped exporters, but the domestic economy has suffered greatly. Now, however,
there are signs of a turnaround in the economy, and the recovery is expected to
trickle down into corporate earnings growth.
4 / PIMCO Funds
<PAGE>
Capital Appreciation Fund
PORTFOLIO MANAGER:
Cadence Capital Management
Boston, Massachusetts
TOTAL RETURN PERFORMANCE
FOR THE PERIOD ENDED 6/30/97
<TABLE>
<CAPTION>
Since
1 Yr. 3 Yrs.* 5 Yrs.* Inception *
(4/91)
<S> <C> <C> <C> <C>
Capital
Appreciation Fund
Inst'l Class (%) 31.52 26.70 20.97 18.72
- ------------------------------------------------------------------------
S&P 500
Index (%) 34.70 28.86 19.78 17.83
- ------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Since
Inception *
(8/96)
<S> <C>
Capital
Appreciation Fund
Admin. Class (%) 42.48
- ------------------------------------------------------------------------
S&P 500
Index (%) 45.48
- ------------------------------------------------------------------------
</TABLE>
* Annualized
- -------------------------------------------
Portfolio Composition
% of Total Investments as of June 30, 1997
- -------------------------------------------
Top Ten Common Stocks
<TABLE>
<CAPTION>
Company
- -------------------------------------------
<S> <C>
Travelers Group, Inc. 1.7%
- -------------------------------------------
AlliedSignal, Inc. 1.7%
- -------------------------------------------
Kroger Co. 1.7%
- -------------------------------------------
Xerox Corp. 1.7%
- -------------------------------------------
Textron, Inc. 1.6%
- -------------------------------------------
TJX Corp., Inc. 1.6%
- -------------------------------------------
Tyco Labs 1.6%
- -------------------------------------------
United Technologies Corp. 1.6%
- -------------------------------------------
Perkin Elmer Corp. 1.6%
- -------------------------------------------
Dayton-Hudson Corp. 1.6%
- -------------------------------------------
Top Ten Total 16.4%
</TABLE>
[PIE CHART APPEARS HERE]
Industry Classifications
<TABLE>
<S> <C>
Financial and Business Services 20.4%
Consumer Discretionary 18.9%
Capital Goods 13.3%
Technology 11.7%
Energy 9.1%
Health Care 7.6%
Consumer Staples 4.1%
Utilities 3.2%
Other 11.7%
</TABLE>
INVESTMENT OBJECTIVE AND PRIMARY INVESTMENTS:
Seeks growth of capital; invests primarily in common stocks of companies with
market capitalizations of at least $100 million that have improving fundamentals
and whose stock is reasonably valued by the market.
[LINE GRAPH APPEARS HERE]
Cumulative Returns Since Inception Through June 30, 1997
<TABLE>
<CAPTION>
CAPITAL APPRECIATION FUND S&P 500
<S> <C>
5,000,000.00 5,000,000.00
4,854,350.00 5,012,000.00
5,094,370.00 5,228,520.00
4,820,060.00 4,989,050.00
5,164,860.00 5,221,540.00
5,327,030.00 5,345,290.00
5,253,320.00 5,256,030.00
5,433,350.00 5,326,460.00
5,275,580.00 5,111,800.00
6,008,530.00 5,696,590.00
5,951,280.00 5,590,630.00
6,015,540.00 5,663,310.00
5,817,820.00 5,552,880.00
5,805,270.00 5,716,130.00
5,830,080.00 5,744,140.00
5,646,490.00 5,658,670.00
5,811,080.00 5,889,830.00
5,666,800.00 5,769,260.00
5,816,060.00 5,837,050.00
6,018,920.00 5,857,190.00
6,371,410.00 6,056,620.00
6,459,840.00 6,130,940.00
6,679,450.00 6,182,190.00
6,599,170.00 6,266,460.00
6,904,240.00 6,398,680.00
6,735,140.00 6,244,020.00
7,040,790.00 6,411,050.00
7,153,400.00 6,429,840.00
7,052,170.00 6,403,990.00
7,310,180.00 6,646,950.00
7,525,190.00 6,595,970.00
7,543,860.00 6,732,440.00
7,393,090.00 6,668,280.00
7,603,510.00 6,748,900.00
7,871,520.00 6,978,370.00
7,764,850.00 6,788,970.00
7,377,450.00 6,492,970.00
7,405,400.00 6,576,210.00
7,399,770.00 6,684,130.00
7,191,570.00 6,520,300.00
7,367,360.00 6,734,430.00
7,587,530.00 7,010,540.00
7,384,300.00 6,839,130.00
7,554,010.00 6,992,810.00
7,208,580.00 6,738,130.00
7,279,890.00 6,838,050.00
7,275,420.00 7,015,370.00
7,638,900.00 7,288,750.00
7,973,990.00 7,503,850.00
8,248,510.00 7,724,830.00
8,550,420.00 8,033,590.00
8,920,690.00 8,220,220.00
9,416,250.00 8,492,800.00
9,507,670.00 8,514,110.00
9,884,780.00 8,873,410.00
9,700,130.00 8,841,730.00
9,998,060.00 9,229,880.00
9,983,890.00 9,407,650.00
10,319,900.00 9,727,890.00
10,711,000.00 9,818,070.00
10,731,300.00 9,912,610.00
10,866,100.00 10,058,700.00
11,141,700.00 10,318,100.00
11,121,100.00 10,357,500.00
10,562,000.00 9,899,860.00
11,016,600.00 10,108,600.00
11,692,500.00 10,677,600.00
11,987,400.00 10,972,000.00
12,859,900.00 11,801,400.00
12,658,800.00 11,567,600.00
13,397,400.00 12,290,400.00
13,259,300.00 12,386,700.00
12,776,200.00 11,877,800.00
13,183,400.00 12,586,900.00
14,025,500.00 13,353,200.00
14,626,000.00 13,951,400.00
</TABLE>
The line graph above assumes the investment of $5,000,000 on 4/1/91, the first
full month following the Fund's Institutional Class inception on 3/8/91,
compared to the S&P 500 Index, an unmanaged market index. The performance of the
Administrative Class (shown at left) reflects the payment of a service fee in an
amount not to exceed 0.25% on an annualized basis. The Administrative Class
commenced operations on 7/31/96. The performance since inception (shown at left)
begins 8/1/96. Past performance is not an indication of future results.
The Capital Appreciation Fund had an outstanding 12 months ended June 30,
1997, with returns of 31.5% for its Institutional Class shares. The Fund has
also posted strong results for the longer term. For the five-year period ended
June 30, 1997, the Fund outperformed the market in general measured by the S&P
500 Index.
Although the large-cap market performed well over the last year, it was
the largest stocks in the index that were the clear standouts. Known as the
"Nifty 50," the 50 largest stocks in the S&P 500 were up 26.2% over the one-year
period ended June 30, 1997, compared to 15.8% for the remaining 450 stocks in
the index. Due to what the Fund's manager believes are relatively high
valuations, the Fund did not have a large exposure to the market's largest
companies last year. Yet, astute stock picking and sector rotation in the Fund
helped to post returns similar to that of the entire S&P 500 Index.
Over the past 12 months the Fund's manager modified the portfolio,
decreasing exposure to the technology sector in favor of financial services
stocks. These changes were advantageous for the Fund, as technology stocks
experienced a sharp correction earlier in the year while falling interest rates
have helped the profitability of the financial services sector.
The Fund's third largest sector, energy, was also an outstanding performer
for the Fund. Led by three oil services companies, the Fund's exposure to this
industry handily beat that of the S&P 500 Index's energy sector. Oil services
companies reaped the benefits of stepped-up exploration for oil and natural gas.
This higher demand allowed the companies to charge higher prices, driving up
corporate profits as well as stock prices.
Among the other winners in the Fund's portfolio was Dayton Hudson Corp.
The nation's fourth largest general merchandise retailer posted strong results,
as both sales and operating profits from its Target discount stores continued to
increase. The company's most recent quarterly results reported an 88% increase
in operating profits at Target, mostly due to merchandise improvements and cost
reductions. Considering this division of Dayton Hudson accounts for 70% of total
sales, and expansion plans into the Northeast are proceeding as expected, the
Fund's manager believes the company should continue to offer strong growth
potential going forward.
As the Fund's fiscal year ended, many investors continued to favor
large-cap stocks. However, the strong returns of these stocks has led to
extremely high valuations in many cases. As a result, the Fund's manager
believes its approach of seeking growth stocks that are reasonably priced could
be especially beneficial going forward.
1997 Annual Report / 5
<PAGE>
Mid Cap Growth Fund
PORTFOLIO MANAGER:
Cadence Capital Management
Boston, Massachusetts
TOTAL RETURN PERFORMANCE
FOR THE PERIOD ENDED 6/30/97
<TABLE>
<CAPTION>
Since
1 Yr. 3 Yrs.* 5 Yrs.* Inception*
(9/91)
<S> <C> <C> <C> <C>
Mid Cap
Growth Fund
Inst'l Class (%) 30.58 26.25 20.18 18.53
- ------------------------------------------------------------------------
S&P Mid Cap
Index (%) 23.33 22.42 17.60 16.41
- ------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Since
1 Yr. 2 Yrs.* Inception*
(12/94)
<S> <C> <C> <C>
Mid Cap
Growth Fund
Admin. (%) 30.23 25.66 29.77
- ------------------------------------------------------------------------
S&P Mid Cap
Index (%) 23.33 22.45 25.00
- ------------------------------------------------------------------------
</TABLE>
* Annualized
- ------------------------------------------------------
Portfolio Composition
% of Total Investments as of June 30, 1997
- ------------------------------------------------------
Top Ten Common Stocks
<TABLE>
<CAPTION>
Company
- ------------------------------------------------------
<S> <C>
Falcon Drilling Co., Inc. 1.7%
- ------------------------------------------------------
Borders Group, Inc. 1.5%
- ------------------------------------------------------
Consolidated Stores Corp. 1.5%
- ------------------------------------------------------
Compuware Corp. 1.5%
- ------------------------------------------------------
Cullen/Frost Bankers, Inc. 1.4%
- ------------------------------------------------------
McAfee Associates, Inc. 1.4%
- ------------------------------------------------------
Fort Howard Corp. 1.4%
- ------------------------------------------------------
Tandem Computers, Inc. 1.4%
- ------------------------------------------------------
Cooper Cameron Corp. 1.4%
- ------------------------------------------------------
Smith International, Inc. 1.4%
- ------------------------------------------------------
Top Ten Total 14.6%
</TABLE>
Industry Classifications
[PIE CHART APPEARS HERE]
<TABLE>
<S> <C>
Financial and Business Services 30.7%
Consumer Discretionary 24.0%
Energy 14.0%
Technology 11.4%
Health Care 5.6%
Materials and Processing 4.9%
Capital Goods 3.1%
Consumer Staples 2.6%
Other 3.7%
</TABLE>
INVESTMENT OBJECTIVE AND PRIMARY INVESTMENTS:
Seeks growth of capital; invests primarily in common stocks of companies with
market capitalizations in excess of $500 million that have improving
fundamentals and whose stock is reasonably valued by the market.
- --------------------------------------------------------------------------------
Cumulative Returns Since Inception Through June 30, 1997
- --------------------------------------------------------------------------------
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Mid Cap Growth Fund S&P Mid Cap Index
<S> <C>
5,000,000.00 5,000,000.00
4,974,950.00 4,983,720.00
5,157,140.00 5,178,960.00
5,011,660.00 5,004,440.00
5,665,300.00 5,595,980.00
5,671,670.00 5,694,980.00
5,727,030.00 5,785,590.00
5,555,920.00 5,567,700.00
5,519,130.00 5,501,200.00
5,524,160.00 5,553,290.00
5,378,130.00 5,394,740.00
5,525,920.00 5,662,560.00
5,364,440.00 5,527,110.00
5,541,060.00 5,604,470.00
5,722,280.00 5,738,600.00
6,066,940.00 6,059,310.00
6,185,400.00 6,262,640.00
6,141,600.00 6,340,950.00
6,216,680.00 6,252,240.00
6,470,420.00 6,468,100.00
6,293,130.00 6,298,860.00
6,562,550.00 6,585,790.00
6,765,880.00 6,618,820.00
6,682,650.00 6,606,110.00
7,013,470.00 6,878,850.00
7,201,790.00 6,951,560.00
7,128,880.00 6,974,260.00
6,929,870.00 6,819,980.00
7,161,000.00 7,136,600.00
7,309,330.00 7,302,600.00
7,299,100.00 7,198,980.00
7,033,120.00 6,865,540.00
7,058,600.00 6,916,620.00
6,930,630.00 6,851,150.00
6,700,290.00 6,615,200.00
6,851,810.00 6,839,200.00
7,210,540.00 7,197,380.00
7,026,050.00 7,063,070.00
7,167,800.00 7,140,300.00
6,829,170.00 6,818,230.00
6,991,680.00 6,880,820.00
6,924,890.00 6,952,450.00
7,346,140.00 7,317,230.00
7,582,450.00 7,444,210.00
7,753,580.00 7,593,670.00
8,020,950.00 7,776,850.00
8,493,980.00 8,093,440.00
9,295,490.00 8,515,660.00
9,367,550.00 8,673,140.00
9,501,370.00 8,883,370.00
9,355,710.00 8,654,800.00
9,536,020.00 9,032,800.00
9,599,030.00 9,010,330.00
9,789,110.00 9,141,050.00
10,026,700.00 9,451,740.00
10,152,400.00 9,565,010.00
10,364,600.00 9,857,130.00
10,539,600.00 9,990,440.00
10,325,500.00 9,840,530.00
9,831,500.00 9,174,780.00
10,368,000.00 9,703,920.00
11,095,600.00 10,127,000.00
11,170,000.00 10,156,500.00
11,849,800.00 10,728,600.00
11,841,200.00 10,740,500.00
12,326,600.00 11,143,700.00
12,120,500.00 11,052,100.00
11,774,800.00 10,580,900.00
12,027,400.00 10,855,100.00
12,858,500.00 11,804,300.00
13,483,500.00 12,136,000.00
</TABLE>
The line graph above assumes the investment of $5,000,000 on 9/1/91, the first
full month following the Fund's Institutional Class inception on 8/26/91,
compared to the S&P Mid Cap Index, an unmanaged market index. The performance of
the Administrative Class (shown at left) reflects the payment of a service fee
in an amount not to exceed 0.25% on an annualized basis. The Administrative
Class commenced operations on 11/30/94. The performance since inception (shown
at left) begins 12/1/94. Past performance is not an indication of future
results.
The Mid Cap Growth Fund posted excellent results for the one-year period
ended June 30, 1997, with returns of 30.6% for Institutional Class shares and
30.2% for Administrative Class shares. These returns handily outperformed the
S&P Mid Cap Index, continuing a consistent pattern that has seen the Fund
surpass its S&P Mid Cap benchmark for the 3- and 5-year periods as well.
During the past year, the Fund's manager maintained the portfolio's
exposure to the financial sector. This strategy proved to be beneficial, as this
industry has been a strong performer for the Fund. Helped by lower interest
rates, which in turn lowered the interest that financial institutions paid to
their account holders, several Fund holdings were able to expand their margins
and report better-than-expected earnings. Specific examples include SunAmerica,
Inc., a firm that specializes in selling investments to the pre-retirement
market, and Public Storage, Inc., the largest self-storage real estate
investment trust (REIT) in the country. The manager remains bullish on this
sector going forward, as consolidation and cost-cutting could lead to profitable
opportunities in the future.
Another success for the Fund was its position in the Borders Group, a
leading player in the growing superstore and mall-based book retailing industry.
The company looks to be on its way to another stellar fiscal year, as quarterly
profits exceed expectations. Driven by the popularity of the book "superstore,"
where retail outlets sell books along with CDs, cassettes, coffee and desserts,
Borders continues to post strong sales growth. The Fund's manager is attracted
to the price of the company's stock, as it is well below its historical price
level and, the manager feels, trading at a discount.
There were limited areas within the Fund's portfolio that hindered its
performance over the past year. For example, the Fund's holdings in the capital
goods and raw materials sectors underperformed the market, yet still added to
the Fund's overall performance.
Looking ahead, one aspect the Fund's manager will closely monitor is the
high market valuations that have resulted from this record bull run. Given this
market environment, the manager plans to maintain its strategy of investing in
growth stocks that have strong upside potential and are reasonably priced.
6 / PIMCO Funds
<PAGE>
Micro Cap Growth Fund
PORTFOLIO MANAGER:
Cadence Capital Management
Boston, Massachusetts
TOTAL RETURN PERFORMANCE
FOR THE PERIOD ENDED 6/30/97
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------
Since
1 Yr. 3 Yrs.* Inception *
(7/93)
----- ------- -----------
<S> <C> <C> <C>
Micro Cap
Growth Fund
Inst'l Class (%) 20.05 27.40 22.72
- ------------------------------------------------------------------------
Russell 2000
Index (%) 16.33 20.05 15.92
- ------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------
Since
1 Yr. Inception *
(4/96)
----- -----------
<S> <C> <C>
Micro Cap
Growth Fund
Admin. Class (%) 19.72 24.96
- ------------------------------------------------------------------------
Russell 2000
Index (%) 16.33 17.37
- ------------------------------------------------------------------------
</TABLE>
* Annualized
- -------------------------------------------
Portfolio Composition
% of Total Investments as of June 30, 1997
- -------------------------------------------
Top Ten Common Stocks
<TABLE>
<CAPTION>
Company
- ------------------------------------------------------
<S> <C>
Plexus Corp. 2.4%
- ------------------------------------------------------
Rexall Sundown, Inc. 2.0%
- ------------------------------------------------------
Gardner Denver Machinery, Inc. 1.9%
- ------------------------------------------------------
Asyst Technologies, Inc. 1.8%
- ------------------------------------------------------
QLogic Corp. 1.8%
- ------------------------------------------------------
Warren Bancorp, Inc. 1.7%
- ------------------------------------------------------
Dime Financial Corp. 1.7%
- ------------------------------------------------------
Barra, Inc. 1.7%
- ------------------------------------------------------
Community First Bankshares, Inc. 1.6%
- ------------------------------------------------------
Chittenden Corp. 1.6%
- ------------------------------------------------------
Top Ten Total 18.2%
</TABLE>
Industry Classifications
[PIE CHART APPEARS HERE]
<TABLE>
<S> <C>
Consumer Discretionary 20.6%
Financial and Business Services 20.3%
Technology 13.0%
Consumer Staples 9.4%
Capital Goods 8.2%
Health Care 5.2%
Energy 4.6%
Consumer Services 4.0%
Other 14.7%
</TABLE>
INVESTMENT OBJECTIVE AND PRIMARY INVESTMENTS:
Seeks long-term growth of capital; invests primarily in common stocks of
companies with market capitalizations of less than $100 million that have
improving fundamentals and whose stock is reasonably valued by the market.
- --------------------------------------------------------------------------------
Cumulative Returns Since Inception Through June 30, 1997
- --------------------------------------------------------------------------------
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Micro Cap Growth Fund Russell 2000 Index
<S> <C>
$ 5,000,000.00 $ 5,000,000.00
5,021,690.00 5,069,050.00
5,277,280.00 5,287,930.00
5,442,670.00 5,437,160.00
5,547,910.00 5,577,160.00
5,517,840.00 5,395,460.00
5,893,720.00 5,579,820.00
6,099,190.00 5,754,640.00
6,084,160.00 5,733,750.00
5,763,410.00 5,431,750.00
5,903,740.00 5,463,960.00
5,723,320.00 5,402,490.00
5,487,770.00 5,220,210.00
5,482,760.00 5,306,030.00
5,808,520.00 5,601,580.00
5,958,870.00 5,582,590.00
5,953,860.00 5,560,040.00
5,838,590.00 5,335,360.00
5,953,860.00 5,478,180.00
5,803,510.00 5,408,990.00
6,003,970.00 5,634,170.00
6,124,250.00 5,730,740.00
6,389,870.00 5,858,080.00
6,455,020.00 5,958,780.00
6,941,150.00 6,267,920.00
7,472,390.00 6,628,950.00
7,602,690.00 6,766,100.00
7,813,180.00 6,886,950.00
7,707,940.00 6,578,960.00
7,923,440.00 6,855,340.00
8,111,990.00 7,036,190.00
7,666,720.00 7,028,590.00
8,040,340.00 7,247,670.00
8,444,660.00 7,395,160.00
9,355,660.00 7,790,580.00
9,729,270.00 8,097,610.00
9,452,900.00 7,765,120.00
8,736,380.00 7,086,910.00
9,268,650.00 7,498,380.00
9,601,320.00 7,791,420.00
9,350,540.00 7,671,350.00
9,780,450.00 7,987,410.00
10,044,800.00 8,196,760.00
10,387,800.00 8,360,530.00
10,073,400.00 8,157,790.00
9,581,730.00 7,772,820.00
9,324,460.00 7,794,510.00
10,445,000.00 8,661,650.00
11,348,300.00 9,032,890.00
</TABLE>
The line graph above assumes the investment of $5,000,000 on 7/1/93, the first
full month following the Fund's Institutional Class inception on 6/25/93,
compared to the Russell 2000 Index, an unmanaged market index. The performance
of the Administrative Class (shown at left) reflects the payment of a service
fee in an amount not to exceed 0.25% on an annualized basis. The Administrative
Class commenced operations on 4/1/96. The performance since inception (shown at
left) begins 4/1/96. Past performance is not an indication of future results.
The Micro Cap Growth Fund posted excellent results for the past 12
months, beating its benchmark, the Russell 2000 Index. Specifically, for the
one-year period ended June 30, 1997, the Fund's Institutional and Administrative
Class shares were up 20.1% and 19.7%, respectively.
Financial services holdings continue to be important contributors to Fund
performance. While not always associated with "growth," banks and other
financial services companies have posted consistent, double-digit earnings gains
year-over-year while selling at reasonable valuations. In addition, they have
benefited from dwindling concerns over the probability of interest rate
increases by the Federal Reserve. Recently, Dime Financial, Southwest Securities
Group and Chittenden Corp. were standouts.
The Fund's growth-at-a-price strategy analyzes the trade-off between
company growth fundamentals and stock valuation. Financial stocks currently
exhibit an attractive balance. Consumer goods stocks were also noteworthy, with
strong price appreciation. Virco Manufacturing, Koala and Chattem led the group,
but the sector as a whole bolstered the Fund's performance.
After reaching an all-time high early in 1997, the Fund's weighting in
energy stocks has started to decline. Healthcare and consumer services
companies, while up slightly from the first quarter, have also contracted over
the last 12 months. In contrast, the Fund's allocation to consumer goods has
increased steadily over this period. The weighting in technology stocks, while
lighter than a year ago, has been buoyed recently by gains in several robust
issues.
The strength of technology reflects growing confidence in industry
fundamentals. Advanced Logic Research, a manufacturer of a wide-ranging line of
computer systems, gained after an acquisition by Gateway 2000; Plexus, a
contract developer offering test services for electronics industries, also
increased; and Asyst Technologies, a developer of environmental technology
systems, nearly doubled.
Despite the market's exuberance for high-technology stocks, the Fund's
manager remains cognizant of their risks. The manager sold several technology
stocks in recent months, based on declining growth prospects. In total, the
Fund's technology holdings were strong.
With the current bull run in the stock market, many large-cap stocks are
priced higher relative to smaller-caps. Given this market environment, the
Fund's manager will continue to seek out smaller-cap stocks that have strong
earning potential and are reasonably priced.
1997 Annual Report / 7
<PAGE>
Small Cap Growth Fund
PORTFOLIO MANAGER:
Cadence Capital Management
Boston, Massachusetts
TOTAL RETURN PERFORMANCE
FOR THE PERIOD ENDED 6/30/97
<TABLE>
<CAPTION>
Since
1 Yr. 3 Yrs.* 5 Yrs.* Inception *
(2/91)
<S> <C> <C> <C> <C>
Small Cap
Growth Fund
Inst'l Class (%) 22.82 19.11 19.45 20.20
- ------------------------------------------------------------------------
Russell 2000
Index (%) 16.33 20.05 17.87 19.00
- ------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Since
1 Yr. Inception *
(10/95)
<S> <C> <C>
Small Cap
Growth Fund
Admin. Class (%) 23.12 13.04
- ------------------------------------------------------------------------
Russell 2000
Index (%) 16.33 16.76
- ------------------------------------------------------------------------
</TABLE>
* Annualized
- -------------------------------------------
Portfolio Composition
% of Total Investments as of June 30, 1997
- -------------------------------------------
Top Ten Common Stocks
<TABLE>
<CAPTION>
Company
- ------------------------------------------------------
<S> <C>
Rexall Sundown, Inc. 2.0%
- ------------------------------------------------------
Falcon Drilling Co., Inc. 1.5%
- ------------------------------------------------------
Pride Petroleum Services, Inc. 1.4%
- ------------------------------------------------------
Protective Life Corp. 1.3%
- ------------------------------------------------------
Capital Re Corp. 1.3%
- ------------------------------------------------------
Pier 1 Imports, Inc. 1.3%
- ------------------------------------------------------
Pool Energy Services Co. 1.2%
- ------------------------------------------------------
Meyer (Fred), Inc. 1.2%
- ------------------------------------------------------
Genrad, Inc. 1.2%
- ------------------------------------------------------
Camco International, Inc. 1.2%
- ------------------------------------------------------
Top Ten Total 13.6%
</TABLE>
Industry Classifications
[PIE CHART APPEARS HERE]
<TABLE>
<S> <C>
Financial and Business Services 24.7%
Consumer Discretionary 18.8%
Technology 11.5%
Energy 9.3%
Materials and Processing 8.9%
Health Care 7.0%
Capital Goods 7.0%
Consumer Services 5.2%
Other 7.6%
</TABLE>
INVESTMENT OBJECTIVE AND PRIMARY INVESTMENTS:
Seeks growth of capital; invests primarily in common stocks of companies with
market capitalizations between $50 million and $1 billion that have improving
fundamentals and whose stock is reasonably valued by the market.
Cumulative Returns Since Inception Through June 30, 1997
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
SMALL CAP GROWTH FUND RUSSELL 2000 INDEX
<S> <C>
5,000,000.00 5,000,000.00
5,463,290.00 5,560,750.00
5,843,530.00 5,950,730.00
5,766,170.00 5,935,370.00
6,033,040.00 6,218,070.00
5,766,170.00 5,858,480.00
6,099,240.00 6,063,470.00
6,374,880.00 6,287,090.00
6,383,630.00 6,336,130.00
6,581,880.00 6,503,660.00
6,263,400.00 6,202,670.00
6,995,450.00 6,699,010.00
7,323,080.00 7,242,300.00
7,544,460.00 7,453,700.00
7,247,810.00 7,201,470.00
7,066,290.00 6,948,620.00
7,030,870.00 7,041,040.00
6,694,380.00 6,710,180.00
6,951,170.00 6,943,430.00
6,712,090.00 6,747,070.00
6,955,600.00 6,902,450.00
7,249,840.00 7,120,290.00
7,809,630.00 7,665,560.00
8,162,950.00 7,932,400.00
8,548,380.00 8,200,680.00
8,456,610.00 8,011,570.00
9,066,880.00 8,271,460.00
8,644,740.00 8,044,080.00
9,154,070.00 8,399,870.00
9,374,310.00 8,452,040.00
9,374,310.00 8,568,760.00
9,934,110.00 8,938,760.00
10,250,700.00 9,191,010.00
10,066,600.00 9,427,680.00
9,599,040.00 9,120,520.00
10,158,800.00 9,432,170.00
10,348,900.00 9,727,680.00
10,609,700.00 9,692,370.00
9,979,530.00 9,181,870.00
10,202,300.00 9,236,320.00
9,887,180.00 9,132,410.00
9,631,850.00 8,824,290.00
9,903,480.00 8,969,360.00
10,354,400.00 9,468,950.00
10,316,300.00 9,436,850.00
10,528,200.00 9,398,720.00
9,898,050.00 9,018,920.00
10,214,100.00 9,260,360.00
9,843,670.00 9,143,400.00
10,372,900.00 9,524,040.00
10,437,600.00 9,687,280.00
10,502,300.00 9,902,530.00
10,766,900.00 10,072,800.00
11,296,100.00 10,595,300.00
12,825,000.00 11,205,600.00
12,836,800.00 11,437,500.00
13,160,200.00 11,641,700.00
12,360,400.00 11,121,100.00
12,384,000.00 11,588,300.00
12,445,300.00 11,894,000.00
12,400,700.00 11,881,200.00
12,808,000.00 12,251,500.00
12,037,000.00 12,500,800.00
12,787,800.00 13,169,300.00
14,144,100.00 13,688,300.00
13,253,300.00 13,126,200.00
12,318,000.00 11,979,800.00
13,132,400.00 12,675,300.00
13,717,800.00 13,170,700.00
13,533,300.00 12,967,700.00
14,214,100.00 13,502,000.00
14,540,400.00 13,855,900.00
14,856,200.00 14,132,700.00
14,005,900.00 13,790,000.00
13,738,700.00 13,139,200.00
13,787,300.00 13,175,900.00
15,342,100.00 14,641,700.00
16,277,500.00 15,269,300.00
</TABLE>
The line graph above assumes the investment of $5,000,000 on 2/1/91, the first
full month following the Fund's Institutional Class inception on 1/17/91,
compared to the Russell 2000 Index, an unmanaged market index. The performance
of the Administrative Class (shown at left) reflects the payment of a service
fee in an amount not to exceed 0.25% on an annualized basis. The Administrative
Class commenced operations on 9/27/95. The performance since inception (shown at
left) begins 10/1/95. Past performance is not an indication of future results.
The Small Cap Growth Fund posted outstanding results for the past 12
months, handily outperforming its small cap benchmark, the Russell 2000 Index.
Specifically, for the one-year period ended June 30, 1997, the Fund posted
returns of 22.8% and 23.1% for its Institutional and Administrative Class
shares, respectively.
Consumer service stocks were standouts in the Fund's portfolio over the
past few months. The sector was buoyed by gains in existing holdings such as
Ha-Lo Industries, a distributor in the specialty and premium advertising
products industry, Williams Sonoma and Pier One Imports. The Fund's energy
stocks climbed during the second quarter, bolstered by big gains in drilling
companies. In particular, Falcon Drilling, Cliffs Drilling and Marine Drilling
benefited from increased demand and higher off-shore day rates.
Over the past year, the Fund's allocations to stocks in the capital goods
and financial sectors have steadily declined. In contrast, the portfolio's
weighting in energy has grown during the same period. As a percentage of equity,
technology is the third largest industry group, but robust gains in several
issues have made this sector an important contributor to portfolio return.
The Fund was also helped by well-executed sales over the past few months.
The holding in Riser Foods, an operator of 40 supermarkets and a wholesale
distribution business, was sold after it achieved its takeover price upon
merging with Giant Eagle.
The strength of technology in recent months reflects growing confidence
in industry fundamentals following a period of steep declines in March. Existing
holdings were particularly strong, with Veritas Software, Kulicke & Soffa
Industries and Genrad posting solid results. Several holdings were added to the
Fund, including fault-tolerant computer system manufacturer Stratus Computer,
technical equipment manufacturer Pacific Scientific and custom chip maker VLSI
Technology.
Looking ahead, one factor the Fund's manager will closely monitor is the
high market valuations that have resulted from this record bull run. Given this
market environment, the manager plans to maintain its strategy of investing in
growth stocks that have strong upside potential and are reasonably priced.
8 / PIMCO Funds
<PAGE>
Core Equity Fund
PORTFOLIO MANAGER:
Columbus Circle Investors
Stamford, Connecticut
TOTAL RETURN PERFORMANCE
FOR THE PERIOD ENDED 6/30/97
<TABLE>
<CAPTION>
- -----------------------------------------------------------
Since
1 Yr. 2 Yrs.* Inception*
(1/95)
---------------------------------------
<S> <C> <C> <C>
Core
Equity Fund
Inst'l Class(%) 21.59 19.79 23.64
- -----------------------------------------------------------
S&P 500
Index (%) 34.70 30.28 33.03
- -----------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------
Since
1 Yr. 2 Yrs.* Inception*
(6/95)
---------------------------------------
<S> <C> <C> <C>
Core
Equity Fund
Admin. Class (%) 21.20 19.49 20.45
- -----------------------------------------------------------
S&P 500
Index (%) 34.70 30.28 30.31
- -----------------------------------------------------------
</TABLE>
* Annualized
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
% of Total Investments as of June 30, 1997
- --------------------------------------------------------------------------------
Top Ten Common Stocks
<TABLE>
<CAPTION>
Company
- -------------------------------------------------------
<S> <C>
General Electronic Co. 3.7%
- -------------------------------------------------------
HBO & Co. 3.0%
- -------------------------------------------------------
Worldcom, Inc. 3.0%
- -------------------------------------------------------
Allstate Corp. 3.0%
- -------------------------------------------------------
CUC International, Inc. 2.8%
- -------------------------------------------------------
Warner Lambert Co. 2.7%
- -------------------------------------------------------
Pfizer, Inc. 2.6%
- -------------------------------------------------------
Eli Lilly & Co. 2.5%
- -------------------------------------------------------
Microsoft Corp. 2.5%
- -------------------------------------------------------
Boeing Co. 2.5%
- -------------------------------------------------------
Top Ten Total 28.3%
</TABLE>
Industry Classifications
[PIE CHART APPEARS HERE]
<TABLE>
<S> <C>
Technology 30.0%
Health Care 18.8%
Financial and
Business Services 12.5%
Consumer
Discretionary 9.9%
Capital Goods 6.5%
Utilities 5.8%
Energy 5.3%
Consumer Services 5.1%
Other 6.1%
</TABLE>
INVESTMENT OBJECTIVE AND PRIMARY INVESTMENTS:
Seeks long-term growth of capital, with income as a secondary objective; invests
primarily in common stocks of companies with market capitalizations in excess of
$3 billion.
- --------------------------------------------------------------------------------
Cumulative Returns Since Inception Through June 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CORE EQUITY FUND S&P 500 INDEX
<S> <C>
5,000,000.00 5,000,000.00
5,034,970.00 5,129,650.00
5,189,810.00 5,329,550.00
5,339,660.00 5,486,830.00
5,545,390.00 5,648,410.00
5,735,750.00 5,874,180.00
5,921,090.00 6,010,640.00
6,181,580.00 6,209,950.00
6,246,700.00 6,225,540.00
6,422,030.00 6,488,260.00
6,387,000.00 6,465,090.00
6,502,480.00 6,748,910.00
6,397,850.00 6,878,890.00
6,644,710.00 7,113,050.00
6,799,000.00 7,178,990.00
6,772,780.00 7,248,120.00
6,875,790.00 7,354,960.00
7,107,560.00 7,544,650.00
6,987,960.00 7,573,390.00
6,513,500.00 7,238,800.00
6,761,040.00 7,391,460.00
7,225,190.00 7,807,460.00
7,333,490.00 8,022,790.00
7,777,000.00 8,629,230.00
7,546,200.00 8,458,280.00
7,917,780.00 8,986,760.00
7,731,990.00 9,057,210.00
7,327,630.00 8,685,050.00
7,628,170.00 9,203,550.00
8,245,630.00 9,763,860.00
8,496,990.00 10,201,300.00
</TABLE>
The line graph above assumes the investment of $5,000,000 on 1/1/95, the first
full month following the Fund's Institutional Class inception on 12/28/94,
compared to the S&P 500 Index, an unmanaged market index. The performance of the
Administrative Class (shown at left) reflects the payment of a service fee in an
amount not to exceed 0.25% on an annualized basis. The Administrative Class
commenced operations on 5/31/95. The performance since inception (shown at left)
begins 6/1/95. Past performance is not an indication of future results.
While the performance of the Fund has improved recently, the Fund's one
year results lagged the broad-based S&P 500 Index. Specifically, for the twelve
months ended June 30, 1997, the Fund's Institutional and Administrative shares
increased 21.6% and 21.2%, respectively, compared to an increase of 34.7% for
the Index.
Technology remained the Fund's largest sector weight throughout the
fiscal year, and this allocation both helped and hurt performance. In the last
half of 1996 and the second quarter of 1997, Core Equity's relative
overweighting in technology aided performance, as this industry was among the
strongest in the market. Cisco Systems, Lucent Technologies and Motorola are
examples of large Fund holdings that benefited from this strength.
But during the first quarter of 1997, technology was the worst performing
sector for the Fund. Glitches in company stories and unexpected earnings
disappointments dragged down the industry as a whole, and our concentration on
strong company fundamentals was seen as a negative relative to larger, more
liquid corporations.
The healthcare sector has also been one of the heavier weightings in the
Fund, and these holdings have performed very well in recent months.
Stronger-than-expected demand for products such as Warner-Lambert's
cholesterol-lowering drug Lipitor and Medtronic's new pacemaker has driven the
sector's earnings higher, making it a top performer last quarter.
Companies that took part in major acquisitions endured a difficult
environment during most of the year. Profiteers, defined as exploiters of risk
arbitrage opportunities, depressed the price of the acquiring company's stock
seeking to capitalize on their "short" positions. Fundamentally sound companies
such as HBO & Company and Washington Mutual declined as a result, and their
performance negatively influenced the return of the Core Equity Fund.
The Fund's manager believes that although stock prices have risen to
levels some investors feel may be overvalued, company fundamentals are also
improving and the business and investment environment continues to foretell
further fundamental improvement. With this in mind, the manager will continue to
buy and own companies exceeding investor expectations, and avoid those companies
that are falling short.
1997 Annual Report / 9
<PAGE>
Mid Cap Equity Fund
PORTFOLIO MANAGER:
Columbus Circle Investors
Stamford, Connecticut
TOTAL RETURN PERFORMANCE
FOR THE PERIOD ENDED 6/30/97
<TABLE>
<CAPTION>
- -----------------------------------------------------------
Since
1 Yr. 2 Yrs.* Inception*
(1/95)
<S> <C> <C> <C>
Mid Cap
Equity Fund (%) 9.61 18.93 22.33
- -----------------------------------------------------------
S&P Mid Cap
Index (%) 23.33 22.45 25.50
- -----------------------------------------------------------
</TABLE>
* Annualized
PORTFOLIO COMPOSITION
% of Total Investments as of June 30, 1997
<TABLE>
<CAPTION>
Top Ten Common Stocks
Company
- --------------------------------------------------------
<S> <C>
Sunbeam-Oster, Inc. 3.5%
- --------------------------------------------------------
McKesson Corp. 3.0%
- --------------------------------------------------------
National Semiconductor Corp. 2.9%
- --------------------------------------------------------
T. Rowe Price Associates 2.6%
- --------------------------------------------------------
Maxim Integrated Products, Inc. 2.4%
- --------------------------------------------------------
Greenpoint Financial Corp. 2.3%
- --------------------------------------------------------
Valero Energy Corp. 2.3%
- --------------------------------------------------------
BJ Services Co. 2.3%
- --------------------------------------------------------
Autodesk, Inc. 2.3%
- --------------------------------------------------------
Beverly Enterprises, Inc. 2.3%
- --------------------------------------------------------
Top Ten Total 25.9%
</TABLE>
Industry Classifications
[PIE CHART APPEARS HERE]
<TABLE>
<S> <C>
Technology 31.5%
Consumer
Discretionary 19.4%
Financial and
Business Services 13.3%
Health Care 10.7%
Energy 9.1%
Capital Goods 6.0%
Consumer Services 3.9%
Materials and
Processing 1.2%
Other 4.9%
</TABLE>
INVESTMENT OBJECTIVE AND PRIMARY INVESTMENTS:
Seeks long-term growth of capital; invests primarily in common stocks of
companies with market capitalizations between $800 million and $3 billion.
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
MID CAP EQUITY S&P 500
<S> <C>
5,000,000.00 5,000,000.00
4,910,000.00 5,052,050.00
5,190,000.00 5,317,130.00
5,370,000.00 5,409,390.00
5,445,000.00 5,518,000.00
5,435,000.00 5,651,110.00
5,850,000.00 5,881,160.00
6,205,000.00 6,187,970.00
6,205,000.00 6,302,410.00
6,375,000.00 6,455,170.00
6,467,600.00 6,289,080.00
6,542,690.00 6,563,760.00
6,585,780.00 6,547,430.00
6,539,440.00 6,642,420.00
6,750,560.00 6,868,180.00
7,002,870.00 6,950,490.00
7,389,050.00 7,162,760.00
7,734,050.00 7,259,630.00
7,548,680.00 7,150,700.00
6,704,210.00 6,666,930.00
7,100,700.00 7,051,430.00
7,574,420.00 7,358,870.00
7,574,420.00 7,380,290.00
7,945,160.00 7,796,020.00
7,725,850.00 7,804,670.00
7,914,430.00 8,097,660.00
7,578,520.00 8,031,090.00
7,266,190.00 7,688,730.00
7,454,770.00 7,887,940.00
8,073,540.00 8,577,670.00
8,273,910.00 8,818,700.00
</TABLE>
The line graph above assumes the investment of $5,000,000 on 1/1/95, the first
full month following the Fund's Institutional Class inception on 12/28/94,
compared to the S&P Mid Cap Index, an unmanaged market index. Past performance
is not an indication of future results.
The Institutional Class shares of the PIMCO Mid Cap Equity Fund increased
9.6% for the one-year period ended June 30, 1997, falling short of returns for
its mid cap benchmark, the S&P Mid Cap Index. As investors' interest moved to
larger-cap, more liquid blue chip companies during the course of the year, the
mid-cap arena fell out of favor. The Fund was hurt by this trend, although
relatively strong performance in the most recent quarter may reflect a positive
change.
A large exposure to the financial sector helped performance as interest
rates declined over the last twelve months. This resulted in lower operating
costs for both banks and investment firms, and created an environment where
possible consolidation was again attractive. The Fund focused on regional banks
and savings and loan issues that could potentially benefit from these industry
mergers.
The Fund's largest weighting, technology, made a positive contribution to
performance in the most recent quarter, although this allocation was a drag on
returns for the first nine months of the year. Software and semiconductor stocks
were the primary factors driving performance last quarter, spurred by
innovations regarding possible system problems in the year 2000 and a rebound in
the computer chip market. But as large-cap technology stocks performed well
early in the year due to investor confidence, mid-cap companies were out of
favor and, as a result, not able to take part in the positive trend.
Energy was another area with mixed results over the year, both helping
and hurting the Fund's performance. Rising oil prices and an increase in the
supply and demand for well drilling boosted the stock prices of refiners,
marketers and equipment companies for most of the year. But a drop in prices
slowed that trend substantially in the most recent quarter, although the manager
believes this industry will continue to be a strong performer over the long
term.
Going forward, the Fund's manager will continue to closely monitor the
investment environment for potentially adverse trends. Technology and finance
will remain a relatively large part of the portfolio, as the manager believes
these areas offer the greatest opportunity for positive momentum and positive
surprise.
10 / PIMCO Funds
<PAGE>
Equity Income Fund
PORTFOLIO MANAGER:
NFJ Investment Group
Dallas, Texas
TOTAL RETURN PERFORMANCE
FOR THE PERIOD ENDED 6/30/97
<TABLE>
<CAPTION>
- -----------------------------------------------------------------
Since
1 Yr. 3 Yrs.* 5 Yrs.* Inception*
(4/91)
-------------------------------------------
<S> <C> <C> <C> <C>
Equity
Income Fund
Inst'l Class (%) 27.67 23.69 16.72 16.94
- -----------------------------------------------------------------
S&P 500
Index (%) 34.70 28.86 19.78 17.83
- -----------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------
Since
1 Yr. 2 Yrs.* Inception*
(12/94)
----------------- -------------
<S> <C> <C> <C>
Equity
Income Fund
Admin. Class (%) 27.40 25.93 27.14
- -----------------------------------------------------------
S&P 500
Index (%) 34.70 30.28 32.54
- -----------------------------------------------------------
</TABLE>
* Annualized
- ------------------------------------------
PORTFOLIO COMPOSITION
% of Total Investments as of June 30, 1997
- ------------------------------------------
Top Ten Common Stocks
<TABLE>
<CAPTION>
Company
- --------------------------------------------------------
<S> <C>
RJR Nabisco Holdings Corp. 3.8%
- --------------------------------------------------------
Maytag Corp. 3.7%
- --------------------------------------------------------
Southern New England
Telecommunications Corp. 3.6%
- --------------------------------------------------------
SUPERVALU, Inc. 3.6%
- --------------------------------------------------------
USX-U.S. Steel, Inc. 2.2%
- --------------------------------------------------------
Nynex Corp. 2.2%
- --------------------------------------------------------
Lincoln National Corp. 2.1%
- --------------------------------------------------------
Meditrust Corp. 2.1%
- --------------------------------------------------------
Ultramar Diamond Shamrock 2.0%
- --------------------------------------------------------
CIGNA Corp. 2.0%
- --------------------------------------------------------
Top Ten Total 27.3%
</TABLE>
Industry Classifications
[PIE CHART APPEARS HERE]
<TABLE>
<S> <C>
Consumer Discretionary 22.6%
Utilities 19.3%
Financial and Business Services 15.6%
Materials and Processing 9.7%
Energy 9.5%
Technology 5.8%
Consumer Staples 5.7%
Capital Goods 3.9%
Other 7.9%
</TABLE>
INVESTMENT OBJECTIVE AND PRIMARY INVESTMENTS:
Seeks current income as a primary investment objective, and long-term growth of
capital as a secondary objective; invests primarily in common stocks with
below-average price to earnings ratios and higher dividend yields relative to
their industry groups.
- --------------------------------------------------------------------------------
Cumulative Returns Since Inception Through June 30, 1997
- --------------------------------------------------------------------------------
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Equity Income Fund S&P 500 Index
<S> <C>
5,000,000.00 5,000,000.00
5,034,640.00 5,012,000.00
5,319,620.00 5,228,520.00
5,134,630.00 4,989,050.00
5,421,920.00 5,221,540.00
5,502,700.00 5,345,290.00
5,532,990.00 5,256,030.00
5,571,980.00 5,326,460.00
5,349,510.00 5,111,800.00
5,820,740.00 5,696,590.00
5,965,180.00 5,590,630.00
6,116,660.00 5,663,310.00
6,017,410.00 5,552,880.00
6,125,610.00 5,716,130.00
6,136,150.00 5,744,140.00
6,141,420.00 5,658,670.00
6,416,500.00 5,889,830.00
6,230,290.00 5,769,260.00
6,283,490.00 5,837,050.00
6,291,690.00 5,857,190.00
6,481,830.00 6,056,620.00
6,678,970.00 6,130,940.00
6,713,380.00 6,182,190.00
6,852,880.00 6,266,460.00
7,009,810.00 6,398,680.00
6,872,710.00 6,244,020.00
6,925,440.00 6,411,050.00
7,048,480.00 6,429,840.00
7,037,200.00 6,403,990.00
7,285,360.00 6,646,950.00
7,279,450.00 6,595,970.00
7,338,490.00 6,732,440.00
7,264,800.00 6,668,280.00
7,244,360.00 6,748,900.00
7,485,090.00 6,978,370.00
7,323,450.00 6,788,970.00
7,031,260.00 6,492,970.00
7,086,480.00 6,576,210.00
7,130,340.00 6,684,130.00
7,030,090.00 6,520,300.00
7,261,760.00 6,734,430.00
7,559,320.00 7,010,540.00
7,420,030.00 6,839,130.00
7,508,100.00 6,992,810.00
7,105,540.00 6,738,130.00
7,128,120.00 6,838,050.00
7,360,720.00 7,015,370.00
7,600,310.00 7,288,750.00
7,819,940.00 7,503,850.00
8,022,850.00 7,724,830.00
8,318,500.00 8,033,590.00
8,345,380.00 8,220,220.00
8,637,760.00 8,492,800.00
8,759,800.00 8,514,110.00
8,990,320.00 8,873,410.00
8,955,480.00 8,841,730.00
9,263,350.00 9,229,880.00
9,513,520.00 9,407,650.00
9,656,250.00 9,727,890.00
9,784,720.00 9,818,070.00
9,980,550.00 9,912,610.00
10,232,200.00 10,058,700.00
10,397,600.00 10,318,100.00
10,420,000.00 10,357,500.00
9,941,080.00 9,899,860.00
10,282,100.00 10,108,600.00
10,636,700.00 10,677,600.00
10,878,300.00 10,972,000.00
11,698,200.00 11,801,400.00
11,556,500.00 11,567,600.00
11,812,200.00 12,290,400.00
12,153,100.00 12,386,700.00
11,746,800.00 11,877,800.00
12,175,500.00 12,586,900.00
12,938,600.00 13,353,200.00
13,303,500.00 13,951,400.00
</TABLE>
The line graph above assumes the investment of $5,000,000 on 4/1/91, the first
full month following the Fund's Institutional Class inception on 3/8/91,
compared to the S&P 500 Index, an unmanaged market index. The performance of the
Administrative Class (shown at left) reflects the payment of a service fee in an
amount not to exceed 0.25% on an annualized basis. The Administrative Class
commenced operations on 11/30/94. The performance since inception (shown at
left) begins 12/1/94. Past performance is not an indication of future results.
The Equity Income Fund's performance for the past 12 months was strong,
on an absolute basis, but lagged its broad-based performance benchmark, the S&P
500 Index. Specifically, for the year ended June 30, 1997, the Fund's shares
increased 27.7% and 27.4% for its Institutional and Administrative Class shares,
respectively.
Over the past year, the Fund's manager maintained the portfolio's
exposure to the utilities sector. This exposure helped the Equity Income Fund,
as this industry has been one of the better relative performers in 1997. Many
utility companies streamlined their operations, thereby decreasing operating
expenses. And, with the positive environment in the bond market, the dividends
offered by utility companies become more attractive relative to other
investments. These factors have helped boost the stock prices in the Fund's
utility holdings.
Another success story for the Fund in recent months was its steel
industry holdings. The Fund's position in USX-U.S. Steel, the nation's largest
steel producer, benefited from very strong financial results. This was due to
the growing economy, which provided a positive operating environment for the
firm. As a result, the firm was able to raise prices and widen profit margins.
U.S. Steel is a prime example of the type of stock the Fund's manager seeks, as
the company has one of the lowest price-to-earnings ratios in its sector, and
its nearly 3% dividend yield is one of the highest in the steel industry.
For most of its fiscal year, the Fund also benefited from the energy
sector's strong performance. However, a recent decline in oil prices detracted
from the Fund's performance, as it was overweighted in this sector. An agreement
between Saudi Arabia and Iran that attempts to force other members of OPEC to
curtail crude oil production and raise world oil prices appears to have also
hindered this sector's performance.
Given the lofty level of the stock market, the manager believes there are
compelling reasons to invest in undervalued stocks. The Fund will continue to
focus on these securities and stocks that offer above-average yields.
1997 Annual Report / 11
<PAGE>
Value Fund
PORTFOLIO MANAGER:
NFJ Investment Group
Dallas, Texas
TOTAL RETURN PERFORMANCE
FOR THE PERIOD ENDED 6/30/97
<TABLE>
<CAPTION>
- -----------------------------------------------------------------
Since
1 Yr. 3 Yrs.* 5 Yrs.* Inception*
(1/92)
-------------------------------------------
<S> <C> <C> <C> <C>
Value Fund (%) 26.38 25.01 19.01 17.42
- -----------------------------------------------------------------
S&P 500
Index (%) 34.70 28.86 19.78 17.68
- -----------------------------------------------------------------
</TABLE>
* Annualized
- --------------------------------------------------------
PORTFOLIO COMPOSITION
% of Total Investments as of June 30, 1997
- --------------------------------------------------------
Top Ten Common Stocks
<TABLE>
<CAPTION>
Company
- --------------------------------------------------------
<S> <C>
VF Corp. 3.1%
- --------------------------------------------------------
CIGNA Corp. 3.0%
- --------------------------------------------------------
Amoco Corp. 2.9%
- --------------------------------------------------------
Mellon Bank Corp. 2.9%
- --------------------------------------------------------
NICOR, Inc. 2.7%
- --------------------------------------------------------
Ultramar Diamond Shamrock 2.7%
- --------------------------------------------------------
Repsol SA SP - ADR 2.6%
- --------------------------------------------------------
Anheuser Busch Cos., Inc. 2.5%
- --------------------------------------------------------
Bear Stearns Cos. 2.5%
- --------------------------------------------------------
Chase Manhattan Corp. 2.4%
- --------------------------------------------------------
Top Ten Total 27.3%
</TABLE>
Industry Classifications
[PIE CHART APPEARS HERE]
<TABLE>
<S> <C>
Consumer
Discretionary 22.0%
Financial and
Business Services 16.1%
Energy 12.0%
Utilities 10.8%
Technology 9.0%
Consumer Staples 7.7%
Health Care 6.1%
Materials and
Processing 5.8%
Other 10.5%
</TABLE>
INVESTMENT OBJECTIVE AND PRIMARY INVESTMENTS:
Seeks long-term growth of capital and income; invests primarily in common stocks
with below-average price to earnings ratios relative to their industry groups.
- --------------------------------------------------------
Cumulative Returns Since Inception Through June 30, 1997
- --------------------------------------------------------
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
VALUE FUND S&P 500 INDEX
<S> <C>
5,000,000.00 5,000,000.00
5,144,540.00 4,907,000.00
5,318,510.00 4,970,790.00
5,199,220.00 4,873,860.00
5,222,780.00 5,017,150.00
5,177,660.00 5,041,740.00
5,067,390.00 4,966,720.00
5,247,250.00 5,169,610.00
5,095,740.00 5,063,780.00
5,166,450.00 5,123,280.00
5,199,460.00 5,140,960.00
5,478,840.00 5,316,010.00
5,657,270.00 5,381,240.00
5,776,680.00 5,426,220.00
5,839,130.00 5,500,180.00
6,021,270.00 5,616,240.00
5,916,310.00 5,480,490.00
6,000,080.00 5,627,090.00
6,041,960.00 5,643,580.00
6,013,330.00 5,620,890.00
6,340,080.00 5,834,150.00
6,355,890.00 5,789,400.00
6,576,390.00 5,909,190.00
6,510,190.00 5,852,870.00
6,585,320.00 5,923,630.00
6,890,620.00 6,125,040.00
6,778,760.00 5,958,800.00
6,415,210.00 5,699,000.00
6,337,380.00 5,772,060.00
6,337,380.00 5,866,780.00
6,191,690.00 5,722,980.00
6,450,690.00 5,910,930.00
6,722,770.00 6,153,280.00
6,518,710.00 6,002,830.00
6,588,250.00 6,137,710.00
6,257,410.00 5,914,180.00
6,317,180.00 6,001,880.00
6,489,230.00 6,157,510.00
6,779,500.00 6,397,470.00
6,966,570.00 6,586,260.00
7,155,130.00 6,780,220.00
7,427,830.00 7,051,230.00
7,557,690.00 7,215,030.00
7,890,840.00 7,454,280.00
7,988,830.00 7,472,990.00
8,210,920.00 7,788,350.00
8,234,870.00 7,760,550.00
8,589,770.00 8,101,240.00
8,774,960.00 8,257,260.00
9,026,320.00 8,538,340.00
9,224,370.00 8,617,490.00
9,300,160.00 8,700,480.00
9,422,630.00 8,828,720.00
9,613,990.00 9,056,420.00
9,572,370.00 9,090,920.00
9,057,640.00 8,689,290.00
9,411,040.00 8,872,540.00
9,668,840.00 9,371,890.00
9,807,850.00 9,630,370.00
10,649,600.00 10,358,300.00
10,559,900.00 10,153,100.00
10,916,300.00 10,787,500.00
11,102,500.00 10,872,100.00
10,715,000.00 10,425,300.00
11,137,700.00 11,047,700.00
11,796,200.00 11,720,300.00
12,097,100.00 12,245,400.00
</TABLE>
- --------------------------------------------------------------------------------
The line graph above assumes the investment of $5,000,000 on 1/1/92, the first
full month following the Fund's Institutional Class inception on 12/30/91,
compared to the S&P 500 Index, an unmanaged market index. Past
performance is not an indication of future results.
The Value Fund posted solid absolute results for the year ended June 30,
1997, but with broad market returns favoring large cap growth stocks,
performance trailed its S&P 500 benchmark. Specifically, the Fund's
Institutional Class shares increased 26.4%.
Falling interest rates helped the performance of the Fund's finance
sector holdings in recent months. Although the portfolio was underweight in this
sector relative to the S&P 500 Index, the Fund manager's stock selection
resulted in returns that outperformed the Index by more than three percentage
points. As the yield on the 30-year Treasury bond decreased from 7.1% to 6.8%
during the second quarter, financial firms paid less in interest and therefore
boosted earnings.
An example of a winning stock in the Fund's portfolio is V.F.
Corporation, an international apparel company that has been expanding a number
of its product lines by introducing new brands and acquiring companies. The
company's intimate apparel brands have been the most successful, helping to
drive net income much higher than the market's expectations. Growth in the
Victoria's Secret private label business, new Vanity Fair product introductions,
and a possible purchase of Maidenform Worldwide, Inc., in particular, have had a
positive effect. The manager believes this momentum will continue, and will
benefit not only the gross margins of V.F. Corp., but the share price as well.
With the strong performance record in the large-cap market for most of
the year, the only aspect of the Fund manager's investment philosophy that
somewhat hindered performance was the relative underweighting within certain
sectors of the market. For example, in the second quarter of this year the
Fund's technology holdings did well, but with a weighting that was less than
that of the S&P 500, the sector's performance did not match that of the index.
The Fund's manager believes that the market has yet to fully realize the
intrinsic value of many of the portfolio's holdings. Although it is tempting to
become very bullish in the current market environment, the manager will adhere
to its consistent investment strategy of buying stocks that are a good value.
12 / PIMCO Funds
<PAGE>
Small Cap Value Fund
PORTFOLIO MANAGER:
NFJ Investment Group
Dallas, Texas
TOTAL RETURN PERFORMANCE
FOR THE PERIOD ENDED 6/30/97
<TABLE>
<CAPTION>
- -----------------------------------------------------------------
Since
1 Yr. 3 Yrs.* 5 Yrs.* Inception*
(10/91)
-------------------------------------------
<S> <C> <C> <C> <C>
Small Cap
Value Fund
Inst'l Class (%) 31.99 23.02 18.19 17.62
- -----------------------------------------------------------------
Russell 2000
Index (%) 16.33 20.05 17.87 16.52
- -----------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------
Since
1 Yr. Inception*
(11/95)
----- ----------
<S> <C> <C>
Small Cap
Value Fund
Admin. Class (%) 31.70 28.73
- -----------------------------------------------------------------
Russell 2000
Index (%) 16.33 20.96
- -----------------------------------------------------------------
</TABLE>
* Annualized
- --------------------------------------------------------
PORTFOLIO COMPOSITION
% of Total Investments as of June 30, 1997
- --------------------------------------------------------
Top Ten Common Stocks
<TABLE>
<CAPTION>
Company
- --------------------------------------------------------
<S> <C>
ICN Pharmaceuticals, Inc. 1.1%
- --------------------------------------------------------
Westinghouse Air Brake Co. 1.0%
- --------------------------------------------------------
Bindley Western Industries, Inc. 1.0%
- --------------------------------------------------------
Roadway Express, Inc. 1.0%
- --------------------------------------------------------
Sturm Ruger & Co., Inc. 1.0%
- --------------------------------------------------------
Caraustar Industries, Inc. 1.0%
- --------------------------------------------------------
Guilford Mills, Inc. 1.0%
- --------------------------------------------------------
Aliant Communications, Inc. 1.0%
- --------------------------------------------------------
Barnes Group, Inc. 1.0%
- --------------------------------------------------------
Wyle Electronics 1.0%
- --------------------------------------------------------
Top Ten Total 10.1%
</TABLE>
Industry Classifications
[PIE CHART APPEARS HERE]
<TABLE>
<S> <C>
Materials and
Processing 20.0%
Consumer
Discretionary 18.5%
Financial and
Business Services 17.2%
Utilities 8.2%
Capital Goods 7.5%
Technology 5.7%
Energy 5.4%
Health Care 2.9%
Other 14.6%
</TABLE>
INVESTMENT OBJECTIVE AND PRIMARY INVESTMENTS:
Seeks long-term growth of capital and income; invests primarily in common stocks
of companies with market capitalizations between $50 million and $1 billion and
below-average price to earnings ratios relative to their industry groups.
- --------------------------------------------------------
Cumulative Returns Since Inception Through June 30, 1997
- --------------------------------------------------------
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
SMALL CAP VALUE FUND RUSSELL 2000 INDEX
<S> <C>
5,000,000.00 5,000,000.00
5,057,760.00 5,132,200.00
4,942,470.00 4,894,680.00
5,307,710.00 5,286,350.00
5,669,480.00 5,715,080.00
5,861,330.00 5,881,900.00
5,810,840.00 5,682,860.00
5,692,500.00 5,483,330.00
5,697,570.00 5,556,260.00
5,515,250.00 5,295,170.00
5,683,330.00 5,479,230.00
5,596,830.00 5,324,280.00
5,652,800.00 5,446,900.00
5,755,930.00 5,618,800.00
6,164,820.00 6,049,090.00
6,302,350.00 6,259,660.00
6,581,540.00 6,471,360.00
6,549,920.00 6,322,130.00
6,718,540.00 6,527,220.00
6,541,980.00 6,347,790.00
6,653,130.00 6,628,550.00
6,669,010.00 6,669,710.00
6,692,410.00 6,761,820.00
6,915,670.00 7,053,800.00
6,979,460.00 7,252,850.00
7,122,530.00 7,439,620.00
6,984,830.00 7,197,230.00
7,174,310.00 7,443,160.00
7,443,120.00 7,676,360.00
7,431,870.00 7,648,490.00
7,099,940.00 7,245,650.00
7,124,170.00 7,288,610.00
6,954,540.00 7,206,620.00
6,830,150.00 6,963,460.00
6,936,930.00 7,077,940.00
7,215,540.00 7,472,190.00
7,039,270.00 7,446,850.00
6,908,580.00 7,416,770.00
6,748,320.00 7,117,060.00
6,909,940.00 7,307,580.00
6,947,640.00 7,215,290.00
7,258,630.00 7,515,660.00
7,302,170.00 7,644,480.00
7,472,710.00 7,814,340.00
7,654,210.00 7,948,670.00
7,898,290.00 8,361,040.00
8,291,110.00 8,842,640.00
8,454,660.00 9,025,590.00
8,618,220.00 9,186,790.00
8,281,410.00 8,775,960.00
8,622,780.00 9,144,630.00
8,669,760.00 9,385,870.00
8,629,500.00 9,375,730.00
8,817,390.00 9,667,980.00
9,086,490.00 9,864,720.00
9,396,790.00 10,392,200.00
9,700,350.00 10,801,700.00
9,635,020.00 10,358,200.00
9,105,770.00 9,453,530.00
9,540,030.00 10,002,400.00
9,831,790.00 10,393,300.00
10,021,800.00 10,233,100.00
10,686,700.00 10,654,700.00
11,073,000.00 10,934,000.00
11,435,600.00 11,152,500.00
11,484,000.00 10,882,000.00
11,048,800.00 10,368,500.00
11,161,600.00 10,397,400.00
12,120,600.00 11,554,100.00
12,717,000.00 12,049,300.00
</TABLE>
- --------------------------------------------------------------------------------
The line graph above assumes the investment of $5,000,000 on 10/1/91, the Fund's
Institutional Class inception, compared to the Russell 2000 Index, an unmanaged
market index. The performance of the Administrative Class (shown at left)
reflects the payment of a service fee in an amount not to exceed 0.25% on an
annualized basis. The Administrative Class commenced operations on 11/1/95. The
performance since inception (shown at left) begins 11/1/95. Past performance is
not an indication of future results.
The Small Cap Value Fund posted excellent results for the year ended June
30, 1997, outperforming its benchmark (the Russell 2000, an unmanaged index of
small-cap common stocks) by a wide margin. Specifically, the Fund's results were
32.0% and 31.7% for its Institutional and Administrative Class shares,
respectively.
Small cap funds in general have been hindered lately by assets being
diverted into other investments, especially large-cap stocks. However, the
Fund's value investment style helped it to surpass many competing funds, and to
do so with less volatility than the small-cap market in general. Based on the
Fund's beta, it was 36% less risky than the average small-cap fund over the past
three years.
Over the past year, the Fund benefited from its positions in the
financial and producer durables sectors. As of June 30th, financial services was
one of the largest sectors in the Small Cap Value Fund's portfolio. A
combination of restructuring within the industry and declining interest rates
helped drive this sector's earnings to record levels. Examples of Fund holdings
include Raymond James, BankAtlantic and Eaton Vance. The manager believes the
forecast for lower interest rates will result in continuing strong potential for
the finance sector going forward.
A specific example of a shining star in the Fund's portfolio is
Westinghouse Air Brake Co., North America's largest manufacturer of air brakes
and other safety equipment for trains. The company's performance in recent
months benefited the Small Cap Value Fund, as it reported an increase in net
income greater than the market's expectations. Aggressive efforts for overseas
expansion, as evidenced by the opening of offices in Brazil and China, have paid
off, as have recent acquisitions of domestic companies. These developments,
combined with a relatively low price-to-earnings ratio, make this an attractive
stock going forward.
The Fund's manager believes that the market has yet to fully realize the
intrinsic value of many of the portfolio's holdings, making them very optimistic
about future performance. In pursuing this continued success, the manager
remains committed to the investment strategy of buying stocks that are a good
value, rather than following the latest trend in the market.
1997 Annual Report / 13
<PAGE>
Enhanced Equity Fund
PORTFOLIO MANAGER:
Parametric Portfolio Associates
Seattle, Washington
TOTAL RETURN PERFORMANCE
FOR THE PERIOD ENDED 6/30/97
<TABLE>
<CAPTION>
- -----------------------------------------------------------------
Since
1 Yr. 3 Yrs.* 5 Yrs.* Inception*
(3/91)
-------------------------------------------
<S> <C> <C> <C> <C>
Enhanced Equity
Fund (%) 31.45 25.79 17.12 15.61
- -----------------------------------------------------------------
S&P 500
Index (%) 34.70 28.86 19.78 18.01
- -----------------------------------------------------------------
</TABLE>
* Annualized
- --------------------------------------------------------
PORTFOLIO COMPOSITION
% of Total Investments as of June 30, 1997
- --------------------------------------------------------
Top Ten Common Stocks
<TABLE>
<CAPTION>
Company
- --------------------------------------------------------
<S> <C>
General Electric Co. 3.3%
- --------------------------------------------------------
Intel Corp. 2.6%
- --------------------------------------------------------
Microsoft Corp. 2.6%
- --------------------------------------------------------
Coca-Cola Co. 2.4%
- --------------------------------------------------------
Merck & Co., Inc. 2.3%
- --------------------------------------------------------
Exxon Corp. 2.3%
- --------------------------------------------------------
American Home Products Corp. 2.0%
- --------------------------------------------------------
Compaq Computer Corp. 1.9%
- --------------------------------------------------------
Procter & Gamble Co. 1.8%
- --------------------------------------------------------
BellSouth Corp. 1.7%
- --------------------------------------------------------
Top Ten Total 22.9%
</TABLE>
[PIE CHART APPEARS HERE]
<TABLE>
<CAPTION>
Industry Classifications
<S> <C>
Consumer
Discretionary 18.2%
Financial and
Business Services 15.8%
Technology 15.3%
Health Care 13.2%
Energy 8.7%
Capital Goods 7.9%
Utilities 7.7%
Consumer Staples 5.8%
Other 7.4%
</TABLE>
INVESTMENT OBJECTIVE AND PRIMARY INVESTMENTS:
Seeks to provide a total return which equals or exceeds the total return
performance of the Standard & Poor's 500 Composite Stock Price Index; invests in
common stocks represented in that Index.
[LINE CHART APPEARS HERE]
<TABLE>
<CAPTION>
ENHANCED EQUITY FUND S&P 500 INDEX
<S> <C>
5,000,000.00 5,000,000.00
5,144,570.00 5,121,000.00
5,115,150.00 5,133,290.00
5,300,520.00 5,355,050.00
5,075,070.00 5,109,790.00
5,333,940.00 5,347,900.00
5,480,010.00 5,474,650.00
5,419,560.00 5,383,220.00
5,465,540.00 5,455,360.00
5,283,350.00 5,235,510.00
5,952,780.00 5,834,450.00
5,802,940.00 5,725,930.00
5,823,250.00 5,800,360.00
5,655,710.00 5,687,260.00
5,745,140.00 5,854,460.00
5,780,820.00 5,883,150.00
5,689,060.00 5,795,610.00
5,951,490.00 6,032,360.00
5,890,140.00 5,908,880.00
6,002,620.00 5,978,310.00
6,088,490.00 5,998,930.00
6,269,690.00 6,203,190.00
6,345,500.00 6,279,310.00
6,344,520.00 6,331,800.00
6,386,120.00 6,418,110.00
6,490,130.00 6,553,530.00
6,278,350.00 6,395,130.00
6,424,600.00 6,566,200.00
6,393,260.00 6,585,440.00
6,319,870.00 6,558,960.00
6,550,820.00 6,807,810.00
6,472,090.00 6,755,600.00
6,590,330.00 6,895,370.00
6,519,410.00 6,829,660.00
6,581,170.00 6,912,230.00
6,709,580.00 7,147,240.00
6,566,470.00 6,953,270.00
6,296,770.00 6,650,100.00
6,377,720.00 6,735,360.00
6,460,690.00 6,845,880.00
6,300,280.00 6,678,090.00
6,508,400.00 6,897,400.00
6,786,530.00 7,180,190.00
6,586,280.00 7,004,640.00
6,707,300.00 7,162,030.00
6,489,130.00 6,901,190.00
6,549,130.00 7,003,540.00
6,755,490.00 7,185,140.00
6,989,420.00 7,465,140.00
7,143,470.00 7,685,440.00
7,302,950.00 7,911,770.00
7,589,560.00 8,228,010.00
7,772,990.00 8,419,140.00
8,015,780.00 8,698,320.00
8,056,090.00 8,720,160.00
8,395,840.00 9,088,150.00
8,352,170.00 9,055,700.00
8,681,860.00 9,453,250.00
8,803,250.00 9,635,320.00
9,059,190.00 9,963,300.00
9,094,900.00 10,055,700.00
9,156,280.00 10,152,500.00
9,281,710.00 10,302,100.00
9,490,760.00 10,567,800.00
9,538,860.00 10,608,100.00
9,083,200.00 10,139,400.00
9,305,030.00 10,353,300.00
9,838,630.00 10,936,000.00
10,114,400.00 11,237,600.00
10,863,900.00 12,087,000.00
10,664,900.00 11,847,600.00
11,388,600.00 12,587,800.00
11,480,000.00 12,686,500.00
10,969,600.00 12,165,200.00
11,441,900.00 12,891,500.00
12,089,500.00 13,676,300.00
12,538,900.00 14,289,000.00
</TABLE>
The line graph above assumes the investment of $5,000,000 on 3/1/91, the first
full month following the Fund's Institutional Class inception on 2/11/91,
compared to the S&P 500 Index, an unmanaged market index. Past performance is
not an indication of future results.
The Enhanced Equity Fund's performance for the past 12 months was strong,
on an absolute basis, but nonetheless lagged its performance benchmark, the S&P
500 Index. Specifically, for the one-year period ended June 30, 1997, the Fund's
Institutional Class shares increased 31.5%.
The financial services sector has been one of the best performers for the
Fund going back to the latter half of 1996. The Fund has benefited from superior
stock selection in this sector, and this group has outperformed as the interest
rate environment has improved. Financial services posted the best results of any
sector early this year and the third best results in recent months. In
particular, some of the Fund's bank stocks posted very strong returns in the
month of January.
After turning in solid results in 1996 and earlier this year, technology
was one of the weakest performers in recent months. Early in 1997, Fund
investments in technology benefited from strong stock selection. While
smaller-cap technology issues were hit hard in March, the Fund's emphasis on the
larger-cap issues helped stabilize performance in the group. During the second
quarter, Compaq Computers announced an agreement to acquire Tandem Computers in
exchange for 29 million Compaq shares. Shares fell more than 8% during June, but
finished the quarter up 30%. Seagate Technology told investors that earnings
would not meet analysts' estimates, and share value declined for the quarter as
a result.
Looking ahead, the Fund's manager will continue to maintain sector
weights at or near the weightings represented in the Standard & Poor's 500
Index. The manager will also select stocks with favorable valuations of earnings
and assets, consistent growth estimates and, positive investor sentiment.
14 / PIMCO Funds
<PAGE>
Balanced Fund
PORTFOLIO MANAGER:
Cadence Capital Management
Boston, Massachusetts
NFJ Investment Group
Dallas, Texas
Pacific Investment
Management Company
Newport Beach, California
TOTAL RETURN PERFORMANCE
FOR THE PERIOD ENDED 6/30/97
<TABLE>
<CAPTION>
Since
1 Yr. 3 Yrs.* 5 Yrs.* Inception*
(7/92)
- -----------------------------------------------------------------
<S> <C> <C> <C> <C>
Balanced Fund (%) 20.37 17.87 12.79 12.78
- -----------------------------------------------------------------
Lipper
Balanced Index (%) 20.41 16.88 12.98 12.97
- -----------------------------------------------------------------
60% S&P 500 Index and
40% Lehman Aggregate
Bond Index (%) 23.63 20.44 14.64 14.64
- -----------------------------------------------------------------
</TABLE>
* Annualized
- --------------------------------------------------------
PORTFOLIO COMPOSITION
% of Total Investments as of June 30, 1997
- --------------------------------------------------------
Top Five Holdings
<TABLE>
<CAPTION>
Issuer
- --------------------------------------------------------
<S> <C>
Federal National
Mortgage Association - 8.500% 7.4%
- --------------------------------------------------------
Government National
Mortgage Association - 6.500% 7.2%
- --------------------------------------------------------
Long Island Lighting Co. - 9.000% 3.0%
- --------------------------------------------------------
Government National
Mortgage Association - 8.500% 2.9%
- --------------------------------------------------------
AMR Corp. - 9.430% 1.5%
- --------------------------------------------------------
Top Five Total 22.0%
</TABLE>
Industry Classifications
[PIE CHART APPEARS HERE]
<TABLE>
<S> <C>
Mortgage-
Backed Securities 33.9%
Consumer
Discretionary (stock) 11.1%
Financial and Business
Services (stock) 9.6%
Short-Term
Instruments 7.0%
Technology (stock) 5.8%
Energy (stock) 5.5%
Capital Goods (stock) 4.8%
Utilities (bonds) 4.5%
Other 17.8%
</TABLE>
INVESTMENT OBJECTIVE AND PRIMARY INVESTMENTS:
Seeks total return consistent with prudent investment management; invests in
common stocks, fixed income securities and money market instruments.
--------------------------------------------------------
Cumulative Returns Since Inception Through June 30, 1997
--------------------------------------------------------
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
60% S&P 500 INDEX &
LIPPER 40% LEHMAN AGGREGATE
BALANCED FUND BALANCED INDEX BOND INDEX
<S> <C> <C>
5,000,000.00 5,000,000.00 5,000,000.00
5,193,160.00 5,146,800.00 5,163,350.00
5,183,200.00 5,098,830.00 5,120,860.00
5,267,840.00 5,157,570.00 5,181,240.00
5,284,480.00 5,158,030.00 5,164,490.00
5,375,770.00 5,275,740.00 5,270,470.00
5,452,070.00 5,351,290.00 5,342,790.00
5,495,130.00 5,422,840.00 5,410,570.00
5,561,580.00 5,489,810.00 5,492,710.00
5,612,700.00 5,603,120.00 5,571,400.00
5,540,310.00 5,560,250.00 5,506,120.00
5,607,310.00 5,657,720.00 5,597,300.00
5,638,230.00 5,717,700.00 5,647,720.00
5,613,390.00 5,740,800.00 5,646,870.00
5,779,720.00 5,914,280.00 5,815,010.00
5,753,730.00 5,927,000.00 5,794,630.00
5,816,510.00 5,987,930.00 5,875,230.00
5,757,490.00 5,892,000.00 5,821,640.00
5,799,080.00 5,990,870.00 5,876,500.00
5,893,310.00 6,147,830.00 6,028,110.00
5,789,150.00 6,027,150.00 5,888,060.00
5,591,790.00 5,808,120.00 5,675,960.00
5,634,150.00 5,821,070.00 5,701,490.00
5,661,770.00 5,865,840.00 5,757,310.00
5,573,390.00 5,764,010.00 5,667,550.00
5,725,780.00 5,894,220.00 5,824,260.00
5,876,160.00 6,041,690.00 5,970,420.00
5,753,620.00 5,932,700.00 5,847,690.00
5,819,960.00 5,951,150.00 5,924,440.00
5,696,250.00 5,812,430.00 5,789,720.00
5,744,040.00 5,868,280.00 5,857,230.00
5,890,520.00 5,941,230.00 5,994,720.00
6,060,930.00 6,114,350.00 6,191,900.00
6,151,820.00 6,222,460.00 6,316,730.00
6,264,700.00 6,339,130.00 6,463,640.00
6,488,240.00 6,541,980.00 6,718,700.00
6,585,670.00 6,657,900.00 6,832,050.00
6,678,610.00 6,798,650.00 6,961,880.00
6,748,050.00 6,851,680.00 7,005,970.00
6,927,460.00 7,015,300.00 7,210,620.00
6,951,680.00 6,997,550.00 7,232,690.00
7,162,160.00 7,215,030.00 7,466,550.00
7,292,520.00 7,328,600.00 7,594,750.00
7,433,500.00 7,460,880.00 7,770,040.00
7,369,420.00 7,464,460.00 7,759,230.00
7,371,820.00 7,492,600.00 7,782,490.00
7,410,590.00 7,542,250.00 7,833,810.00
7,513,960.00 7,619,350.00 7,948,670.00
7,582,010.00 7,644,510.00 8,009,530.00
7,373,570.00 7,447,740.00 7,805,980.00
7,419,160.00 7,565,250.00 7,899,530.00
7,690,520.00 7,845,100.00 8,221,340.00
7,881,140.00 8,011,490.00 8,430,240.00
8,328,110.00 8,384,830.00 8,870,340.00
8,249,780.00 8,281,690.00 8,731,920.00
8,509,550.00 8,535,120.00 9,069,960.00
8,525,300.00 8,566,690.00 9,121,650.00
8,308,690.00 8,317,400.00 8,856,330.00
8,538,610.00 8,567,760.00 9,226,590.00
8,895,380.00 8,918,180.00 9,598,510.00
9,126,130.00 9,204,450.00 9,902,090.00
</TABLE>
- --------------------------------------------------------------------------------
The line graph above assumes the investment of $5,000,000 on 7/1/92, the first
full month following the Fund's Institutional Class inception on 6/25/92,
compared to a static 60/40 blend of the Standard and Poor's 500 Index and the
Lehman Brothers Aggregate Bond Index, and the Lipper Balanced Index, each an
unmanaged market index. The Fund may invest in foreign securities which involve
potentially higher risks including foreign currency fluctuations and political
or economic uncertainty. Past performance is not an indication of future
results.
The Balanced Fund posted solid results for the year ended June 30, 1997,
in line with those of mutual funds with the same objective (measured by the
Lipper Balanced Index). Specifically, the Fund's Institutional Class shares
increased 20.4%.
Throughout much of the last fiscal year, the Fund's asset allocation was
maintained at 60% stocks and 40% bonds. The Fund's managers felt this allocation
would allow the Balanced Fund to provide the necessary diversification in the
face of sometimes turbulent financial markets. This strategy proved successful,
as the Fund produced strong returns while exhibiting less volatility than the
overall market.
Among the winners in the Fund's stock portfolio was Bear Stearns
Companies, a major securities firm with business interests in both the stock and
bond markets. Bear Stearns posted strong results, with net revenues increasing
as a result of growth in investment banking. Combined with their successful
margin-lending business, Bear Stearns should be able to continue its
above-average profitability relative to other securities firms.
Another stock success story for the Fund was Brunswick Corp., a
manufacturer of pleasure boats and bowling equipment. This company took another
step toward transforming itself into a diversified, active recreation company by
acquiring Life Fitness in the second quarter. The purchase of this leading maker
of fitness equipment should enable Brunswick to increase sales without having to
undertake significant additional marketing expense.
On the bond side, the Fund's managers continued to invest based on the
view that interest rates would decline further over the long term. This strategy
is exemplified by a high quality portfolio with an above-average duration
relative to the benchmark. Over the last quarter, this strategy was rewarded as
long-term interest rates fell.
Based on the strong performance of the stock and bond markets over the
past year, there were few sectors that detracted from the Fund's returns.
Underweighting in the consumer durables and consumer staples sectors somewhat
limited the performance during the last quarter, although both industries added
value over the year. And, as the 30-year Treasury bond yield fluctuated from
7.2% to 6.8% during the past 12 months, a few volatile swings within that period
affected the Fund's bond portfolio on a short-term basis.
With the stock market at record highs, the managers believe that more
than ever before it is important to maintain a investment portfolio that is
diversified between stocks and bonds. For this reason, the Fund expects to
maintain its 60% stock/40% bond allocation in the coming months.
1997 Annual Report / 15
<PAGE>
Statement of Assets and Liabilities
June 30, 1997
<TABLE>
<CAPTION>
Amounts in thousands, except per share amounts Emerging International Capital Mid Cap Micro Cap
Markets Fund Developed Fund Appreciation Fund Growth Fund Growth Fund
------------ -------------- ----------------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Assets:
Investments, at value $ 53,112 $ 101,936 $ 579,336 $ 371,796 $ 166,709
- ------------------------------------------------------ ------------ -------------- ----------------- ----------- -----------
Cash and foreign currency 159 210 0 13,391 0
- ------------------------------------------------------ ------------ -------------- ----------------- ----------- -----------
Receivable for investments and foreign currency sold 2,765 589 6,077 0 790
- ------------------------------------------------------ ------------ -------------- ----------------- ----------- -----------
Receivable for Fund shares sold 10 237 750 3,502 625
- ------------------------------------------------------ ------------ -------------- ----------------- ----------- -----------
Interest and dividends receivable 288 235 411 214 39
- ------------------------------------------------------ ------------ -------------- ----------------- ----------- -----------
56,334 103,207 586,574 388,903 168,163
====================================================== ============ ============== ================= =========== ===========
Liabilities:
Payable for investments and foreign currency purchased $ 707 $ 0 $ 24,092 $ 611 $ 1,330
- ------------------------------------------------------ ------------ -------------- ----------------- ----------- -----------
Payable for Fund shares redeemed 390 2,801 207 393 393
- ------------------------------------------------------ ------------ -------------- ----------------- ----------- -----------
Dividends payable 0 0 0 0 0
- ------------------------------------------------------ ------------ -------------- ----------------- ----------- -----------
Accrued investment advisor's fee 38 48 198 133 154
- ------------------------------------------------------ ------------ -------------- ----------------- ----------- -----------
Accrued administrator's fee 22 41 112 85 31
- ------------------------------------------------------ ------------ -------------- ----------------- ----------- -----------
Accrued distribution and/or servicing fee 1 2 9 46 0
- ------------------------------------------------------ ------------ -------------- ----------------- ----------- -----------
Accrued servicing fee 1 2 5 18 0
- ------------------------------------------------------ ------------ -------------- ----------------- ----------- -----------
Variation margin payable 0 0 0 0 0
- ------------------------------------------------------ ------------ -------------- ----------------- ----------- -----------
Other liabilities 0 0 0 48 0
- ------------------------------------------------------ ------------ -------------- ----------------- ----------- -----------
1,159 2,894 24,623 1,334 1,908
====================================================== ============ ============== ================= =========== ===========
Net Assets $ 55,175 $ 100,313 $ 561,951 $ 387,569 $ 166,255
====================================================== ============ ============== ================= =========== ===========
Net Assets Consist of:
Paid in capital $ 57,673 $ 86,123 $ 405,396 $ 292,286 $ 121,121
- ------------------------------------------------------ ------------ -------------- ----------------- ----------- -----------
Undistributed (overdistributed) net investment income (69) 1,129 8,727 513 0
- ------------------------------------------------------ ------------ -------------- ----------------- ----------- -----------
Accumulated undistributed net realized gain (loss) (10,347) 2,133 23,166 12,728 7,732
- ------------------------------------------------------ ------------ -------------- ----------------- ----------- -----------
Net unrealized appreciation 7,918 10,928 124,662 82,042 37,402
- ------------------------------------------------------ ------------ -------------- ----------------- ----------- -----------
$ 55,175 $ 100,313 $ 561,951 $ 387,569 $ 166,255
====================================================== ============ ============== ================= =========== ===========
Shares Issued and Outstanding
Institutional Class 3,776 7,171 25,299 14,370 8,269
- ------------------------------------------------------ ------------ -------------- ----------------- ----------- -----------
Administrative Class 8 176 147 102 107
- ------------------------------------------------------ ------------ -------------- ----------------- ----------- -----------
Retail Classes 169 303 1,073 4,664 0
- ------------------------------------------------------ ------------ -------------- ----------------- ----------- -----------
Net Asset Value and Redemption Price* Per Share
(Net Assets Per Share Outstanding)
Institutional Class $ 13.96 $ 13.12 $ 21.19 $ 20.28 $ 19.85
- ------------------------------------------------------ ------------ -------------- ----------------- ----------- -----------
Administrative Class 13.95 13.05 21.16 20.24 19.78
- ------------------------------------------------------ ------------ -------------- ----------------- ----------- -----------
Class A 13.94 13.08 21.16 20.24 0
- ------------------------------------------------------ ------------ -------------- ----------------- ----------- -----------
Class B 13.89 13.06 21.10 20.17 0
- ------------------------------------------------------ ------------ -------------- ----------------- ----------- -----------
Class C 13.89 13.06 21.10 20.18 0
- ------------------------------------------------------ ------------ -------------- ----------------- ----------- -----------
Cost of Investments Owned 45,194 90,981 454,675 289,754 129,307
====================================================== ============ ============== ================= =========== ===========
Cost of Foreign Currency Held 159 0 0 0 0
====================================================== ============ ============== ================= =========== ===========
</TABLE>
*With respect to the Retail Classes, the redemption price varies by the length
of time the shares are held.
16 / PIMCO Funds See accompanying notes
<PAGE>
Statement of Assets and Liabilities
June 30, 1997
<TABLE>
<CAPTION>
Small Cap Core Mid Cap Equity
Growth Fund Equity Fund Equity Fund Income Fund
<S> <C> <C> <C> <C>
Assets:
Investments, at value $ 33,552 $ 36,020 $ 7,685 $ 139,521
- ------------------------------------------------------ ----------- ----------- ----------- -----------
Cash and foreign currency 1 67 29 1
- ------------------------------------------------------ ----------- ----------- ----------- -----------
Receivable for investments and foreign currency sold 1,292 504 234 1,485
- ------------------------------------------------------ ----------- ----------- ----------- -----------
Receivable for Fund shares sold 0 68 0 430
- ------------------------------------------------------ ----------- ----------- ----------- -----------
Interest and dividends receivable 22 12 3 492
- ------------------------------------------------------ ----------- ----------- ----------- -----------
34,867 36,671 7,951 141,929
====================================================== =========== =========== =========== ===========
Liabilities:
Payable for investments and foreign currency purchased $ 388 $ 859 $ 355 $ 1,533
- ------------------------------------------------------ ----------- ----------- ----------- -----------
Payable for Fund shares redeemed 1,055 7 0 84
- ------------------------------------------------------ ----------- ----------- ----------- -----------
Dividends payable 0 0 0 0
- ------------------------------------------------------ ----------- ----------- ----------- -----------
Accrued investment advisor's fee 26 16 4 50
- ------------------------------------------------------ ----------- ----------- ----------- -----------
Accrued administrator's fee 7 7 1 29
- ------------------------------------------------------ ----------- ----------- ----------- -----------
Accrued distribution and/or servicing fee 0 0 0 5
- ------------------------------------------------------ ----------- ----------- ----------- -----------
Accrued servicing fee 0 6 0 4
- ------------------------------------------------------ ----------- ----------- ----------- -----------
Variation margin payable 0 0 0 0
- ------------------------------------------------------ ----------- ----------- ----------- -----------
Other liabilities 0 0 0 0
- ------------------------------------------------------ ----------- ----------- ----------- -----------
1,476 895 360 1,705
====================================================== =========== =========== =========== ===========
Net Assets $ 33,391 $ 35,776 $ 7,591 $ 140,224
====================================================== =========== =========== =========== ===========
Net Assets Consist of:
Paid in capital $ 23,242 $ 24,893 $ 5,617 $ 99,898
- ------------------------------------------------------ ----------- ----------- ----------- -----------
Undistributed (overdistributed) net investment income 272 2,331 474 2,380
- ------------------------------------------------------ ----------- ----------- ----------- -----------
Accumulated undistributed net realized gain (loss) 2,738 3,232 703 13,956
- ------------------------------------------------------ ----------- ----------- ----------- -----------
Net unrealized appreciation 7,139 5,320 797 23,990
- ------------------------------------------------------ ----------- ----------- ----------- -----------
$ 33,391 $ 35,776 $ 7,591 $ 140,224
====================================================== =========== =========== =========== ===========
Shares Issued and Outstanding
Institutional Class 2,491 415 541 7,860
- ------------------------------------------------------ ----------- ----------- ----------- -----------
Administrative Class 0 1,888 0 529
- ------------------------------------------------------ ----------- ----------- ----------- -----------
Retail Classes 0 0 0 712
- ------------------------------------------------------ ----------- ----------- ----------- -----------
Net Asset Value and Redemption Price* Per Share
(Net Assets Per Share Outstanding)
Institutional Class $ 13.40 $ 15.55 $ 14.04 $ 15.41
- ------------------------------------------------------ ----------- ----------- ----------- -----------
Administrative Class 13.41 15.53 0 15.40
- ------------------------------------------------------ ----------- ----------- ----------- -----------
Class A 0 0 0 15.39
- ------------------------------------------------------ ----------- ----------- ----------- -----------
Class B 0 0 0 15.37
- ------------------------------------------------------ ----------- ----------- ----------- -----------
Class C 0 0 0 15.37
- ------------------------------------------------------ ----------- ----------- ----------- -----------
Cost of Investments Owned 26,413 30,700 6,888 115,531
====================================================== =========== =========== =========== ===========
Cost of Foreign Currency Held 0 0 0 0
====================================================== =========== =========== =========== ===========
<CAPTION>
Small Cap Enhanced
Value Fund Value Fund Equity Fund Balanced Fund
<S> <C> <C> <C> <C>
Assets:
Investments, at value $ 178,501 $ 78,726 $ 44,816 $ 72,121
- ------------------------------------------------------ ----------- ----------- ----------- -----------
Cash and foreign currency 1 56 0 29
- ------------------------------------------------------ ----------- ----------- ----------- -----------
Receivable for investments and foreign currency sold 6,776 91 0 3,847
- ------------------------------------------------------ ----------- ----------- ----------- -----------
Receivable for Fund shares sold 255 1,418 2 138
- ------------------------------------------------------ ----------- ----------- ----------- -----------
Interest and dividends receivable 462 154 65 263
- ------------------------------------------------------ ----------- ----------- ----------- -----------
185,995 80,445 44,883 76,398
====================================================== =========== =========== =========== ===========
Liabilities:
Payable for investments and foreign currency purchased $ 5,721 $ 1,534 $ 0 $ 12,400
- ------------------------------------------------------ ----------- ----------- ----------- -----------
Payable for Fund shares redeemed 254 2 17 22
- ------------------------------------------------------ ----------- ----------- ----------- -----------
Dividends payable 0 0 0 0
- ------------------------------------------------------ ----------- ----------- ----------- -----------
Accrued investment advisor's fee 64 35 18 23
- ------------------------------------------------------ ----------- ----------- ----------- -----------
Accrued administrator's fee 48 18 10 13
- ------------------------------------------------------ ----------- ----------- ----------- -----------
Accrued distribution and/or servicing fee 53 16 0 1
- ------------------------------------------------------ ----------- ----------- ----------- -----------
Accrued servicing fee 21 8 0 0
- ------------------------------------------------------ ----------- ----------- ----------- -----------
Variation margin payable 0 0 0 10
- ------------------------------------------------------ ----------- ----------- ----------- -----------
Other liabilities 30 0 0 0
- ------------------------------------------------------ ----------- ----------- ----------- -----------
6,191 1,613 45 12,469
====================================================== =========== =========== =========== ===========
Net Assets $ 179,804 $ 78,832 $ 44,838 $ 63,929
====================================================== =========== =========== =========== ===========
Net Assets Consist of:
Paid in capital $ 145,228 $ 63,775 $ 21,136 $ 52,384
- ------------------------------------------------------ ----------- ----------- ----------- -----------
Undistributed (overdistributed) net investment income 6,824 1,920 3,436 2,860
- ------------------------------------------------------ ----------- ----------- ----------- -----------
Accumulated undistributed net realized gain (loss) 4,999 2,525 11,494 1,139
- ------------------------------------------------------ ----------- ----------- ----------- -----------
Net unrealized appreciation 22,753 10,612 8,772 7,546
- ------------------------------------------------------ ----------- ----------- ----------- -----------
$ 179,804 $ 78,832 $ 44,838 $ 63,929
====================================================== =========== =========== =========== ===========
Shares Issued and Outstanding
Institutional Class 5,039 2,195 2,724 5,387
- ------------------------------------------------------ ----------- ----------- ----------- -----------
Administrative Class 0 375 0 0
- ------------------------------------------------------ ----------- ----------- ----------- -----------
Retail Classes 7,109 2,436 0 212
- ------------------------------------------------------ ----------- ----------- ----------- -----------
Net Asset Value and Redemption Price* Per Share
(Net Assets Per Share Outstanding)
Institutional Class $ 14.81 $ 15.78 $ 16.46 $ 11.42
- ------------------------------------------------------ ----------- ----------- ----------- -----------
Administrative Class 0 15.76 0 0
- ------------------------------------------------------ ----------- ----------- ----------- -----------
Class A 14.80 15.75 0 11.40
- ------------------------------------------------------ ----------- ----------- ----------- -----------
Class B 14.80 15.71 0 11.39
- ------------------------------------------------------ ----------- ----------- ----------- -----------
Class C 14.80 15.71 0 11.39
- ------------------------------------------------------ ----------- ----------- ----------- -----------
Cost of Investments Owned 155,748 68,114 36,043 64,592
====================================================== =========== =========== =========== ===========
Cost of Foreign Currency Held 0 0 0 0
====================================================== =========== =========== =========== ===========
</TABLE>
1997 Annual Report See accompanying notes / 17
<PAGE>
Statement of Operations
For the period ended June 30, 1997
<TABLE>
<CAPTION>
$ in thousands Emerging International Capital Mid Cap Micro Cap
Markets Developed Appreciation Growth Growth Fund
Fund Fund Fund Fund Fund
--------- ------------- ------------ --------- ----------
<S> <C> <C> <C> <C> <C>
Investment Income:
Dividends, net of foreign taxes $ 1,132 $ 1,508 $ 6,017 $ 2,806 $ 710
- ------------------------------------------------------------------ --------- ------------- ------------ --------- ----------
Interest 62 231 1,470 576 445
- ------------------------------------------------------------------ --------- ------------- ------------ --------- ----------
Total income 1,194 1,739 7,487 3,382 1,155
================================================================== ========= ============= ============ ========= ==========
Expenses:
Investment advisory fees 568 526 1,953 1,220 1,390
- ------------------------------------------------------------------ --------- ------------- ------------ --------- ----------
Administration fees 313 437 1,093 730 278
- ------------------------------------------------------------------ --------- ------------- ------------ --------- ----------
Distribution and/or servicing fees - Administrative Class 1 13 3 4 3
- ------------------------------------------------------------------ --------- ------------- ------------ --------- ----------
Distribution and servicing fees - Retail Classes 6 8 39 313 0
- ------------------------------------------------------------------ --------- ------------- ------------ --------- ----------
Trustees' fees 4 6 30 18 8
- ------------------------------------------------------------------ --------- ------------- ------------ --------- ----------
Reorganization costs 20 20 20 20 20
- ------------------------------------------------------------------ --------- ------------- ------------ --------- ----------
Miscellaneous 0 0 0 0 0
- ------------------------------------------------------------------ --------- ------------- ------------ --------- ----------
Total expenses 912 1,010 3,138 2,305 1,699
- ------------------------------------------------------------------ --------- ------------- ------------ --------- ----------
Net Investment Income (Loss) 282 729 4,349 1,077 (544)
================================================================== ========= ============= ============ ========= ==========
Net Realized and Unrealized Gain (Loss):
Net realized gain on investments 3,171 5,106 45,370 30,855 10,317
- ------------------------------------------------------------------ --------- ------------- ------------ --------- ----------
Net realized gain (loss) on futures contracts and written options 0 (358) 0 0 0
- ------------------------------------------------------------------ --------- ------------- ------------ --------- ----------
Net realized loss on foreign currency transactions (131) (940) 0 0 0
- ------------------------------------------------------------------ --------- ------------- ------------ --------- ----------
Net change in unrealized appreciation
(depreciation) on investments 1,574 4,863 74,013 50,902 15,151
- ------------------------------------------------------------------ --------- ------------- ------------ --------- ----------
Net change in unrealized appreciation
(depreciation) on futures contracts and written options 0 21 0 0 0
- ------------------------------------------------------------------ --------- ------------- ------------ --------- ----------
Net change in unrealized appreciation
(depreciation) on translation of assets and liabilities
denominated in foreign currencies 11 (120) 0 0 0
- ------------------------------------------------------------------ --------- ------------- ------------ --------- ----------
Net Gain 4,625 8,572 119,383 81,757 25,468
- ------------------------------------------------------------------ --------- ------------- ------------ --------- ----------
Net Increase in Assets
Resulting from Operations $ 4,907 $ 9,301 $ 123,732 $ 82,834 $ 24,924
================================================================== ========= ============= ============ ========= ==========
</TABLE>
18 / PIMCO Funds See accompanying notes
<PAGE>
<TABLE>
<CAPTION>
$ in thousands Small Cap Core Mid Cap Equity
Growth Fund Equity Fund Equity Fund Income Fund
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Investment Income:
Dividends, net of foreign taxes $ 327 $ 367 $ 33 $ 4,473
- ------------------------------------------------------------------ ----------- ----------- ----------- -----------
Interest 87 86 22 168
- ------------------------------------------------------------------ ----------- ----------- ----------- -----------
Total income 414 453 55 4,641
================================================================== =========== =========== =========== ===========
Expenses:
Investment advisory fees 327 234 49 555
- ------------------------------------------------------------------ ----------- ----------- ----------- -----------
Administration fees 82 103 19 312
- ------------------------------------------------------------------ ----------- ----------- ----------- -----------
Distribution and/or servicing fees - Administrative Class 0 79 0 17
- ------------------------------------------------------------------ ----------- ----------- ----------- -----------
Distribution and servicing fees - Retail Classes 0 0 0 19
- ------------------------------------------------------------------ ----------- ----------- ----------- -----------
Trustees' fees 2 3 1 8
- ------------------------------------------------------------------ ----------- ----------- ----------- -----------
Reorganization costs 20 20 20 20
- ------------------------------------------------------------------ ----------- ----------- ----------- -----------
Miscellaneous 0 0 0 0
- ------------------------------------------------------------------ ----------- ----------- ----------- -----------
Total expenses 431 439 89 931
- ------------------------------------------------------------------ ----------- ----------- ----------- -----------
Net Investment Income (Loss) (17) 14 (34) 3,710
================================================================== =========== =========== =========== ===========
Net Realized and Unrealized Gain (Loss):
Net realized gain on investments 4,368 6,488 1,820 20,609
- ------------------------------------------------------------------ ----------- ----------- ----------- -----------
Net realized gain (loss) on futures contracts and written options 0 0 0 0
- ------------------------------------------------------------------ ----------- ----------- ----------- -----------
Net realized loss on foreign currency transactions 0 0 0 0
- ------------------------------------------------------------------ ----------- ----------- ----------- -----------
Net change in unrealized appreciation
(depreciation) on investments 2,170 1,195 (1,109) 6,318
- ------------------------------------------------------------------ ----------- ----------- ----------- -----------
Net change in unrealized appreciation
(depreciation) on futures contracts and written options 0 (4) 0 0
- ------------------------------------------------------------------ ----------- ----------- ----------- -----------
Net change in unrealized appreciation
(depreciation) on translation of assets and liabilities
denominated in foreign currencies 0 0 0 0
- ------------------------------------------------------------------ ----------- ----------- ----------- -----------
Net Gain 6,538 7,679 711 26,927
- ------------------------------------------------------------------ ----------- ----------- ----------- -----------
Net Increase in Assets
Resulting from Operations $ 6,521 $ 7,693 $ 677 $ 30,637
================================================================== =========== =========== =========== ===========
<CAPTION>
$ in thousands Small Cap Enhanced
Value Fund Value Fund Equity Fund Balanced Fund
---------- ---------- ----------- -------------
<S> <C> <C> <C> <C>
Investment Income:
Dividends, net of foreign taxes $ 2,697 $ 1,055 $ 1,308 $ 786
- ------------------------------------------------------------------ ---------- ---------- ----------- -------------
Interest 175 145 21 1,972
- ------------------------------------------------------------------ ---------- ---------- ----------- -------------
Total income 2,872 1,200 1,329 2,758
================================================================== ========== ========== =========== =============
Expenses:
Investment advisory fees 464 249 292 307
- ------------------------------------------------------------------ ---------- ---------- ----------- -------------
Administration fees 319 114 162 170
- ------------------------------------------------------------------ ---------- ---------- ----------- -------------
Distribution and/or servicing fees - Administrative Class 0 12 0 0
- ------------------------------------------------------------------ ---------- ---------- ----------- -------------
Distribution and servicing fees - Retail Classes 361 60 0 4
- ------------------------------------------------------------------ ---------- ---------- ----------- -------------
Trustees' fees 6 3 5 5
- ------------------------------------------------------------------ ---------- ---------- ----------- -------------
Reorganization costs 20 20 20 20
- ------------------------------------------------------------------ ---------- ---------- ----------- -------------
Miscellaneous 0 0 0 0
- ------------------------------------------------------------------ ---------- ---------- ----------- -------------
Total expenses 1,170 458 479 506
- ------------------------------------------------------------------ ---------- ---------- ----------- -------------
Net Investment Income (Loss) 1,702 742 850 2,252
================================================================== ========== ========== =========== =============
Net Realized and Unrealized Gain (Loss):
Net realized gain on investments 13,315 5,616 21,124 12,264
- ------------------------------------------------------------------ ---------- ---------- ----------- -------------
Net realized gain (loss) on futures contracts and written options 0 0 0 399
- ------------------------------------------------------------------ ---------- ---------- ----------- -------------
Net realized loss on foreign currency transactions 0 0 0 0
- ------------------------------------------------------------------ ---------- ---------- ----------- -------------
Net change in unrealized appreciation
(depreciation) on investments 19,593 6,732 (4,893) (2,880)
- ------------------------------------------------------------------ ---------- ---------- ----------- -------------
Net change in unrealized appreciation
(depreciation) on futures contracts and written options 0 0 0 (185)
- ------------------------------------------------------------------ ---------- ---------- ----------- -------------
Net change in unrealized appreciation
(depreciation) on translation of assets and liabilities
denominated in foreign currencies 0 0 0 0
- ------------------------------------------------------------------ ---------- ---------- ----------- -------------
Net Gain 32,908 12,348 16,231 9,598
- ------------------------------------------------------------------ ---------- ---------- ----------- -------------
Net Increase in Assets
Resulting from Operations $ 34,610 $ 13,090 $ 17,081 $ 11,850
================================================================== ========== ========== =========== =============
</TABLE>
1997 Annual Report See accompanying notes / 19
<PAGE>
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
$ in thousands Emerging Markets Fund International Developed Fund
-------------------------------- ------------------------------
Increase (Decrease) in Net Assets from: Year Ended Eight Months Ended Year Ended Eight Months Ended
June 30, 1997 June 30, 1996 June 30, 1997 June 30, 1996
<S> <C> <C> <C> <C>
Operations
Net investment income (loss) $ 282 $ 434 $ 729 $ 399
- ----------------------------------------------------- ------------------------------- -------------------------------
Net realized gain (loss) 3,040 1,358 3,808 2,749
- ----------------------------------------------------- ------------------------------- -------------------------------
Net change in unrealized appreciation (depreciation) 1,585 7,303 4,764 5,113
- ----------------------------------------------------- ------------------------------- -------------------------------
Net increase (decrease) resulting from operations 4,907 9,095 9,301 8,261
===================================================== =============================== ===============================
Net equalization credits (debits) 0 (4) 0 62
===================================================== =============================== ===============================
Distributions to Shareholders
From net investment income
Institutional Class (310) (236) 0 (382)
- ----------------------------------------------------- ------------------------------- -------------------------------
Administrative Class 0 (3) 0 (4)
- ----------------------------------------------------- ------------------------------- -------------------------------
Retail Classes 0 0 0 0
- ----------------------------------------------------- ------------------------------- -------------------------------
In excess of net investment income
Institutional Class 0 0 0 (1,896)
- ----------------------------------------------------- ------------------------------- -------------------------------
Administrative Class 0 0 0 (21)
- ----------------------------------------------------- ------------------------------- -------------------------------
Retail Classes 0 0 0 0
- ----------------------------------------------------- ------------------------------- -------------------------------
From net realized capital gains
Institutional Class 0 0 (4,189) (1,127)
- ----------------------------------------------------- ------------------------------- -------------------------------
Administrative Class 0 0 (255) (13)
- ----------------------------------------------------- ------------------------------- -------------------------------
Retail Classes 0 0 0 0
- ----------------------------------------------------- ------------------------------- -------------------------------
Total Distributions (310) (239) (4,444) (3,443)
===================================================== =============================== ===============================
Fund Share Transactions
Receipts for shares sold
Institutional Class 12,784 32,382 43,648 14,180
- ----------------------------------------------------- ------------------------------- -------------------------------
Administrative Class 305 387 1,683 5,259
- ----------------------------------------------------- ------------------------------- -------------------------------
Retail Classes 2,597 0 4,293 0
- ----------------------------------------------------- ------------------------------- -------------------------------
Shares issued in reorganization
Retail Classes 0 0 0 0
- ----------------------------------------------------- ------------------------------- -------------------------------
Issued as reinvestment of distributions
Institutional Class 222 174 3,449 2,171
- ----------------------------------------------------- ------------------------------- -------------------------------
Administrative Class 0 3 255 38
- ----------------------------------------------------- ------------------------------- -------------------------------
Retail Classes 0 0 0 0
- ----------------------------------------------------- ------------------------------- -------------------------------
Cost of shares redeemed
Institutional Class (45,330) (34,303) (27,613) (14,496)
- ----------------------------------------------------- ------------------------------- -------------------------------
Administrative Class (553) (951) (5,453) (483)
- ----------------------------------------------------- ------------------------------- -------------------------------
Retail Classes (360) 0 (637) 0
- ----------------------------------------------------- ------------------------------- -------------------------------
Net increase (decrease) resulting from
Fund share transactions (30,335) (2,308) 19,625 6,669
- ----------------------------------------------------- ------------------------------- -------------------------------
Total Increase (Decrease) in Net Assets (25,738) 6,544 24,482 11,549
===================================================== =============================== ===============================
Net Assets
Beginning of period 80,913 74,369 75,831 64,282
- ----------------------------------------------------- ------------------------------- -------------------------------
End of period * $ 55,175 $ 80,913 $ 100,313 $ 75,831
- ----------------------------------------------------- ------------------------------- -------------------------------
*Including net undistributed (overdistributed)
investment income of: $ (69) $ (33) $ 1,129 $ 1,936
- ----------------------------------------------------- ------------------------------- -------------------------------
<CAPTION>
Capital Appreciation Fund
------------------------------
Increase (Decrease) in Net Assets from: Year Ended Eight Months Ended
June 30, 1997 June 30, 1996
<S> <C> <C>
Operations
Net investment income (loss) $ 4,349 $ 2,624
- ----------------------------------------------------- --------------------------------
Net realized gain (loss) 45,370 31,135
- ----------------------------------------------------- --------------------------------
Net change in unrealized appreciation (depreciation) 74,013 6,136
- ----------------------------------------------------- --------------------------------
Net increase (decrease) resulting from operations 123,732 39,895
===================================================== ================================
Net equalization credits (debits) 0 214
===================================================== ================================
Distributions to Shareholders
From net investment income
Institutional Class (2,203) (2,624)
- ----------------------------------------------------- --------------------------------
Administrative Class (7) 0
- ----------------------------------------------------- --------------------------------
Retail Classes 0 0
- ----------------------------------------------------- --------------------------------
In excess of net investment income
Institutional Class 0 0
- ----------------------------------------------------- --------------------------------
Administrative Class 0 0
- ----------------------------------------------------- --------------------------------
Retail Classes 0 0
- ----------------------------------------------------- --------------------------------
From net realized capital gains
Institutional Class (44,041) (15,492)
- ----------------------------------------------------- --------------------------------
Administrative Class (129) 0
- ----------------------------------------------------- --------------------------------
Retail Classes 0 0
- ----------------------------------------------------- --------------------------------
Total Distributions (46,380) (18,116)
===================================================== ================================
Fund Share Transactions
Receipts for shares sold
Institutional Class 165,774 93,460
- ----------------------------------------------------- --------------------------------
Administrative Class 3,111 0
- ----------------------------------------------------- --------------------------------
Retail Classes 22,411 0
- ----------------------------------------------------- --------------------------------
Shares issued in reorganization
Retail Classes 0 0
- ----------------------------------------------------- --------------------------------
Issued as reinvestment of distributions
Institutional Class 36,552 15,598
- ----------------------------------------------------- --------------------------------
Administrative Class 136 0
- ----------------------------------------------------- --------------------------------
Retail Classes 0 0
- ----------------------------------------------------- --------------------------------
Cost of shares redeemed
Institutional Class (90,177) (18,543)
- ----------------------------------------------------- --------------------------------
Administrative Class (349) 0
- ----------------------------------------------------- --------------------------------
Retail Classes (1,587) 0
- ----------------------------------------------------- --------------------------------
Net increase (decrease) resulting from
Fund share transactions 135,871 90,515
- ----------------------------------------------------- --------------------------------
Total Increase (Decrease) in Net Assets 213,223 112,508
===================================================== ================================
Net Assets
Beginning of period 348,728 236,220
- ----------------------------------------------------- --------------------------------
End of period * $ 561,951 $ 348,728
- ----------------------------------------------------- --------------------------------
*Including net undistributed (overdistributed)
investment income of: $ 8,727 $ 3,922
- ----------------------------------------------------- --------------------------------
</TABLE>
20 / PIMCO Funds See accompanying notes
<PAGE>
<TABLE>
<CAPTION>
$ in thousands Mid Cap Growth Fund Micro Cap Growth Fund
--------------------------------- ----------------------------------
Increase (Decrease) in Net Assets from: Year Ended Eight Months Ended Year Ended Eight Months Ended
June 30, 1997 June 30, 1996 June 30, 1997 June 30, 1996
<S> <C> <C> <C> <C>
Operations
Net investment income (loss) $ 1,077 $ 1,524 $ (544) $ (244)
- ----------------------------------------------------- ------------------------------ -------------------------------
Net realized gain (loss) 30,855 30,980 10,317 8,951
- ----------------------------------------------------- ------------------------------ -------------------------------
Net change in unrealized appreciation (depreciation) 50,902 (13,220) 15,151 8,025
- ----------------------------------------------------- ------------------------------ -------------------------------
Net increase (decrease) resulting from operations 82,834 19,284 24,924 16,732
===================================================== ============================== ===============================
Net equalization credits (debits) 0 59 0 0
===================================================== ============================== ===============================
Distributions to Shareholders
From net investment income
Institutional Class (604) (1,518) 0 0
- ----------------------------------------------------- ------------------------------ -------------------------------
Administrative Class (2) (6) 0 0
- ----------------------------------------------------- ------------------------------ -------------------------------
Retail Classes 0 0 0 0
- ----------------------------------------------------- ------------------------------ -------------------------------
In excess of net investment income
Institutional Class 0 (2) 0 0
- ----------------------------------------------------- ------------------------------ -------------------------------
Administrative Class 0 0 0 0
- ----------------------------------------------------- ------------------------------ -------------------------------
Retail Classes 0 0 0 0
- ----------------------------------------------------- ------------------------------ -------------------------------
From net realized capital gains
Institutional Class (43,528) (4,245) (11,397) (1,543)
- ----------------------------------------------------- ------------------------------ -------------------------------
Administrative Class (258) (21) (122) 0
- ----------------------------------------------------- ------------------------------ -------------------------------
Retail Classes 0 0 0 0
- ----------------------------------------------------- ------------------------------ -------------------------------
Total Distributions (44,392) (5,792) (11,519) (1,543)
===================================================== ============================== ===============================
Fund Share Transactions
Receipts for shares sold
Institutional Class 71,437 65,496 72,696 21,977
- ----------------------------------------------------- ------------------------------ -------------------------------
Administrative Class 878 266 2,434 707
- ----------------------------------------------------- ------------------------------ -------------------------------
Retail Classes 10,914 0 0 0
- ----------------------------------------------------- ------------------------------ -------------------------------
Shares issued in reorganization
Retail Classes 75,422 0 0 0
- ----------------------------------------------------- ------------------------------ -------------------------------
Issued as reinvestment of distributions
Institutional Class 42,923 5,548 9,931 1,379
- ----------------------------------------------------- ------------------------------ -------------------------------
Administrative Class 261 27 121 0
- ----------------------------------------------------- ------------------------------ -------------------------------
Retail Classes 0 0 0 0
- ----------------------------------------------------- ------------------------------ -------------------------------
Cost of shares redeemed
Institutional Class (72,699) (42,836) (15,697) (24,322)
- ----------------------------------------------------- ------------------------------ -------------------------------
Administrative Class (280) (182) (1,174) (166)
- ----------------------------------------------------- ------------------------------ -------------------------------
Retail Classes (11,811) 0 0 0
- ----------------------------------------------------- ------------------------------ -------------------------------
Net increase (decrease) resulting from
Fund share transactions 117,045 28,319 68,311 (425)
- ----------------------------------------------------- ------------------------------ -------------------------------
Total Increase (Decrease) in Net Assets 155,487 41,870 81,716 14,764
===================================================== ============================== ===============================
Net Assets
Beginning of period 232,082 190,212 84,539 69,775
- ----------------------------------------------------- ------------------------------ -------------------------------
End of period * $ 387,569 $ 232,082 $ 166,255 $ 84,539
- ----------------------------------------------------- ------------------------------ -------------------------------
*Including net undistributed (overdistributed)
investment income of: $ 513 $ 2,129 $ 0 $ 0
- ----------------------------------------------------- ------------------------------ -------------------------------
<CAPTION>
Small Cap Growth Fund Core Equity Fund
------------------------------- --------------------------------
Increase (Decrease) in Net Assets from: Year Ended Eight Months Ended Year Ended Eight Months Ended
June 30, 1997 June 30, 1996 June 30, 1997 June 30, 1996
<S> <C> <C> <C> <C>
Operations
Net investment income (loss) $ (17) $ (86) $ 14 $ 87
- ----------------------------------------------------- ------------------------------- -----------------------------
Net realized gain (loss) 4,368 15,949 6,488 1,584
- ----------------------------------------------------- ------------------------------- -----------------------------
Net change in unrealized appreciation (depreciation) 2,170 (11,349) 1,191 1,689
- ----------------------------------------------------- ------------------------------- -----------------------------
Net increase (decrease) resulting from operations 6,521 4,514 7,693 3,360
===================================================== =============================== =============================
Net equalization credits (debits) 0 0 0 21
===================================================== =============================== =============================
Distributions to Shareholders
From net investment income
Institutional Class 0 0 (20) (29)
- ----------------------------------------------------- ------------------------------- -----------------------------
Administrative Class 0 0 (17) (58)
- ----------------------------------------------------- ------------------------------- -----------------------------
Retail Classes 0 0 0 0
- ----------------------------------------------------- ------------------------------- -----------------------------
In excess of net investment income
Institutional Class 0 0 0 (9)
- ----------------------------------------------------- ------------------------------- -----------------------------
Administrative Class 0 0 0 (18)
- ----------------------------------------------------- ------------------------------- -----------------------------
Retail Classes 0 0 0 0
- ----------------------------------------------------- ------------------------------- -----------------------------
From net realized capital gains
Institutional Class (17,212) (5,641) (616) (180)
- ----------------------------------------------------- ------------------------------- -----------------------------
Administrative Class (10) (55) (1,861) (577)
- ----------------------------------------------------- ------------------------------- -----------------------------
Retail Classes 0 0 0 0
- ----------------------------------------------------- ------------------------------- -----------------------------
Total Distributions (17,222) (5,696) (2,514) (871)
===================================================== =============================== =============================
Fund Share Transactions
Receipts for shares sold
Institutional Class 10,629 4,731 1,642 2,105
- ----------------------------------------------------- ------------------------------- -----------------------------
Administrative Class 1 437 9,341 17,158
- ----------------------------------------------------- ------------------------------- -----------------------------
Retail Classes 0 0 0 0
- ----------------------------------------------------- ------------------------------- -----------------------------
Shares issued in reorganization
Retail Classes 0 0 0 0
- ----------------------------------------------------- ------------------------------- -----------------------------
Issued as reinvestment of distributions
Institutional Class 12,306 4,655 286 73
- ----------------------------------------------------- ------------------------------- -----------------------------
Administrative Class 10 55 1,878 652
- ----------------------------------------------------- ------------------------------- -----------------------------
Retail Classes 0 0 0 0
- ----------------------------------------------------- ------------------------------- -----------------------------
Cost of shares redeemed
Institutional Class (11,800) (49,237) (6,861) (118)
- ----------------------------------------------------- ------------------------------- -----------------------------
Administrative Class (120) (914) (19,716) (10,789)
- ----------------------------------------------------- ------------------------------- -----------------------------
Retail Classes 0 0 0 0
- ----------------------------------------------------- ------------------------------- -----------------------------
Net increase (decrease) resulting from
Fund share transactions 11,026 (40,273) (13,430) 9,081
- ----------------------------------------------------- ------------------------------- -----------------------------
Total Increase (Decrease) in Net Assets 325 (41,455) (8,251) 11,591
===================================================== =============================== =============================
Net Assets
Beginning of period 33,066 74,521 44,027 32,436
- ----------------------------------------------------- ------------------------------- -----------------------------
End of period * $ 33,391 $ 33,066 $ 35,776 $ 44,027
- ----------------------------------------------------- ------------------------------- -----------------------------
*Including net undistributed (overdistributed)
investment income of: $ 272 $ 3,202 $ 2,331 $ 1,498
- ----------------------------------------------------- ------------------------------- -----------------------------
</TABLE>
1997 Annual Report See accompanying notes / 21
<PAGE>
Statement of Changes in Net Assets (Cont.)
<TABLE>
<CAPTION>
$ in thousands Mid Cap Equity Fund Equity Income Fund
---------------------------------- ---------------------------------
Increase (Decrease) in Net Assets from: Year Ended Eight Months Ended Year Ended Eight Months Ended
June 30, 1997 June 30, 1996 June 30, 1997 June 30, 1996
<S> <C> <C> <C> <C>
Operations
Net investment income (loss) $ (34) $ (18) $ 3,710 $ 3,220
- --------------------------------------------------------- ---------------------------------- ---------------------------------
Net realized gain (loss) 1,820 471 20,609 11,596
- --------------------------------------------------------- ---------------------------------- ---------------------------------
Net change in unrealized appreciation (depreciation) (1,109) 853 6,318 6,902
- --------------------------------------------------------- ---------------------------------- ---------------------------------
Net increase (decrease) resulting from operations 677 1,306 30,637 21,718
========================================================= ================================== =================================
Net equalization credits (debits) 0 (1) 0 (222)
========================================================= ================================== =================================
Distributions to Shareholders
From net investment income
Institutional Class 0 0 (4,331) (3,065)
- --------------------------------------------------------- ---------------------------------- ---------------------------------
Administrative Class 0 0 (249) (155)
- --------------------------------------------------------- ---------------------------------- ---------------------------------
Retail Classes 0 0 (79) 0
- --------------------------------------------------------- ---------------------------------- ---------------------------------
In excess of net investment income
Institutional Class 0 0 0 (7)
- --------------------------------------------------------- ---------------------------------- ---------------------------------
Administrative Class 0 0 0 0
- --------------------------------------------------------- ---------------------------------- ---------------------------------
Retail Classes 0 0 0 0
- --------------------------------------------------------- ---------------------------------- ---------------------------------
From net realized capital gains
Institutional Class (1,083) (243) (14,051) (4,404)
- --------------------------------------------------------- ---------------------------------- ---------------------------------
Administrative Class 0 0 (853) (232)
- --------------------------------------------------------- ---------------------------------- ---------------------------------
Retail Classes 0 0 0 0
- --------------------------------------------------------- ---------------------------------- ---------------------------------
Total Distributions (1,083) (243) (19,563) (7,863)
========================================================= ================================== =================================
Fund Share Transactions
Receipts for shares sold
Institutional Class 574 474 14,386 34,285
- --------------------------------------------------------- ---------------------------------- ---------------------------------
Administrative Class 0 0 2,032 6,890
- --------------------------------------------------------- ---------------------------------- ---------------------------------
Retail Classes 0 0 11,794 0
- --------------------------------------------------------- ---------------------------------- ---------------------------------
Shares issued in reorganization
Retail Classes 0 0 0 0
- --------------------------------------------------------- ---------------------------------- ---------------------------------
Issued as reinvestment of distributions
Institutional Class 263 82 17,797 6,952
- --------------------------------------------------------- ---------------------------------- ---------------------------------
Administrative Class 0 0 1,101 387
- --------------------------------------------------------- ---------------------------------- ---------------------------------
Retail Classes 0 0 71 0
- --------------------------------------------------------- ---------------------------------- ---------------------------------
Cost of shares redeemed
Institutional Class (1,218) (1,597) (37,514) (55,588)
- --------------------------------------------------------- ---------------------------------- ---------------------------------
Administrative Class 0 0 (1,690) (1,903)
- --------------------------------------------------------- ---------------------------------- ---------------------------------
Retail Classes 0 0 (1,638) 0
- --------------------------------------------------------- ---------------------------------- ---------------------------------
Net increase (decrease) resulting from Fund share
transactions (381) (1,041) 6,339 (8,977)
- --------------------------------------------------------- ---------------------------------- ---------------------------------
Total Increase (Decrease) in Net Assets (787) 21 17,413 4,656
========================================================= ================================== =================================
Net Assets
Beginning of period 8,378 8,357 122,811 118,155
- --------------------------------------------------------- ---------------------------------- ---------------------------------
End of period * $ 7,591 $ 8,378 $ 140,224 $ 122,811
- --------------------------------------------------------- ---------------------------------- ---------------------------------
*Including net undistributed (overdistributed) investment
income of: $ 474 $ 280 $ 2,380 $ 3,782
- --------------------------------------------------------- ---------------------------------- ---------------------------------
<CAPTION>
Value Fund
----------------------------------
Increase (Decrease) in Net Assets from: Year Ended Eight Months Ended
June 30, 1997 June 30, 1996
<S> <C> <C>
Operations
Net investment income (loss) $ 1,702 $ 355
- -------------------------------------------------------------------- ----------------------------------
Net realized gain (loss) 13,315 1,115
- -------------------------------------------------------------------- ----------------------------------
Net change in unrealized appreciation (depreciation) 19,593 1,082
- -------------------------------------------------------------------- ----------------------------------
Net increase (decrease) resulting from operations 34,610 2,552
==================================================================== ==================================
Net equalization credits (debits) 0 42
==================================================================== ==================================
Distributions to Shareholders
From net investment income
Institutional Class (1,517) (355)
- -------------------------------------------------------------------- ----------------------------------
Administrative Class 0 0
- -------------------------------------------------------------------- ----------------------------------
Retail Classes (451) 0
- -------------------------------------------------------------------- ----------------------------------
In excess of net investment income
Institutional Class 0 0
- -------------------------------------------------------------------- ----------------------------------
Administrative Class 0 0
- -------------------------------------------------------------------- ----------------------------------
Retail Classes 0 0
- -------------------------------------------------------------------- ----------------------------------
From net realized capital gains
Institutional Class (2,344) (2,045)
- -------------------------------------------------------------------- ----------------------------------
Administrative Class 0 0
- -------------------------------------------------------------------- ----------------------------------
Retail Classes 0 0
- -------------------------------------------------------------------- ----------------------------------
Total Distributions (4,312) (2,400)
==================================================================== ==================================
Fund Share Transactions
Receipts for shares sold
Institutional Class 17,251 36,330
- -------------------------------------------------------------------- ----------------------------------
Administrative Class 0 0
- -------------------------------------------------------------------- ----------------------------------
Retail Classes 21,246 0
- -------------------------------------------------------------------- ----------------------------------
Shares issued in reorganization
Retail Classes 80,835 0
- -------------------------------------------------------------------- ----------------------------------
Issued as reinvestment of distributions
Institutional Class 3,854 2,397
- -------------------------------------------------------------------- ----------------------------------
Administrative Class 0 0
- -------------------------------------------------------------------- ----------------------------------
Retail Classes 406 0
- -------------------------------------------------------------------- ----------------------------------
Cost of shares redeemed
Institutional Class (10,770) (637)
- -------------------------------------------------------------------- ----------------------------------
Administrative Class 0 0
- -------------------------------------------------------------------- ----------------------------------
Retail Classes (16,043) 0
- -------------------------------------------------------------------- ----------------------------------
Net increase (decrease) resulting from Fund share transactions 96,779 38,090
- -------------------------------------------------------------------- ----------------------------------
Total Increase (Decrease) in Net Assets 127,077 38,284
==================================================================== ==================================
Net Assets
Beginning of period 52,727 14,443
- -------------------------------------------------------------------- ----------------------------------
End of period * $ 179,804 $ 52,727
- -------------------------------------------------------------------- ----------------------------------
*Including net undistributed (overdistributed) investment income of: $ 6,824 $ 348
- -------------------------------------------------------------------- ----------------------------------
</TABLE>
22 / PIMCO Funds See accompanying notes
<PAGE>
<TABLE>
<CAPTION>
$ in thousands Small Cap Value Fund Enhanced Equity Fund
---------------------------------- ---------------------------------
Increase (Decrease) in Net Assets from: Year Ended Eight Months Ended Year Ended Eight Months Ended
June 30, 1997 June 30, 1996 June 30, 1997 June 30, 1996
<S> <C> <C> <C> <C>
Operations
Net investment income (loss) $ 742 $ 544 $ 850 $ 958
- --------------------------------------------------------- ---------------------------------- ---------------------------------
Net realized gain (loss) 5,616 3,943 21,124 11,972
- --------------------------------------------------------- ---------------------------------- ---------------------------------
Net change in unrealized appreciation (depreciation) 6,732 1,415 (4,893) (909)
- --------------------------------------------------------- ---------------------------------- ---------------------------------
Net increase (decrease) resulting from operations 13,090 5,902 17,081 12,021
========================================================= ================================== =================================
Net equalization credits (debits) 0 (26) 0 10
========================================================= ================================== =================================
Distributions to Shareholders
From net investment income
Institutional Class (302) (483) (613) (958)
- --------------------------------------------------------- ---------------------------------- ---------------------------------
Administrative Class (41) (62) 0 0
- --------------------------------------------------------- ---------------------------------- ---------------------------------
Retail Classes 0 0 0 0
- --------------------------------------------------------- ---------------------------------- ---------------------------------
In excess of net investment income
Institutional Class 0 (5) 0 0
- --------------------------------------------------------- ---------------------------------- ---------------------------------
Administrative Class 0 (1) 0 0
- --------------------------------------------------------- ---------------------------------- ---------------------------------
Retail Classes 0 0 0 0
- --------------------------------------------------------- ---------------------------------- ---------------------------------
From net realized capital gains
Institutional Class (4,690) (2,049) (16,690) (2,327)
- --------------------------------------------------------- ---------------------------------- ---------------------------------
Administrative Class (700) (293) 0 0
- --------------------------------------------------------- ---------------------------------- ---------------------------------
Retail Classes 0 0 0 0
- --------------------------------------------------------- ---------------------------------- ---------------------------------
Total Distributions (5,733) (2,893) (17,303) (3,285)
========================================================= ================================== =================================
Fund Share Transactions
Receipts for shares sold
Institutional Class 5,653 2,712 11,801 44,945
- --------------------------------------------------------- ---------------------------------- ---------------------------------
Administrative Class 1,269 5,755 0 0
- --------------------------------------------------------- ---------------------------------- ---------------------------------
Retail Classes 36,469 0 0 0
- --------------------------------------------------------- ---------------------------------- ---------------------------------
Shares issued in reorganization
Retail Classes 0 0 0 0
- --------------------------------------------------------- ---------------------------------- ---------------------------------
Issued as reinvestment of distributions
Institutional Class 4,969 2,501 17,302 3,136
- --------------------------------------------------------- ---------------------------------- ---------------------------------
Administrative Class 741 355 0 0
- --------------------------------------------------------- ---------------------------------- ---------------------------------
Retail Classes 0 0 0 0
- --------------------------------------------------------- ---------------------------------- ---------------------------------
Cost of shares redeemed
Institutional Class (8,698) (13,943) (67,468) (47,401)
- --------------------------------------------------------- ---------------------------------- ---------------------------------
Administrative Class (1,177) (2,006) 0 0
- --------------------------------------------------------- ---------------------------------- ---------------------------------
Retail Classes (1,201) 0 0 0
- --------------------------------------------------------- ---------------------------------- ---------------------------------
Net increase (decrease) resulting from Fund share
transactions 38,025 (4,626) (38,365) 680
- --------------------------------------------------------- ---------------------------------- ---------------------------------
Total Increase (Decrease) in Net Assets 45,382 (1,643) (38,587) 9,426
========================================================= ================================== =================================
Net Assets
Beginning of period 33,450 35,093 83,425 73,999
- --------------------------------------------------------- ---------------------------------- ---------------------------------
End of period * $ 78,832 $ 33,450 $ 44,838 $ 83,425
- --------------------------------------------------------- ---------------------------------- ---------------------------------
*Including net undistributed (overdistributed) investment
income of: $ 1,920 $ 837 $ 3,436 $ 954
- --------------------------------------------------------- ---------------------------------- ---------------------------------
<CAPTION>
Balanced Fund
----------------------------------
Increase (Decrease) in Net Assets from: Year Ended Eight Months Ended
June 30, 1997 June 30, 1996
<S> <C> <C>
Operations
Net investment income (loss) $ 2,252 $ 1,802
- --------------------------------------------------------- ----------------------------------
Net realized gain (loss) 12,663 1,778
- --------------------------------------------------------- ----------------------------------
Net change in unrealized appreciation (depreciation) (3,065) 3,088
- --------------------------------------------------------- ----------------------------------
Net increase (decrease) resulting from operations 11,850 6,668
- --------------------------------------------------------- ----------------------------------
Net equalization credits (debits) 0 0
- --------------------------------------------------------- ----------------------------------
Distributions to Shareholders
From net investment income
Institutional Class (2,191) (1,802)
- --------------------------------------------------------- ----------------------------------
Administrative Class 0 0
- --------------------------------------------------------- ----------------------------------
Retail Classes (22) 0
- --------------------------------------------------------- ----------------------------------
In excess of net investment income
Institutional Class 0 0
- --------------------------------------------------------- ----------------------------------
Administrative Class 0 0
- --------------------------------------------------------- ----------------------------------
Retail Classes 0 0
- --------------------------------------------------------- ----------------------------------
From net realized capital gains
Institutional Class (10,060) (6,227)
- --------------------------------------------------------- ----------------------------------
Administrative Class 0 0
- --------------------------------------------------------- ----------------------------------
Retail Classes 0 0
- --------------------------------------------------------- ----------------------------------
Total Distributions (12,273) (8,029)
========================================================= ==================================
Fund Share Transactions
Receipts for shares sold
Institutional Class 10,422 9,459
- --------------------------------------------------------- ----------------------------------
Administrative Class 0 0
- --------------------------------------------------------- ----------------------------------
Retail Classes 2,436 0
- --------------------------------------------------------- ----------------------------------
Shares issued in reorganization
Retail Classes 0 0
- --------------------------------------------------------- ----------------------------------
Issued as reinvestment of distributions
Institutional Class 12,237 8,025
- --------------------------------------------------------- ----------------------------------
Administrative Class 0 0
- --------------------------------------------------------- ----------------------------------
Retail Classes 19 0
- --------------------------------------------------------- ----------------------------------
Cost of shares redeemed
Institutional Class (43,185) (6,199)
- --------------------------------------------------------- ----------------------------------
Administrative Class 0 0
- --------------------------------------------------------- ----------------------------------
Retail Classes (139) 0
- --------------------------------------------------------- ----------------------------------
Net increase (decrease) resulting from Fund share
transactions (18,210) 11,285
- --------------------------------------------------------- ----------------------------------
Total Increase (Decrease) in Net Assets (18,633) 9,924
========================================================= ==================================
Net Assets
Beginning of period 82,562 72,638
- --------------------------------------------------------- ----------------------------------
End of period * $ 63,929 $ 82,562
- --------------------------------------------------------- ----------------------------------
*Including net undistributed (overdistributed) investment
income of: $ 2,860 $ 0
- --------------------------------------------------------- ----------------------------------
</TABLE>
1997 Annual Report See accompanying notes / 23
<PAGE>
Financial Highlights - Institutional Classes
<TABLE>
<CAPTION>
Net Asset Net Realized/ Total
Value Net Unrealized Income from
Beginning Investment Gain (Loss) on Investment
Selected Per Share Data for the Year or Period Ended: of Period Income (Loss) Investments Operations
<S> <C> <C> <C> <C>
Emerging Markets Fund
Institutional Class
06/30/97 $ 12.66 $ 0.06 (a) $ 1.30 (a) $ 1.36
- ---------------------------------------------------------- ------------ ------------ ------------ ------------
11/01/95-06/30/96 11.27 0.03 1.40 1.43
- ---------------------------------------------------------- ------------ ------------ ------------ ------------
10/31/95 16.53 0.07 (4.55) (4.48)
- ---------------------------------------------------------- ------------ ------------ ------------ ------------
10/31/94 12.27 (0.01) 4.45 4.44
- ---------------------------------------------------------- ------------ ------------ ------------ ------------
06/01/93-10/31/93 10.00 0.03 2.52 2.55
- ---------------------------------------------------------- ------------ ------------ ------------ ------------
Administrative Class
06/30/97 12.63 0.00 (a) 1.32 (a) 1.32
- ---------------------------------------------------------- ------------ ------------ ------------ ------------
11/01/95-06/30/96 11.24 0.02 (a) 1.40 (a) 1.42
- ---------------------------------------------------------- ------------ ------------ ------------ ------------
10/31/95 16.95 0.00 (4.95) (4.95)
- ---------------------------------------------------------- ------------ ------------ ------------ ------------
International Developed Fund
Institutional Class
06/30/97 $ 12.54 $ 0.10 (a) $ 1.09 (a) $ 1.19
- ---------------------------------------------------------- ------------ ------------ ------------ ------------
11/01/95-06/30/96 11.74 0.72 0.72 1.44
- ---------------------------------------------------------- ------------ ------------ ------------ ------------
10/31/95 11.86 0.10 0.30 0.40
- ---------------------------------------------------------- ------------ ------------ ------------ ------------
10/31/94 10.69 0.09 1.15 1.24
- ---------------------------------------------------------- ------------ ------------ ------------ ------------
06/08/93-10/31/93 10.00 0.05 0.69 0.74
- ---------------------------------------------------------- ------------ ------------ ------------ ------------
Administrative Class
06/30/97 12.51 0.06 (a) 1.09 (a) 1.15
- ---------------------------------------------------------- ------------ ------------ ------------ ------------
11/01/95-06/30/96 11.73 0.69 (a) 0.72 (a) 1.41
- ---------------------------------------------------------- ------------ ------------ ------------ ------------
11/30/94-10/31/95 11.21 0.02 1.01 1.03
- ---------------------------------------------------------- ------------ ------------ ------------ ------------
Capital Appreciation Fund
Institutional Class
06/30/97 $ 18.10 $ 0.24 $ 5.08 $ 5.32
- ---------------------------------------------------------- ------------ ------------ ------------ ------------
11/01/95-06/30/96 16.94 0.35 1.99 2.34
- ---------------------------------------------------------- ------------ ------------ ------------ ------------
10/31/95 13.34 0.18 3.60 3.78
- ---------------------------------------------------------- ------------ ------------ ------------ ------------
10/31/94 13.50 0.14 (0.12) 0.02
- ---------------------------------------------------------- ------------ ------------ ------------ ------------
10/31/93 11.27 0.11 2.73 2.84
- ---------------------------------------------------------- ------------ ------------ ------------ ------------
10/31/92 11.02 0.14 1.05 1.19
- ---------------------------------------------------------- ------------ ------------ ------------ ------------
03/08/91-10/31/91 10.00 0.09 1.02 1.11
- ---------------------------------------------------------- ------------ ------------ ------------ ------------
Administrative Class
07/31/96-06/30/97 17.19 0.16 6.03 6.19
- ---------------------------------------------------------- ------------ ------------ ------------ ------------
Mid Cap Growth Fund
Institutional Class
06/30/97 $ 19.44 $ (0.07) $ 5.25 $ 5.18
- ---------------------------------------------------------- ------------ ------------ ------------ ------------
11/01/95-06/30/96 18.16 0.32 1.53 1.85
- ---------------------------------------------------------- ------------ ------------ ------------ ------------
10/31/95 13.97 0.07 4.19 4.26
- ---------------------------------------------------------- ------------ ------------ ------------ ------------
10/31/94 13.97 0.06 0.01 0.07
- ---------------------------------------------------------- ------------ ------------ ------------ ------------
10/31/93 11.29 0.07 2.70 2.77
- ---------------------------------------------------------- ------------ ------------ ------------ ------------
10/31/92 10.28 0.10 1.03 1.13
- ---------------------------------------------------------- ------------ ------------ ------------ ------------
08/26/91-10/31/91 10.00 0.02 0.27 0.29
- ---------------------------------------------------------- ------------ ------------ ------------ ------------
Administrative Class
06/30/97 19.44 (0.13) 5.25 5.12
- ---------------------------------------------------------- ------------ ------------ ------------ ------------
11/01/95-06/30/96 18.17 0.28 1.53 1.81
- ---------------------------------------------------------- ------------ ------------ ------------ ------------
11/30/94-10/31/95 13.31 0.03 4.85 4.88
- ---------------------------------------------------------- ------------ ------------ ------------ ------------
<CAPTION>
Dividends Dividends in Distributions
from Net Excess of Net from Net
Investment Investment Realized
Selected Per Share Data for the Year or Period Ended: Income Income Capital Gains
<S> <C> <C> <C>
Emerging Markets Fund
Institutional Class
06/30/97 $ (0.06) $ 0.00 $ 0.00
- ---------------------------------------------------------- ------------ ------------ ------------
11/01/95-06/30/96 (0.04) 0.00 0.00
- ---------------------------------------------------------- ------------ ------------ ------------
10/31/95 (0.06) 0.00 (0.72)
- ---------------------------------------------------------- ------------ ------------ ------------
10/31/94 0.00 0.00 (0.18)
- ---------------------------------------------------------- ------------ ------------ ------------
06/01/93-10/31/93 (0.02) 0.00 (0.26)
- ---------------------------------------------------------- ------------ ------------ ------------
Administrative Class
06/30/97 0.00 0.00 0.00
- ---------------------------------------------------------- ------------ ------------ ------------
11/01/95-06/30/96 (0.03) 0.00 0.00
- ---------------------------------------------------------- ------------ ------------ ------------
10/31/95 (0.05) 0.00 (0.71)
- ---------------------------------------------------------- ------------ ------------ ------------
International Developed Fund
Institutional Class
06/30/97 $ 0.00 $ 0.00 $ (0.61)
- ---------------------------------------------------------- ------------ ------------ ------------
11/01/95-06/30/96 (0.07) (0.36) (0.21)
- ---------------------------------------------------------- ------------ ------------ ------------
10/31/95 (0.09) 0.00 (0.43)
- ---------------------------------------------------------- ------------ ------------ ------------
10/31/94 (0.03) 0.00 (0.04)
- ---------------------------------------------------------- ------------ ------------ ------------
06/08/93-10/31/93 (0.04) 0.00 (0.01)
- ---------------------------------------------------------- ------------ ------------ ------------
Administrative Class
06/30/97 0.00 0.00 (0.61)
- ---------------------------------------------------------- ------------ ------------ ------------
11/01/95-06/30/96 (0.07) (0.35) (0.21)
- ---------------------------------------------------------- ------------ ------------ ------------
11/30/94-10/31/95 (0.08) 0.00 (0.43)
- ---------------------------------------------------------- ------------ ------------ ------------
Capital Appreciation Fund
Institutional Class
06/30/97 (0.10) $ 0.00 $ (2.13)
- ---------------------------------------------------------- ------------ ------------ ------------
11/01/95-06/30/96 (0.15) 0.00 (1.03)
- ---------------------------------------------------------- ------------ ------------ ------------
10/31/95 (0.18) 0.00 0.00
- ---------------------------------------------------------- ------------ ------------ ------------
10/31/94 (0.14) 0.00 (0.04)
- ---------------------------------------------------------- ------------ ------------ ------------
10/31/93 (0.11) 0.00 (0.50)
- ---------------------------------------------------------- ------------ ------------ ------------
10/31/92 (0.14) 0.00 (0.72)
- ---------------------------------------------------------- ------------ ------------ ------------
03/08/91-10/31/91 (0.09) 0.00 0.00
- ---------------------------------------------------------- ------------ ------------ ------------
Administrative Class
07/31/96-06/30/97 (0.09) 0.00 (2.13)
- ---------------------------------------------------------- ------------ ------------ ------------
Mid Cap Growth Fund
Institutional Class
06/30/97 $ (0.05) $ 0.00 $ (4.29)
- ---------------------------------------------------------- ------------ ------------ ------------
11/01/95-06/30/96 (0.14) 0.00 (0.43)
- ---------------------------------------------------------- ------------ ------------ ------------
10/31/95 (0.07) 0.00 0.00
- ---------------------------------------------------------- ------------ ------------ ------------
10/31/94 (0.06) 0.00 (0.01)
- ---------------------------------------------------------- ------------ ------------ ------------
10/31/93 (0.07) 0.00 (0.02)
- ---------------------------------------------------------- ------------ ------------ ------------
10/31/92 (0.10) 0.00 0.00
- ---------------------------------------------------------- ------------ ------------ ------------
08/26/91-10/31/91 (0.01) 0.00 0.00
- ---------------------------------------------------------- ------------ ------------ ------------
Administrative Class
06/30/97 (0.03) 0.00 (4.29)
- ---------------------------------------------------------- ------------ ------------ ------------
11/01/95-06/30/96 (0.11) 0.00 (0.43)
- ---------------------------------------------------------- ------------ ------------ ------------
11/30/94-10/31/95 (0.02) 0.00 0.00
- ---------------------------------------------------------- ------------ ------------ ------------
</TABLE>
*Annualized
(a) Per share amounts based on average number of shares outstanding during the
period.
24 / PIMCO Funds See accompanying notes
<PAGE>
<TABLE>
<CAPTION>
Distributions
in Excess of Distributions Tax Basis Net Asset
Net Realized from Return of Total Value End
Capital Gains Equalization Capital Distributions of Period Total Return
------------- ------------ ---------- ------------- --------- ------------
<S> <C> <C> <C> <C> <C> <C>
Emerging Markets Fund
Institutional Class
06/30/97 $ 0.00 $ 0.00 $ 0.00 $ (0.06) $ 13.96 10.85%
- ------------------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
11/01/95-06/30/96 0.00 0.00 0.00 (0.04) 12.66 12.70
- ------------------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
10/31/95 0.00 0.00 0.00 (0.78) 11.27 (27.70)
- ------------------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
10/31/94 0.00 0.00 0.00 (0.18) 16.53 36.31
- ------------------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
06/01/93-10/31/93 0.00 0.00 0.00 (0.28) 12.27 25.55
- ------------------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
Administrative Class
06/30/97 0.00 0.00 0.00 0.00 13.95 10.45
- ------------------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
11/01/95-06/30/96 0.00 0.00 0.00 (0.03) 12.63 12.70
- ------------------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
10/31/95 0.00 0.00 0.00 (0.76) 11.24 (27.96)
- ------------------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
International Developed Fund
Institutional Class
06/30/97 $ 0.00 $ 0.00 $ 0.00 $ (0.61) $ 13.12 10.07%
- ------------------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
11/01/95-06/30/96 0.00 0.00 0.00 (0.64) 12.54 12.54
- ------------------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
10/31/95 0.00 0.00 0.00 (0.52) 11.74 3.83
- ------------------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
10/31/94 0.00 0.00 0.00 (0.07) 11.86 11.68
- ------------------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
06/08/93-10/31/93 0.00 0.00 0.00 (0.05) 10.69 7.39
- ------------------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
Administrative Class
06/30/97 0.00 0.00 0.00 (0.61) 13.05 9.77
- ------------------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
11/01/95-06/30/96 0.00 0.00 0.00 (0.63) 12.51 12.33
- ------------------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
11/30/94-10/31/95 0.00 0.00 0.00 (0.51) 11.73 9.61
- ------------------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
Capital Appreciation Fund
Institutional Class
06/30/97 $ 0.00 $ 0.00 $ 0.00 $ (2.23) $ 21.19 31.52%
- ------------------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
11/01/95-06/30/96 0.00 0.00 0.00 (1.18) 18.10 14.65
- ------------------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
10/31/95 0.00 0.00 0.00 (0.18) 16.94 28.47
- ------------------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
10/31/94 0.00 0.00 0.00 (0.18) 13.34 0.15
- ------------------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
10/31/93 0.00 0.00 0.00 (0.61) 13.50 25.30
- ------------------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
10/31/92 0.00 (0.08) 0.00 (0.94) 11.27 10.75
- ------------------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
03/08/91-10/31/91 0.00 0.00 0.00 (0.09) 11.02 11.19
- ------------------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
Administrative Class
07/31/96-06/30/97 0.00 0.00 0.00 (2.22) 21.16 38.26
- ------------------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
Mid Cap Growth Fund
Institutional Class
06/30/97 $ 0.00 $ 0.00 $ 0.00 (4.34) $ 20.28 30.58%
- ------------------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
11/01/95-06/30/96 0.00 0.00 0.00 (0.57) 19.44 10.37
- ------------------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
10/31/95 0.00 0.00 0.00 (0.07) 18.16 30.54
- ------------------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
10/31/94 0.00 0.00 0.00 (0.07) 13.97 0.58
- ------------------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
10/31/93 0.00 0.00 0.00 (0.09) 13.97 24.57
- ------------------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
10/31/92 0.00 (0.02) 0.00 (0.12) 11.29 10.91
- ------------------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
08/26/91-10/31/91 0.00 0.00 0.00 (0.01) 10.28 2.98
- ------------------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
Administrative Class
06/30/97 0.00 0.00 0.00 (4.32) 20.24 30.23
- ------------------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
11/01/95-06/30/96 0.00 0.00 0.00 (0.54) 19.44 10.17
- ------------------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
11/30/94-10/31/95 0.00 0.00 0.00 (0.02) 18.17 36.64
- ------------------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
<CAPTION>
Ratio of Net
Ratio of Investment
Net Assets Expenses to Income to Average
End of Average Net Average Net Portfolio Commission
Period (000s) Assets Assets Turnover Rate Rate
------------- ----------- ----------- -------------- ------------
<S> <C> <C> <C> <C> <C>
Emerging Markets Fund
Institutional Class
06/30/97 $ 52,703 1.45% 0.45% 74% $ 0.00
- ------------------------------------------- ----------- ----------- ----------- ----------- -----------
11/01/95-06/30/96 80,545 1.35* 0.84* 74 0.01
- ------------------------------------------- ----------- ----------- ----------- ----------- -----------
10/31/95 73,539 1.35 0.57 118 0.03
- ------------------------------------------- ----------- ----------- ----------- ----------- -----------
10/31/94 79,620 1.35 (0.06) 79
- ------------------------------------------- ----------- ----------- ----------- -----------
06/01/93-10/31/93 14,625 1.34* 0.64* 37
- ------------------------------------------- ----------- ----------- ----------- -----------
Administrative Class
06/30/97 117 1.69 0.02 74 0.00
- ------------------------------------------- ----------- ----------- ----------- ----------- -----------
11/01/95-06/30/96 368 1.61* 0.18* 74 0.01
- ------------------------------------------- ----------- ----------- ----------- ----------- -----------
10/31/95 830 1.62 0.02 118 N/A
- ------------------------------------------- ----------- ----------- ----------- ----------- -----------
International Developed Fund
Institutional Class
06/30/97 $ 94,044 1.13% 0.85% 77% $ 0.03
- ------------------------------------------- ----------- ----------- ----------- ----------- -----------
11/01/95-06/30/96 70,207 1.10* 0.81* 60 0.02
- ------------------------------------------- ----------- ----------- ----------- ----------- -----------
10/31/95 63,607 1.10 1.10 63 0.03
- ------------------------------------------- ----------- ----------- ----------- ----------- -----------
10/31/94 22,569 1.10 1.12 89
- ------------------------------------------- ----------- ----------- ----------- -----------
06/08/93-10/31/93 8,299 1.10* 0.91* 20
- ------------------------------------------- ----------- ----------- ----------- -----------
Administrative Class
06/30/97 2,302 1.38 0.52 77 0.03
- ------------------------------------------- ----------- ----------- ----------- ----------- -----------
11/01/95-06/30/96 5,624 1.35* 1.04* 60 0.02
- ------------------------------------------- ----------- ----------- ----------- ----------- -----------
11/30/94-10/31/95 675 1.34* 0.50* 58 N/A
- ------------------------------------------- ----------- ----------- ----------- ----------- -----------
Capital Appreciation Fund
Institutional Class
06/30/97 $ 536,187 0.71% 1.02% 87% $ 0.06
- ------------------------------------------- ----------- ----------- ----------- ----------- -----------
11/01/95-06/30/96 348,728 0.70* 1.33* 73 0.04
- ------------------------------------------- ----------- ----------- ----------- ----------- -----------
10/31/95 236,220 0.70 1.22 83 0.05
- ------------------------------------------- ----------- ----------- ----------- ----------- -----------
10/31/94 165,441 0.70 1.17 77
- ------------------------------------------- ----------- ----------- ----------- -----------
10/31/93 84,990 0.70 0.94 81
- ------------------------------------------- ----------- ----------- ----------- -----------
10/31/92 36,334 0.70 1.13 134
- ------------------------------------------- ----------- ----------- ----------- -----------
03/08/91-10/31/91 18,813 0.75* 1.55* 41
- ------------------------------------------- ----------- ----------- ----------- -----------
Administrative Class
07/31/96-06/30/97 3,115 0.96* 0.66* 87 0.06
- ------------------------------------------- ----------- ----------- ----------- ----------- -----------
Mid Cap Growth Fund
Institutional Class
06/30/97 $ 291,374 0.71% 0.53% 82% $ 0.06
- ------------------------------------------- ----------- ----------- ----------- ----------- -----------
11/01/95-06/30/96 231,011 0.70* 1.11* 79 0.04
- ------------------------------------------- ----------- ----------- ----------- ----------- -----------
10/31/95 189,320 0.70 0.43 78 0.04
- ------------------------------------------- ----------- ----------- ----------- ----------- -----------
10/31/94 121,791 0.70 0.45 61
- ------------------------------------------- ----------- ----------- ----------- -----------
10/31/93 67,625 0.70 0.56 98
- ------------------------------------------- ----------- ----------- ----------- -----------
10/31/92 21,213 0.70 0.87 66
- ------------------------------------------- ----------- ----------- ----------- -----------
08/26/91-10/31/91 2,748 0.82* 0.92* 13
- ------------------------------------------- ----------- ----------- ----------- -----------
Administrative Class
06/30/97 2,066 0.96 0.28 82 0.06
- ------------------------------------------- ----------- ----------- ----------- ----------- -----------
11/01/95-06/30/96 1,071 0.95* 0.89* 79 0.04
- ------------------------------------------- ----------- ----------- ----------- ----------- -----------
11/30/94-10/31/95 892 0.94* 0.23* 72 N/A
- ------------------------------------------- ----------- ----------- ----------- ----------- -----------
</TABLE>
1997 Annual Report See accompanying notes / 25
<PAGE>
Financial Highlights - Institutional Classes (Cont.)
<TABLE>
<CAPTION>
Net Asset Net Realized/ Total
Value Net Unrealized Income from
Beginning Investment Gain (Loss) on Investment
Selected Per Share Data for the Year or Period Ended: of Period Income(Loss) Investments Operations
--------- ------------ -------------- -----------
<S> <C> <C> <C> <C>
Micro Cap Growth Fund
Institutional Class
06/30/97 $ 18.47 $ 0.00 $ 3.41 $ 3.41
- ----------------------------------------------------- --------- --------- --------- --------
11/01/95-06/30/96 15.38 0.00 3.43 3.43
- ----------------------------------------------------- --------- --------- --------- --------
10/31/95 11.87 (0.04) 3.55 3.51
- ----------------------------------------------------- --------- --------- --------- --------
10/31/94 11.06 (0.03) 0.84 0.81
- ----------------------------------------------------- --------- --------- --------- --------
06/25/93-10/31/93 10.00 0.00 1.07 1.07
- ----------------------------------------------------- --------- --------- --------- --------
Administrative Class
06/30/97 18.46 (0.06) 3.41 3.35
- ----------------------------------------------------- --------- --------- --------- --------
04/01/96-06/30/96 16.73 0.03 1.70 1.73
- ----------------------------------------------------- --------- --------- --------- --------
Small Cap Growth Fund
Institutional Class
06/30/97 $ 20.83 $ (0.01) (a) $ 3.17 (a) $ 3.16
- ----------------------------------------------------- --------- --------- --------- --------
11/01/95-06/30/96 21.02 2.02 (0.61) 1.41
- ----------------------------------------------------- --------- --------- --------- --------
10/31/95 19.38 (0.05) 3.12 3.07
- ----------------------------------------------------- --------- --------- --------- --------
10/31/94 19.15 (0.02) 0.89 0.87
- ----------------------------------------------------- --------- --------- --------- --------
10/31/93 15.80 (0.06) 6.19 6.13
- ----------------------------------------------------- --------- --------- --------- --------
10/31/92 14.87 0.01 1.50 1.51
- ----------------------------------------------------- --------- --------- --------- --------
01/07/91-10/31/91 10.00 0.02 5.03 5.05
- ----------------------------------------------------- --------- --------- --------- --------
Administrative Class
06/30/97 20.82 (0.06) (a) 3.24 (a) 3.18
- ----------------------------------------------------- --------- --------- --------- --------
11/01/95-06/30/96 21.01 2.02 (a) (0.61) (a) 1.41
- ----------------------------------------------------- --------- --------- --------- --------
09/27/95-10/31/95 21.90 (0.02) (0.87) (0.89)
- ----------------------------------------------------- --------- --------- --------- --------
Core Equity Fund
Institutional Class
06/30/97 $ 13.55 $ 0.03 (a) $ 2.78 (a) $ 2.81
- ----------------------------------------------------- --------- --------- --------- --------
11/01/95-06/30/96 12.72 0.51 0.65 1.16
- ----------------------------------------------------- --------- --------- --------- --------
12/28/94-10/31/95 10.00 0.07 2.71 2.78
- ----------------------------------------------------- --------- --------- --------- --------
Administrative Class
06/30/97 13.56 0.00 (a) 2.77 (a) 2.77
- ----------------------------------------------------- --------- --------- --------- --------
11/01/95-06/30/96 12.73 0.49 0.65 1.14
- ----------------------------------------------------- --------- --------- --------- --------
05/31/95-10/31/95 11.45 0.02 1.28 1.30
- ----------------------------------------------------- --------- --------- --------- --------
Mid Cap Equity Fund
Institutional Class
06/30/97 $ 14.66 $ (0.06) (a) $ 1.31 (a) $ 1.25
- ----------------------------------------------------- --------- --------- --------- --------
11/01/95-06/30/96 12.92 0.49 1.62 2.11
- ----------------------------------------------------- --------- --------- --------- --------
12/28/94-10/31/95 10.00 0.02 2.92 2.94
- ----------------------------------------------------- --------- --------- --------- --------
Equity Income Fund
Institutional Class
06/30/97 $ 14.36 $ 0.40 $ 3.17 $ 3.57
- ----------------------------------------------------- --------- --------- --------- --------
11/01/95-06/30/96 13.09 0.78 1.31 2.09
- ----------------------------------------------------- --------- --------- --------- --------
10/31/95 11.75 0.46 1.67 2.13
- ----------------------------------------------------- --------- --------- --------- --------
10/31/94 11.95 0.42 (0.16) 0.26
- ----------------------------------------------------- --------- --------- --------- --------
10/31/93 10.92 0.40 1.40 1.80
- ----------------------------------------------------- --------- --------- --------- --------
10/31/92 10.77 0.45 0.93 1.38
- ----------------------------------------------------- --------- --------- --------- --------
03/08/91-10/31/91 10.00 0.24 0.92 1.16
- ----------------------------------------------------- --------- --------- --------- --------
Administrative Class
06/30/97 14.35 0.27 3.26 3.53
- ----------------------------------------------------- --------- --------- --------- --------
11/01/95-06/30/96 13.13 0.75 1.31 2.06
- ----------------------------------------------------- --------- --------- --------- --------
11/30/94-10/31/95 11.12 0.39 2.35 2.74
- ----------------------------------------------------- --------- --------- --------- --------
<CAPTION>
Dividends Dividends in Distributions
from Net Excess of Net from Net
Investment Investment Realized
Selected Per Share Data for the Year or Period Ended: Income Income Capital Gains
---------- ------------- --------------
<S> <C> <C> <C>
Micro Cap Growth Fund
Institutional Class
06/30/97 $ 0.00 $ 0.00 $ (2.03)
- ----------------------------------------------------- --------- --------- ---------
11/01/95-06/30/96 0.00 0.00 (0.34)
- ----------------------------------------------------- --------- --------- ---------
10/31/95 0.00 0.00 0.00
- ----------------------------------------------------- --------- --------- ---------
10/31/94 0.00 0.00 0.00
- ----------------------------------------------------- --------- --------- ---------
06/25/93-10/31/93 0.00 0.00 0.00
- ----------------------------------------------------- --------- --------- ---------
Administrative Class
06/30/97 0.00 0.00 (2.03)
- ----------------------------------------------------- --------- --------- ---------
04/01/96-06/30/96 0.00 0.00 0.00
- ----------------------------------------------------- --------- --------- ---------
Small Cap Growth Fund
Institutional Class
06/30/97 $ 0.00 $ 0.00 $ (10.59)
- ----------------------------------------------------- --------- --------- ---------
11/01/95-06/30/96 0.00 0.00 (1.60)
- ----------------------------------------------------- --------- --------- ---------
10/31/95 0.00 0.00 (1.43)
- ----------------------------------------------------- --------- --------- ---------
10/31/94 0.00 0.00 (0.64)
- ----------------------------------------------------- --------- --------- ---------
10/31/93 0.00 0.00 (2.78)
- ----------------------------------------------------- --------- --------- ---------
10/31/92 (0.01) 0.00 (0.57)
- ----------------------------------------------------- --------- --------- ---------
01/07/91-10/31/91 (0.02) 0.00 (0.16)
- ----------------------------------------------------- --------- --------- ---------
Administrative Class
06/30/97 0.00 0.00 (10.59)
- ----------------------------------------------------- --------- --------- ---------
11/01/95-06/30/96 0.00 0.00 (1.60)
- ----------------------------------------------------- --------- --------- ---------
09/27/95-10/31/95 0.00 0.00 0.00
- ----------------------------------------------------- --------- --------- ---------
Core Equity Fund
Institutional Class
06/30/97 $ (0.02) $ 0.00 $ (0.79)
- ----------------------------------------------------- --------- --------- ---------
11/01/95-06/30/96 (0.04) (0.01) (0.28)
- ----------------------------------------------------- --------- --------- ---------
12/28/94-10/31/95 (0.06) 0.00 0.00
- ----------------------------------------------------- --------- --------- ---------
Administrative Class
06/30/97 (0.01) 0.00 (0.79)
- ----------------------------------------------------- --------- --------- ---------
11/01/95-06/30/96 (0.02) (0.01) (0.28)
- ----------------------------------------------------- --------- --------- ---------
05/31/95-10/31/95 (0.02) 0.00 0.00
- ----------------------------------------------------- --------- --------- ---------
Mid Cap Equity Fund
Institutional Class
06/30/97 $ 0.00 $ 0.00 $ (1.87)
- ----------------------------------------------------- --------- --------- ---------
11/01/95-06/30/96 0.00 0.00 (0.37)
- ----------------------------------------------------- --------- --------- ---------
12/28/94-10/31/95 (0.02) 0.00 0.00
- ----------------------------------------------------- --------- --------- ---------
Equity Income Fund
Institutional Class
06/30/97 $ (0.55) $ 0.00 $ (1.97)
- ----------------------------------------------------- --------- --------- ---------
11/01/95-06/30/96 (0.34) 0.00 (0.48)
- ----------------------------------------------------- --------- --------- ---------
10/31/95 (0.46) 0.00 (0.33)
- ----------------------------------------------------- --------- --------- ---------
10/31/94 (0.42) 0.00 (0.04)
- ----------------------------------------------------- --------- --------- ---------
10/31/93 (0.40) 0.00 (0.37)
- ----------------------------------------------------- --------- --------- ---------
10/31/92 (0.43) 0.00 (0.57)
- ----------------------------------------------------- --------- --------- ---------
03/08/91-10/31/91 (0.24) 0.00 (0.15)
- ----------------------------------------------------- --------- --------- ---------
Administrative Class
06/30/97 (0.51) 0.00 (1.97)
- ----------------------------------------------------- --------- --------- ---------
11/01/95-06/30/96 (0.36) 0.00 (0.48)
- ----------------------------------------------------- --------- --------- ---------
11/30/94-10/31/95 (0.40) 0.00 (0.33)
- ----------------------------------------------------- --------- --------- ---------
</TABLE>
*Annualized
(a) Per share amounts based on average number of shares outstanding during the
period.
26 / PIMCO Funds See accompanying notes
<PAGE>
<TABLE>
<CAPTION>
Distributions
in Excess of Distributions Tax Basis Net Asset
Net Realized from Return of Total Value End
Selected Per Share Data for the Year or Period Ended: Capital Gains Equalization Capital Distribution of Period
------------- ------------ --------- ------------ ---------
<S> <C> <C> <C> <C> <C>
Micro Cap Growth Fund
Institutional Class
06/30/97 $ 0.00 $ 0.00 $ 0.00 $ (2.03) $ 19.85
- ----------------------------------------------------- ------------- ------------ --------- --------- ---------
11/01/95-06/30/96 0.00 0.00 0.00 (0.34) 18.47
- ----------------------------------------------------- ------------- ------------ --------- --------- ---------
10/31/95 0.00 0.00 0.00 0.00 15.38
- ----------------------------------------------------- ------------- ------------ --------- --------- ---------
10/31/94 0.00 0.00 0.00 0.00 11.87
- ----------------------------------------------------- ------------- ------------ --------- --------- ---------
06/25/93-10/31/93 0.00 0.00 (0.01) (0.01) 11.06
- ----------------------------------------------------- ------------- ------------ --------- --------- ---------
Administrative Class
06/30/97 0.00 0.00 0.00 (2.03) 19.78
- ----------------------------------------------------- ------------- ------------ --------- --------- ---------
04/01/96-06/30/96 0.00 0.00 0.00 0.00 18.46
- ----------------------------------------------------- ------------- ------------ --------- --------- ---------
Small Cap Growth Fund
Institutional Class
06/30/97 $ 0.00 $ 0.00 $ 0.00 $ (10.59) $ 13.40
- ----------------------------------------------------- ------------- ------------ --------- --------- ---------
11/01/95-06/30/96 0.00 0.00 0.00 (1.60) 20.83
- ----------------------------------------------------- ------------- ------------ --------- --------- ---------
10/31/95 0.00 0.00 0.00 (1.43) 21.02
- ----------------------------------------------------- ------------- ------------ --------- --------- ---------
10/31/94 0.00 0.00 0.00 (0.64) 19.38
- ----------------------------------------------------- ------------- ------------ --------- --------- ---------
10/31/93 0.00 0.00 0.00 (2.78) 19.15
- ----------------------------------------------------- ------------- ------------ --------- --------- ---------
10/31/92 0.00 0.00 0.00 (0.58) 15.80
- ----------------------------------------------------- ------------- ------------ --------- --------- ---------
01/07/91-10/31/91 0.00 0.00 0.00 (0.18) 14.87
- ----------------------------------------------------- ------------- ------------ --------- --------- ---------
Administrative Class
06/30/97 0.00 0.00 0.00 (10.59) 13.41
- ----------------------------------------------------- ------------- ------------ --------- --------- ---------
11/01/95-06/30/96 0.00 0.00 0.00 (1.60) 20.82
- ----------------------------------------------------- ------------- ------------ --------- --------- ---------
09/27/95-10/31/95 0.00 0.00 0.00 0.00 21.01
- ----------------------------------------------------- ------------- ------------ --------- --------- ---------
Core Equity Fund
Institutional Class
06/30/97 $ 0.00 $ 0.00 $ 0.00 $ (0.81) $ 15.55
- ----------------------------------------------------- ------------- ------------ --------- --------- ---------
11/01/95-06/30/96 0.00 0.00 0.00 (0.33) 13.55
- ----------------------------------------------------- ------------- ------------ --------- --------- ---------
12/28/94-10/31/95 0.00 0.00 0.00 (0.06) 12.72
- ----------------------------------------------------- ------------- ------------ --------- --------- ---------
Administrative Class
06/30/97 0.00 0.00 0.00 (0.80) 15.53
- ----------------------------------------------------- ------------- ------------ --------- --------- ---------
11/01/95-06/30/96 0.00 0.00 0.00 (0.31) 13.56
- ----------------------------------------------------- ------------- ------------ --------- --------- ---------
05/31/95-10/31/95 0.00 0.00 0.00 (0.02) 12.73
- ----------------------------------------------------- ------------- ------------ --------- --------- ---------
Mid Cap Equity Fund
Institutional Class
06/30/97 $ 0.00 $ 0.00 $ 0.00 $ (1.87) $ 14.04
- ----------------------------------------------------- ------------- ------------ --------- --------- ---------
11/01/95-06/30/96 0.00 0.00 0.00 (0.37) 14.66
- ----------------------------------------------------- ------------- ------------ --------- --------- ---------
12/28/94-10/31/95 0.00 0.00 0.00 (0.02) 12.92
- ----------------------------------------------------- ------------- ------------ --------- --------- ---------
Equity Income Fund
Institutional Class
06/30/97 $ 0.00 $ 0.00 $ 0.00 $ (2.52) $ 15.41
- ----------------------------------------------------- ------------- ------------ --------- --------- ---------
11/01/95-06/30/96 0.00 0.00 0.00 (0.82) 14.36
- ----------------------------------------------------- ------------- ------------ --------- --------- ---------
10/31/95 0.00 0.00 0.00 (0.79) 13.09
- ----------------------------------------------------- ------------- ------------ --------- --------- ---------
10/31/94 0.00 0.00 0.00 (0.46) 11.75
- ----------------------------------------------------- ------------- ------------ --------- --------- ---------
10/31/93 0.00 0.00 0.00 (0.77) 11.95
- ----------------------------------------------------- ------------- ------------ --------- --------- ---------
10/31/92 0.00 (0.23) 0.00 (1.23) 10.92
- ----------------------------------------------------- ------------- ------------ --------- --------- ---------
03/08/91-10/31/91 0.00 0.00 0.00 (0.39) 10.77
- ----------------------------------------------------- ------------- ------------ --------- --------- ---------
Administrative Class
06/30/97 0.00 0.00 0.00 (2.48) 15.40
- ----------------------------------------------------- ------------- ------------ --------- --------- ---------
11/01/95-06/30/96 0.00 0.00 0.00 (0.84) 14.35
- ----------------------------------------------------- ------------- ------------ --------- --------- ---------
11/30/94-10/31/95 0.00 0.00 0.00 (0.73) 13.13
- ----------------------------------------------------- ------------- ------------ --------- --------- ---------
<CAPTION>
Ratio of Net
Ratio of Investment
Net Assets Expenses to Income to
End of Average Net Average Net
Selected Per Share Data for the Year or Period Ended: Total Return Period (000s) Assets Assets
------------ ------------- ----------- ------------
<S> <C> <C> <C> <C>
Micro Cap Growth Fund
Institutional Class
06/30/97 20.05% $ 164,139 1.52% (0.49)%
- ----------------------------------------------------- ------------ ------------- ----------- ------------
11/01/95-06/30/96 22.64 83,973 1.50* (0.45)*
- ----------------------------------------------------- ------------ ------------- ----------- ------------
10/31/95 29.54 69,775 1.50 (0.37)
- ----------------------------------------------------- ------------ ------------- ----------- ------------
10/31/94 7.31 32,605 1.50 (0.25)
- ----------------------------------------------------- ------------ ------------- ----------- ------------
06/25/93-10/31/93 10.81 10,827 1.50* (0.02)*
- ----------------------------------------------------- ------------ ------------- ----------- ------------
Administrative Class
06/30/97 19.72 2,116 1.77 (0.74)
- ----------------------------------------------------- ------------ ------------- ----------- ------------
04/01/96-06/30/96 10.34 566 1.73* (0.74)*
- ----------------------------------------------------- ------------ ------------- ----------- ------------
Small Cap Growth Fund
Institutional Class
06/30/97 22.82% $ 33,390 1.32% (0.05)%
- ----------------------------------------------------- ------------ ------------- ----------- ------------
11/01/95-06/30/96 7.22 32,954 1.25* (0.20)*
- ----------------------------------------------------- ------------ ------------- ----------- ------------
10/31/95 17.39 73,977 1.25 (0.27)
- ----------------------------------------------------- ------------ ------------- ----------- ------------
10/31/94 4.62 50,425 1.25 (0.33)
- ----------------------------------------------------- ------------ ------------- ----------- ------------
10/31/93 38.80 43,308 1.25 (0.35)
- ----------------------------------------------------- ------------ ------------- ----------- ------------
10/31/92 10.20 33,734 1.25 0.09
- ----------------------------------------------------- ------------ ------------- ----------- ------------
01/07/91-10/31/91 50.68 33,168 1.29* 0.11*
- ----------------------------------------------------- ------------ ------------- ----------- ------------
Administrative Class
06/30/97 23.12 1 1.54 (0.36)
- ----------------------------------------------------- ------------ ------------- ----------- ------------
11/01/95-06/30/96 7.18 112 1.50* (0.41)*
- ----------------------------------------------------- ------------ ------------- ----------- ------------
09/27/95-10/31/95 (5.34) 544 1.60* (0.82)*
- ----------------------------------------------------- ------------ ------------- ----------- ------------
Core Equity Fund
Institutional Class
06/30/97 21.59% $ 6,444 0.87% 0.23%
- ----------------------------------------------------- ------------ ------------- ----------- ------------
11/01/95-06/30/96 9.41 10,452 0.82* 0.53*
- ----------------------------------------------------- ------------ ------------- ----------- ------------
12/28/94-10/31/95 27.86 7,791 0.82* 0.79*
- ----------------------------------------------------- ------------ ------------- ----------- ------------
Administrative Class
06/30/97 21.20 29,332 1.13 (0.03)
- ----------------------------------------------------- ------------ ------------- ----------- ------------
11/01/95-06/30/96 9.23 33,575 1.07* 0.28*
- ----------------------------------------------------- ------------ ------------- ----------- ------------
05/31/95-10/31/95 11.34 24,645 1.06* 0.34*
- ----------------------------------------------------- ------------ ------------- ----------- ------------
Mid Cap Equity Fund
Institutional Class
06/30/97 9.61% $ 7,591 1.15% (0.43)%
- ----------------------------------------------------- ------------ ------------- ----------- ------------
11/01/95-06/30/96 16.72 8,378 0.88* (0.32)*
- ----------------------------------------------------- ------------ ------------- ----------- ------------
12/28/94-10/31/95 29.34 8,357 0.88* 0.24*
- ----------------------------------------------------- ------------ ------------- ----------- ------------
Equity Income Fund
Institutional Class
06/30/97 27.67% $ 121,138 0.72% 3.03%
- ----------------------------------------------------- ------------ ------------- ----------- ------------
11/01/95-06/30/96 16.35 116,714 0.70* 3.41*
- ----------------------------------------------------- ------------ ------------- ----------- ------------
10/31/95 19.36 118,015 0.70 3.83
- ----------------------------------------------------- ------------ ------------- ----------- ------------
10/31/94 2.25 92,365 0.70 3.77
- ----------------------------------------------------- ------------ ------------- ----------- ------------
10/31/93 16.65 67,854 0.70 3.55
- ----------------------------------------------------- ------------ ------------- ----------- ------------
10/31/92 12.89 30,506 0.70 3.83
- ----------------------------------------------------- ------------ ------------- ----------- ------------
03/08/91-10/31/91 11.81 15,628 0.74* 4.18*
- ----------------------------------------------------- ------------ ------------- ----------- ------------
Administrative Class
06/30/97 27.40 8,145 0.97 2.79
- ----------------------------------------------------- ------------ ------------- ----------- ------------
11/01/95-06/30/96 16.08 6,097 0.95* 3.19*
- ----------------------------------------------------- ------------ ------------- ----------- ------------
11/30/94-10/31/95 25.69 140 0.95* 3.43*
- ----------------------------------------------------- ------------ ------------- ----------- ------------
<CAPTION>
Average
Portfolio Commission
Selected Per Share Data for the Year or Period Ended: Turnover Rate Rate
------------- ----------
<S> <C> <C>
Micro Cap Growth Fund
Institutional Class
06/30/97 84% $ 0.05
- ----------------------------------------------------- ------------- ----------
11/01/95-06/30/96 54 0.02
- ----------------------------------------------------- ------------- ----------
10/31/95 87 0.03
- ----------------------------------------------------- ------------- ----------
10/31/94 59
- ----------------------------------------------------- -------------
06/25/93-10/31/93 16
- ----------------------------------------------------- -------------
Administrative Class
06/30/97 84 0.05
- ----------------------------------------------------- ------------- ----------
04/01/96-06/30/96 54 0.02
- ----------------------------------------------------- ------------- ----------
Small Cap Growth Fund
Institutional Class
06/30/97 129% $ 0.05
- ----------------------------------------------------- ------------- ----------
11/01/95-06/30/96 59 0.02
- ----------------------------------------------------- ------------- ----------
10/31/95 86 0.02
- ----------------------------------------------------- ------------- ----------
10/31/94 66
- ----------------------------------------------------- -------------
10/31/93 62
- ----------------------------------------------------- -------------
10/31/92 66
- ----------------------------------------------------- -------------
01/07/91-10/31/91 48
- ----------------------------------------------------- -------------
Administrative Class
06/30/97 129 0.05
- ----------------------------------------------------- ------------- ----------
11/01/95-06/30/96 59 0.02
- ----------------------------------------------------- ------------- ----------
09/27/95-10/31/95 9 N/A
- ----------------------------------------------------- ------------- ----------
Core Equity Fund
Institutional Class
06/30/97 139% $ 0.06
- ----------------------------------------------------- ------------- ----------
11/01/95-06/30/96 73 0.04
- ----------------------------------------------------- ------------- ----------
12/28/94-10/31/95 123 0.03
- ----------------------------------------------------- ------------- ----------
Administrative Class
06/30/97 139 0.06
- ----------------------------------------------------- ------------- ----------
11/01/95-06/30/96 73 0.04
- ----------------------------------------------------- ------------- ----------
05/31/95-10/31/95 58 N/A
- ----------------------------------------------------- ------------- ----------
Mid Cap Equity Fund
Institutional Class
06/30/97 202% $ 0.06
- ----------------------------------------------------- ------------- ----------
11/01/95-06/30/96 97 0.03
- ----------------------------------------------------- ------------- ----------
12/28/94-10/31/95 132 0.04
- ----------------------------------------------------- ------------- ----------
Equity Income Fund
Institutional Class
06/30/97 45% $ 0.06
- ----------------------------------------------------- ------------- ----------
11/01/95-06/30/96 52 0.06
- ----------------------------------------------------- ------------- ----------
10/31/95 46 0.06
- ----------------------------------------------------- ------------- ----------
10/31/94 36
- ----------------------------------------------------- -------------
10/31/93 39
- ----------------------------------------------------- -------------
10/31/92 47
- ----------------------------------------------------- -------------
03/08/91-10/31/91 62
- ----------------------------------------------------- -------------
Administrative Class
06/30/97 45 0.06
- ----------------------------------------------------- ------------- ----------
11/01/95-06/30/96 52 0.06
- ----------------------------------------------------- ------------- ----------
11/30/94-10/31/95 43 N/A
- ----------------------------------------------------- ------------- ----------
</TABLE>
*Annualized
(a) Per share amounts based on average number of shares outstanding during the
period.
1997 Annual Report See accompanying notes / 27
<PAGE>
Financial Highlights - Institutional Classes (Cont.)
<TABLE>
<CAPTION>
Net Asset Net Realized/ Total
Value Net Unrealized Income from
Beginning Investment Gain (Loss) on Investment
Selected Per Share Data for the Year or Period Ended: of Period Income (Loss) Investments Operations
--------- ------------- -------------- -----------
<S> <C> <C> <C> <C>
Value Fund
Institutional Class
06/30/97 $ 12.46 $ 1.05 $ 2.11 $ 3.16
- ----------------------------------------------------- ----------- ----------- ----------- -----------
11/01/95-06/30/96 12.53 0.25 1.62 1.87
- ----------------------------------------------------- ----------- ----------- ----------- -----------
10/31/95 11.55 0.30 2.18 2.48
- ----------------------------------------------------- ----------- ----------- ----------- -----------
10/31/94 11.92 0.30 (0.28) 0.02
- ----------------------------------------------------- ----------- ----------- ----------- -----------
10/31/93 10.05 0.28 2.36 2.64
- ----------------------------------------------------- ----------- ----------- ----------- -----------
12/30/91-10/31/92 10.00 0.24 0.23 0.47
- ----------------------------------------------------- ----------- ----------- ----------- -----------
Small Cap Value Fund
Institutional Class
06/30/97 $ 14.20 $ 0.46 $ 3.63 $ 4.09
- ----------------------------------------------------- ----------- ----------- ----------- -----------
11/01/95-06/30/96 13.10 0.56 1.49 2.05
- ----------------------------------------------------- ----------- ----------- ----------- -----------
10/31/95 12.07 0.28 1.92 2.20
- ----------------------------------------------------- ----------- ----------- ----------- -----------
10/31/94 12.81 0.29 (0.65) (0.36)
- ----------------------------------------------------- ----------- ----------- ----------- -----------
10/31/93 10.98 0.24 2.33 2.57
- ----------------------------------------------------- ----------- ----------- ----------- -----------
10/31/92 10.09 0.22 1.17 1.39
- ----------------------------------------------------- ----------- ----------- ----------- -----------
10/01/91-10/31/91 10.00 0.02 0.10 0.12
- ----------------------------------------------------- ----------- ----------- ----------- -----------
Administrative Class
06/30/97 14.20 0.38 3.68 4.06
- ----------------------------------------------------- ----------- ----------- ----------- -----------
11/01/95-06/30/96 13.16 0.54 1.43 1.97
- ----------------------------------------------------- ----------- ----------- ----------- -----------
Enhanced Equity Fund
Institutional Class
06/30/97 $ 15.91 $ 1.18 $ 3.10 $ 4.28
- ----------------------------------------------------- ----------- ----------- ----------- -----------
11/01/95-06/30/96 14.44 0.34 1.67 2.01
- ----------------------------------------------------- ----------- ----------- ----------- -----------
10/31/95 11.99 0.25 2.62 2.87
- ----------------------------------------------------- ----------- ----------- ----------- -----------
10/31/94 12.08 0.25 (0.04) 0.21
- ----------------------------------------------------- ----------- ----------- ----------- -----------
10/31/93 11.76 0.23 0.74 0.97
- ----------------------------------------------------- ----------- ----------- ----------- -----------
10/31/92 10.80 0.16 1.06 1.22
- ----------------------------------------------------- ----------- ----------- ----------- -----------
02/11/91-10/31/91 10.00 0.16 0.80 0.96
- ----------------------------------------------------- ----------- ----------- ----------- -----------
Balanced Fund
Institutional Class
06/30/97 $ 11.64 $ 0.89 $ 1.21 $ 2.10
- ----------------------------------------------------- ----------- ----------- ----------- -----------
11/01/95-06/30/96 11.89 0.27 0.76 1.03
- ----------------------------------------------------- ----------- ----------- ----------- -----------
10/31/95 10.35 0.44 1.54 1.98
- ----------------------------------------------------- ----------- ----------- ----------- -----------
10/31/94 10.84 0.34 (0.34) 0.00
- ----------------------------------------------------- ----------- ----------- ----------- -----------
10/31/93 10.42 0.35 0.68 1.03
- ----------------------------------------------------- ----------- ----------- ----------- -----------
06/25/92-10/31/92 10.00 0.12 0.52 0.64
- ----------------------------------------------------- ----------- ----------- ----------- -----------
<CAPTION>
Dividends Dividends in Distributions
from Net Excess of Net from Net
Investment Investment Realized
Selected Per Share Data for the Year or Period Ended: Income Income Capital Gains
---------- ------------- -------------
<S> <C> <C> <C>
Value Fund
Institutional Class
06/30/97 $ (0.31) $ 0.00 $ (0.50)
- ----------------------------------------------------- ------------ ----------- ------------
11/01/95-06/30/96 (0.17) 0.00 (1.77)
- ----------------------------------------------------- ------------ ----------- ------------
10/31/95 (0.30) 0.00 (1.20)
- ----------------------------------------------------- ------------ ----------- ------------
10/31/94 (0.29) 0.00 (0.10)
- ----------------------------------------------------- ------------ ----------- ------------
10/31/93 (0.28) 0.00 (0.49)
- ----------------------------------------------------- ------------ ----------- ------------
12/30/91-10/31/92 (0.24) 0.00 (0.18)
- ----------------------------------------------------- ------------ ----------- ------------
Small Cap Value Fund
Institutional Class
06/30/97 $ (0.13) $ 0.00 $ (2.38)
- ----------------------------------------------------- ------------ ----------- ------------
11/01/95-06/30/96 (0.21) 0.00 (0.74)
- ----------------------------------------------------- ------------ ----------- ------------
10/31/95 (0.28) 0.00 (0.89)
- ----------------------------------------------------- ------------ ----------- ------------
10/31/94 (0.29) 0.00 (0.09)
- ----------------------------------------------------- ------------ ----------- ------------
10/31/93 (0.24) 0.00 (0.50)
- ----------------------------------------------------- ------------ ----------- ------------
10/31/92 (0.22) 0.00 (0.24)
- ----------------------------------------------------- ------------ ----------- ------------
10/01/91-10/31/91 (0.03) 0.00 0.00
- ----------------------------------------------------- ------------ ----------- ------------
Administrative Class
06/30/97 (0.12) 0.00 (2.38)
- ----------------------------------------------------- ------------ ----------- ------------
11/01/95-06/30/96 (0.19) 0.00 (0.74)
- ----------------------------------------------------- ------------ ----------- ------------
Enhanced Equity Fund
Institutional Class
06/30/97 $ (0.10) $ 0.00 $ (3.63)
- ----------------------------------------------------- ------------ ----------- ------------
11/01/95-06/30/96 (0.16) 0.00 (0.38)
- ----------------------------------------------------- ------------ ----------- ------------
10/31/95 (0.25) 0.00 (0.17)
- ----------------------------------------------------- ------------ ----------- ------------
10/31/94 (0.25) 0.00 (0.05)
- ----------------------------------------------------- ------------ ----------- ------------
10/31/93 (0.23) 0.00 (0.42)
- ----------------------------------------------------- ------------ ----------- ------------
10/31/92 (0.16) 0.00 (0.04)
- ----------------------------------------------------- ------------ ----------- ------------
02/11/91-10/31/91 (0.16) 0.00 0.00
- ----------------------------------------------------- ------------ ----------- ------------
Balanced Fund
Institutional Class
06/30/97 $ (0.36) $ 0.00 $ (1.96)
- ----------------------------------------------------- ------------ ----------- ------------
11/01/95-06/30/96 (0.27) 0.00 (1.01)
- ----------------------------------------------------- ------------ ----------- ------------
10/31/95 (0.44) 0.00 0.00
- ----------------------------------------------------- ------------ ----------- ------------
10/31/94 (0.34) 0.00 (0.15)
- ----------------------------------------------------- ------------ ----------- ------------
10/31/93 (0.35) 0.00 (0.26)
- ----------------------------------------------------- ------------ ----------- ------------
06/25/92-10/31/92 (0.12) 0.00 (0.10)
- ----------------------------------------------------- ------------ ----------- ------------
</TABLE>
*Annualized
28 / PIMCO Funds See accompanying notes
<PAGE>
<TABLE>
<CAPTION>
Distributions
in Excess of Distributions Tax Basis
Net Realized from Return of Total
Selected Per Share Data for the Year or Period Ended: Capital Gains Equalization Capital Distributions
------------- ------------- --------- -------------
<S> <C> <C> <C> <C>
Value Fund
Institutional Class
06/30/97 $ 0.00 $ 0.00 $ 0.00 $ (0.81)
- ----------------------------------------------------- ----------- ----------- ----------- ------------
11/01/95-06/30/96 0.00 0.00 0.00 (1.94)
- ----------------------------------------------------- ----------- ----------- ----------- ------------
10/31/95 0.00 0.00 0.00 (1.50)
- ----------------------------------------------------- ----------- ----------- ----------- ------------
10/31/94 0.00 0.00 0.00 (0.39)
- ----------------------------------------------------- ----------- ----------- ----------- ------------
10/31/93 0.00 0.00 0.00 (0.77)
- ----------------------------------------------------- ----------- ----------- ----------- ------------
12/30/91-10/31/92 0.00 0.00 0.00 (0.42)
- ----------------------------------------------------- ----------- ----------- ----------- ------------
Small Cap Value Fund
Institutional Class
06/30/97 $ 0.00 $ 0.00 $ 0.00 $ (2.51)
- ----------------------------------------------------- ----------- ----------- ----------- ------------
11/01/95-06/30/96 0.00 0.00 0.00 (0.95)
- ----------------------------------------------------- ----------- ----------- ----------- ------------
10/31/95 0.00 0.00 0.00 (1.17)
- ----------------------------------------------------- ----------- ----------- ----------- ------------
10/31/94 0.00 0.00 0.00 (0.38)
- ----------------------------------------------------- ----------- ----------- ----------- ------------
10/31/93 0.00 0.00 0.00 (0.74)
- ----------------------------------------------------- ----------- ----------- ----------- ------------
10/31/92 0.00 (0.04) 0.00 (0.50)
- ----------------------------------------------------- ----------- ----------- ----------- ------------
10/01/91-10/31/91 0.00 0.00 0.00 (0.03)
- ----------------------------------------------------- ----------- ----------- ----------- ------------
Administrative Class
06/30/97 0.00 0.00 0.00 (2.50)
- ----------------------------------------------------- ----------- ----------- ----------- ------------
11/01/95-06/30/96 0.00 0.00 0.00 (0.93)
- ----------------------------------------------------- ----------- ----------- ----------- ------------
Enhanced Equity Fund
Institutional Class
06/30/97 $ 0.00 $ 0.00 $ 0.00 $ (3.73)
- ----------------------------------------------------- ----------- ----------- ----------- ------------
11/01/95-06/30/96 0.00 0.00 0.00 (0.54)
- ----------------------------------------------------- ----------- ----------- ----------- ------------
10/31/95 0.00 0.00 0.00 (0.42)
- ----------------------------------------------------- ----------- ----------- ----------- ------------
10/31/94 0.00 0.00 0.00 (0.30)
- ----------------------------------------------------- ----------- ----------- ----------- ------------
10/31/93 0.00 0.00 0.00 (0.65)
- ----------------------------------------------------- ----------- ----------- ----------- ------------
10/31/92 0.00 (0.06) 0.00 (0.26)
- ----------------------------------------------------- ----------- ----------- ----------- ------------
02/11/91-10/31/91 0.00 0.00 0.00 (0.16)
- ----------------------------------------------------- ----------- ----------- ----------- ------------
Balanced Fund
Institutional Class
06/30/97 $ 0.00 $ 0.00 $ 0.00 $ (2.32)
- ----------------------------------------------------- ----------- ----------- ----------- ------------
11/01/95-06/30/96 0.00 0.00 0.00 (1.28)
- ----------------------------------------------------- ----------- ----------- ----------- ------------
10/31/95 0.00 0.00 0.00 (0.44)
- ----------------------------------------------------- ----------- ----------- ----------- ------------
10/31/94 0.00 0.00 0.00 (0.49)
- ----------------------------------------------------- ----------- ----------- ----------- ------------
10/31/93 0.00 0.00 0.00 (0.61)
- ----------------------------------------------------- ----------- ----------- ----------- ------------
06/25/92-10/31/92 0.00 0.00 0.00 (0.22)
- ----------------------------------------------------- ----------- ----------- ----------- ------------
<CAPTION>
Ratio of
Net Asset Net Assets Expenses to
Value End End of Average Net
Selected Per Share Data for the Year or Period Ended: of Period Total Return Period (000s) Assets
----------- ------------ ------------- ------------
<S> <C> <C> <C> <C>
Value Fund
Institutional Class
06/30/97 $ 14.81 26.38% $ 74,613 0.73%
- ----------------------------------------------------- ----------- ----------- ----------- ------------
11/01/95-06/30/96 12.46 16.24 52,727 0.70*
- ----------------------------------------------------- ----------- ----------- ----------- ------------
10/31/95 12.53 24.98 14,443 0.70
- ----------------------------------------------------- ----------- ----------- ----------- ------------
10/31/94 11.55 0.15 15,442 0.70
- ----------------------------------------------------- ----------- ----------- ----------- ------------
10/31/93 11.92 26.35 22,930 0.70
- ----------------------------------------------------- ----------- ----------- ----------- ------------
12/30/91-10/31/92 10.05 4.68 18,083 0.70*
- ----------------------------------------------------- ----------- ----------- ----------- ------------
Small Cap Value Fund
Institutional Class
06/30/97 $ 15.78 31.99% $ 34,639 0.90%
- ----------------------------------------------------- ----------- ----------- ----------- ------------
11/01/95-06/30/96 14.20 16.35 29,017 0.85*
- ----------------------------------------------------- ----------- ----------- ----------- ------------
10/31/95 13.10 19.88 35,093 0.85
- ----------------------------------------------------- ----------- ----------- ----------- ------------
10/31/94 12.07 (2.89) 31,236 0.85
- ----------------------------------------------------- ----------- ----------- ----------- ------------
10/31/93 12.81 23.60 46,523 0.85
- ----------------------------------------------------- ----------- ----------- ----------- ------------
10/31/92 10.98 13.75 18,261 0.85
- ----------------------------------------------------- ----------- ----------- ----------- ------------
10/01/91-10/31/91 10.09 1.19 5,060 1.09*
- ----------------------------------------------------- ----------- ----------- ----------- ------------
Administrative Class
06/30/97 15.76 31.70 5,916 1.16
- ----------------------------------------------------- ----------- ----------- ----------- ------------
11/01/95-06/30/96 14.20 15.64 4,433 1.10*
- ----------------------------------------------------- ----------- ----------- ----------- ------------
Enhanced Equity Fund
Institutional Class
06/30/97 $ 16.46 31.45% $ 44,838 0.74%
- ----------------------------------------------------- ----------- ----------- ----------- ------------
11/01/95-06/30/96 15.91 14.21 83,425 0.70*
- ----------------------------------------------------- ----------- ----------- ----------- ------------
10/31/95 14.44 24.46 73,999 0.70
- ----------------------------------------------------- ----------- ----------- ----------- ------------
10/31/94 11.99 1.83 65,915 0.70
- ----------------------------------------------------- ----------- ----------- ----------- ------------
10/31/93 12.08 8.20 46,724 0.70
- ----------------------------------------------------- ----------- ----------- ----------- ------------
10/31/92 11.76 11.46 36,515 0.70
- ----------------------------------------------------- ----------- ----------- ----------- ------------
02/11/91-10/31/91 10.80 9.59 4,451 0.73*
- ----------------------------------------------------- ----------- ----------- ----------- ------------
Balanced Fund
Institutional Class
06/30/97 $ 11.42 20.37% $ 61,518 0.74%
- ----------------------------------------------------- ----------- ----------- ----------- ------------
11/01/95-06/30/96 11.64 9.07 82,562 0.70*
- ----------------------------------------------------- ----------- ----------- ----------- ------------
10/31/95 11.89 19.47 72,638 0.70
- ----------------------------------------------------- ----------- ----------- ----------- ------------
10/31/94 10.35 0.08 130,694 0.70
- ----------------------------------------------------- ----------- ----------- ----------- ------------
10/31/93 10.84 10.06 126,410 0.70
- ----------------------------------------------------- ----------- ----------- ----------- ------------
06/25/92-10/31/92 10.42 6.40 99,198 0.70*
- ----------------------------------------------------- ----------- ----------- ----------- ------------
<CAPTION>
Ratio of Net
Investment
Income to Average
Average Net Portfolio Commission
Selected Per Share Data for the Year or Period Ended: Assets Turnover Rate Rate
------------ ------------- ----------
<S> <C> <C> <C>
Value Fund
Institutional Class
06/30/97 2.02% 71% $ 0.06
- ----------------------------------------------------- ------------ ------------- ----------
11/01/95-06/30/96 2.40* 29 0.06
- ----------------------------------------------------- ------------ ------------- ----------
10/31/95 2.50 71 0.06
- ----------------------------------------------------- ------------ ------------- ----------
10/31/94 2.34 44
- ----------------------------------------------------- ------------ -------------
10/31/93 2.43 28
- ----------------------------------------------------- ------------ -------------
12/30/91-10/31/92 2.57* 73
- ----------------------------------------------------- ------------ -------------
Small Cap Value Fund
Institutional Class
06/30/97 1.92% 48% $ 0.06
- ----------------------------------------------------- ------------ ------------- ----------
11/01/95-06/30/96 2.12* 35 0.04
- ----------------------------------------------------- ------------ ------------- ----------
10/31/95 2.25 50 0.04
- ----------------------------------------------------- ------------ ------------- ----------
10/31/94 2.23 48
- ----------------------------------------------------- ------------ -------------
10/31/93 2.05 42
- ----------------------------------------------------- ------------ -------------
10/31/92 2.16 27
- ----------------------------------------------------- ------------ -------------
10/01/91-10/31/91 3.06* 0
- ----------------------------------------------------- ------------ -------------
Administrative Class
06/30/97 1.68 48 0.06
- ----------------------------------------------------- ------------ ------------- ----------
11/01/95-06/30/96 1.86* 35 0.04
- ----------------------------------------------------- ------------ ------------- ----------
Enhanced Equity Fund
Institutional Class
06/30/97 1.31% 91% $ 0.06
- ----------------------------------------------------- ------------ ------------- ----------
11/01/95-06/30/96 1.58* 53 0.05
- ----------------------------------------------------- ------------ ------------- ----------
10/31/95 1.91 21 0.05
- ----------------------------------------------------- ------------ ------------- ----------
10/31/94 2.20 44
- ----------------------------------------------------- ------------ -------------
10/31/93 1.89 15
- ----------------------------------------------------- ------------ -------------
10/31/92 1.81 17
- ----------------------------------------------------- ------------ -------------
02/11/91-10/31/91 2.14* 0
- ----------------------------------------------------- ------------ -------------
Balanced Fund
Institutional Class
06/30/97 3.33% 199% $ 0.06
- ----------------------------------------------------- ------------ ------------- ----------
11/01/95-06/30/96 3.46* 140 0.05
- ----------------------------------------------------- ------------ ------------- ----------
10/31/95 3.73 43 0.04
- ----------------------------------------------------- ------------ ------------- ----------
10/31/94 3.25 47
- ----------------------------------------------------- ------------ -------------
10/31/93 3.10 19
- ----------------------------------------------------- ------------ -------------
06/25/92-10/31/92 3.36* 39
- ----------------------------------------------------- ------------ -------------
</TABLE>
*Annualized
1997 Annual Report See accompanying notes / 29
<PAGE>
Financial Highlights - Retail Classes
<TABLE>
<CAPTION>
Net Asset Net Realized/ Total
Value Net Unrealized Income from
Beginning Investment Gain (Loss) on Investment
Selected Per Share Data for the Year or Period Ended: of Period Income (Loss) Investments Operations
------------- ----------------- ------------------ -------------
<S> <C> <C> <C> <C>
Emerging Markets Fund
Class A
01/20/97-06/30/97 $ 12.82 $ 0.09 (a) $ 1.03 (a) $ 1.12
- -------------------------------------------------------------- ------------- ----------------- ------------------ -------------
Class B
01/20/97-06/30/97 12.82 0.03 (a) 1.04 (a) 1.07
- -------------------------------------------------------------- ------------- ----------------- ------------------ -------------
Class C
01/20/97-06/30/97 12.82 0.04 (a) 1.03 (a) 1.07
- -------------------------------------------------------------- ------------- ----------------- ------------------ -------------
International Developed Fund
Class A
01/20/97-06/30/97 $ 11.71 $ 0.09 (a) $ 1.28 (a) $ 1.37
- -------------------------------------------------------------- ------------- ----------------- ------------------ -------------
Class B
01/20/97-06/30/97 11.71 0.06 (a) 1.29 (a) 1.35
- -------------------------------------------------------------- ------------- ----------------- ------------------ -------------
Class C
01/20/97-06/30/97 11.71 0.06 (a) 1.29 (a) 1.35
- -------------------------------------------------------------- ------------- ----------------- ------------------ -------------
Capital Appreciation Fund
Class A
01/20/97-06/30/97 $ 19.31 $ 0.09 $ 1.76 $ 1.85
- -------------------------------------------------------------- ------------- ----------------- ------------------ -------------
Class B
01/20/97-06/30/97 19.31 0.01 1.78 1.79
- -------------------------------------------------------------- ------------- ----------------- ------------------ -------------
Class C
01/20/97-06/30/97 19.31 0.02 1.77 1.79
- -------------------------------------------------------------- ------------- ----------------- ------------------ -------------
Mid Cap Growth Fund
Class A
01/13/97-06/30/97 $ 18.14 $ (0.04) $ 2.14 $ 2.10
- -------------------------------------------------------------- ------------- ----------------- ------------------ -------------
Class B
01/13/97-06/30/97 18.14 (0.11) 2.14 2.03
- -------------------------------------------------------------- ------------- ----------------- ------------------ -------------
Class C
01/13/97-06/30/97 18.14 (0.10) 2.14 2.04
- -------------------------------------------------------------- ------------- ----------------- ------------------ -------------
Equity Income Fund
Class A
01/20/97-06/30/97 $ 13.94 $ 0.15 $ 1.48 $ 1.63
- -------------------------------------------------------------- ------------- ----------------- ------------------ -------------
Class B
01/20/97-06/30/97 13.94 0.11 1.48 1.59
- -------------------------------------------------------------- ------------- ----------------- ------------------ -------------
Class C
01/20/97-06/30/97 13.94 0.11 1.48 1.59
- -------------------------------------------------------------- ------------- ----------------- ------------------ -------------
Value Fund
Class A
01/13/97-06/30/97 $ 13.17 $ 0.47 $ 1.26 $ 1.73
- -------------------------------------------------------------- ------------- ----------------- ------------------ -------------
Class B
01/13/97-06/30/97 13.16 0.44 1.26 1.70
- -------------------------------------------------------------- ------------- ----------------- ------------------ -------------
Class C
01/13/97-06/30/97 13.15 0.43 1.28 1.71
- -------------------------------------------------------------- ------------- ----------------- ------------------ -------------
Small Cap Value Fund
Class A
01/20/97-06/30/97 $ 14.02 $ 0.10 $ 1.63 $ 1.73
- -------------------------------------------------------------- ------------- ----------------- ------------------ -------------
Class B
01/20/97-06/30/97 14.02 0.08 1.61 1.69
- -------------------------------------------------------------- ------------- ----------------- ------------------ -------------
Class C
01/20/97-06/30/97 14.02 0.08 1.61 1.69
- -------------------------------------------------------------- ------------- ----------------- ------------------ -------------
Balanced Fund
Class A
01/20/97-06/30/97 $ 10.77 $ 0.21 $ 0.58 $ 0.79
- -------------------------------------------------------------- ------------- ----------------- ------------------ -------------
Class B
01/20/97-06/30/97 10.77 0.19 0.58 0.77
- -------------------------------------------------------------- ------------- ----------------- ------------------ -------------
Class C
01/20/97-06/30/97 10.77 0.18 0.58 0.76
- -------------------------------------------------------------- ------------- ----------------- ------------------ -------------
<CAPTION>
Dividends Dividends in Distributions
from Net Excess of Net from Net
Investment Investment Realized
Selected Per Share Data for the Year or Period Ended: Income Income Capital Gains
---------------- ---------------- -------------
<S> <C> <C> <C>
Emerging Markets Fund
Class A
01/20/97-06/30/97 $ 0.00 $ 0.00 $ 0.00
- ----------------------------------------------------------------- ---------------- ---------------- -------------
Class B
01/20/97-06/30/97 0.00 0.00 0.00
- ----------------------------------------------------------------- ---------------- ---------------- -------------
Class C
01/20/97-06/30/97 0.00 0.00 0.00
- ----------------------------------------------------------------- ---------------- ---------------- -------------
International Developed Fund
Class A
01/20/97-06/30/97 $ 0.00 $ 0.00 $ 0.00
- ----------------------------------------------------------------- ---------------- ---------------- -------------
Class B
01/20/97-06/30/97 0.00 0.00 0.00
- ----------------------------------------------------------------- ---------------- ---------------- -------------
Class C
01/20/97-06/30/97 0.00 0.00 0.00
- ----------------------------------------------------------------- ---------------- ---------------- -------------
Capital Appreciation Fund
Class A
01/20/97-06/30/97 $ 0.00 $ 0.00 $ 0.00
- ----------------------------------------------------------------- ---------------- ---------------- -------------
Class B
01/20/97-06/30/97 0.00 0.00 0.00
- ----------------------------------------------------------------- ---------------- ---------------- -------------
Class C
01/20/97-06/30/97 0.00 0.00 0.00
- ----------------------------------------------------------------- ---------------- ---------------- -------------
Mid Cap Growth Fund
Class A
01/13/97-06/30/97 $ 0.00 $ 0.00 $ 0.00
- ----------------------------------------------------------------- ---------------- ---------------- -------------
Class B
01/13/97-06/30/97 0.00 0.00 0.00
- ----------------------------------------------------------------- ---------------- ---------------- -------------
Class C
01/13/97-06/30/97 0.00 0.00 0.00
- ----------------------------------------------------------------- ---------------- ---------------- -------------
Equity Income Fund
Class A
01/20/97-06/30/97 $ (0.18) $ 0.00 $ 0.00
- ----------------------------------------------------------------- ---------------- ---------------- -------------
Class B
01/20/97-06/30/97 (0.16) 0.00 0.00
- ----------------------------------------------------------------- ---------------- ---------------- -------------
Class C
01/20/97-06/30/97 (0.16) 0.00 0.00
- ----------------------------------------------------------------- ---------------- ---------------- -------------
Value Fund
Class A
01/13/97-06/30/97 $ (0.10) $ 0.00 $ 0.00
- ----------------------------------------------------------------- ---------------- ---------------- -------------
Class B
01/13/97-06/30/97 (0.06) 0.00 0.00
- ----------------------------------------------------------------- ---------------- ---------------- -------------
Class C
01/13/97-06/30/97 (0.06) 0.00 0.00
- ----------------------------------------------------------------- ---------------- ---------------- -------------
Small Cap Value Fund
Class A
01/20/97-06/30/97 $ 0.00 $ 0.00 $ 0.00
- ----------------------------------------------------------------- ---------------- ---------------- -------------
Class B
01/20/97-06/30/97 0.00 0.00 0.00
- ----------------------------------------------------------------- ---------------- ---------------- -------------
Class C
01/20/97-06/30/97 0.00 0.00 0.00
- ----------------------------------------------------------------- ---------------- ---------------- -------------
Balanced Fund
Class A
01/20/97-06/30/97 $ (0.16) $ 0.00 $ 0.00
- ----------------------------------------------------------------- ---------------- ---------------- -------------
Class B
01/20/97-06/30/97 (0.15) 0.00 0.00
- ----------------------------------------------------------------- ---------------- ---------------- -------------
Class C
01/20/97-06/30/97 (0.14) 0.00 0.00
- ----------------------------------------------------------------- ---------------- ---------------- -------------
</TABLE>
*Annualized
(a) Per share amounts based on average number of shares outstanding during the
period.
30 / PIMCO Funds See accompanying notes
<PAGE>
<TABLE>
<CAPTION>
Distributions
in Excess of Distributions Tax Basis
Net Realized from Return of Total
Selected Per Share Data for the Year or Period Ended: Capital Gains Equalization Capital Distributions
--------------- --------------- --------------- -------------
<S> <C> <C> <C> <C>
Emerging Markets Fund
Class A
01/20/97-06/30/97 $ 0.00 $ 0.00 $ 0.00 $ 0.00
- ---------------------------------------------------------------- --------------- --------------- --------------- -------------
Class B
01/20/97-06/30/97 0.00 0.00 0.00 0.00
- ---------------------------------------------------------------- --------------- --------------- --------------- -------------
Class C
01/20/97-06/30/97 0.00 0.00 0.00 0.00
- ---------------------------------------------------------------- --------------- --------------- --------------- -------------
International Developed Fund
Class A
01/20/97-06/30/97 $ 0.00 $ 0.00 $ 0.00 $ 0.00
- ---------------------------------------------------------------- --------------- --------------- --------------- -------------
Class B
01/20/97-06/30/97 0.00 0.00 0.00 0.00
- ---------------------------------------------------------------- --------------- --------------- --------------- -------------
Class C
01/20/97-06/30/97 0.00 0.00 0.00 0.00
- ---------------------------------------------------------------- --------------- --------------- --------------- -------------
Capital Appreciation Fund
Class A
01/20/97-06/30/97 $ 0.00 $ 0.00 $ 0.00 $ 0.00
- ---------------------------------------------------------------- --------------- --------------- --------------- -------------
Class B
01/20/97-06/30/97 0.00 0.00 0.00 0.00
- ---------------------------------------------------------------- --------------- --------------- --------------- -------------
Class C
01/20/97-06/30/97 0.00 0.00 0.00 0.00
- ---------------------------------------------------------------- --------------- --------------- --------------- -------------
Mid Cap Growth Fund
Class A
01/13/97-06/30/97 $ 0.00 $ 0.00 $ 0.00 $ 0.00
- ---------------------------------------------------------------- --------------- --------------- --------------- -------------
Class B
01/13/97-06/30/97 0.00 0.00 0.00 0.00
- ---------------------------------------------------------------- --------------- --------------- --------------- -------------
Class C
01/13/97-06/30/97 0.00 0.00 0.00 0.00
- ---------------------------------------------------------------- --------------- --------------- --------------- -------------
Equity Income Fund
Class A
01/20/97-06/30/97 $ 0.00 $ 0.00 $ 0.00 $ (0.18)
- ---------------------------------------------------------------- --------------- --------------- --------------- -------------
Class B
01/20/97-06/30/97 0.00 0.00 0.00 (0.16)
- ---------------------------------------------------------------- --------------- --------------- --------------- -------------
Class C
01/20/97-06/30/97 0.00 0.00 0.00 (0.16)
- ---------------------------------------------------------------- --------------- --------------- --------------- -------------
Value Fund
Class A
01/13/97-06/30/97 $ 0.00 $ 0.00 $ 0.00 $ (0.10)
- ---------------------------------------------------------------- --------------- --------------- --------------- -------------
Class B
01/13/97-06/30/97 0.00 0.00 0.00 (0.06)
- ---------------------------------------------------------------- --------------- --------------- --------------- -------------
Class C
01/13/97-06/30/97 0.00 0.00 0.00 (0.06)
- ---------------------------------------------------------------- --------------- --------------- --------------- -------------
Small Cap Value Fund
Class A
01/20/97-06/30/97 $ 0.00 $ 0.00 $ 0.00 $ 0.00
- ---------------------------------------------------------------- --------------- --------------- --------------- -------------
Class B
01/20/97-06/30/97 0.00 0.00 0.00 0.00
- ---------------------------------------------------------------- --------------- --------------- --------------- -------------
Class C
01/20/97-06/30/97 0.00 0.00 0.00 0.00
- ---------------------------------------------------------------- --------------- --------------- --------------- -------------
Balanced Fund
Class A
01/20/97-06/30/97 $ 0.00 $ 0.00 $ 0.00 $ (0.16)
- ---------------------------------------------------------------- --------------- --------------- --------------- -------------
Class B
01/20/97-06/30/97 0.00 0.00 0.00 (0.15)
- ---------------------------------------------------------------- --------------- --------------- --------------- -------------
Class C
01/20/97-06/30/97 0.00 0.00 0.00 (0.14)
- ---------------------------------------------------------------- --------------- --------------- --------------- -------------
<CAPTION>
Ratio of
Net Asset Net Assets Expenses to
Value End End of Average Net
Selected Per Share Data for the Year or Period Ended: of Period Total Return Period (000s) Assets
-------------- -------------- -------------------- ------------
<S> <C> <C> <C> <C>
Emerging Markets Fund
Class A
01/20/97-06/30/97 $ 13.94 8.74% $ 214 1.89%*
- ----------------------------------------------------------------- -------------- -------------- -------------------- ------------
Class B
01/20/97-06/30/97 13.89 8.35 308 2.62*
- ----------------------------------------------------------------- -------------- -------------- -------------------- ------------
Class C
01/20/97-06/30/97 13.89 8.35 1,833 2.63*
- ----------------------------------------------------------------- -------------- -------------- -------------------- ------------
International Developed Fund
Class A
01/20/97-06/30/97 $ 13.08 11.70% $ 318 1.54%*
- ----------------------------------------------------------------- -------------- -------------- -------------------- ------------
Class B
01/20/97-06/30/97 13.06 11.53 1,123 2.28*
- ----------------------------------------------------------------- -------------- -------------- -------------------- ------------
Class C
01/20/97-06/30/97 13.06 11.53 2,526 2.28*
- ----------------------------------------------------------------- -------------- -------------- -------------------- ------------
Capital Appreciation Fund
Class A
01/20/97-06/30/97 $ 21.16 9.58% $ 6,534 1.11%*
- ----------------------------------------------------------------- -------------- -------------- -------------------- ------------
Class B
01/20/97-06/30/97 21.10 9.27 3,022 1.85*
- ----------------------------------------------------------------- -------------- -------------- -------------------- ------------
Class C
01/20/97-06/30/97 21.10 9.27 13,093 1.86*
- ----------------------------------------------------------------- -------------- -------------- -------------------- ------------
Mid Cap Growth Fund
Class A
01/13/97-06/30/97 $ 20.24 11.58% $ 12,184 1.11%*
- ----------------------------------------------------------------- -------------- -------------- -------------------- ------------
Class B
01/13/97-06/30/97 20.17 11.19 28,259 1.85*
- ----------------------------------------------------------------- -------------- -------------- -------------------- ------------
Class C
01/13/97-06/30/97 20.18 11.25 53,686 1.86*
- ----------------------------------------------------------------- -------------- -------------- -------------------- ------------
Equity Income Fund
Class A
01/20/97-06/30/97 $ 15.39 11.77% $ 1,756 1.13%*
- ----------------------------------------------------------------- -------------- -------------- -------------------- ------------
Class B
01/20/97-06/30/97 15.37 11.45 2,561 1.87*
- ----------------------------------------------------------------- -------------- -------------- -------------------- ------------
Class C
01/20/97-06/30/97 15.37 11.42 6,624 1.87*
- ----------------------------------------------------------------- -------------- -------------- -------------------- ------------
Value Fund
Class A
01/13/97-06/30/97 $ 14.80 13.19% $ 15,648 1.11%*
- ----------------------------------------------------------------- -------------- -------------- -------------------- ------------
Class B
01/13/97-06/30/97 14.80 12.93 25,433 1.86*
- ----------------------------------------------------------------- -------------- -------------- -------------------- ------------
Class C
01/13/97-06/30/97 14.80 13.02 64,110 1.86*
- ----------------------------------------------------------------- -------------- -------------- -------------------- ------------
Small Cap Value Fund
Class A
01/20/97-06/30/97 $ 15.75 12.34% $ 6,563 1.30%*
- ----------------------------------------------------------------- -------------- -------------- -------------------- ------------
Class B
01/20/97-06/30/97 15.71 12.05 11,077 2.04*
- ----------------------------------------------------------------- -------------- -------------- -------------------- ------------
Class C
01/20/97-06/30/97 15.71 12.05 20,637 2.05*
- ----------------------------------------------------------------- -------------- -------------- -------------------- ------------
Balanced Fund
Class A
01/20/97-06/30/97 $ 11.40 7.42% $ 366 1.15%*
- ----------------------------------------------------------------- -------------- -------------- -------------------- ------------
Class B
01/20/97-06/30/97 11.39 7.15 1,124 1.90*
- ----------------------------------------------------------------- -------------- -------------- -------------------- ------------
Class C
01/20/97-06/30/97 11.39 7.12 921 1.90*
- ----------------------------------------------------------------- -------------- -------------- -------------------- ------------
<CAPTION>
Ratio of Net
Investment
Income to Average
Average Net Portfolio Commission
Selected Per Share Data for the Year or Period Ended: Assets Turnover Rate Rate
---------------- ---------------- -----------
<S> <C> <C> <C>
Emerging Markets Fund
Class A
01/20/97-06/30/97 1.52%* 74% $ 0.00
- ------------------------------------------------------------------ ---------------- ---------------- -----------
Class B
01/20/97-06/30/97 0.47* 74 0.00
- ------------------------------------------------------------------ ---------------- ---------------- -----------
Class C
01/20/97-06/30/97 0.66* 74 0.00
- ------------------------------------------------------------------ ---------------- ---------------- -----------
International Developed Fund
Class A
01/20/97-06/30/97 1.74%* 77% $ 0.03
- ------------------------------------------------------------------ ---------------- ---------------- -----------
Class B
01/20/97-06/30/97 1.08* 77 0.03
- ------------------------------------------------------------------ ---------------- ---------------- -----------
Class C
01/20/97-06/30/97 1.07* 77 0.03
- ------------------------------------------------------------------ ---------------- ---------------- -----------
Capital Appreciation Fund
Class A
01/20/97-06/30/97 0.59%* 87% $ 0.06
- ------------------------------------------------------------------ ---------------- ---------------- -----------
Class B
01/20/97-06/30/97 (0.26)* 87 0.06
- ------------------------------------------------------------------ ---------------- ---------------- -----------
Class C
01/20/97-06/30/97 (0.23)* 87 0.06
- ------------------------------------------------------------------ ---------------- ---------------- -----------
Mid Cap Growth Fund
Class A
01/13/97-06/30/97 0.17%* 82% $ 0.06
- ------------------------------------------------------------------ ---------------- ---------------- -----------
Class B
01/13/97-06/30/97 (0.58)* 82 0.06
- ------------------------------------------------------------------ ---------------- ---------------- -----------
Class C
01/13/97-06/30/97 (0.58)* 82 0.06
- ------------------------------------------------------------------ ---------------- ---------------- -----------
Equity Income Fund
Class A
01/20/97-06/30/97 2.85%* 45% $ 0.06
- ------------------------------------------------------------------ ---------------- ---------------- -----------
Class B
01/20/97-06/30/97 2.11* 45 0.06
- ------------------------------------------------------------------ ---------------- ---------------- -----------
Class C
01/20/97-06/30/97 2.15* 45 0.06
- ------------------------------------------------------------------ ---------------- ---------------- -----------
Value Fund
Class A
01/13/97-06/30/97 1.71%* 71% $ 0.06
- ------------------------------------------------------------------ ---------------- ---------------- -----------
Class B
01/13/97-06/30/97 0.96* 71 0.06
- ------------------------------------------------------------------ ---------------- ---------------- -----------
Class C
01/13/97-06/30/97 0.97* 71 0.06
- ------------------------------------------------------------------ ---------------- ---------------- -----------
Small Cap Value Fund
Class A
01/20/97-06/30/97 1.94%* 48% $ 0.06
- ------------------------------------------------------------------ ---------------- ---------------- -----------
Class B
01/20/97-06/30/97 1.23* 48 0.06
- ------------------------------------------------------------------ ---------------- ---------------- -----------
Class C
01/20/97-06/30/97 1.13* 48 0.06
- ------------------------------------------------------------------ ---------------- ---------------- -----------
Balanced Fund
Class A
01/20/97-06/30/97 3.01%* 199% $ 0.06
- ------------------------------------------------------------------ ---------------- ---------------- -----------
Class B
01/20/97-06/30/97 2.28* 199 0.06
- ------------------------------------------------------------------ ---------------- ---------------- -----------
Class C
01/20/97-06/30/97 2.26* 199 0.06
- ------------------------------------------------------------------ ---------------- ---------------- -----------
</TABLE>
*Annualized
(a) Per share amounts based on average number of shares outstanding during the
period.
1997 Annual Report See accompanying notes / 31
<PAGE>
Schedule of Investments
Emerging Markets Fund
June 30, 1997
<TABLE>
<CAPTION>
Value
Shares (000s)
- -------------------------------------------------------------------------------
COMMON STOCK 95.7%
- -------------------------------------------------------------------------------
<S> <C> <C>
Argentina 3.7%
YPF Sociedad Anonima - ADR 23,100 $ 710
Telefonica de Argentina - ADR 14,100 488
Compania Naviera Perez Co. - ADR 19,912 318
Banco de Galicia y Buenos Aires SA de CV 20,100 134
Banco Frances del Rio de la Plata SA 11,804 128
Siderca SA 'A' 35,667 92
Astra Cia Argentina de Petro SA 22,700 48
Inversiones Y Representaciones SA - GDR 1,084 47
Molinos Rio de La Plata SA 10,670 42
CIADEA SA 9,300 40
Siderar SAIC 'A' 2,946 12
--------------
2,059
Brazil 13.2%
Telecomunicacoes Brasileiras - ADR 10,050 1,525
Centrais Electricas Brasileiras SA 'B' 2,196,000 1,310
Banco Bradesco SA 70,255,000 708
Telecomunicacoes Brasileiras SA 3,883,000 527
Companhia Vale do Rio Doce 21,362 473
Banco Itau SA 808,000 452
Petroleo Brasileiro SA 1,321,000 367
Usimas Siderurgicas Minas Gerais SA PR 32,319 360
Companhia Cervejaria Brahma 408,000 311
Companhia Energetica de Minas Gerais 5,916,000 305
Souza Cruz SA 21,800 230
White Martins SA 74,555 218
Aracruz Celulose SA 'B' 85,300 173
Companhia Siderurgica Nacional 4,808,000 159
Companhia Paulista de Forca e Luz 869,000 146
--------------
7,264
Chile 6.0%
Compania de Telecomunicaciones de Chile SA SP - ADR 21,822 720
Enersis SA SP - ADR 18,900 672
Empresa Nacional de Electricidad SA SP - ADR 23,700 535
Banco Santander Chile SP - ADR 21,500 317
Chilgener SA SP - ADR 11,300 316
Quimica Minera Chile SA SP - ADR 4,130 273
Maders Y Sinteticos Sociedad - ADS 9,890 164
Compania Cervecerias Unidas SA SP - ADR 7,300 160
Madeco SA - ADR 6,100 149
Chilgener - ADR Rights 3,728 8
--------------
3,314
Hungary 3.2%
MOL Magyar Olaj-es Gazipare 25,800 559
Richter Gedeon 5,500 496
OTP Bank 11,800 308
Borsodchem 4,200 164
Graboplast 2,700 124
EGIS 1,850 116
--------------
1,767
India 8.4%
Tata Engineering and Locomotive Co. Limited SP - GDR 45,224 694
Hindalco Industries Limited SP - GDR 18,910 668
State Bank Of India - GDR 18,300 485
Larsen & Tourbro Limited - GDR 26,480 457
Videsh Sanchar Nigam Limited SP - ADR 18,000 374
Indian Hotels Co. - GDR 13,700 325
Bajaj Auto Limited 9,270 318
Indian Rayon & Industries Limited - GDR 19,550 244
BSES Limited - GDR 9,100 241
Gujarat Ambuja - GDR 20,200 235
EIH Limited 13,540 223
Steel Authority Of India 22,400 198
Videsh Sanchar Nigam Limited - GDR 8,900 185
--------------
4,647
Indonesia 4.1%
Bank International Indonesia 840,747 726
Bimantara Citra 251,000 439
Telekomunikasi Indonesia SP - ADR 12,800 416
United Tractors 86,500 320
Hanjaya Mandala Sampoerna 52,000 199
Semen Gresik 57,000 128
Bank International Indonesia 'F' Warrants 88,066 34
Indah Kiat Paper & Pulp Corp. 189 0
Indah Kiat Pulp & Paper Corp. Rights (b) 170 0
--------------
2,262
Israel 6.3%
Teva Pharmaceutical Industries Limited 8,400 $ 542
ECI Telecommunications Limited 13,800 411
Clal Israel Limited 1,138,000 326
Israel Chemicals Limited 276,000 325
Bank Hapoalim Limited 155,900 325
Industrial Buildings Corp. 152,000 268
Blue Square Chain Stores (b) 26,900 262
Elco Holdings Limited 29,000 258
Bezek Israeli Telecommunication Corp. Limited 83,300 210
Formula Systems Limited (b) 11,100 181
Agis Industries Limited 16,800 177
Elite Industries Limited 6,600 160
Industrial Buildings Rights 17,200 0
Tadiran Limited 0 0
--------------
3,445
Malaysia 9.2%
Telekom Malaysia 139,500 652
Perusahaan Otomobil Nasional Berhad 109,000 510
Jaya Tiasa Holdings Berhad 99,000 498
United Engineers (Malaysia) Limited 69,000 498
Gamuda Berhad 122,500 430
Road Builder (M) Holdings Berhad 86,400 407
Metacorp Berhad 173,000 360
Public Bank Berhad 218,666 341
DCB Holdings Berhad 103,000 326
Sungei Way Holdings Berhad 168,400 318
UMW Holdings Berhad 61,000 288
Land & General Berhad 205,000 236
IOI Properties Berhad 110,000 209
DCB Holdings Berhad Rights 5,150 0
--------------
5,073
Mexico 9.1%
Telefonos de Mexico - ADR 21,850 1,043
Cemex SA de CV 98,800 430
Cifra SA de CV 'B' 204,580 382
Grupo Carso SA de CV 'A1' 48,200 336
Kimberly Clark de Mexico SA de CV 'A' 78,000 313
Grupo Modelo SA de CV 'C' 43,000 298
Fomento Economico Mexicano 45,100 269
Alfa SA de CV 'A' 38,200 260
Grupo Financiero Banamex Accival 'L' (b) 105,907 250
Grupo Televisa SA SP - GDR (b) 7,810 237
Apasco SA de CV 21,400 153
Desc SA de CV 'B' 20,600 151
Grupo Mexico SA 'B' 37,560 141
Grupo Industrial Bimbo SA de CV 'A' 18,916 136
Empresas ICA Sociedad Controladora SA de CV 8,020 128
Empresas La Moderna SA de CV 22,100 118
Tubos de Acero de Mexico SA SP (b) 6,000 110
Controladora Comercial Mexicana SA de CV 101,100 94
Industrias Penoles SA 19,200 92
Cifra SA de CV 'A' 25,022 46
Desc SA de CV 'C' 1,531 11
Transport Maritima - ADR 750 5
--------------
5,003
Pakistan 1.0%
Pakistan State Oil 16,523 133
Hub Power Co. Limited SP - GDR (b) 4,700 118
Fauji Fertilizer Co. 53,900 106
Engro Chemical Pakistan Limited 23,000 81
Faysal Bank Limited 71,700 48
Pakistan Telecommunications - GDS 400 31
DG Kahn Cement 97,010 29
Sui Southern Gas Pipeline (b) 28,750 20
--------------
566
Peru 2.0%
Telefonica del Peru SA 'B' 146,988 386
Credicorp Limited 7,442 164
Southern Peru Copper Corp. 'T' 27,359 135
Banco Wiese SP - ADR 11,800 77
Cerveceria Backus Y Johnston SA 'T' 66,285 69
Luz del Sur Servicios SA 'B' 58,550 69
Compania de Minas Buenaventura SA 'A' 7,297 68
Ferreyros SA 32,606 37
Cementos Lima SA 14,941 30
</TABLE>
32 / PIMCO Funds See accompanying notes
<PAGE>
<TABLE>
<CAPTION>
Value
Shares (000s)
- --------------------------------------------------------------------------------
<S> <C> <C>
Compania de Minas Buenaventura SA 'B' 2,824 $ 28
Minsur SA 5,500 21
---------------
1,084
Philippines 4.0%
Philippine Long Distance Telephone Co. SP - ADR 6,800 437
Metro Bank Trust Co. 19,450 413
SM Prime Holdings, Inc. 1,341,000 397
Ayala Corp. 483,750 348
San Miguel Corp. 114,067 301
Petron Corp. 994,130 253
Equitable Banking Corp. 11,300 41
---------------
2,190
Poland 0.9%
Elektrim Spolka Akcyjna SA 21,531 187
Bank Rozwoju Eksportu SA 5,310 111
Bank Slaski SA W Katawicach 1,080 77
Polifarb-Cieszyn SA 12,940 66
Debica SA 2,180 45
---------------
486
Portugal 5.6%
Portugal Telecom SA 18,110 731
Banco Espirito Santo e Comercial de Lisboa SA 14,250 323
Investec-Consultoria Internacional SA (b) 9,300 317
Jeronimo Martins & Filho 4,338 303
Sonae Investimentor-Sociedade Gestora de
Participacoes Sociais SA 7,100 297
Companhia de Seguros Mundial Confianca SA 18,600 274
Colep-Companhia Portuguesa de Embalagens 15,100 242
Cimpor-Cimentos de Portugal SGPS SA 10,140 236
EDP-Electricidade de Portugal SA 10,900 200
Telecel-Comunicacoes Pessoais SA (b) 2,000 166
---------------
3,089
South Africa 6.0%
Nedcor Limited 18,450 406
Gencor Limited 78,810 363
Rembrandt Group Limited 31,240 333
De Beers Centenary AG 7,940 293
South African Breweries Limited 9,490 291
Liberty Life Association of Africa 10,250 278
Sasol Limited 20,800 273
Nasionale Pers Beperk Limited 21,000 241
Barlow Limited 21,180 231
Smith C.G. Limited 40,930 229
Driefontein Consolidated Limited 25,800 174
Metro Cash & Carry Limited 146,500 129
Norwich Holdings SA Limited 47,800 93
---------------
3,334
South Korea 4.8%
Korea Electric Power Corp. 29,600 883
Korea Fund, Inc. 37,000 546
Cho Hung Bank Co. Limited 65,316 434
Samsung Electronics Co. 2,800 294
Korea Kumho Petrochemical Co. 37,600 261
Daewoo Securities Co. (b) 8,700 158
Samsung Corp. - GDS 15,850 52
Samsung Corp. SP - GDR 144A 1,172 4
Samsung Electronics Co. 2,892 2
---------------
2,634
Taiwan 1.5%
Taiwan Fund 22,000 556
China Steel Corp. SP - GDS 9,350 198
Advanced Semiconductor Engineering - GDR (b) 4,830 96
---------------
850
Thailand 0.9%
Electricity Generating Public Co. Limited 51,600 132
Krung Thai Bank Public Co. Limited 106,500 116
Bangkok Bank Public Co. 15,000 107
Cogeneration Public Co. Limited 33,900 95
Thai Farmers Bank Public Company Limited 13,500 60
---------------
510
Turkey 5.8%
Arcelik AS 2,766,750 373
Eregli Demir Ve Celik Fabrikalari TAS 1,849,000 308
Adana Cimento Sanayii 'A' 2,840,000 263
Akbank TAS 2,830,476 243
Turk Sise Ve Cam Fabrikalari AS 3,198,000 202
Migros Turk TAS 281,400 199
Turkiye Garanti Bankasi AS 5,251,000 198
Haci Omer Sabanci Holding AS 5,000,000 185
Izmir Demir Celik Sanayii AS (b) 14,982,000 177
Northern Elektrik Telekomunikasyon AS 633,000 175
Yapi ve Kredi Bankasi AS 7,614,000 174
Bagfas Bandirma Gubre Fabrikalari AS 724,000 173
Ak-Al Tekstil Sanayii AS 3,294,376 166
Otosan Otomobil Sanayii AS 304,000 162
Tansas Izmir Buyuksehir Belediyesi Ic Ve Dis
Ticaret AS 512,000 105
Ege Biracilik Ve Malt Sanajii AS 405,000 94
---------------
3,197
---------------
Total Common Stocks 52,774
(Cost $44,924) ===============
</TABLE>
- -------------------------------------------------------------------------------
CORPORATE BONDS AND NOTES 0.6%
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount
(000s)
<S> <C> <C>
Taiwan 0.6%
Nan Ya Plastics Corp.
1.750% due 07/19/01 180 257
Far Eastern Department Stores
3.000% due 07/06/01 75 81
--------------
Total Corporate Bonds and Notes 338
(Cost $270) --------------
Total Investments (a) 96.3% $ 53,112
(Cost $45,194)
Other Assets and Liabilities (Net) 3.7% 2,063
--------------
Net Assets 100.0% $ 55,175
==============
Notes to Schedule of Investments ($ in thousands):
(a) At June 30, 1997, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation for all investments
in which there was an excess of tax cost over value. $ 11,315
Aggregate gross unrealized depreciation for all investments
in which there was an excess of tax cost over value. (3,645)
--------------
Unrealized appreciation-net $ 7,670
==============
</TABLE>
(b) Non-income producing security.
1997 Annual Report See accompanying notes / 33
<PAGE>
Schedule of Investments
International Developed Fund
June 30, 1997
<TABLE>
<CAPTION>
Value
Shares (000s)
- -------------------------------------------------------------------------------
COMMON STOCKS 99.2%
- -------------------------------------------------------------------------------
<S> <C> <C>
Australia 0.9%
Broken Hill Property Co. 12,022 $ 177
Pasminco Limited 84,000 171
Westpac Banking Corp. 26,700 161
Amcor Limited 'A' 14,800 98
News Corp. Limited 18,600 89
Comalco Limited 16,200 87
Leighton Holdings Limited 10,400 51
Tabcorp Holdings Limited 8,850 48
QNI Limited 20,000 36
--------------
918
Belgium 3.6%
Webs-Belgium 205,000 3,588
Finland 4.1%
Nokia Corp. 13,210 985
Werner Soderstrom Osakey 'B' 17,800 617
Hartwall OY AB 5,850 339
UPM-Kymmene Corp. 14,380 332
Valmet Corp. OY 15,500 268
Yit-Yhtyma OY 18,580 245
Rautaruukki OY 23,100 243
Neste OY 9,030 240
Metsa Serla 'B' 27,890 227
Okobank 'A' 16,400 221
Stockmann AB 'B' 3,990 212
Viking Line AB 4,000 126
Rauma Group OY 400 9
--------------
4,064
France 11.0%
Elf Aquitaine SA 11,512 1,242
Alcatel Alsthom 8,660 1,085
Carrefour SA 1,272 924
Rhone-Poulenc SA 'A' 21,790 890
Societe Generale 7,960 889
Banque National de Paris 21,350 880
Hermes International 7,170 671
Societe BIC SA 4,077 667
Groupe Danone 4,000 661
AXA-UAP 10,540 656
Compagnie Generale des Eaux 5,000 641
Synthelabo 4,490 584
Lafarge SA 9,000 560
Valeo 6,910 429
Schneider SA 5,211 277
Compagnie Gen de Eaux Warrants 2,800 2
--------------
11,058
Germany 12.2%
VEBA AG 29,880 1,688
Volkswagen AG 2,040 1,547
Bayer AG 33,360 1,286
Siemens AG 18,700 1,121
Degussa AG 19,400 1,026
Mannesmann AG 2,203 985
MAN AG 3,850 976
Deutsche Telekom AG 37,200 914
Daimler Benz AG 11,000 895
Allianz AG 3,930 840
Dresdner Bank AG 15,000 526
Commerzbank AG 14,100 403
--------------
12,207
Hong Kong 1.5%
Cheung Kong Holdings Limited 23,000 227
Hutchison Whampoa Limited 25,000 216
Sun Hung Kai Properties 17,816 214
New World Development Co. Limited 28,000 167
HSBC Holdings PLC 5,200 156
Citic Pacific Limited 25,000 156
Wharf Holdings 36,000 156
China Light & Power Co. Limited 24,000 136
Amoy Properties Limited 113,500 125
--------------
1,553
Italy 6.8%
ENI SpA 258,800 $ 1,468
Fiat SpA 230,000 829
Telecom Italia SpA 256,000 768
Telecom Italia Mobile SpA 211,000 684
Instituto Nazionale delle Assicurazioni 418,000 638
Istituto Mobiliare Italiano SpA 70,000 631
Banca Commerciale Italiana 279,000 579
Alleanza Assicurazioni 66,000 519
Benetton Group SpA 27,040 433
Danieli & Co. 45,000 298
--------------
6,847
Japan 26.5%
NEC Corp. 133,000 1,859
Fanuc 48,000 1,845
Matsushita Electric Works Limited 160,000 1,817
Sumitomo Bank Limited 104,000 1,708
Fujisawa Pharmaceutical 162,000 1,670
Nippon Oil Co. 280,000 1,533
Aoyama Trading Co. Limited 47,700 1,533
Murata Manufacturing Co. 36,000 1,434
Marubeni Corp. 312,000 1,417
Nippon Telegraph & Telephone 132 1,268
NKK Corp. 586,000 1,259
Sumitomo Trust & Banking 114,000 1,225
Daiwa Securities Co. Limited 152,000 1,200
Tokyo Tatemono Co. Limited 225,000 1,189
Tokyu Corp. 180,000 1,118
Dainippon Screen Manufacturing Co. 115,000 1,085
Autobacs Seven Co. 13,000 1,031
Sumitomo Metal Mining Co. 133,000 941
Mitsui O.S.K. Lines Limited (b) 424,000 874
Tokyo Steel Manufacturing 45,100 504
Tokyo Electron Limited 2,000 96
--------------
26,606
Malaysia 3.1%
Telekom Malaysia 91,500 428
Edaran Otomobil Nasional 47,000 400
Road Builder (M) Holdings Berhad 80,412 379
United Engineers (Malaysia) Limited 46,000 332
Malayan Banking Berhad 31,000 325
Sungei Way Holdings Berhad 128,000 241
Metacorp Berhad 115,000 239
DCB Holdings Berhad 68,000 216
Resorts World Berhad 69,000 208
Land & General Berhad 136,000 156
IOI Properties Berhad 73,000 139
DCB Holdings Berhad Rights 3,400 0
--------------
3,063
Netherlands 5.0%
Royal Dutch Petroleum Co. 28,800 1,499
Unilever NV 2,766 583
Vendex International NV 6,800 372
Elsevier NV 22,251 372
Philips Electronics NV 5,100 365
ABN-AMRO Holdings 16,280 304
Royal PTT Nederland NV 7,600 298
ING Groep NV 6,195 286
Koninklijke Ahold NV 3,161 267
Akzo Noble NV 1,940 266
Verernigde Nederlandse Uitgeversbedrijven
Verenigd Bezit 10,800 239
DSM NV 1,850 184
--------------
5,035
Singapore 3.4%
Overseas Chinese Banking 66,360 687
Singapore Airlines Limited 64,300 576
United Overseas Bank Limited 53,200 547
Development Bank Of Singapore Limited 42,300 533
City Developments Limited 43,900 430
Keppel Corp. Limited 81,400 362
Fraser & Neave Limited 43,600 311
--------------
3,446
</TABLE>
34 / PIMCO Funds See accompanying notes
<PAGE>
<TABLE>
<CAPTION>
Value
Shares (000s)
- --------------------------------------------------------------------------------
<S> <C> <C>
Spain 1.0%
Telefonica de Espana 8,210 $ 237
Banco Bilbao Vizcaya SA 2,630 214
Banco Santander SA 5,400 166
Iberdrola SA 9,226 116
Repsol SA 2,356 100
Tabaclera SA 'A' 1,800 97
Gas Y Electricidad SA '2' 1,700 91
--------------
1,021
Switzerland 9.0%
Roche Holding AG 200 1,809
Novartis AG 1,106 1,769
Credit Suisse Group 7,314 940
UBS (Schweiz Bankgesellschaft) 710 812
Nestle SA 601 793
Clariant AG 860 557
Holderbank Financiere Glarus AG 535 505
Tag Heuer International SA (b) 3,040 456
Kuoni Reisen AG 130 445
ABB AG 294 445
Allusuisse-Lonza Holdings AG 385 399
Ciba Specialty Chemicals AG (b) 1,106 102
--------------
9,032
United Kingdom 11.1%
Lloyds TSB Group PLC 104,104 1,067
Zeneca Group 32,060 1,059
Abbey National PLC 77,400 1,056
Smithkline Beecham PLC 56,798 1,045
Scottish & Newcastle PLC 64,800 697
Scottish Power PLC 102,780 668
Shell Transport & Trading Co. 95,400 650
British Telecommunications PLC 86,500 642
Wolseley PLC 71,800 559
Prudential 53,100 514
Unilever PLC 17,500 501
IMI PLC 87,000 496
EMI Group PLC 27,500 493
Boots Co. PLC 39,700 465
LASMO PLC 103,000 445
Burton Group PLC 192,000 376
Commercial Union PLC 34,700 365
--------------
11,098
--------------
Total Common Stocks 99,536
(Cost $88,581) ==============
</TABLE>
- -------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 2.4%
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount
(000s)
<S> <C> <C>
Time Deposits 2.4%
Chase Manhattan Bank
5.75% due 07/01/97 $ 2,400 2,400
--------------
Total Short-Term Instruments 2,400
(Cost $2,400) ==============
Total Investments (a) 101.6% $ 101,936
(Cost $90,981)
Other Assets and Liabilities (Net) (1.6%) (1,623)
--------------
Net Assets 100.0% $ 100,313
==============
<CAPTION>
<S> <C>
Notes to Schedule of Investments ($ in thousands):
(a) At June 30, 1997, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation for all investments
in which there was an excess of tax cost over value. $ 14,494
Aggregate gross unrealized depreciation for all investments
in which there was an excess of tax cost over value. (3,594)
--------------
Unrealized appreciation-net $ 10,900
==============
</TABLE>
(b) Non-income producing security.
1997 Annual Report See accompanying notes / 35
<PAGE>
Schedule of Investments
Capital Appreciation Fund
June 30, 1997
<TABLE>
<CAPTION>
Value
Shares (000s)
- -------------------------------------------------------------------------------
COMMON STOCKS 97.4%
- -------------------------------------------------------------------------------
<S> <C> <C>
Capital Goods 13.7%
AlliedSignal, Inc. 115,900 $ 9,736
Textron, Inc. 143,800 9,545
United Technologies Corp. 112,400 9,329
Perkin Elmer Corp. 116,800 9,293
Sundstrand Corp. 161,400 9,008
Deere & Co. 143,400 7,869
Ingersoll Rand Co. 126,500 7,811
Johnson Controls, Inc. 180,400 7,408
Illinois Tool Works, Inc. 141,000 7,041
--------------
77,040
Consumer Discretionary 19.5%
Kroger Co. (b) 332,300 9,637
Xerox Corp. 121,300 9,568
TJX Corp., Inc. 361,800 9,542
Dayton-Hudson Corp. 174,100 9,260
Omnicom Group 137,800 8,492
Costco Cos. (b) 242,900 7,985
Estee Lauder Cos. 'A' 154,500 7,764
New York Times Co. 149,700 7,410
Gannett, Inc. 74,900 7,396
Armstrong World Industries 96,600 7,088
Jones Apparel Group, Inc. (b) 147,400 7,038
Brunswick Corp. 206,600 6,456
Federated Department Stores, Inc. (b) 177,700 6,175
Sunbeam-Oster, Inc. 153,000 5,776
Mattel, Inc. 1 0
--------------
109,587
Consumer Services 2.9%
Marriott International, Inc. 134,200 8,237
Carnival Corp. 'A' 193,100 7,965
--------------
16,202
Consumer Staples 4.2%
Safeway, Inc. (b) 178,700 8,243
Campbell Soup Co. 154,600 7,730
Hershey Foods Corp. 136,200 7,533
--------------
23,506
Energy 9.3%
Noble Drilling Corp. (b) 391,300 8,829
Rowan Cos., Inc. (b) 267,100 7,529
Halliburton Co. 94,800 7,513
Transocean Offshore, Inc. 102,700 7,459
Global Marine, Inc. (b) 315,200 7,328
Schlumberger Limited 57,200 7,150
ENSCO International, Inc. (b) 126,800 6,689
--------------
52,497
Financial and Business Services 21.0%
Travelers Group, Inc. 158,400 9,989
Norwest Corp. 122,900 6,913
American Express Co. 90,400 6,735
Southtrust Corp. 162,600 6,727
Federal Home Loan Mortgage Corp. 194,000 6,669
Federal National Mortgage Assoc. 152,300 6,644
Bear Stearns Cos. 192,303 6,574
Hartford Financial Services Group, Inc. 79,200 6,554
Times Mirror Co. 'A' 117,900 6,514
First Union Corp. 69,300 6,410
National City Corp. 119,400 6,269
Lincoln National Corp. 95,300 6,135
Green Tree Financial Corp. 168,200 5,992
Chase Manhattan Corp. 61,600 5,979
PNC Bank Corp. 142,915 5,949
BankBoston Corp. 80,700 5,815
Associates First Capital Corp. 'A' 100,100 5,556
BankAmerica Corp. 51,800 3,344
Citicorp 26,600 3,207
--------------
117,975
Health Care 7.8%
Schering-Plough Corp. 189,000 9,048
Tenet Healthcare Corp. (b) 262,505 7,760
American Home Products Corp. 94,800 7,252
U.S. Surgical Corp. 184,800 6,884
Lilly Eli & Co. 60,700 6,635
Cognizant Corp. 160,000 6,480
--------------
44,059
Materials & Processing 2.5%
Rohm & Haas Co. 81,400 $ 7,331
Dresser Industries, Inc. 177,200 6,601
--------------
13,932
Technology 12.1%
Tyco Labs 136,400 9,488
Sun Microsystems, Inc. (b) 212,400 7,905
BMC Software, Inc. (b) 133,900 7,415
Adaptec, Inc. (b) 194,300 6,752
Computer Associates International, Inc. 119,700 6,666
Cisco Systems, Inc. (b) 96,000 6,444
Dell Computer Corp. (b) 52,300 6,142
Intel Corp. 41,300 5,857
Compaq Computer Corp. (b) 55,900 5,548
National Semiconductor Corp. (b) 179,200 5,488
--------------
67,705
Transportation 1.1%
Continental Airlines, Inc. 'B' (b) 181,900 6,355
Utilities 3.3%
Ameritech Corp. 97,100 6,597
GPU, Inc. 167,800 6,020
American Electric Power, Inc. 141,400 5,939
--------------
18,556
--------------
Total Common Stocks 547,414
(Cost $422,753) ==============
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 5.7%
- --------------------------------------------------------------------------------
Principal
Amount
(000s)
<S> <C> <C>
Repurchase Agreements 5.7%
State Street Bank
4.250% due 07/01/97 $ 31,922 31,922
(Dated 06/30/97. Collateralized by U.S.
Treasury Note 6.00% due 05/31/98
valued at $32,564,731. Repurchase
proceeds are $31,925,769.)
--------------
Total Short-Term Instruments 31,922
(Cost $31,922) ==============
Total Investments (a) 103.1% $ 579,336
(Cost $454,675)
Other Assets and Liabilities (3.1%) (17,385)
--------------
Net Assets 100.0% $ 561,951
==============
<CAPTION>
<S> <C>
Notes to Schedule of Investments ($ in thousands):
(a) At June 30, 1997, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of tax cost
over value. $ 124,633
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (239)
--------------
Unrealized appreciation-net $ 124,394
==============
</TABLE>
(b) Non-income producing security.
36 / PIMCO Funds See accompanying notes
<PAGE>
Schedule of Investments
Mid Cap Growth Fund
June 30, 1997
<TABLE>
<CAPTION>
Value
Shares (000s)
- --------------------------------------------------------------------------------
COMMON STOCKS 95.5%
- --------------------------------------------------------------------------------
<S> <C> <C>
Capital Goods 3.0%
Waters Corp. (b) 112,000 $ 4,018
Mark IV Industries, Inc. 161,751 3,882
Belden, Inc. 108,000 3,679
--------------
11,579
Consumer Discretionary 23.0%
Borders Group, Inc. (b) 233,200 5,626
Consolidated Stores Corp. (b) 161,156 5,600
Fort Howard Corp. (b) 103,500 5,240
Tiffany & Co. 104,500 4,827
Callaway Golf Co. 134,600 4,778
Herman Miller, Inc. 124,200 4,471
Maytag Corp. 167,100 4,365
U.S. Industries, Inc. (b) 120,400 4,289
Flowers Industries, Inc. 247,700 4,164
Bemis, Inc. 95,800 4,143
Cytec Industries, Inc. (b) 107,500 4,018
International Game Technology 221,400 3,930
Lancaster Colony Corp. 80,700 3,904
Liz Claiborne, Inc. 83,600 3,898
Bed, Bath & Beyond, Inc. (b) 125,400 3,809
Sealed Air Corp. (b) 79,000 3,753
Snap-On, Inc. 94,900 3,737
Kroger Co. (b) 128,400 3,724
Alberto-Culver Co. 'A' 151,100 3,523
HON Industries 79,200 3,505
Lear Corp. (b) 77,600 3,444
K2, Inc. 15,000 475
--------------
89,223
Consumer Services 1.2%
Promus Hotel Corp. (b) 119,600 4,635
Consumer Staples 2.5%
Interstate Bakeries Corp. 81,800 4,852
Richfood Holdings, Inc. 183,750 4,778
--------------
9,630
Energy 13.4%
Falcon Drilling Co., Inc. (b) 112,000 6,454
Cooper Cameron Corp. (b) 109,200 5,105
Smith International, Inc. (b) 83,400 5,066
EVI, Inc. (b) 115,700 4,859
BJ Services Co. (b) 83,200 4,462
El Paso Natural Gas Co. 81,100 4,460
Weatherford Enterra, Inc. (b) 109,100 4,200
Diamond Offshore Drilling, Inc. 53,400 4,172
Baker Hughes, Inc. 92,900 3,594
Tosco Corp. 113,500 3,398
Reading & Bates Corp. (b) 111,600 2,985
National Fuel Gas Co. 66,800 2,801
Camco International, Inc. 10,000 547
--------------
52,103
Financial and Business Services 29.4%
Cullen/Frost Bankers, Inc. 124,900 5,293
Citizens Corp. 183,400 5,066
Mutual Risk Management Limited 107,465 4,930
Allmerica Financial Corp. 121,300 4,837
Protective Life Corp. 93,800 4,713
Progressive Corp. 53,200 4,628
Crescent Real Estate Equities Co. 143,300 4,550
Union Planters Corp. 87,700 4,549
Popular, Inc. 108,200 4,368
First American Corp. 112,400 4,313
Penncorp Financial Group, Inc. 108,600 4,181
Banc One Corp. 85,460 4,139
Ambac, Inc. 54,000 4,124
BB&T Corp. 90,200 4,059
Mercantile BanCorp. 66,242 4,024
Travelers Property Casualty 'A' 100,700 4,015
Comdisco, Inc. 152,875 3,975
Finova Group, Inc. 49,900 3,817
Equity Residential Properties Trust 79,800 3,791
Public Storage, Inc. 128,100 3,747
AmSouth Bancorp. 98,800 3,736
Ace Limited 50,000 3,694
SunAmerica, Inc. 69,500 3,388
PMI Group, Inc. 52,200 3,256
Summit Bancorp 64,460 3,231
Equifax, Inc. 85,500 3,179
Crestar Financial Corp. 80,600 3,133
HCC Insurance Holdings, Inc. 36,550 975
City National Corp. 25,000 602
Reinsurance Group of America 10,000 575
Magna Group, Inc. 15,000 521
Associated Banc-Corp 12,000 474
Crescent Operating, Inc. (b) 14,330 172
First Midwest Bancorp, Inc. 1,250 40
--------------
114,095
Health Care 5.4%
Guidant Corp. 55,700 4,734
Health Management Association, Inc. 'A' (b) 158,350 4,513
Beckman Instruments, Inc. 83,600 4,034
Watson Pharmaceutical, Inc. (b) 87,900 3,714
DePuy, Inc. (b) 151,800 3,492
Orthodontic Centers of America, Inc. (b) 24,000 437
--------------
20,924
Materials & Processing 4.7%
Lennar Corp. 140,000 4,471
Titanium Metals Corp. (b) 135,200 4,276
Praxair, Inc. 73,800 4,133
Mascotech, Inc. 166,600 3,478
Johns Manville Corp. 50,800 600
Medusa Corp. 15,000 576
Mueller Industries, Inc. (b) 10,000 438
Mississippi Chemical Corp. 15,000 311
--------------
18,283
Technology 11.0%
Compuware Corp. (b) 117,200 5,596
McAfee Associates, Inc. (b) 83,200 5,252
Tandem Computers, Inc. (b) 253,100 5,125
SCI Systems, Inc. (b) 76,000 4,845
Electronics for Imaging, Inc. (b) 93,600 4,423
Gateway 2000, Inc. (b) 119,100 3,863
Cognos, Inc. (b) 123,100 3,831
American Power Conversion Corp. (b) 164,500 3,126
General Dynamics Corp. 41,500 3,113
Adaptec, Inc. (b) 75,200 2,613
Sanmina Corp. (b) 10,000 635
--------------
42,422
Transportation 1.0%
CNF Transportation, Inc. 125,300 4,041
Utilities 0.9%
Cinergy Corp. 83,200 2,897
Oneok, Inc. 15,000 483
--------------
3,380
--------------
Total Common Stocks 370,315
(Cost $288,273) ==============
</TABLE>
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 0.4%
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount
(000s)
<S> <C> <C>
Repurchase Agreements 0.4%
State Street Bank
4.250% due 07/01/97 $ 1,481 1,481
(Dated 06/30/97. Collateralized by U.S.
Treasury Bond 8.500% due 02/15/20
valued at $1,514,131. Repurchase proceeds
are $1,481,175.)
--------------
Total Short-Term Instruments 1,481
==============
(Cost $1,481)
Total Investments (a) 95.9% $ 371,796
(Cost $289,754)
Other Assets and Liabilities 4.1% 15,773
--------------
Net Assets 100.0% $ 387,569
==============
</TABLE>
1997 Annual Report See accompanying notes / 37
<PAGE>
Schedule of Investments (Cont.)
Mid Cap Growth Fund
June 30, 1997
<TABLE>
<S> <C>
================================================================================
Notes to Schedule of Investments ($ in thousands):
(a) At June 30, 1997, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of tax cost
over value. $ 84,186
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (2,212)
--------------
Unrealized appreciation-net $ 81,974
==============
</TABLE>
(b) Non-income producing security.
38 / PIMCO Funds See accompanying notes
<PAGE>
Schedule of Investments
Micro Cap Growth Fund
June 30, 1997
<TABLE>
<CAPTION>
Value
Shares (000s)
- -------------------------------------------------------------------------------
COMMON STOCKS 92.8%
- -------------------------------------------------------------------------------
<S> <C> <C>
Capital Goods 8.2%
Gardner Denver Machinery, Inc. (b) 103,700 $ 3,085
Asyst Technologies, Inc. (b) 69,400 3,054
Powell Industries, Inc. (b) 133,600 2,037
Monaco Coach Corp. (b) 82,200 1,993
BHA Group, Inc. 91,080 1,685
M/I Schottenstein Homes, Inc. (b) 137,400 1,546
Watsco, Inc. 'A' 7,800 195
--------------
13,595
Consumer Discretionary 20.7%
Culp, Inc. 146,250 2,651
Chattem, Inc. (b) 173,200 2,338
Pillowtex Corp. 104,100 2,284
The First Years 104,800 2,227
Movado Group, Inc. 83,475 2,129
Sodak Gaming, Inc. (b) 134,500 1,984
American Safety Razor Co. (b) 105,700 1,916
Koala Corp. (b) 116,800 1,869
Shoe Carnival, Inc. (b) 175,300 1,753
Quaker Fabric Corp. (b) 104,800 1,729
Winsloew Furniture, Inc. (b) 154,300 1,688
Galey & Lord, Inc. (b) 89,100 1,671
Piercing Pagoda, Inc. (b) 63,500 1,595
Steinway Musical Instruments, Inc. (b) 81,300 1,585
American Woodmark Corp. 101,200 1,581
Baker J., Inc. 184,800 1,455
BeautiControl Cosmetics, Inc. 105,000 1,181
Rocky Shoes & Boots, Inc. (b) 62,800 1,036
Drypers Corp. (b) 110,300 848
Motorcar Parts and Accessories, Inc. (b) 30,000 510
Lacrosse Footwear, Inc. 26,300 342
--------------
34,372
Consumer Services 4.1%
Ha-Lo Industries, Inc. (b) 102,550 2,423
Anchor Gaming (b) 48,400 2,311
All American Communications, Inc. 'B' (b) 165,500 2,007
--------------
6,741
Consumer Staples 9.4%
Worthington Foods, Inc. 93,800 2,298
Fresh America Corp. (b) 105,200 1,959
Sanderson Farms, Inc. 110,900 1,941
Ingles Markets, Inc. 118,200 1,936
Mortons Restaurant Group, Inc. (b) 94,300 1,874
S&K Famous Brands, Inc. (b) 162,300 1,785
Tasty Baking Co. 91,500 1,601
Standard Commercial Corp. (b) 84,381 1,466
Eagle Food Centers, Inc. (b) 121,300 728
--------------
15,588
Energy 4.6%
St. Mary Land & Exploration 65,500 2,301
American Oilfield Divers, Inc. (b) 149,100 1,789
Key Production Co., Inc. (b) 151,100 1,530
Clayton Williams Energy, Inc. (b) 123,600 1,406
UTI Energy Corp. (b) 14,000 642
--------------
7,668
Financial and Business Services 20.3%
Warren Bancorp, Inc. 159,300 2,867
Dime Financial Corp. 110,500 2,818
Community First Bankshares, Inc. 71,000 2,725
Chittenden Corp. 79,355 2,718
Graphic Industries, Inc. 192,900 2,556
Vermont Financial Services Corp. 50,500 2,374
Provident Bankshares Corp. 53,762 2,238
Progressive Bank, Inc. 69,100 2,177
Sho-Me Financial Corp. (b) 54,300 2,063
CFI Proservices, Inc. (b) 106,600 1,919
JeffBanks, Inc. 65,100 1,904
Southwest Securities Group 97,100 1,893
Peoples Heritage Financial Group 47,700 1,807
Abington Bancorp, Inc. 68,300 1,742
Alabama National Bancorp 56,000 1,253
Equity Marketing, Inc. (b) 30,700 721
--------------
33,775
Health Care 5.2%
Rexall Sundown, Inc. (b) 84,750 3,305
Alliance Imaging, Inc. (b) 197,400 2,023
Osteotech, Inc. (b) 147,950 1,553
Sheridan Healthcare, Inc. (b) 130,000 1,365
CyanoTech Corp. (b) 85,000 420
--------------
8,666
Materials & Processing 3.6%
Virco Manufacturing Corp. 84,900 2,197
Fibermark, Inc. (b) 99,500 2,077
Northwest Pipe Co. (b) 93,100 1,711
--------------
5,985
Technology 13.0%
Plexus Corp. (b) 71,300 3,979
QLogic Corp. (b) 115,100 2,935
Barra, Inc. (b) 83,500 2,756
Ikos Systems, Inc. (b) 114,000 2,437
Engineered Support Systems, Inc. 118,100 2,214
Advanced Logic Research, Inc. (b) 137,200 2,101
Applied Voice Technology, Inc. (b) 112,300 2,078
Dendrite International (b) 101,100 1,668
Ciber, Inc. (b) 42,800 1,463
--------------
21,631
Transportation 3.7%
Atlantic Coast Airlines, Inc. (b) 160,600 2,529
Mesaba Holdings, Inc. (b) 129,900 1,916
MTL, Inc. (b) 75,200 1,758
--------------
6,203
--------------
Total Common Stocks 154,224
(Cost $116,822) ==============
</TABLE>
<TABLE>
- -------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 7.5%
- -------------------------------------------------------------------------------
Principal
Amount
(000s)
<S> <C> <C>
Repurchase Agreements 7.5%
State Street Bank
4.250% due 07/01/97 $ 12,485 12,485
(Dated 06/30/97. Collateralized by U.S.
Treasury Bond 8.500% due 02/15/20
valued at $12,735,791. Repurchase proceeds
are $12,486,474.)
--------------
Total Short-Term Instruments 12,485
(Cost $12,485) ==============
Total Investments (a) 100.3% $ 166,709
(Cost $129,307)
Other Assets and Liabilities (0.3%) (454)
--------------
Net Assets 100.0% $ 166,255
==============
<CAPTION>
<S> <C>
Notes to Schedule of Investments ($ in thousands):
(a) At June 30, 1997, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of tax cost
over value. $ 38,687
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (1,396)
--------------
Unrealized appreciation-net $ 37,291
==============
</TABLE>
(b) Non-income producing security.
1997 Annual Report See accompanying notes / 39
<PAGE>
Schedule of Investments
Small Cap Growth Fund
June 30, 1997
<TABLE>
<CAPTION>
Value
Shares (000s)
- --------------------------------------------------------------------------------
COMMON STOCKS 97.9%
- --------------------------------------------------------------------------------
<S> <C> <C>
Capital Goods 7.0%
Manitowoc Co., Inc. 8,000 $ 374
Gleason Corp. 8,000 372
RMI Titanium Co. (b) 10,400 283
Kulicke & Soffa Industries (b) 7,000 227
Gardner Denver Machinery, Inc. (b) 7,600 226
Cambrex Corp. 5,600 223
Barnes Group, Inc. 6,900 204
Aviall, Inc. (b) 10,600 148
DT Industries, Inc. 3,700 132
Chart Industries, Inc. 4,200 115
Watsco, Inc. `A' 1,840 46
--------------
2,350
Consumer Discretionary 18.9%
Pier 1 Imports, Inc. 16,000 424
Meyer (Fred), Inc. (b) 8,000 413
Central Garden & Pet Co. (b) 16,000 400
Duty Free International, Inc. 21,200 397
Wet Seal, Inc. `A' (b) 12,200 385
Ross Stores, Inc. (b) 11,300 369
Emmis Broadcasting Corp. `A' (b) 8,000 349
Ethan Allen Interiors, Inc. 6,000 342
Robbins & Myers, Inc. 10,000 325
Sodak Gaming, Inc. (b) 21,500 317
K2, Inc. 10,000 317
Action Performance Cos., Inc. (b) 12,300 298
Pacific Sunwear Of California (b) 7,200 232
Seattle Filmworks, Inc. (b) 18,900 227
Southern Energy Homes, Inc. (b) 24,300 222
Kimball International `B' 4,800 193
Culp, Inc. 10,600 192
Windmere Corp. 10,700 175
Foamex International, Inc. (b) 13,200 173
Authentic Fitness Corp. 13,700 173
Helen Of Troy Corp. (b) 6,200 159
Russ Berrie & Co., Inc. 5,400 118
Royal Appliance Manufacturing Co. (b) 10,900 93
--------------
6,293
Consumer Services 5.2%
Anchor Gaming (b) 8,000 382
Ha-Lo Industries, Inc. (b) 16,025 379
Cole National Corp. (b) 7,400 326
Williams-Sonoma, Inc. (b) 7,000 299
Felcor Suite Hotels, Inc. 5,600 209
Penn National Gaming, Inc. (b) 9,700 144
--------------
1,739
Consumer Staples 1.9%
Performance Food Group Co. (b) 12,200 256
Michael Foods, Inc. 10,600 196
Standard Commercial Corp. (b) 9,593 167
--------------
619
Energy 9.3%
Falcon Drilling Co., Inc. (b) 8,500 490
Pride Petroleum Services, Inc. (b) 18,900 454
Pool Energy Services Co. (b) 22,900 415
Camco International, Inc. 7,400 405
Veritas DGC, Inc. (b) 15,400 350
Cliffs Drilling Co. (b) 8,200 299
Marine Drilling Co., Inc (b) 13,900 273
Varco International, Inc. (b) 7,000 226
Newpark Resources, Inc. (b) 6,000 203
--------------
3,115
Financial and Business Services 24.8%
Protective Life Corp. 8,600 432
Capital Re Corp. 8,000 428
Reinsurance Group Of America 7,000 403
Associated Banc-Corp 9,764 386
Allied Group, Inc. 10,000 380
Morningstar Group, Inc. (b) 12,900 379
Peoples Heritage Financial Group 9,900 375
Susquehanna Bancshares, Inc. 9,200 361
Westamerica BanCorp 4,600 350
Executive Risk, Inc. 6,600 343
First Midwest Bancorp, Inc. 10,825 343
UST Corp. 15,200 340
Penncorp Financial Group, Inc. 8,800 339
Colonial BancGroup, Inc. 13,700 332
Magna Group, Inc. 9,400 327
City National Corp. 13,300 320
Redwood Trust, Inc. 6,700 313
Frontier Insurance Group, Inc. 4,700 304
HCC Insurance Holdings, Inc. 11,400 304
CMAC Investment Corp. 5,400 258
Patriot American Hospitality, Inc. 9,600 245
Innkeepers USA Trust 14,900 224
Hospitality Properties Trust 6,900 211
Beacon Properties Corp. 6,200 207
Highwoods Properties, Inc. 6,100 195
Merrill Corp. 5,000 182
--------------
8,281
Health Care 7.0%
Rexall Sundown, Inc. (b) 17,400 679
Universal Health Services, Inc. (b) 7,700 296
Orthodontic Centers Of America, Inc. (b) 15,400 280
TECHNOLI Medical Products, Inc. (b) 12,300 274
Curative Health Services, Inc. (b) 7,600 219
Ballard Medical Products 10,100 203
Owens & Minor, Inc. 12,500 187
United Wisconsin Services, Inc. 3,900 131
Hologic, Inc. (b) 2,400 64
--------------
2,333
Materials & Processing 8.9%
Mueller Industries, Inc. (b) 9,000 394
Martin Marietta Materials, Inc. 12,000 389
Medusa Corp. 10,000 384
GenCorp, Inc. 16,000 370
Universal Corp. 10,900 346
Lone Star Industries, Inc. 7,400 335
Zeigler Coal Holding Co. 12,900 302
Mississippi Chemical Corp. 14,000 290
Oregon Metallurgical Corp. (b) 6,100 172
--------------
2,982
Technology 11.5%
Genrad, Inc. (b) 18,000 407
Sanmina Corp. (b) 6,000 381
Veritas Software Corp. (b) 7,500 377
Coherent Communications Systems Corp. (b) 13,800 345
BancTec, Inc. (b) 11,000 285
Dynatech Corp. (b) 7,000 250
SPSS, Inc. (b) 8,000 232
RadiSys Corp. (b) 5,800 231
Comverse Technology, Inc. (b) 4,200 218
MTS Systems Corp. 6,000 183
Stratus Computer, Inc. (b) 3,600 180
BENCHMARQ Microelectronics, Inc. (b) 10,200 176
Gilat Satellite Networks Limited (b) 5,100 170
Pacific Scientific Co. 12,100 160
VLSI Technology, Inc. (b) 5,300 125
Inso Corp. (b) 5,000 103
Technitrol, Inc. 1,000 27
--------------
3,850
Utilities 3.4%
Lincoln Electric Co. `A' 10,500 402
Oneok, Inc. 12,200 393
Aliant Communications, Inc. 16,700 326
--------------
1,121
--------------
Total Common Stocks 32,683
(Cost $25,544) ==============
</TABLE>
40 / PIMCO Funds See accompanying notes
<PAGE>
<TABLE>
<CAPTION>
Principal
Amount Value
(000s) (000s)
- -------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 2.6%
- -------------------------------------------------------------------------------
<S> <C> <C>
Repurchase Agreements 2.6%
State Street Bank
4.250% due 07/01/97 $ 869 $ 869
(Dated 06/30/97. Collateralized by U.S.
Treasury Bond 8.500% due 02/15/20
valued at $891,383. Repurchase proceeds
are $869,103.)
--------------
Total Short-Term Instruments 869
(Cost $869) ==============
Total Investments (a) 100.5% $ 33,552
(Cost $26,413)
Other Assets and Liabilities (0.5%) (161)
--------------
Net Assets 100.0% $ 33,391
==============
<CAPTION>
<S> <C>
Notes to Schedule of Investments ($ in thousands):
(a) At June 30, 1997, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of tax cost
over value. $ 7,394
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (388)
--------------
Unrealized appreciation-net $ 7,006
==============
</TABLE>
(b) Non-income producing security.
1997 Annual Report See accompanying notes / 41
<PAGE>
Schedule of Investments
Core Equity Fund
June 30, 1997
<TABLE>
<CAPTION>
Value
Shares (000s)
- -------------------------------------------------------------------------------
COMMON STOCKS 97.1%
- -------------------------------------------------------------------------------
<S> <C> <C>
Capital Goods 6.6%
General Electric Co. 20,200 $ 1,320
Archer-Daniels-Midland Co. 14,800 348
Deere & Co. 6,300 346
Newell Co. 8,700 345
--------------
2,359
Consumer Discretionary 10.0%
TJX Corp., Inc. 31,400 828
Browning Ferris Industries, Inc. 19,100 635
Staples, Inc. (b) 26,300 611
Costco Cos. (b) 17,500 575
Home Depot, Inc. 8,100 558
Wendy's International, Inc. 13,800 358
--------------
3,565
Consumer Services 5.1%
CUC International, Inc. (b) 38,700 999
Waste Management, Inc. 15,800 507
Manpower, Inc. 7,100 316
--------------
1,822
Consumer Staples 1.6
American Stores Co. 11,400 563
Energy 5.3%
Schlumberger Limited 5,200 650
USX Marathon Group 22,400 647
Tosco Corp. 20,600 617
--------------
1,914
Financial and Business Services 12.6%
Allstate Corp. 14,600 1,066
NationsBank Corp. 11,300 729
Washington Mutual, Inc. 11,000 657
Merrill Lynch Co. 9,800 584
First Union Corp. 6,200 574
Associates First Capital Corp. 'A' 9,800 544
Aetna, Inc. 3,300 338
--------------
4,492
Health Care 19.0%
HBO & Co. 15,900 1,095
Warner Lambert Co. 7,700 957
Pfizer, Inc. 7,700 920
Lilly Eli & Co. 8,400 918
Boston Scientific Corp. (b) 11,500 707
Medtronic, Inc. 5,500 445
CVS Corp. 8,400 431
Cardinal Health, Inc. 6,000 344
Oxford Health Plans, Inc. (b) 4,700 337
Bristol-Myers Squibb Co. 4,100 332
Conseco, Inc. 8,000 296
--------------
6,782
Materials & Processing 0.9%
Georgia-Pacific Corp. 3,800 324
Technology 30.2%
Microsoft Corp. (b) 7,200 910
Boeing Co. (The) 17,000 902
Motorola, Inc. 11,600 882
Service Corp. International 25,900 851
America Online, Inc. (b) 13,600 756
Honeywell, Inc. 9,900 751
Lucent Technologies, Inc. 9,900 713
Cisco Systems, Inc. (b) 10,500 705
Nokia Corp. - ADR 8,200 605
Ascend Communications, Inc. (b) 14,500 571
Qualcomm, Inc. (b) 9,500 483
Intel Corp. 3,200 454
Xilinx, Inc. (b) 9,100 446
Compaq Computer Corp. (b) 4,300 427
Tele-Communications 'A' (b) 26,800 399
LSI Logic Corp. (b) 11,300 362
3Com Corp. (b) 6,700 302
Westinghouse Electric Corp. 12,700 294
--------------
10,813
Utilities 5.8%
Worldcom, Inc. (b) 34,200 $ 1,094
Sonat, Inc. 10,000 513
Nextel Communications, Inc. 'A' (b) 25,400 481
--------------
2,088
--------------
Total Common Stocks 34,722
(Cost $29,402) ==============
</TABLE>
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 3.6%
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount
(000s)
<S> <C> <C>
Repurchase Agreements 3.6%
State Street Bank
4.250% due 07/01/97 $ 1,298 1,298
(Dated 06/30/97. Collateralized by U.S.
Treasury Bond 8.500% due 02/15/20
valued at $1,324,864. Repurchase proceeds
are $1,298,153.)
--------------
Total Short-Term Instruments 1,298
(Cost $1,298) ==============
Total Investments (a) 100.7% $ 36,020
(Cost $30,700)
Other Assets and Liabilities (0.7%) (244)
--------------
Net Assets 100.0% $ 35,776
==============
<CAPTION>
Notes to Schedule of Investments ($ in thousands):
(a) At June 30, 1997, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of tax cost
over value. $ 5,746
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (517)
--------------
Unrealized appreciation-net $ 5,229
==============
(b) Non-income producing security.
</TABLE>
42 / PIMCO Funds See accompanying notes
<PAGE>
Schedule of Investments
Mid Cap Equity Fund
June 30, 1997
<TABLE>
<CAPTION>
Value
Shares (000s)
- --------------------------------------------------------------------------------
COMMON STOCKS 97.9%
- --------------------------------------------------------------------------------
<S> <C> <C>
Capital Goods 6.0%
Paccar, Inc. 3,100 $ 144
Perkin Elmer Corp. 1,500 119
AGCO Corp. 2,800 101
Coltec Industries, Inc. (b) 4,800 94
--------------
458
Consumer Discretionary 19.6%
Sunbeam-Oster, Inc. 7,200 272
General Nutrition Cos., Inc. (b) 6,200 174
Hertz Corp. `A' (b) 4,600 166
Jones Apparel Group, Inc. (b) 2,900 138
Amway Asia Pacific Limited 2,900 127
Westpoint Stevens, Inc. (b) 3,200 125
Samsonite Corp. (b) 2,500 110
Callaway Golf Co. 3,100 110
Borders Group, Inc. (b) 4,200 101
Revlon, Inc. `A' (b) 1,700 88
Valassis Communications, Inc. (b) 3,300 79
--------------
1,490
Consumer Services 3.9%
Starbuck Corp. (b) 3,000 117
Gartner Group, Inc. `A' (b) 2,600 93
Williams-Sonoma, Inc. (b) 2,100 90
--------------
300
Consumer Staples 1.1%
Dean Foods Co. 2,000 81
Energy 9.2%
Valero Energy Corp. 4,900 178
BJ Services Co. (b) 3,300 177
Sun Co., Inc. 4,700 146
Columbia Gas Systems, Inc. 1,800 117
Anadarko Petroleum Corp. 1,300 78
--------------
696
Financial and Business Services 13.5%
T. Rowe Price Associates 3,800 196
Greenpoint Financial Corp. 2,700 180
Dime Bancorp, Inc. 8,700 152
Everest Reinsurance Holdings, Inc. 3,600 143
Union Planters Corp. 2,500 130
Southtrust Corp. 2,700 112
Marshall & Ilsley Corp. 2,700 110
--------------
1,023
Health Care 10.9%
McKesson Corp. 3,000 233
Beverly Enterprises, Inc. (b) 10,700 174
Wellpoint Health Networks (b) 3,700 170
Acuson Corp. (b) 7,200 166
BioChem Pharma, Inc. (b) 3,700 82
--------------
825
Materials & Processing 1.2%
Owens Illinois, Inc. (b) 3,000 93
Technology 31.9%
National Semiconductor Corp. (b) 7,200 221
Maxim Integrated Products, Inc. (b) 3,200 182
Autodesk, Inc. 4,600 176
DSC Communications Corp. (b) 7,700 171
Jacor Communications, Inc. (b) 3,700 142
Lattice Semiconductor Corp. (b) 2,300 130
Compuware Corp. (b) 2,500 119
International Rectifier Corp. (b) 6,300 117
Transaction Systems Archit `A' (b) 3,400 117
Vishay Intertechnology, Inc. (b) 3,990 115
Cypress Semiconductor Corp. (b) 7,800 113
Kohls Corp. (b) 2,100 111
Symantec Corp. (b) 5,600 109
Xilinx, Inc. (b) 2,200 108
Advanced Fibre Communication (b) 1,600 97
Qualcomm, Inc. (b) 1,800 91
Stratus Computer, Inc. (b) 1,600 80
General Signal Corp. 1,800 78
Sawtek, Inc. (b) 2,200 74
Storage Technology Corp.(b) 1,600 71
--------------
2,422
Utilities 0.6%
Quest Communications International (b) 1,700 $ 46
--------------
Total Common Stocks 7,434
(Cost $6,637) ==============
</TABLE>
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 3.3%
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount
(000s)
<S> <C> <C>
Repurchase Agreements 3.3%
State Street Bank
4.250% due 07/01/97 $ 251 251
(Dated 06/30/97. Collateralized by U.S.
Treasury Bond 8.500% due 02/15/20
valued at $256,425. Repurchase proceeds
are $251,030.)
--------------
Total Short-Term Instruments 251
(Cost $251) ==============
Total Investments (a) 101.2% $ 7,685
(Cost $6,888)
Other Assets and Liabilities (1.2%) (94)
--------------
Net Assets 100.0% $ 7,591
==============
<CAPTION>
<S> <C>
Notes to Schedule of Investments ($ in thousands):
(a) At June 30, 1997, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of tax cost
over value. $ 867
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (80)
--------------
Unrealized appreciation-net $ 787
==============
(b) Non-income producing security.
</TABLE>
1997 Annual Report See accompanying notes / 43
<PAGE>
Schedule of Investments
Equity Income Fund
June 30, 1997
<TABLE>
<CAPTION>
Value
Shares (000s)
- --------------------------------------------------------------------------------
COMMON STOCKS 95.3%
- --------------------------------------------------------------------------------
<S> <C> <C>
Capital Goods 3.9%
GATX Corp. 47,800 $ 2,760
Northrop Grumman Corp. 30,600 2,687
--------------
5,447
Consumer Discretionary 22.4%
Maytag Corp. 197,500 5,160
SUPERVALU, Inc. 146,300 5,047
VF Corp. 33,300 2,835
Springs Indusries, Inc. 'A' 53,500 2,822
Chrysler Corp. 83,860 2,752
Ford Motor Co. 72,600 2,741
Penny J.C., Inc. 52,000 2,714
Brunswick Corp. 85,400 2,669
American Greetings Corp. 'A' 59,400 2,205
John H. Harland Co. 85,100 1,941
Xerox Corp. 7,800 615
--------------
31,501
Consumer Staples 5.7%
RJR Nabisco Holdings Corp. 161,300 5,323
Anheuser Busch Cos., Inc. 62,400 2,617
--------------
7,940
Energy 9.4%
Ultramar Diamond Shamrock 87,300 2,848
Occidental Petroleum Corp. 106,500 2,669
Amoco Corp. 30,400 2,643
Repsol SA SP - ADR 62,200 2,640
Atlantic Richfield Co. 34,000 2,397
--------------
13,197
Financial and Business Services 15.5%
Lincoln National Corp. 45,500 2,929
Meditrust Corp. 73,100 2,915
CIGNA Corp. 16,000 2,840
Bear Stearns Cos. 82,726 2,828
Mellon Bank Corp. 59,400 2,680
Bankers Trust New York Corp. 30,000 2,610
Chase Manhattan Corp. 25,356 2,461
PNC Bank Corp. 58,600 2,439
--------------
21,702
Health Care 3.8%
Pharmacia & Upjohn, Inc. 79,695 2,769
American Home Products Corp. 33,600 2,570
--------------
5,339
Materials & Processing 9.7%
USX-U.S. Steel, Inc. 87,400 3,065
Phelps Dodge Corp. 31,900 2,717
Vulcan Materials Co. 34,200 2,685
Dow Chemical Co. 30,200 2,631
Illinois Central Corp. 69,700 2,435
--------------
13,533
Technology 5.7%
Harris Corp. 32,600 2,739
International Business Machines Corp. 30,200 2,724
General Dynamics Corp. 34,800 2,610
--------------
8,073
Utilities 19.2%
Southern New England Telecommunications Corp. 130,900 5,089
Nynex Corp. 52,300 3,014
Washington Water Power Co. 143,000 2,806
DTE Energy Co. 100,200 2,768
U.S. West Communications Group 73,200 2,759
NICOR, Inc. 75,300 2,701
Peoples Energy Corp. 71,000 2,658
PG & E 105,400 2,556
P.P. & L. Resources, Inc. 127,200 2,536
--------------
26,887
--------------
Total Common Stocks 133,619
(Cost $109,629) ==============
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 4.2%
- --------------------------------------------------------------------------------
<S> <C> <C>
Repurchase Agreements 4.2%
State Street Bank
4.250% due 07/01/97 $ 5,902 $ 5,902
(Dated 06/30/97. Collateralized by U.S.
Treasury Bond 8.500% due 02/15/20
valued at $6,025,995. Repurchase proceeds
are $5,902,697.)
--------------
Total Short-Term Instruments 5,902
(Cost $5,902) ==============
Total Investments (a) 99.5% $ 139,521
(Cost $115,531)
Other Assets and Liabilities 0.5% 703
--------------
Net Assets 100.0% $ 140,224
==============
<CAPTION>
<S> <C>
Notes to Schedule of Investments ($ in thousands):
(a) At June 30, 1997, the net unrealized appreciation
(depreciation) of investments based on cost for
federal income tax purposes was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of tax cost
over value. $ 24,945
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (987)
--------------
Unrealized appreciation-net $ 23,958
==============
</TABLE>
44 / PIMCO Funds See accompanying notes
<PAGE>
Schedule of Investments
Value Fund
June 30, 1997
<TABLE>
<CAPTION>
Value
Shares (000s)
- --------------------------------------------------------------------------------
COMMON STOCKS 94.8%
- --------------------------------------------------------------------------------
<S> <C> <C>
Capital Goods 4.2%
Northrop Grumman Corp. 40,000 $ 3,513
Deere & Co. 56,000 3,073
GATX Corp. 17,000 982
--------------
7,568
Consumer Discretionary 21.8%
VF Corp. 65,000 5,533
American Greetings Corp. `A' 115,000 4,269
Maytag Corp. 139,400 3,642
Goodyear Tire & Rubber Co. 55,000 3,482
Chrysler Corp. 104,700 3,435
Brunswick Corp. 107,000 3,344
SUPERVALU, Inc. 95,900 3,308
Westvaco Corp. 81,600 2,565
Tupperware Corp. 70,000 2,555
Washington Post Co. 4,500 1,791
Dillards, Inc. `A' 50,000 1,731
Tandy Corp. 25,000 1,400
Xerox Corp. 14,900 1,175
Springs Indusries, Inc. `A' 19,000 1,002
--------------
39,232
Consumer Staples 7.6%
Anheuser Busch Cos., Inc. 105,000 4,403
RJR Nabisco Holdings Corp. 106,300 3,508
Unilever NV 15,000 3,270
IBP, Inc. 55,000 1,279
Whitman Corp. 50,000 1,266
--------------
13,726
Energy 11.9%
Amoco Corp. 60,000 5,216
Ultramar Diamond Shamrock 145,000 4,731
Repsol SA SP - ADR 110,000 4,668
Atlantic Richfield Co. 50,000 3,525
Union Texas Petroleum Holdings, Inc. 160,000 3,350
--------------
21,490
Financial and Business Services 16.0%
CIGNA Corp. 30,000 5,325
Mellon Bank Corp. 114,000 5,144
Bear Stearns Cos. 128,782 4,403
Chase Manhattan Corp. 45,000 4,368
Countrywide Credit Industries, Inc. 120,000 3,743
Loews Corp. 30,000 3,004
PNC Bank Corp. 23,000 957
Bankers Trust New York Corp. 9,000 783
Meditrust Corp. 17,000 678
Lincoln National Corp. 4,400 283
--------------
28,688
Health Care 6.1%
American Home Products Corp. 47,000 3,596
Beckman Instruments, Inc. 69,900 3,373
Pharmacia & Upjohn, Inc. 68,410 2,377
Foundation Health Systems `A' (b) 52,000 1,576
--------------
10,922
Materials & Processing 5.7%
Phelps Dodge Corp. 50,500 4,302
USG Corp. (b) 80,400 2,935
Union Carbide Corp. 23,600 1,111
Vulcan Materials Co. 13,800 1,083
Wellman, Inc. 48,000 834
--------------
10,265
Technology 8.9%
Tektronix, Inc. 60,000 3,600
Harris Corp. 37,800 3,175
Intel Corp. 20,300 2,879
Seagate Technology, Inc. (b) 80,000 2,815
Adobe Systems, Inc. 50,900 1,785
Wheelabrator Technologies, Inc. 115,000 1,775
--------------
16,029
Transportation 1.8%
UAL Corp. (b) 45,000 3,220
Utilities 10.8%
NICOR, Inc. 135,000 4,843
Nynex Corp. 65,000 3,746
Southern New England Telecommunications Corp. 85,900 3,339
PG & E 135,000 3,274
DTE Energy Co. 87,400 2,414
U.S. West Communications Group 24,000 905
Peoples Energy Corp. 22,000 824
--------------
19,345
--------------
Total Common Stocks 170,485
(Cost $147,732) ==============
</TABLE>
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 4.5%
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount
(000s)
<S> <C> <C>
Repurchase Agreements 4.5%
State Street Bank
4.250% due 07/01/97 $ 8,016 8,016
(Dated 06/30/97. Collateralized by U.S.
Treasury Bond 8.500% due 02/15/20
valued at $8,181,189. Repurchase proceeds
are $8,016,933.)
--------------
Total Short-Term Instruments 8,016
(Cost $8,016) ==============
Total Investments (a) 99.3% $ 178,501
(Cost $155,748)
Other Assets and Liabilities 0.7% 1,303
--------------
Net Assets 100.0% $ 179,804
==============
<CAPTION>
<S> <C>
Notes to Schedule of Investments ($ in thousands):
(a) At June 30, 1997, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of tax cost
over value. $ 25,211
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (2,561)
--------------
Unrealized appreciation-net $ 22,650
==============
(b) Non-income producing security.
</TABLE>
1997 Annual Report See accompanying notes / 45
<PAGE>
Schedule of Investments
Small Cap Value Fund
June 30, 1997
<TABLE>
<CAPTION>
Value
Shares (000s)
<S> <C> <C>
- --------------------------------------------------------------------------------
COMMON STOCKS 89.9%
- --------------------------------------------------------------------------------
Capital Goods 7.5%
Barnes Group, Inc. 25,900 $ 767
Tecumseh Products Co. 'A' 12,400 743
C&D Technologies, Inc. 19,300 724
Zurn Industries, Inc. 24,700 710
Mosinee Paper Corp. 28,550 699
Oshkosh Truck Corp. 'B' 48,500 691
Allied Products Corp. 20,600 682
Del Webb Corp. 41,900 681
Gleason Corp. 3,800 177
--------------
5,874
Consumer Discretionary 18.5%
Westinghouse Air Brake Co. 41,200 824
Bindley Western Industries, Inc. 34,500 791
Sturm Ruger & Co., Inc. 39,400 773
Guilford Mills, Inc. 37,050 771
Bowne & Co., Inc. 21,800 760
Brown Group, Inc. 40,000 748
Nash Finch Co. 33,300 737
DIMON, Inc. 27,700 734
Borg-Warner Automotive, Inc. 13,400 725
Harman International Industries, Inc. 16,900 712
Ennis Business Forms 73,800 710
Fleetwood Enterprises, Inc. 23,800 709
Stanhome, Inc. 21,100 694
Rival Co. 47,000 693
Toro Co. 18,200 689
Bergen Brunswig Corp. 'A' 24,518 683
Garan, Inc. 33,500 674
Fedders USA, Inc. 117,400 668
Winnebago Industries 83,900 603
ShopKo Stores, Inc. 16,500 421
La-Z-Boy Inc. 11,400 410
--------------
14,529
Consumer Services 0.9%
Lubys Cafeterias, Inc. 35,500 708
Consumer Staples 0.9%
Marsh Supermarkets, Inc. 'B' 50,500 707
Energy 5.4%
Vintage Petroleum, Inc. 23,700 729
Offshore Logistics, Inc. (b) 37,800 713
Mitchell Energy & Development Corp. 'B' 32,300 703
Aquila Gas Pipeline Corp. 50,100 698
World Fuel Services Corp. 31,900 698
Monterey Resources, Inc. 45,900 683
--------------
4,224
Financial and Business Services 17.2%
Chittenden Corp. 22,300 764
Merrill Corp. 20,300 738
AmVestors Financial Corp. 38,800 728
Centris Group, Inc. 34,300 725
Quick & Reilly Group, Inc. 31,150 724
McGrath Rentcorp 35,300 724
Sovereign Bancorp, Inc. 47,420 723
First Financial Corp. 24,600 723
Morgan Keegan, Inc. 35,850 713
Raymond James Financial Corp. 25,850 708
FirstBank Puerto Rico 27,300 706
Orion Capital Corp. 9,500 701
American Health Properties, Inc. 27,800 698
Commercial Federal Corp. 18,800 698
Eaton Vance Corp. 25,000 695
United Dominion Realty Trust 48,915 694
Excel Realty Trust, Inc. 26,100 688
Capstead Mortgage Corp. 27,350 675
PXRE Corp. 20,700 637
BankAtlantic Bancorp, Inc. 'A' 5,900 83
--------------
13,545
Health Care 2.9%
ICN Pharmaceuticals, Inc. 29,924 858
Integrated Health Services, Inc. 18,400 708
Chemed Corp. 18,900 708
--------------
2,274
Materials & Processing 19.9%
Caraustar Industries, Inc. 22,300 772
Kaman Corp. 48,600 747
Commercial Metals Co. 22,900 739
APL Limited 23,500 734
Continental Homes Holding Corp. 41,100 724
Mississippi Chemical Corp. 34,809 722
Glimcher Realty Trust 35,000 722
Cleveland-Cliffs, Inc. 17,600 717
GenCorp, Inc. 31,000 717
Wellman, Inc. 41,200 716
Nacco Industries, Inc. 'A' 12,600 711
Southdown, Inc. 16,300 711
Standard Motor Products, Inc. 51,600 710
Ethyl Corp. 76,700 709
Texas Industries, Inc. 26,600 707
Quanex Corp. 23,000 706
Butler Manufacturing Co. 21,200 702
Castle (A.M.) & Co. 31,725 700
Zeigler Coal Holding Co. 29,900 699
Universal Forest Products, Inc. 47,600 696
Varlen Corp. 25,750 692
Universal Corp. 21,000 667
--------------
15,720
Technology 5.7%
Wyle Electronics 19,400 766
Dallas Semiconductor Corp. 18,800 738
MTS Systems Corp. 23,900 729
Thiokol Corp. 10,300 721
Pioneer Standard Electronics, Inc. 51,700 698
Computer Data Systems, Inc. 23,300 682
Innovex, Inc. 5,700 166
--------------
4,500
Transportation 2.8%
Roadway Express, Inc. 33,600 786
ASA Holdings, Inc. 25,500 730
Sea Containers Limited 'A' 32,100 726
--------------
2,242
Utilities 8.2%
Aliant Communications, Inc. 39,500 770
Southern California Water Co. 30,500 747
United Illuminating Co. 23,900 738
Commonwealth Energy System 30,200 723
Eastern Enterprises 20,700 718
Central Hudson Gas & Electric 20,800 716
Energen Corp. 20,900 704
Rochester Gas & Electric Corp. 33,000 695
Eastern Utilities Association 37,200 679
--------------
6,490
--------------
Total Common Stocks 70,813
(Cost $60,201) ==============
</TABLE>
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 10.0%
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount
(000s)
<S> <C> <C>
Repurchase Agreements 10.0%
State Street Bank
4.250% due 07/01/97 $ 7,913 7,913
(Dated 06/30/97. Collateralized by U.S.
Treasury Bond 8.500% due 02/15/20
valued at $8,071,293. Repurchase proceeds
are $7,913,934.)
--------------
Total Short-Term Instruments 7,913
(Cost $7,913) ==============
Total Investments (a) 99.9% $ 78,726
(Cost $68,114)
Other Assets and Liabilities 0.1% 106
--------------
Net Assets 100.0% $ 78,832
==============
</TABLE>
46 / PIMCO Funds See accompanying notes
<PAGE>
<TABLE>
<S> <C>
Notes to Schedule of Investments ($ in thousands):
(a) At June 30, 1997, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of tax cost
over value. $ 11,340
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax
cost over value. (871)
--------------
Unrealized appreciation-net $ 10,469
==============
(b) Non-income producing security.
</TABLE>
1997 Annual Report See accompanying notes / 47
<PAGE>
Schedule of Investments
Enhanced Equity Fund
June 30, 1997
<TABLE>
<CAPTION>
Value
Shares (000s)
<S> <C> <C>
- --------------------------------------------------------------------------------
COMMON STOCKS 99.9%
- --------------------------------------------------------------------------------
Capital Goods 7.9%
General Electric Co. 22,300 $ 1,458
Caterpillar, Inc. 5,700 612
Deere & Co. 6,300 346
Johnson Controls, Inc. 7,800 320
Northrop Grumman Corp. 2,000 176
Newell Co. 4,300 170
AlliedSignal, Inc. 1,800 151
Paccar, Inc. 2,100 98
Raychem Corp. 1,100 82
Avery Dennison Corp. 1,100 44
Kaufman & Broad Home Corp. 2,500 44
Harnischfeger Industries, Inc. 700 29
--------------
3,530
Consumer Discretionary 18.2%
Procter & Gamble Co. 5,800 819
Pitney Bowes, Inc. 8,300 577
Gannett, Inc. 5,800 573
Wal-Mart Stores, Inc. 16,000 541
Corning, Inc. 8,800 490
Dayton-Hudson Corp. 8,800 468
Eastman Kodak Co. 6,000 461
Nike, Inc. `B' 7,700 449
General Motors Corp. 7,100 395
Kroger Co. (b) 13,200 383
Ford Motor Co. 7,600 287
Chrysler Corp. 7,400 243
New York Times Co. 4,900 242
Federated Department Stores, Inc. (b) 5,800 201
Crown Cork & Seal Co., Inc. 3,500 187
TJX Corp., Inc. 6,400 169
Disney (Walt) Co. 2,100 169
Masco Corp. 4,000 167
Sears, Roebuck & Co. 3,000 161
Hasbro, Inc. 4,950 140
Liz Claiborne, Inc. 2,900 135
Ralston-Ralston Purina Group 1,601 132
Time Warner, Inc. 2,600 125
Fruit Of The Loom, Inc. (b) 3,800 118
Armstrong World Industries 1,600 117
Moore Limited 4,300 85
Brunswick Corp. 2,500 78
Lowe's Cos., Inc. 1,900 71
Costco Cos. (b) 1,800 59
Ecolab, Inc. 700 33
Fleming Cos., Inc. 1,493 27
Jostens, Inc. 700 19
John H. Harland Co. 400 9
Mattel, Inc. 175 6
--------------
8,136
Consumer Services 1.4%
HFS, Inc. (b) 4,900 284
Hilton Hotels Corp. 10,100 268
Woolworth Corp. 2,800 67
--------------
619
Consumer Staples 5.8%
Coca-Cola Co. 16,000 1,080
Philip Morris Co., Inc. 13,300 590
Sara Lee Corp. 7,800 325
Pepsico, Inc. 5,300 199
Kimberly Clark Corp. 3,000 149
Unilever NV 600 131
Clorox Co. 600 79
ConAgra, Inc. 1,000 64
--------------
2,617
Energy 8.7%
Exxon Corp. 16,400 1,009
Chevron Corp. 7,200 532
Halliburton Co. 5,100 404
Texaco, Inc. 3,168 345
Royal Dutch Petroleum Co. 6,000 326
Rowan Cos., Inc.(b) 6,500 183
Phillips Petroleum Co. 3,300 144
Baker Hughes, Inc. 3,700 143
Oryx Energy Co. (b) 6,700 142
Burlington Resources, Inc. 2,300 101
Columbia Gas Systems, Inc. 1,500 98
Noram Energy Corp. 6,400 98
Pennzoil Co. 1,200 92
Union Pacific Resources Group 2,800 70
Kerr McGee Corp. 1,000 63
USX Marathon Group 2,100 61
Sun Co., Inc. 1,500 47
Helmerich & Payne 700 40
Unocal Corp. 29 1
--------------
3,899
Financial and Business Services 15.8%
Chase Manhattan Corp. 7,579 736
NationsBank Corp. 10,232 660
Allstate Corp. 8,100 591
American International Group, Inc. 3,800 568
BankAmerica Corp. 8,700 562
First Union Corp. 5,615 519
Morgan Stanley Dean Witter Discovery 10,230 440
CIGNA Corp. 2,400 426
MBNA Corp. 10,000 366
Hartford Financial Services Group, Inc. 3,900 323
Citicorp 1,983 239
Loews Corp. 2,300 230
First Chicago NBD Corp. 3,150 190
Travelers Group, Inc. 3,000 189
Household International, Inc. 1,600 188
Torchmark Corp. 2,600 185
Aegon NV 1,825 128
Morgan, J.P. and Co., Inc. 1,200 125
Providian Financial (b) 3,500 112
Aetna, Inc. 900 92
MBIA, Inc. 800 90
Green Tree Financial Corp. 2,100 75
Bankers Trust New York Corp. 600 52
--------------
7,086
Health Care 13.2%
Merck & Co., Inc. 10,000 1,035
American Home Products Corp. 12,000 918
Schering-Plough Corp. 12,600 603
Bristol-Myers Squibb Co. 7,300 591
Abbott Laboratories 8,300 554
Tenet Healthcare Corp. 14,000 414
Columbia HCA Healthcare Corp. 9,300 366
Becton, Dickinson & Co. 6,300 319
Warner Lambert Co. 2,100 261
Johnson & Johnson 3,600 232
Biomet, Inc. 9,300 173
Pfizer, Inc. 1,200 143
Pharmacia & Upjohn, Inc. 4,100 142
CVS Corp. 1,800 92
U.S. Surgical Corp. 1,100 41
Amgen, Inc. (b) 500 29
--------------
5,913
Materials & Processing 4.4%
E.I. Du Pont de Nemours Co. 10,300 648
Dow Chemical Co. 4,000 349
James River Corp. of Virginia 5,500 204
Monsanto Co. 4,300 185
Union Carbide Corp. 3,400 160
Rohm & Haas Co. 1,700 153
Aluminum Co. Of America 1,400 106
BFGoodrich Co. 1,500 65
Pioneer Hi-Bred International, Inc. 800 64
Alcan Aluminium Limited 600 21
Bethlehem Steel Corp. (b) 1,200 13
--------------
1,968
Technology 15.3%
Intel Corp. 8,300 1,177
Microsoft Corp. (b) 9,100 1,150
Compaq Computer Corp. (b) 8,500 844
Sun Microsystems, Inc. (b) 14,700 547
Hewlett Packard Co. 7,100 398
Seagate Technology, Inc. (b) 11,000 387
</TABLE>
48 / PIMCO Funds See accompanying notes
<PAGE>
<TABLE>
<CAPTION>
Value
Shares (000s)
- --------------------------------------------------------------------------------
<S> <C> <C>
International Business Machines Corp. 4,100 $ 370
Motorola, Inc. 4,700 357
Lucent Technologies, Inc. 4,700 339
EMC Corp. (b) 8,300 324
Tektronix, Inc. 4,100 246
Tyco Labs 3,400 237
Tandem Computers, Inc. (b) 7,500 152
Computer Associates International, Inc. 2,475 138
Harris Corp. 1,500 126
General Dynamics Corp. 700 52
Data General Corp. (b) 1,300 34
--------------
6,878
Transportation 1.5%
Delta Air Lines 2,700 221
AMR Corp. (b) 1,900 176
Laidlaw, Inc. `B' 6,700 93
Timken Co. 2,500 89
U.S. Airways Group, Inc. (b) 2,500 88
--------------
667
Utilities 7.7%
BellSouth Corp. 16,370 759
Nynex Corp. 11,406 657
Bell Atlantic Corp. 8,000 607
Ameritech Corp. 6,800 462
U.S. West Communications Group 5,200 196
Houston Industry, Inc. 6,500 139
P.P. & L. Resources, Inc. 6,200 124
GPU, Inc. 3,300 118
Coastal Corp. 1,500 80
Public Service Enterprise Group, Inc. 3,000 75
AT&T Corp. 1,700 60
Pacific Enterprises 1,700 57
Entergy Corp. 1,800 49
Peoples Energy Corp. 900 34
NICOR, Inc. 700 25
--------------
3,442
--------------
Total Common Stocks 44,755
(Cost $35,982) ==============
</TABLE>
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 0.1%
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount
(000s)
<S> <C> <C>
Repurchase Agreements 0.1%
State Street Bank
4.250% due 07/01/97 $ 61 61
(Dated 06/30/97. Collateralized by U.S.
Treasury Bond 13.750% due 08/15/04
valued at $65,779. Repurchase proceeds
are $61,007.)
--------------
Total Short-Term Instruments 61
(Cost $61) ==============
Total Investments (a) 100.0% $ 44,816
(Cost $36,043)
Other Assets and Liabilities 0.0% 22
--------------
Net Assets 100.0% $ 44,838
==============
<CAPTION>
<S> <C>
Notes to Schedule of Investments ($ in thousands):
(a) At June 30, 1997, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of tax cost
over value. $ 9,017
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (283)
--------------
Unrealized appreciation-net $ 8,734
==============
(b) Non-income producing security.
</TABLE>
1997 Annual Report See accompanying notes / 49
<PAGE>
Schedule of Investments
Balanced Fund
June 30, 1997
<TABLE>
<CAPTION>
Value
Shares (000s)
- --------------------------------------------------------------------------------
COMMON STOCKS 59.3%
- --------------------------------------------------------------------------------
<S> <C> <C>
Capital Goods 5.4%
Deere & Co. 11,300 $ 620
Northrop Grumman Corp. 4,800 422
Textron, Inc. 5,000 332
Perkin Elmer Corp. 4,100 326
Sundstrand Corp. 5,800 324
United Technologies Corp. 3,800 315
AlliedSignal, Inc. 3,700 311
Johnson Controls, Inc. 6,800 279
Ingersoll Rand Co. 4,400 272
Illinois Tool Works, Inc. 4,700 235
--------------
3,436
Consumer Discretionary 12.5%
VF Corp. 7,200 613
Brunswick Corp. 18,200 569
American Greetings Corp. 'A' 12,600 468
Xerox Corp. 5,800 457
Goodyear Tire & Rubber Co. 7,000 443
Westvaco Corp. 13,000 409
Tupperware Corp. 10,900 398
Maytag Corp. 14,700 384
Chrysler Corp. 11,500 377
TJX Corp., Inc. 12,600 332
Dayton Hudson Corp. 6,100 324
Omnicom Group 4,900 302
Kroger Co. (b) 10,000 290
Estee Lauder Cos. 'A' 5,500 276
Costco Cos. 8,400 276
Jones Apparel Group, Inc. (b) 5,400 258
Armstrong World Industries 3,500 257
Gannett, Inc. 2,600 257
New York Times Co. 5,100 252
Dillards, Inc. 'A' 6,800 235
Tandy Corp. 4,000 224
Federated Department Stores, Inc. (b) 6,300 219
Sunbeam-Oster, Inc. 5,400 204
Washington Post Co. 500 199
--------------
8,023
Consumer Services 0.9%
Carnival Corp. 'A' 7,000 289
Marriott International, Inc. 4,600 282
--------------
571
Consumer Staples 4.6%
Anheuser Busch Cos., Inc. 11,900 499
SUPERVALU, Inc. 12,400 428
Unilever NV 1,900 414
RJR Nabisco Holdings Corp. 11,700 386
Campbell Soup Co. 5,500 275
Safeway, Inc. (b) 5,900 272
Hershey Foods Corp. 4,800 266
Whitman Corp. 8,500 215
IBP, Inc. 8,000 186
--------------
2,941
Energy 6.2%
Ultramar Diamond Shamrock 16,100 525
Amoco Corp. 6,000 522
Repsol SA SP - ADR 11,800 501
Atlantic Richfield Co. 5,000 353
Noble Drilling Corp. (b) 13,500 305
Halliburton Co. 3,400 269
Transocean Offshore, Inc. 3,700 269
Global Marine, Inc. (b) 11,400 265
Rowan Cos., Inc. (b) 9,300 262
Union Texas Petroleum Holdings, Inc. 12,200 256
Schlumberger Limited 1,900 238
ENSCO International, Inc. (b) 3,800 200
--------------
3,965
Financial and Business Services 10.9%
Chase Manhattan Corp. 7,600 738
Bear Stearns Cos. 18,365 628
Mellon Bank Corp. 13,000 587
CIGNA Corp. 3,300 586
Loews Corp. 3,900 390
Travelers Group, Inc. 6,133 387
Countrywide Credit Industries, Inc. 11,500 359
American Express Co. 3,200 238
Norwest Corp. 4,200 236
Southtrust Corp. 5,700 236
Federal Home Loan Mortgage Corp. 6,600 227
Federal National Mortgage Assoc. 5,200 227
Times Mirror Co. 'A' 4,100 227
Hartford Financial Services Group, Inc. 2,700 223
First Union Corp. 2,400 222
National City Corp. 4,100 215
Green Tree Financial Corp. 6,000 214
Lincoln National Corp. 3,300 212
PNC Bank Corp. 5,000 208
BankBoston Corp. 2,700 195
Associates First Capital Corp. 'A' 3,500 194
BankAmerica Corp. 1,700 110
Citicorp 800 97
--------------
6,956
Health Care 4.4%
American Home Products Corp. 8,200 627
Pharmacia & Upjohn, Inc. 11,400 396
Schering-Plough Corp. 6,500 311
Tenet Healthcare Corp. (b) 9,175 271
Eli Lilly & Co. 2,200 240
Beckman Instruments, Inc. 4,900 236
U.S. Surgical Corp. 6,300 235
Foundation Health Systems 'A' (b) 7,540 229
Cognizant Corp. 5,600 227
--------------
2,772
Materials & Processing 2.5%
Phelps Dodge Corp. 4,900 417
USG Corp. (b) 8,900 325
Rohm & Haas Co. 2,900 261
Dresser Industries, Inc. 6,200 231
Union Carbide Corp. 4,200 198
Wellman, Inc. 11,200 195
--------------
1,627
Technology 6.6%
Intel Corp. 3,900 553
Tektronix, Inc. 6,600 396
Harris Corp. 4,500 378
Tyco Labs 4,900 341
Seagate Technology, Inc. 8,800 310
Sun Microsystems, Inc. 7,300 272
BMC Software, Inc. 4,400 244
Adaptec, Inc. 6,800 236
Dell Computer Corp. 2,000 235
Cisco Systems, Inc. 3,400 228
Computer Associates International, Inc. 4,000 223
Wheelabrator Technologies, Inc. 14,000 216
Compaq Computer Corp. (b) 2,100 208
National Semiconductor Corp. (b) 6,200 190
Adobe Systems, Inc. 5,100 179
--------------
4,209
Transportation 0.9%
UAL Corp. (b) 5,000 358
Continental Airlines, Inc. 'B' (b) 6,300 220
--------------
578
Utilities 4.4%
NICOR, Inc. 16,100 578
Nynex Corp. 7,200 415
DTE Energy Co. 14,300 395
Southern New England Telecommunications Corp. 9,600 373
Pacific Gas & Electric 14,600 354
Ameritech Corp. 3,800 258
American Electric Power, Inc. 5,400 227
GPU, Inc. 6,300 226
--------------
2,826
--------------
Total Common Stocks 37,904
(Cost $30,805) ==============
</TABLE>
50 / PIMCO Funds See accompanying notes
<PAGE>
<TABLE>
<CAPTION>
Principal
Amount Value
(000s) (000s)
<S> <C> <C>
- --------------------------------------------------------------------------------
CORPORATE BONDS AND NOTES 7.5%
- --------------------------------------------------------------------------------
Industrials 2.4%
AMR Corp.
10.000% due 02/01/01 $ 400 $ 440
9.430% due 05/10/01 1,000 1,081
--------------
1,521
Utilities 5.1%
Cleveland Electric Illuminating Co.
9.375% due 03/01/17 1,000 1,041
Long Island Lighting Co.
9.000% due 11/01/22 2,000 2,201
--------------
3,242
--------------
Total Corporate Bonds and Notes 4,763
(Cost $4,443) ==============
<CAPTION>
- --------------------------------------------------------------------------------
MORTGAGE-BACKED SECURITIES 38.2%
- --------------------------------------------------------------------------------
<S> <C> <C>
Collateralized Mortgage Obligations 5.0%
Capstead Mortgage Corp.
8.900% due 12/25/21 257 266
Federal Home Loan Mortgage Corp.
10.150% due 04/15/06 49 49
Federal National Mortgage Assoc.
9.500% due 06/25/18 543 577
Independent National Mortgage Corp.
7.954% due 11/25/24 (d) 910 935
8.121% due 11/25/24 (d) 773 793
PNC Mortgage Securities Corp.
7.500% due 06/25/10 559 557
--------------
3,177
Federal Home Loan Mortgage Corporation 4.1%
6.500% due 08/13/27 2,000 1,913
8.500% due 03/01/23 691 729
--------------
2,642
Federal Housing Administration 0.9%
6.930% due 07/01/14 587 564
Federal National Mortgage Association 9.1%
8.035% due 12/01/23 (d) 469 491
8.500% due 07/01/02-01/01/08 (e) 1,033 1,068
8.500% due 03/01/25-07/01/25 (e) 4,118 4,283
--------------
5,842
Government National Mortgage Association 17.6%
6.500% due 03/15/26-01/15/27 (e) 5,461 5,226
7.120% due 08/20/24 (d) 780 800
7.125% due 04/20/23 (d) 1,730 1,780
7.500% due 05/15/17 18 18
8.000% due 09/15/06 75 78
8.000% due 07/21/27 500 512
8.500% due 07/21/27 2,000 2,078
9.500% due 09/15/09-10/15/09 (e) 157 170
10.750% due 09/15/00-10/15/00 (e) 136 143
14.000% due 08/15/12 31 36
16.000% due 10/15/11-04/15/12 (e) 335 391
--------------
11,232
Other Mortgage-Backed Securities 1.5%
Home Savings of America
5.758% due 05/25/27 (d) 1,020 983
--------------
Total Mortgage-Backed Securities 24,440
(Cost $24,330)
<CAPTION>
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 7.8%
- --------------------------------------------------------------------------------
<S> <C> <C>
Discount Notes 5.3%
General Electric Capital Corp.
5.550% due 08/15/97 100 99
General Motors Acceptance Corp.
5.570% due 08/27/97 400 397
Motorola, Inc.
5.500% due 07/16/97 1,000 998
National Rural Utilities Cooperative
5.580% due 07/21/97 100 100
5.530% due 07/22/97 200 199
5.550% due 09/03/97 600 594
New Center Asset Trust
5.550% due 08/15/97 300 298
5.550% due 08/20/97 600 595
5.560% due 09/10/97 100 99
--------------
3,379
Repurchase Agreements 2.4%
State Street Bank
4.250% due 07/01/97 1,566 1,566
(Dated 06/30/97. Collateralized by U.S.
Treasury Bond 8.500% due 02/15/20
valued at $1,605,711. Repurchase proceeds
are $1,566,185.)
U.S. Treasury Bills 0.1%
5.038% due 07/03/97-10/02/97 (c)(e) 70 69
--------------
Total Short-Term Instruments 5,014
(Cost $5,014) ==============
Total Investments (a) 112.8% $ 72,121
(Cost $64,592)
Other Assets and Liabilities (12.8%) (8,192)
--------------
Net Assets 100.0% $ 63,929
==============
<CAPTION>
<S> <C>
Notes to Schedule of Investments ($ in thousands):
(a) At June 30, 1997, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of tax cost
over value. $ 7,785
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (335)
--------------
Unrealized appreciation-net $ 7,450
==============
(b) Non-income producing security.
(c) Securities with an aggregate market value of $39 have
been segregated with the custodian to cover margin
requirements for the following open futures contract at
June 30, 1997:
</TABLE>
<TABLE>
<CAPTION>
Unrealized
Type Contracts Appreciation
- -------------------------------------------------------------------------------
<S> <C> <C>
U.S. Treasury 10 Year Note (09/97) 29 $ 17
</TABLE>
(d) Variable rate security. The rate listed is as of
June 30, 1997.
(e) Securities are grouped by coupon and represent a
range of maturities.
1997 Annual Report See accompanying notes / 51
<PAGE>
Notes to Financial Statements
June 30, 1997
1. Organization
PIMCO Funds: Multi-Manager Series (the "Trust"), formerly known
as PIMCO Funds: Equity Advisors Series, was established as a
Massachusetts business trust on August 24, 1990. The Trust is
registered under the Investment Company Act of 1940, as amended,
as an open-end management investment company. The Trust currently
consists of twenty two separate investment funds (the "Funds"):
the Equity Income Fund; the Renaissance Fund; the Small Cap Value
Fund; the Value Fund; the Capital Appreciation Fund; the Mid Cap
Growth Fund; the Micro Cap Growth Fund; the Small Cap Growth
Fund; the Core Equity Fund; the Mid Cap Equity Fund; the
Innovation Fund; the Enhanced Equity Fund; the Emerging Markets
Fund; the International Fund; the International Developed Fund;
the Target Fund; the Tax Exempt Fund; the Growth Fund; the
Opportunity Fund; the Precious Metals Fund; the Structured
Emerging Markets Fund; and the Balanced Fund. The Structured
Emerging Markets Fund had not commenced operations as of June 30,
1997. As used in the financial statements, "Institutional
Classes" refers to the Institutional and Administrative Classes
and "Retail Classes" refers to the A, B, and C Classes of the
Trust.
2. Significant Accounting Policies
The following is a summary of significant accounting policies
consistently followed by the Trust in preparation of its
financial statements. These policies are in conformity with
generally accepted accounting principles. The preparation of
financial statements in accordance with generally accepted
accounting principles requires management to make estimates and
assumptions that affect the reported amounts and disclosures in
the financial statements. Actual results could differ from those
estimates.
Security Valuation. Portfolio securities and other financial
instruments for which market quotations are readily available are
stated at market value. Market value is determined on the basis
of last reported sales prices, or if no sales are reported, as is
the case for most securities traded over-the-counter, the mean
between representative bid and asked quotations obtained from a
quotation reporting system or from established market makers.
Foreign currency amounts are converted to U.S. dollars using
foreign exchange quotations received from independent dealers.
Short-term investments having a maturity of 60 days or less are
valued at amortized cost, which approximates market value.
Certain fixed income securities for which daily market quotations
are not readily available may be valued, pursuant to guidelines
established by the Board of Trustees, with reference to fixed
income securities whose prices are more readily obtainable.
Securities Transactions and Investment Income. Securities
transactions are recorded as of the trade date. Securities
purchased or sold on a when-issued or delayed-delivery basis may
be settled a month or more after the trade date. Realized gains
and losses from securities sold are recorded on the identified
cost basis. Dividend income is recorded on the ex-dividend date,
except certain dividends from foreign securities where the
ex-dividend date may have passed, are recorded as soon as the
fund is informed of the ex-dividend date. Interest income,
adjusted for the accretion of discounts and amortization of
premiums, is recorded on the accrual basis and includes the
accretion of discounts and amortization of premiums.
During the year ended June 30, 1997, the Capital
Appreciation, Mid Cap Growth and Enhanced Equity Funds incurred
one redemption in kind each, resulting in net realized gains of
$2,666,079, $4,329,586 and $1,574,899, respectively. A redemption
in kind occurs when a Fund pays a shareholder with portfolio
securities in lieu of cash.
52 / PIMCO Funds
<PAGE>
Dividends and Distributions to Shareholders. Dividends from net
investment income, if any, are declared and paid quarterly to
shareholders of record by the Equity Income, Value and Balanced
Funds. Dividends from net investment income, if any, are declared
and paid at least annually to shareholders of record by the other
Funds. Net long-term capital gains earned by a Fund, if any, will
be distributed no less frequently than once each year. Foreign
exchange gains or losses on investments and the income generated
from such investments, arising from fluctuations of exchange
rates of the non-dollar denominated investments relative to the
U.S. dollar, are reported to shareholders as income in accordance
with the provisions of the Internal Revenue Code.
Income dividends and capital gain distributions are
determined in accordance with income tax regulations which may
differ from generally accepted accounting principles. These
differences are primarily due to differing treatments for such
items as wash sales, foreign currency transactions, net operating
losses and capital loss carryforwards. Certain amounts have been
reclassified between undistributed net investment income,
accumulated undistributed net realized gains or losses and paid
in capital to more appropriately conform financial accounting and
tax requirements characterizations of dividend distributions.
Multiclass Operations. Each class offered by the Trust has equal
rights as to assets and voting privileges. Income, non-class
specific expenses and realized and unrealized capital gains and
losses are allocated to each class of shares based on the
relative net assets of each class.
Federal Income Taxes. Each Fund intends to qualify as a regulated
investment company and distribute all of its taxable income and
net realized gains, if applicable, to shareholders. Accordingly,
no provision for Federal income taxes has been made.
Foreign Taxes on Dividends. Dividend income in the statement of
operations is shown net of foreign taxes withheld on dividends
from foreign securities. Foreign taxes withheld were as follows:
Emerging Markets Fund - $153,802; International Developed Fund -
$235,194; Capital Appreciation Fund - $26,287; Mid Cap Growth
Fund - $4,463; Core Equity Fund - $163; Mid Cap Equity Fund -
$229; Equity Income Fund - $13,433; Value Fund - $18,234; Small
Cap Value Fund - $885; Enhanced Equity Fund - $5,304; and
Balanced Fund - $3,328.
Equalization. Prior to July 1, 1996, all of the Funds followed
the accounting practice known as equalization, by which a portion
of the proceeds from sales and costs of repurchases of Fund
shares, equivalent on a per share basis to the amount of
distributable investment income on the date of the transaction,
was credited or charged to undistributed income. As a result,
undistributed investment income per share was unaffected by sales
or redemptions of Fund shares. As of July 1, 1996, the Funds
discontinued using equalization. This change has no effect on the
Funds' net assets, net asset values per share, or their net
increases (decreases) in net assets resulting from operations.
Futures and Options. Certain Funds are authorized to enter into
futures contracts and options. A Fund may use futures contracts
to manage its exposure to the stock and bond markets or change in
interest rates and currency values, or for gaining exposure to
markets. The primary risks associated with the use of futures
contracts and options are imperfect correlation between the
change in market value of the securities held by a Fund and the
prices of futures contracts and options, the possibility of an
illiquid market, and the inability of the counterparty to meet
the terms of the contract. Futures contracts and purchased
options are valued based upon their quoted daily settlement
prices. The premium received for a written option is recorded as
an asset with an equal liability which is marked to market based
on the option's quoted daily settlement price. Fluctuations in
the value of such instruments are recorded as unrealized
appreciation (depreciation) until terminated, at which time
realized gains and losses are recognized.
1997 Annual Report / 53
<PAGE>
Notes to Financial Statements (Cont.)
Forward Currency Transactions. Certain Funds are authorized to
enter into forward foreign exchange contracts for the purpose of
hedging against foreign exchange risk arising from the Fund's
investment or anticipated investment in securities denominated in
foreign currencies. A Fund may also enter into these contracts
for purposes of increasing exposure to a foreign currency or to
shift exposure to foreign currency fluctuations from one country
to another. All commitments are marked to market daily at the
applicable translation rates and any resulting unrealized gains
or losses are recorded. Realized gains or losses are recorded at
the time the forward contract matures or by delivery of the
currency. Risks may arise upon entering these contracts from the
potential inability of counterparties to meet the terms of their
contracts and from unanticipated movements in the value of a
foreign currency relative to the U.S. dollar. The following
foreign forward currency contracts were outstanding at June 30,
1997 (amounts in thousands):
<TABLE>
<CAPTION>
Principal
Amount Unrealized
Covered by Expiration Appreciation
Fund Type Contract Month (Depreciation)
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Emerging Markets Fund Sell Brazillian Real 989 7/97 $ 0
Cruzeiro
Sell Israeli Shekel 261 7/97 0
Sell Peruvian Inti 1,038 7/97 1
Sell Philippines Peso 9,190 7/97 0
--------------
$ 1
International Developed Fund Buy Japanese Yen 220,000 7/97 (16)
</TABLE>
For assets and liabilities other than investments in
securities, net realized and unrealized gains and losses from
foreign currency transactions arise from changes in currency
exchange rates.
Repurchase Agreements. Each Fund may engage in repurchase
transactions. Under the terms of a typical repurchase agreement,
the Fund takes possession of an underlying debt obligation
subject to an obligation of the seller to repurchase, and the
Fund to resell, the obligation at an agreed-upon price and time.
The market value of the collateral must be equal at all times to
the total amount of the repurchase obligations, including
interest. Generally, in the event of counterparty default, the
Fund has the right to use the collateral to offset losses
incurred.
3. Fees, Expenses, and Related Party Transactions
Investment Advisory Fee. PIMCO Advisors L.P. ("PIMCO Advisors")
serves as investment advisor to the Trust, pursuant to an
Investment Advisory Agreement. PIMCO Advisors receives from the
Trust a fee based on an annual percentage of the average daily
net assets of each Fund as follows: 0.57% for the Core Equity
Fund; 0.60% for the International Developed and Small Cap Value
Funds; 0.63% for the Mid Cap Equity Fund; 0.85% for the Emerging
Markets Fund; 1.00% for the Small Cap Growth Fund; 1.25% for the
Micro Cap Growth Fund; and 0.45% for all other Funds. Each of the
Funds also has a sub-advisor which, under the supervision of
PIMCO Advisors, directs the investments of the Fund's assets.
Other than the sub-advisor of the Precious Metals Fund, all of
the sub-advisors are affiliates of PIMCO Advisors. The advisory
fees received by PIMCO Advisors are paid in all or in part to
each of the sub-advisers in accordance with the portfolio
management agreements.
Administration Fee. PIMCO provides administrative services to the
Trust for which it receives from each Fund a monthly
administrative fee based on each share class's average daily net
assets. The Administration Fee for the Institutional Classes is
charged at the annual rate of 0.50% for the Emerging Markets and
International Developed Funds and 0.25% for all other Funds. The
Administration Fee for the Retail Classes is charged at the
annual rate of 0.65% for the Emerging Markets and International
Developed Funds and 0.40% for all other Funds.
54 / PIMCO Funds
<PAGE>
Distribution and Servicing Fees. PIMCO Funds Distribution
Company ("PFDCO"), a wholly-owned subsidiary of PIMCO Advisors
L.P., serves as the distributor of the Trust's shares.
The Trust is permitted to reimburse, out of the
Administrative Class assets of each Fund in an amount up to 0.25%
on an annual basis of the average daily net assets of that class,
financial in termediaries that provide services in connection
with the distribution of shares or administration of plans or
programs that use Fund shares as their funding medium. The
effective rate paid to PFDCO was 0.25% during the current fiscal
year.
Pursuant to the Distribution and Servicing Plans adopted by
the Retail Classes of the Trust, the Trust compensates PFDCO for
services provided and expenses incurred in connection with
assistance rendered in the sale of shares and services rendered
to shareholders and for maintenance of shareholder accounts of
the Retail Classes. The Trust paid PFDCO distribution and
servicing fees at an effective rate as set forth below
(calculated as a percentage of each Fund's average daily net
assets attributable to each class):
<TABLE>
Distribution Fee (%) Servicing Fee (%)
- --------------------------------------------------------------------------------
<S> <C> <C>
Class A
All Funds - 0.25
Class B
All Funds 0.75 0.25
Class C
All Funds 0.75 0.25
</TABLE>
PFDCO also receives the proceeds of the initial sales charges
paid by the shareholders upon the purchase of Class A shares and
the contingent deferred sales charges paid by the shareholders
upon certain redemptions of Class A, Class B and Class C shares.
For the year ended June 30, 1997, the Funds were informed that
PFDCO received $235,599 representing commissions (sales charges)
and contingent deferred sales charges related to the Retail
Classes.
Expenses. The Trust is also responsible for the following
expenses: (i) salaries and other compensation of any of the
Trust's executive officers and employees who are not officers,
directors, stockholders or employees of PIMCO Advisors, PIMCO, or
its subsidiaries or affiliates; (ii) taxes and governmental fees;
(iii) brokerage fees and commissions and other portfolio
transaction expenses; (iv) the cost of borrowing money, including
interest expenses; (v) fees and expenses of the Trustees who are
not "interested persons" of the Advisor, PIMCO, Portfolio
Managers, or the Trust, and any counsel retained exclusively for
their benefit; (vi) extraordinary expenses, including costs of
litigation and indemnification expenses; (vii) expenses such as
organizational expenses, which are capitalized in accordance with
generally accepted accounting principles; and (viii) any expenses
allocated or allocable to a specific class of shares, which
include service fees payable with respect to the Administrative
Class shares and may include certain other expenses as permitted
by the Trust's Multiple Class Plan adopted pursuant to Rule 18f-3
under the Investment Company Act of 1940 and subject to review
and approval by the Trustees. The ratio of expenses to average
net assets per share class, as disclosed in Financial Highlights,
may differ from the annual fund operating expenses per share
class as disclosed in the Prospectus for the reasons set forth
above. During the reporting period ended June 30,1997,
differences occurred primarily due to reoganization expenses
incurred as a result of the reorganization of the former PIMCO
Funds: Equity Advisors Series and PIMCO Advisors Funds and the
related adoption of a new fee structure, compensation of the
Trustees and overdraft expenses. The reorganization expenses are
non-recurring.
Each unaffiliated Trustee receives an annual retainer of
$45,000, plus $2,000 for each Board of Trustees meeting attended,
plus reimbursement of related expenses. In addition, each
committee chair receives an annual retainer of $2,000. These
expenses are allocated to the Funds of the Trust according to
their respective net assets.
1997 Annual Report / 55
<PAGE>
Notes to Financial Statements (Cont.)
4. Purchases and Sales of Securities
Purchases and sales of securities (excluding short-term investments) for the
period ended June 30, 1997 were as follows ($ in thousands):
<TABLE>
<CAPTION>
U.S. Government/Agency All Other
------------------------------------------------------------------------------
Purchases Sales Purchases Sales
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Emerging Markets Fund $ 45,590 $ 74,451
International Developed Fund 81,697 63,192
Capital Appreciation Fund 468,212 334,686
Mid Cap Growth Fund 255,660 213,102
Micro Cap Growth Fund 133,141 85,488
Small Cap Growth Fund 40,379 46,051
Core Equity Fund 54,100 70,513
Mid Cap Equity Fund 14,636 16,097
Equity Income Fund 53,991 68,130
Value Fund 92,324 71,400
Small Cap Value Fund 45,651 18,674
Enhanced Equity Fund 56,990 111,690
Balanced Fund $ 77,683 $ 77,504 65,440 85,173
</TABLE>
5. Transactions in Written Call and Put Options
Transactions in written call and put options were as follows ($ in thousands):
<TABLE>
<CAPTION>
Core Equity Fund Balanced Fund
------------------------------------------------------------------------------
Premium Contracts Premium Contracts
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Balance at 06/30/96 $ 6 16 $ 3 8
Sales 118 438 47 70
Closing Buys (47) (175) 0 0
Expirations (39) (134) (50) (78)
Exercised (38) (145) 0 0
------------------------------------------------------------------------------
Balance at 06/30/97 $ 0 0 $ 0 0
------------------------------------------------------------------------------
</TABLE>
6. Retail Class Summaries
The following amounts relate to items accumulated in the Statement of Assets and
Liabilities, the Statement of Operations and the Statement of Changes in Net
Assets (amounts in thousands):
<TABLE>
<CAPTION>
International Capital Mid Cap Equity Small Cap
Emerging Developed Appreciation Growth Income Value Value Balanced
Markets Fund Fund Fund Fund Fund Fund Fund Fund
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares Outstanding
Class A 15 24 309 602 114 1,057 417 32
- ----------------------------------------------------------------------------------------------------------------------------------
Class B 22 86 143 1,401 167 1,719 705 99
- ----------------------------------------------------------------------------------------------------------------------------------
Class C 132 193 621 2,661 431 4,333 1,314 81
- ----------------------------------------------------------------------------------------------------------------------------------
169 303 1,073 4,664 712 7,109 2,436 212
- ----------------------------------------------------------------------------------------------------------------------------------
Distribution and Servicing Fees
Class A $ 0 $ 0 $ 6 $ 12 $ 1 $ 15 $ 3 $ 0
- ----------------------------------------------------------------------------------------------------------------------------------
Class B 1 2 5 104 5 101 17 2
- ----------------------------------------------------------------------------------------------------------------------------------
Class C 5 6 28 197 13 245 40 2
- ----------------------------------------------------------------------------------------------------------------------------------
$ 6 $ 8 $ 39 $ 313 $ 19 $ 361 $ 60 $ 4
- ----------------------------------------------------------------------------------------------------------------------------------
Distributions to Shareholders
From net investment income
Class A $ 0 $ 0 $ 0 $ 0 $ 15 $ 105 $ 0 $ 4
- ----------------------------------------------------------------------------------------------------------------------------------
Class B 0 0 0 0 17 99 0 10
- ----------------------------------------------------------------------------------------------------------------------------------
Class C 0 0 0 0 47 247 0 8
- ----------------------------------------------------------------------------------------------------------------------------------
$ 0 $ 0 $ 0 $ 0 $ 79 $ 451 $ 0 $ 22
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
56 / PIMCO Funds
<PAGE>
7. Change in Portfolio Manager for the Balanced Fund
Effective August 1, 1996, NFJ Investment Group and Cadence Capital Management
replaced Parametric Portfolio Associates as managers of the common stock segment
of the Balanced Fund. There was no change to the advisory fee. PIMCO continues
to manage the fixed income segment of the Balanced Fund.
8. Federal Income Tax Matters
As of June 30, 1997, the Funds listed in the table below have remaining capital
loss carryforwards that were realized in prior years (amounts in thousands):
<TABLE>
<CAPTION>
Capital Loss Carryforwards
-------------------------------------
Realized Losses Acquired Losses Expiration
- ------------------------------------------------------------------------------------------
<S> <C> <C>
Emerging Markets Fund $ 10,105 $ 0 06/30/03
</TABLE>
9. Reorganization
On September 17, 1996, the Board of Trustees approved the reorganization of
certain of the funds of PIMCO Advisors Funds ("PAF"), an affiliated management
investment company, into the Trust. The reorganization occurred on January 17,
1997. In conjunction with the reorganization, the name of the Trust was changed
to "PIMCO Funds: Multi-Manager Series" from "PIMCO Funds: Equity Advisors
Series." Certain PAF funds were acquired intact and became new Funds of the
Trust. Two Funds of the Trust, the NFJ Diversified Low P/E and the Cadence Mid
Cap Growth Funds, were combined with funds acquired from PAF.
Also, as part of the reorganization, the NFJ Diversified Low P/E Fund and
the Blairlogie International Active Fund were renamed Value Fund and
International Developed Fund, respectively, to more accurately describe their
investment styles.
Each Acquiring Fund, as listed below, acquired the assets and certain
liabilities of the Acquired Fund, also listed below, in a tax-free exchange for
shares of the Acquiring Fund, pursuant to a plan of reorganization approved by
the Acquired Fund's shareholders (amounts in thousands):
<TABLE>
<CAPTION>
Total
Shares Value of Total Net Total Net Net Assets Acquired
Issued by Shares Issued Assets of Assets of of Acquiring Fund
Acquiring by Acquiring Acquired Acquiring Fund After Unrealized
Acquiring Fund Acquired Fund Date Fund Fund Fund Fund Acquisition Appreciation
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PIMCO
NFJ Diversified
Low P/E Fund PIMCO Advisors
(renamed Value Fund) Value Fund 01/17/97 5,988 $ 80,835 $80,835 $67,334 $148,169 $ 9,962
PIMCO Cadence
Mid Cap Growth Fund
(renamed Mid Cap PIMCO Advisors
Growth Fund) Discovery Fund 01/17/97 4,103 75,422 75,422 237,494 312,916 11,691
</TABLE>
1997 Annual Report / 57
<PAGE>
Notes to Financial Statements (Cont.)
10. Shares of Beneficial Interest
The Trust may issue an unlimited number of shares of beneficial interest with a
$.0001 par value. Changes in shares of beneficial interest were as follows
(amounts in thousands):
<TABLE>
<CAPTION>
Emerging Markets Fund International Developed Fund
------------------------------------------------ ------------------------------------------------
Year Ended 6/30/97 Eight Months Ended 6/30/96 Year Ended 6/30/97 Eight Months Ended 6/30/96
Shares Amount Shares Amount Shares Amount Shares Amount
------------------------------------------------ ------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Receipts for shares sold
Institutional Class 1,007 $ 12,784 2,675 $ 32,382 3,568 $ 43,648 1,178 $ 14,180
- ------------------------------- ------------------------------------------------ ------------------------------------------------
Administrative Class 26 305 33 387 140 1,683 428 5,259
- ------------------------------- ------------------------------------------------ ------------------------------------------------
Class A 16 214 0 0 39 477 0 0
- ------------------------------- ------------------------------------------------ ------------------------------------------------
Class B 28 362 0 0 87 1,057 0 0
- ------------------------------- ------------------------------------------------ ------------------------------------------------
Class C 153 2,021 0 0 228 2,759 0 0
- ------------------------------- ------------------------------------------------ ------------------------------------------------
Shares issued in reorganization
Class A 0 0 0 0 0 0 0 0
- ------------------------------- ------------------------------------------------ ------------------------------------------------
Class B 0 0 0 0 0 0 0 0
- ------------------------------- ------------------------------------------------ ------------------------------------------------
Class C 0 0 0 0 0 0 0 0
- ------------------------------- ------------------------------------------------ ------------------------------------------------
Issued as reinvestment of
distributions
Institutional Class 19 222 14 174 296 3,449 182 2,171
- ------------------------------- ------------------------------------------------ ------------------------------------------------
Administrative Class 0 0 0 3 22 255 3 38
- ------------------------------- ------------------------------------------------ ------------------------------------------------
Class A 0 0 0 0 0 0 0 0
- ------------------------------- ------------------------------------------------ ------------------------------------------------
Class B 0 0 0 0 0 0 0 0
- ------------------------------- ------------------------------------------------ ------------------------------------------------
Class C 0 0 0 0 0 0 0 0
- ------------------------------- ------------------------------------------------ ------------------------------------------------
Cost of shares redeemed
Institutional Class (3,613) (45,330) (2,853) (34,303) (2,294) (27,613) (1,178) (14,496)
- ------------------------------- ------------------------------------------------ ------------------------------------------------
Administrative Class (46) (553) (78) (951) (435) (5,453) (39) (483)
- ------------------------------- ------------------------------------------------ ------------------------------------------------
Class A (1) (10) 0 0 (15) (189) 0 0
- ------------------------------- ------------------------------------------------ ------------------------------------------------
Class B (5) (73) 0 0 (1) (15) 0 0
- ------------------------------- ------------------------------------------------ ------------------------------------------------
Class C (21) (277) 0 0 (35) (433) 0 0
- ------------------------------- ------------------------------------------------ ------------------------------------------------
Net increase (decrease)
resulting from Fund
share transactions (2,437) $ (30,335) (209) $ (2,308) 1,600 $ 19,625 574 $ 6,669
=============================== ================================================ ================================================
</TABLE>
<TABLE>
<CAPTION>
Capital Appreciation Fund
-------------------------------------------------
Year Ended 6/30/97 Eight Months Ended 6/30/96
Shares Amount Shares Amount
-------------------------------------------------
<S> <C> <C> <C> <C>
Receipts for shares sold
Institutional Class 8,723 $ 165,774 5,442 $ 93,460
- ------------------------------------------- -------------------------------------------------
Administrative Class 157 3,111 0 0
- ------------------------------------------- -------------------------------------------------
Class A 330 6,440 0 0
- ------------------------------------------- -------------------------------------------------
Class B 144 2,819 0 0
- ------------------------------------------- -------------------------------------------------
Class C 676 13,152 0 0
- ------------------------------------------- -------------------------------------------------
Shares issued in reorganization
Class A 0 0 0 0
- ------------------------------------------- -------------------------------------------------
Class B 0 0 0 0
- ------------------------------------------- -------------------------------------------------
Class C 0 0 0 0
- ------------------------------------------- -------------------------------------------------
Issued as reinvestment of distributions
Institutional Class 2,018 36,552 947 15,598
- ------------------------------------------- -------------------------------------------------
Administrative Class 8 136 0 0
- ------------------------------------------- -------------------------------------------------
Class A 0 0 0 0
- ------------------------------------------- -------------------------------------------------
Class B 0 0 0 0
- ------------------------------------------- -------------------------------------------------
Class C 0 0 0 0
- ------------------------------------------- -------------------------------------------------
Cost of shares redeemed
Institutional Class (4,708) (90,177) (1,070) (18,543)
- ------------------------------------------- -------------------------------------------------
Administrative Class (17) (349) 0 0
- ------------------------------------------- -------------------------------------------------
Class A (21) (415) 0 0
- ------------------------------------------- -------------------------------------------------
Class B (1) (11) 0 0
- ------------------------------------------- -------------------------------------------------
Class C (55) (1,161) 0 0
- ------------------------------------------- -------------------------------------------------
Net increase (decrease) resulting from
Fund share transactions 7,254 $ 135,871 5,319 $ 90,515
=========================================== =================================================
<CAPTION>
Mid Cap Equity Fund Equity Income Fund
------------------------------------------------ ------------------------------------------------
Year Ended 6/30/97 Eight Months Ended 6/30/96 Year Ended 6/30/97 Eight Months Ended 6/30/96
Shares Amount Shares Amount Shares Amount Shares Amount
------------------------------------------------ ------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Receipts for shares sold
Institutional Class 42 $ 575 36 $ 474 1,004 $ 14,387 2,560 $ 34,285
- ------------------------------- ------------------------------------------------- -----------------------------------------------
Administrative Class 0 0 0 0 142 2,032 524 6,890
- ------------------------------- ------------------------------------------------- -----------------------------------------------
Class A 0 0 0 0 118 1,691 0 0
- ------------------------------- ------------------------------------------------- -----------------------------------------------
Class B 0 0 0 0 213 3,040 0 0
- ------------------------------- ------------------------------------------------- -----------------------------------------------
Class C 0 0 0 0 488 7,063 0 0
- ------------------------------- ------------------------------------------------- -----------------------------------------------
Shares issued in reorganization
Class A 0 0 0 0 0 0 0 0
- ------------------------------- ------------------------------------------------- -----------------------------------------------
Class B 0 0 0 0 0 0 0 0
- ------------------------------- ------------------------------------------------- -----------------------------------------------
Class C 0 0 0 0 0 0 0 0
- ------------------------------- ------------------------------------------------- -----------------------------------------------
Issued as reinvestment of
distributions
Institutional Class 20 262 6 82 1,299 17,796 514 6,952
- ------------------------------- ------------------------------------------------- -----------------------------------------------
Administrative Class 0 0 0 0 80 1,101 29 387
- ------------------------------- ------------------------------------------------- -----------------------------------------------
Class A 0 0 0 0 1 13 0 0
- ------------------------------- ------------------------------------------------- -----------------------------------------------
Class B 0 0 0 0 1 15 0 0
- ------------------------------- ------------------------------------------------- -----------------------------------------------
Class C 0 0 0 0 3 43 0 0
- ------------------------------- ------------------------------------------------- -----------------------------------------------
Cost of shares redeemed
Institutional Class (92) (1,218) (118) (1,597) (2,573) (37,514) (3,957) (55,588)
- ------------------------------- ------------------------------------------------- -----------------------------------------------
Administrative Class 0 0 0 0 (118) (1,690) (139) (1,903)
- ------------------------------- ------------------------------------------------- -----------------------------------------------
Class A 0 0 0 0 (5) (69) 0 0
- ------------------------------- ------------------------------------------------- -----------------------------------------------
Class B 0 0 0 0 (47) (670) 0 0
- ------------------------------- ------------------------------------------------- -----------------------------------------------
Class C 0 0 0 0 (60) (899) 0 0
- ------------------------------- ------------------------------------------------- -----------------------------------------------
Net increase (decrease)
resulting from Fund
share transactions (30) $ (381) (76) $ (1,041) 546 $ 6,339 (469) $ (8,977)
=============================== ================================================= ===============================================
<CAPTION>
Value Fund
-------------------------------------------------
Year Ended 6/30/97 Eight Months Ended 6/30/96
Shares Amount Shares Amount
-------------------------------------------------
<S> <C> <C> <C> <C>
Receipts for shares sold
Institutional Class 1,317 $ 17,251 2,925 $ 36,330
- ------------------------------------------- -------------------------------------------------
Administrative Class 0 0 0 0
- ------------------------------------------- -------------------------------------------------
Class A 349 3,387 0 0
- ------------------------------------------- -------------------------------------------------
Class B 303 1,609 0 0
- ------------------------------------------- -------------------------------------------------
Class C 1,607 16,250 0 0
- ------------------------------------------- -------------------------------------------------
Shares issued in reorganization
Class A 843 11,374 0 0
- ------------------------------------------- -------------------------------------------------
Class B 1,521 20,538 0 0
- ------------------------------------------- -------------------------------------------------
Class C 3,624 48,923 0 0
- ------------------------------------------- -------------------------------------------------
Issued as reinvestment of distributions
Institutional Class 293 3,854 207 2,397
- ------------------------------------------- -------------------------------------------------
Administrative Class 0 0 0 0
- ------------------------------------------- -------------------------------------------------
Class A 7 95 0 0
- ------------------------------------------- -------------------------------------------------
Class B 6 86 0 0
- ------------------------------------------- -------------------------------------------------
Class C 16 225 0 0
Cost of shares redeemed
Institutional Class (803) (10,770) (53) (637)
- ------------------------------------------- -------------------------------------------------
Administrative Class 0 0 0 0
- ------------------------------------------- -------------------------------------------------
Class A (142) (1,972) 0 0
- ------------------------------------------- -------------------------------------------------
Class B (112) (1,562) 0 0
- ------------------------------------------- -------------------------------------------------
Class C (913) (12,509) 0 0
- ------------------------------------------- -------------------------------------------------
Net increase (decrease) resulting from
Fund share transactions 7,916 $ 96,779 3,079 $ 38,090
=========================================== =================================================
</TABLE>
58 / PIMCO Funds
<PAGE>
<TABLE>
<CAPTION>
Mid Cap Growth Fund Micro Cap Growth Fund
------------------------------------------------ ------------------------------------------------
Year Ended 6/30/97 Eight Months Ended 6/30/96 Year Ended 6/30/97 Eight Months Ended 6/30/96
Shares Amount Shares Amount Shares Amount Shares Amount
------------------------------------------------ ------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Receipts for shares sold
Institutional Class 3,798 $ 71,437 3,438 $ 65,496 4,050 $ 72,696 1,333 $ 21,977
- ------------------------------- ------------------------------------------------- -----------------------------------------------
Administrative Class 47 878 14 266 135 2,434 40 707
- ------------------------------- ------------------------------------------------- -----------------------------------------------
Class A 133 673 0 0 0 0 0 0
- ------------------------------- ------------------------------------------------- -----------------------------------------------
Class B 277 1,840 0 0 0 0 0 0
- ------------------------------- ------------------------------------------------- -----------------------------------------------
Class C 792 8,401 0 0 0 0 0 0
- ------------------------------- ------------------------------------------------- -----------------------------------------------
Shares issued in reorganization
Class A 618 11,363 0 0 0 0 0 0
- ------------------------------- ------------------------------------------------- -----------------------------------------------
Class B 1,223 22,472 0 0 0 0 0 0
- ------------------------------- ------------------------------------------------- -----------------------------------------------
Class C 2,262 41,587 0 0 0 0 0 0
- ------------------------------- ------------------------------------------------- -----------------------------------------------
Issued as reinvestment of
distributions
Institutional Class 2,481 42,923 301 5,548 572 9,931 88 1,379
- ------------------------------- ------------------------------------------------- -----------------------------------------------
Administrative Class 15 261 2 27 7 121 0 0
- ------------------------------- ------------------------------------------------- -----------------------------------------------
Class A 0 0 0 0 0 0 0 0
- ------------------------------- ------------------------------------------------- -----------------------------------------------
Class B 0 0 0 0 0 0 0 0
- ------------------------------- ------------------------------------------------- -----------------------------------------------
Class C 0 0 0 0 0 0 0 0
- ------------------------------- ------------------------------------------------- -----------------------------------------------
Cost of shares redeemed
Institutional Class (3,791) (72,699) (2,281) (42,836) (899) (15,697) (1,411) (24,322)
- ------------------------------- ------------------------------------------------- -----------------------------------------------
Administrative Class (15) (280) (10) (182) (66) (1,174) (9) (166)
- ------------------------------- ------------------------------------------------- -----------------------------------------------
Class A (149) (2,743) 0 0 0 0 0 0
- ------------------------------- ------------------------------------------------- -----------------------------------------------
Class B (99) (1,818) 0 0 0 0 0 0
- ------------------------------- ------------------------------------------------- -----------------------------------------------
Class C (392) (7,250) 0 0 0 0 0 0
- ------------------------------- ------------------------------------------------- -----------------------------------------------
Net increase (decrease)
resulting from Fund
share transactions 7,200 $ 117,045 1,464 $ 28,319 3,799 $ 68,311 41 $ (425)
=============================== ================================================= ===============================================
<CAPTION>
Small Cap Growth Fund Core Equity Fund
------------------------------------------------ ------------------------------------------------
Year Ended 6/30/97 Eight Months Ended 6/30/96 Year Ended 6/30/97 Eight Months Ended 6/30/96
Shares Amount Shares Amount Shares Amount Shares Amount
------------------------------------------------ ------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Receipts for shares sold
Institutional Class 688 $ 10,629 238 $ 4,731 116 $ 1,642 162 $ 2,105
- ------------------------------- ------------------------------------------------- -----------------------------------------------
Administrative Class 0 1 22 437 671 9,341 1,313 17,158
- ------------------------------- ------------------------------------------------- -----------------------------------------------
Class A 0 0 0 0 0 0 0 0
- ------------------------------- ------------------------------------------------- -----------------------------------------------
Class B 0 0 0 0 0 0 0 0
- ------------------------------- ------------------------------------------------- -----------------------------------------------
Class C 0 0 0 0 0 0 0 0
- ------------------------------- ------------------------------------------------- -----------------------------------------------
Shares issued in reorganization
Class A 0 0 0 0 0 0 0 0
- ------------------------------- ------------------------------------------------- -----------------------------------------------
Class B 0 0 0 0 0 0 0 0
- ------------------------------- ------------------------------------------------- -----------------------------------------------
Class C 0 0 0 0 0 0 0 0
- ------------------------------- ------------------------------------------------- -----------------------------------------------
Issued as reinvestment of
distributions
Institutional Class 1,056 12,306 239 4,655 21 286 5 73
- ------------------------------- ------------------------------------------------- -----------------------------------------------
Administrative Class 1 10 2 55 137 1,878 52 652
- ------------------------------- ------------------------------------------------- -----------------------------------------------
Class A 0 0 0 0 0 0 0 0
- ------------------------------- ------------------------------------------------- -----------------------------------------------
Class B 0 0 0 0 0 0 0 0
- ------------------------------- ------------------------------------------------- -----------------------------------------------
Class C 0 0 0 0 0 0 0 0
- ------------------------------- ------------------------------------------------- -----------------------------------------------
Cost of shares redeemed
Institutional Class (835) (11,800) (2,414) (49,237) (493) (6,861) (9) (118)
- ------------------------------- ------------------------------------------------- -----------------------------------------------
Administrative Class (6) (120) (45) (914) (1,397) (19,716) (825) (10,789)
- ------------------------------- ------------------------------------------------- -----------------------------------------------
Class A 0 0 0 0 0 0 0 0
- ------------------------------- ------------------------------------------------- -----------------------------------------------
Class B 0 0 0 0 0 0 0 0
- ------------------------------- ------------------------------------------------- -----------------------------------------------
Class C 0 0 0 0 0 0 0 0
- ------------------------------- ------------------------------------------------- -----------------------------------------------
Net increase (decrease)
resulting from Fund
share transactions 904 $ 11,026 (1,958) $ (40,273) (945) $ (13,430) 698 $ 9,081
=============================== ================================================= ===============================================
<CAPTION>
Small Cap Value Fund Enhanced Equity Fund
------------------------------------------------ ------------------------------------------------
Year Ended 6/30/97 Eight Months Ended 6/30/96 Year Ended 6/30/97 Eight Months Ended 6/30/96
Shares Amount Shares Amount Shares Amount Shares Amount
------------------------------------------------ ------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Receipts for shares sold
Institutional Class 395 $ 5,653 201 $ 2,712 761 $ 11,801 2,985 $ 44,945
- ------------------------------- ------------------------------------------------- -----------------------------------------------
Administrative Class 90 1,269 437 5,755 0 0 0 0
- ------------------------------- ------------------------------------------------- -----------------------------------------------
Class A 422 6,136 0 0 0 0 0 0
- ------------------------------- ------------------------------------------------- -----------------------------------------------
Class B 743 10,821 0 0 0 0 0 0
- ------------------------------- ------------------------------------------------- -----------------------------------------------
Class C 1,351 19,512 0 0 0 0 0 0
- ------------------------------- ------------------------------------------------- -----------------------------------------------
Shares issued in reorganization
Class A 0 0 0 0 0 0 0 0
- ------------------------------- ------------------------------------------------- -----------------------------------------------
Class B 0 0 0 0 0 0 0 0
- ------------------------------- ------------------------------------------------- -----------------------------------------------
Class C 0 0 0 0 0 0 0 0
- ------------------------------- ------------------------------------------------- -----------------------------------------------
Issued as reinvestment of
distributions
Institutional Class 368 4,969 192 2,501 1,245 17,302 210 3,136
- ------------------------------- ------------------------------------------------- -----------------------------------------------
Administrative Class 55 741 27 355 0 0 0 0
- ------------------------------- ------------------------------------------------- -----------------------------------------------
Class A 0 0 0 0 0 0 0 0
- ------------------------------- ------------------------------------------------- -----------------------------------------------
Class B 0 0 0 0 0 0 0 0
- ------------------------------- ------------------------------------------------- -----------------------------------------------
Class C 0 0 0 0 0 0 0 0
- ------------------------------- ------------------------------------------------- -----------------------------------------------
Cost of shares redeemed
Institutional Class (612) (8,698) (1,028) (13,943) (4,525) (67,468) (3,078) (47,401)
- ------------------------------- ------------------------------------------------- -----------------------------------------------
Administrative Class (82) (1,177) (152) (2,006) 0 0 0 0
- ------------------------------- ------------------------------------------------- -----------------------------------------------
Class A (5) (78) 0 0 0 0 0 0
- ------------------------------- ------------------------------------------------- -----------------------------------------------
Class B (38) (588) 0 0 0 0 0 0
- ------------------------------- ------------------------------------------------- -----------------------------------------------
Class C (37) (535) 0 0 0 0 0 0
- ------------------------------- ------------------------------------------------- -----------------------------------------------
Net increase (decrease)
resulting from Fund
share transactions 2,650 $ 38,025 (323) $ (4,626) (2,519) $ (38,365) 117 $ 680
=============================== ================================================= ===============================================
<CAPTION>
Balanced Fund
-------------------------------------------------
Year Ended 6/30/97 Eight Months Ended 6/30/96
Shares Amount Shares Amount
-------------------------------------------------
<S> <C> <C> <C> <C>
Receipts for shares sold
Institutional Class 926 $ 10,421 821 $ 9,459
- ------------------------------------------- -------------------------------------------------
Administrative Class 0 0 0 0
- ------------------------------------------- -------------------------------------------------
Class A 32 354 0 0
- ------------------------------------------- -------------------------------------------------
Class B 102 1,113 0 0
- ------------------------------------------- -------------------------------------------------
Class C 89 969 0 0
- ------------------------------------------- -------------------------------------------------
Shares issued in reorganization
Class A 0 0 0 0
- ------------------------------------------- -------------------------------------------------
Class B 0 0 0 0
- ------------------------------------------- -------------------------------------------------
Class C 0 0 0 0
- ------------------------------------------- -------------------------------------------------
Issued as reinvestment of distributions
Institutional Class 1,158 12,237 704 8,025
- ------------------------------------------- -------------------------------------------------
Administrative Class 0 0 0 0
- ------------------------------------------- -------------------------------------------------
Class A 0 3 0 0
- ------------------------------------------- -------------------------------------------------
Class B 1 9 0 0
- ------------------------------------------- -------------------------------------------------
Class C 1 7 0 0
- ------------------------------------------- -------------------------------------------------
Cost of shares redeemed
Institutional Class (3,794) (43,185) (538) (6,199)
- ------------------------------------------- -------------------------------------------------
Administrative Class 0 0 0 0
- ------------------------------------------- -------------------------------------------------
Class A 0 (4) 0 0
- ------------------------------------------- -------------------------------------------------
Class B (4) (44) 0 0
- ------------------------------------------- -------------------------------------------------
Class C (8) (90) 0 0
- ------------------------------------------- -------------------------------------------------
Net increase (decrease) resulting from
Fund share transactions (1,497) $(18,210) 987 $ 11,285
=========================================== =================================================
</TABLE>
1997 Annual Report / 59
<PAGE>
Report of Independent Accountants
To the Trustees and Shareholders of the
PIMCO Funds: Multi-Manager Series
In our opinion, the accompanying statements of assets and
liabilities, including the schedules of investments, and the
related statements of operations and of changes in net assets and
the financial highlights present fairly, in all material respects,
the financial position of the Emerging Markets Fund, International
Developed Fund, Capital Appreciation Fund, Mid Cap Growth Fund,
Micro Cap Growth Fund, Small Cap Growth Fund, Core Equity Fund,
Mid Cap Equity Fund, Equity Income Fund, Value Fund, Small Cap
Value Fund, Enhanced Equity Fund and Balanced Fund (each a Fund of
PIMCO Funds: Multi-Manager Series, hereafter referred to as the
"Funds") at June 30, 1997, and the results of each of their
operations, the changes in each of their net assets and the
financial highlights for the periods indicated, in conformity with
generally accepted accounting principles. These financial
statements and the financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Funds'
management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits
of these financial statements in accordance with generally
accepted auditing standards which require that we plan and perform
the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by
management, and evaluating the overall financial statement
presentation. We believe that our audits, which included
confirmation of securities at June 30, 1997 by correspondence with
the custodians and brokers and the application of alternative
auditing procedures where confirmations from brokers were not
received, provide a reasonable basis for the opinion expressed
above.
Price Waterhouse LLP
Kansas City, Missouri
August 15, 1997
60 / PIMCO Funds
<PAGE>
Shareholder Vote (unaudited)
Special meetings of shareholders were held on December 20, 1996, and January 8,
1997, to vote on the following resolutions:
1. Election of eight additional Trustees. The following Trustees were
recommended for election: E. Philip Cannon, Donald P. Carter, Gary A. Childress,
Gary L. Light, Robert A. Prindiville, Joel Segall, W. Bryant Stooks and Gerald
M. Thorne. The following Trustees continue to serve the Trust: William D.
Cvengros, Richard L. Nelson, Lyman W. Porter and Alan Richards.
2. The Cadence Mid Cap Growth Fund will acquire the assets (subject to the
liabilities) of the Discovery Fund, a series of PIMCO Advisors Funds ("PAF").
The NFJ Diversified Low P/E Fund will acquire the assets (subject to the
liabilities) of the Value Fund, a series of PAF.
3. Approve Addendum to the Portfolio Management Agreement. Reallocate investment
advisory fees paid to PIMCO Advisors L.P. ("the Advisor") between the Advisor
and each of the portfolio managers.
4. Approve Second Amended and Restated Declaration of Trust. The Declaration
states that shareholder voting requirements will be provided for in the
provisions of the proposed Bylaws adopted by the Trustees, eliminate the
requirement of a shareholder vote with respect to consolidations or mergers of
the Trust, allows the Trustees to assign certain preferences and special or
relative rights and privileges (including conversion rights, if any) to the
classes of the Trust, eliminate the provision of "reasonable and fair" for
advisory and distribution contracts entered into with certain interested parties
of the Trust and retain the requirement that the contracts remain subject to the
requirements of the Investment Company Act of 1940, and clarifies the procedures
for determining whether parties are entitled to indemnification by the Trust.
5. Approve the Administrative Class Distribution Plan. Under the terms of the
Plan, the Trust will reimburse brokers and other service organizations for costs
and expenses incurred in connection with the distribution and marketing of the
Administrative Class shares and/or the provision of shareholder services to its
customers that invest in the Funds.
Shareholders adopted all resolutions, except for Resolution 5 which was not
adopted by the shareholders of the Cadence Capital Appreciation Fund, Cadence
Small Cap Growth Fund and the Blairlogie Emerging Markets Fund.
The voting on each resolution is summarized below:
<TABLE>
<CAPTION>
Resolution 1
- -------------------------------------------------------------------------------
For Withheld
- -------------------------------------------------------------------------------
<S> <C> <C>
E. Philip Cannon 57,405,747 129,451
Donald P. Carter 57,405,747 129,451
Gary A. Childress 57,405,747 129,451
Gary L. Light 57,405,747 129,451
Robert A. Prindiville 57,417,947 117,250
Joel Segall 57,010,964 524,233
W. Bryant Stooks 57,405,747 129,451
Gerald M. Thorne 57,405,747 129,451
- -------------------------------------------------------------------------------
<CAPTION>
Resolution 2
- -----------------------------------------------------------------------------------------
Broker
For Against Abstain Non-Votes
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NFJ Diversified Low P/E Fund 3,563,807 161 5,813 525
Cadence Mid Cap Growth Fund 6,125,657 4,053 570 23,439
<CAPTION>
Resolution 3
- ----------------------------------------------------------------------------------------
Broker
For Against Abstain Non-Votes
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NFJ Equity Income Fund 4,324,360 14,756 15,001 0
NFJ Diversified Low P/E Fund 3,560,691 94 5,813 3,708
NFJ Small Cap Value Fund 1,326,551 0 5,235 0
Cadence Capital Appreciation Fund 14,313,578 908,626 109,950 0
Cadence Mid Cap Growth Fund 6,149,096 4,053 570 23,439
Cadence Micro Cap Growth Fund 3,536,653 9,159 12,186 0
Cadence Small Cap Growth Fund 1,167,224 3,790 0 0
Columbus Circle Investors Core
Equity Fund 2,798,640 0 2,673 0
Columbus Circle Investors Mid Cap
Equity Fund 478,678 0 633 0
Parametric Enhanced Equity Fund 3,839,764 0 15,960 0
Blairlogie Emerging Markets Fund 4,238,889 23,349 36,439 0
Blairlogie International Active Fund 4,793,969 4,033 4,715 0
Balanced Fund (NFJ Addendum) 4,758,053 0 12,693 0
Balanced Fund (Cadence Addendum) 4,755,416 2,637 12,693 0
<CAPTION>
Resolution 4
- ----------------------------------------------------------------------------------------
Broker
For Against Abstain Non-Votes
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NFJ Equity Income Fund 4,227,369 21,829 15,700 89,218
NFJ Diversified Low P/E Fund 3,559,510 94 5,813 4,889
NFJ Small Cap Value Fund 1,326,201 0 5,235 350
Cadence Capital Appreciation Fund 10,756,595 1,418,188 118,236 3,025,336
Cadence Mid Cap Growth Fund 6,124,869 4,841 570 0
Cadence Micro Cap Growth Fund 2,665,179 11,236 12,149 863,922
Cadence Small Cap Growth Fund 1,167,224 3,790 0 0
Columbus Circle Investors Core
Equity Fund 2,798,640 0 2,672 0
Columbus Circle Investors Mid Cap
Equity Fund 478,678 0 633 0
Parametric Enhanced Equity Fund 3,839,764 0 15,960 0
Blairlogie Emerging Markets Fund 3,265,118 26,693 33,658 1,378,527
Blairlogie International Active Fund 4,398,987 5,859 4,150 393,722
Balanced Fund 4,755,416 2,637 12,693 0
<CAPTION>
Resolution 5
- ------------------------------------------------------------------------------------------
Broker
For Against Abstain Non-Votes
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NFJ Equity Income Fund 418,547 0 0 10,270
NFJ Small Cap Value Fund 306,741 0 0 1,255
Cadence Capital Appreciation Fund 886 0 0 4,667
Cadence Mid Cap Growth Fund 48,900 0 0 8,939
Cadence Micro Cap Growth Fund 51,948 0 0 0
Cadence Small Cap Growth Fund 0 0 0 5,313
Columbus Circle Investors Core
Equity Fund 2,203,401 0 0 0
Blairlogie Emerging Markets Fund 5,184 0 0 19,689
Blairlogie International Active Fund 286,674 0 0 183,042
</TABLE>
1997 Annual Report / 61
<PAGE>
Federal Income Tax Information (unaudited)
As required by the Internal Revenue Code regulations,
shareholders must be notified within 60 days of the Trust's
fiscal year end (June 30, 1997) regarding the status of the
dividend received deduction for corporations.
Dividend Received Deduction. Corporate shareholders are generally
entitled to take the dividend received deduction on the portion
of a Fund's dividend distribution that qualifies under tax law.
The percentage of each Fund's fiscal 1997 ordinary income
dividends that qualifies for the corporate dividend received
deduction is set forth below:
<TABLE>
<S> <C>
Capital Appreciation Fund 42.81%
Mid Cap Growth Fund 66.85%
Small Cap Growth 10.48%
Core Equity Fund 15.11%
Mid Cap Equity Fund 5.64%
Equity Income Fund 60.76%
Value Fund 39.30%
Small Cap Value Fund 40.96%
Enhanced Equity Fund 51.23%
Balanced Fund 13.56%
</TABLE>
Shareholders are advised to consult their own tax advisor with
respect to the tax consequences of their investment in the Trust.
However, income received by tax-exempt recipients need not be
reported as taxable income. In January 1998, you will be advised
on IRS form 1099-DIV as to the federal tax status of the dividends
and distributions received by you in calendar year 1997.
<PAGE>
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<PAGE>
[This Page Intentionally Left Blank]
<PAGE>
Trustees and Officers
William D. Cvengros, Chairman and Trustee
Stephen J. Treadway, President, Chief Executive Officer and Trustee
E. Philip Cannon, Trustee
Donald P. Carter, Trustee
Gary A. Childress, Trustee
Gary L. Light, Trustee
Richard Nelson, Trustee
Lyman W. Porter, Trustee
Robert A. Prindiville, Trustee
Alan Richards, Trustee
Joel Segall, Trustee
W. Bryant Stooks, Trustee
Gerald M. Thorne, Trustee
Newton B. Schott, Jr., Secretary
John P. Hardaway, Treasurer
Investment Advisor
PIMCO Advisors L.P.
840 Newport Center Drive, Suite 360
Newport Beach, California 92660
Administrator
Pacific Investment Management Company
840 Newport Center Drive, Suite 360
Newport Beach, California 92660
Transfer Agent and Custodian
Investors Fiduciary Trust Company
127 West 10th Street
Kansas City, Missouri 64105
Counsel
Ropes & Gray
One International Place
Boston, Massachusetts 02110
Independent Accountants
Price Waterhouse LLP
1055 Broadway
Kansas City, Missouri 64105
<PAGE>
- --------------------------------------
P I M C O
840 Newport Center Drive, Suite 360
Newport Beach, CA 92660
800.927.4648
- --------------------------------------
This report is submitted for the general information of the shareholders
of the PIMCO Funds. It is not authorized for distribution to prospective
investors unless accompanied or preceded by an effective prospectus for the
PIMCO Funds, which contains information covering its investment policies as well
as other pertinent information.
