<PAGE>
Rule 497(c)
33-36528
811-6161
PIMCO Funds Prospectus
PIMCO This Prospectus describes 15 mutual funds offered by PIMCO Funds:
Funds: Multi-Manager Series. The Funds provide access to the professional
Multi- investment advisory services offered by PIMCO Advisors L.P. and
Manager its investment management affiliates. As of September 30, 1999,
Series PIMCO Advisors and its affiliates managed approximately $256
billion, including assets for 67 of the 200 largest U.S.
corporations.
November
1, 1999
The Prospectus explains what you should know about the Funds
Share before you invest. Please read it carefully.
Classes
A, B
and C
The Securities and Exchange Commission has not approved or
disapproved these securities or determined if this Prospectus is
truthful or complete. Any representation to the contrary is a
criminal offense.
PIMCO Funds: Multi-Manager Series
1
<PAGE>
Table of Contents
<TABLE>
<S> <C>
Summary Information.............................................. 3
Fund Summaries
Capital Appreciation Fund...................................... 5
Equity Income Fund............................................. 7
Growth Fund.................................................... 9
Innovation Fund................................................ 11
International Fund............................................. 13
Mid-Cap Growth Fund............................................ 15
Opportunity Fund............................................... 17
Precious Metals Fund........................................... 19
Renaissance Fund............................................... 21
Small-Cap Growth Fund.......................................... 23
Small-Cap Value Fund........................................... 25
Target Fund.................................................... 27
Tax-Efficient Equity Fund...................................... 29
Value Fund..................................................... 31
Value 25 Fund.................................................. 33
Summary of Principal Risks....................................... 35
Management of the Funds.......................................... 37
Investment Options - Class A, B and C Shares .................... 42
How Fund Shares Are Priced....................................... 44
How to Buy and Sell Shares....................................... 45
Fund Distributions............................................... 48
Tax Consequences................................................. 49
Characteristics and Risks of Securities and Investment
Techniques...................................................... 50
Financial Highlights............................................. 57
</TABLE>
Prospectus 2
<PAGE>
Summary Information
The table below lists the investment objectives and compares certain
investment characteristics of the Funds. Other important characteristics are
described in the individual Fund Summaries beginning on page 5.
<TABLE>
<CAPTION>
Approximate Approximate
PIMCO Investment Main Number of Capitalization
Fund Objective Investments Holdings Range
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Growth Stock Growth Long-term growth of capital; Common stocks of 35-40 At least $5 billion
Funds income is an incidental companies with
consideration market
capitalizations
of at least $5
billion
-----------------------------------------------------------------------------------------------------------------
Target Capital appreciation; no Common stocks of 40-60 Between $1 billion
consideration is given to income companies with and $10 billion
market
capitalizations
of between $1
billion and
$10 billion
-----------------------------------------------------------------------------------------------------------------
Opportunity Capital appreciation; no Common stocks of 60-100 Between $100 million
consideration is given to income companies with and $2 billion
market
capitalizations
of between $100
million and $2
billion
--------------------------------------------------------------------------------------------------------------------------------
Blend Stock Capital Appreciation Growth of capital Common stocks of 60-100 At least $1 billion
Funds companies with
market
capitalizations
of at least $1
billion that
have improving
fundamentals and
whose stock is
reasonably
valued by the
market
-----------------------------------------------------------------------------------------------------------------
Mid-Cap Growth Growth of capital Common stocks of 60-100 More than $500 million
companies with (excluding the largest
market 200 companies)
capitalizations
of more than
$500 million
(excluding the
largest 200
companies) that
have improving
fundamentals and
whose stock is
reasonably
valued by the
market
-----------------------------------------------------------------------------------------------------------------
Small-Cap Growth Growth of capital Common stocks of 60-100 More than $100 million
companies with (excluding the largest
market 1,000 companies)
capitalizations
of more than
$100 million
(excluding the
largest 1,000
companies) that
have improving
fundamentals and
whose stock is
reasonably
valued by the
market
--------------------------------------------------------------------------------------------------------------------------------
Value Stock Equity Income Current income as a primary Income-producing 40-50 More than $2 billion
Funds objective; long-term growth of common stocks of
capital as a secondary objective companies with
market
capitalizations
of more than $2
billion
-----------------------------------------------------------------------------------------------------------------
Renaissance Long-term growth of capital Common stocks 50-80 All capitalizations
and income having below-
average
valuations where
the company's
business
fundamentals are
expected to
improve
-----------------------------------------------------------------------------------------------------------------
Value Long-term growth of capital Common stocks of 40 More than $2 billion
and income companies with
market
capitalizations
of more than $2
billion that are
undervalued
relative to the
market and their
industry groups
-----------------------------------------------------------------------------------------------------------------
Value 25 Long-term growth of capital Approximately 25 25 Between $1 billion
and income common stocks of and $5 billion
companies with
market
capitalizations
of between $1
billion and $5
billion and
below-average
price to
earnings ratios
relative to
their industry
groups
-----------------------------------------------------------------------------------------------------------------
Small-Cap Value Long-term growth of capital Common stocks of 100 Between $100 million
and income companies with and $1.5 billion
market
capitalizations
of between $100
million and $1.5
billion and
below-average
price to
earnings ratios
relative to the
market and their
industry groups
--------------------------------------------------------------------------------------------------------------------------------
Enhanced Index Tax-Efficient Equity Maximum after-tax growth A broadly More than 200 More than $5 billion
Stock Funds of capital diversified
portfolio of at
least 200 common
stocks of
companies
represented in
the S&P 500
Index with
market
capitalizations
of more than $5
billion
--------------------------------------------------------------------------------------------------------------------------------
International International Capital appreciation through Common stocks of 200-250 More than $500 million
Stock Funds investment in an international foreign (non-
portfolio; income is an incidental U.S.) issuers
consideration (developed and
emerging markets)
with market
capitalizations
of more than
$500 million
--------------------------------------------------------------------------------------------------------------------------------
Sector-Related Innovation Capital appreciation; no Common stocks of 40 More than $200 million
Stock Funds consideration is given to income technology-
related
companies with
market
capitalizations
of more than
$200 million
-----------------------------------------------------------------------------------------------------------------
Precious Metals Capital appreciation; no Common stocks of 50-60 Between $50 million
consideration is given to income precious metals- and $7 billion
related
companies of
between $50
million and $7
billion
</TABLE>
3 PIMCO Funds: Multi-Manager Series
<PAGE>
Summary Information (continued)
Fund Descrip- The Funds provide a broad range of investment choices. The
tions, Perfor- following Fund Summaries identify each Fund's investment
mance and Fees objective, principal investments and strategies, principal
risks, performance information and fees and expenses. A more
detailed "Summary of Principal Risks" describing principal risks
of investing in the Funds begins after the Fund Summaries.
It is possible to lose money on investments in the Funds. An
investment in a Fund is not a deposit of a bank and is not
guaranteed or insured by the Federal Deposit Insurance
Corporation or any other government agency.
Prospectus 4
<PAGE>
PIMCO Capital Appreciation Fund
- --------------------------------------------------------------------------------
Principal Investment Fund Approximate
Investments Objective Focus Capitalization Range
and Seeks growth of Larger At least $1
Strategies capital capitalization billion
common stocks
Fund Approximate Number Dividend Frequency
Category of Holdings At least annually
Blend Stocks 60-100
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in common stocks of companies
with larger market capitalizations that have improving
fundamentals (based on growth criteria) and whose stock is
reasonably valued by the market (based on value criteria).
In making investment decisions for the Fund, the portfolio
management team considers the 1,000 largest publicly traded
companies (in terms of market capitalization) in the U.S. The team
screens the stocks in this universe for a series of growth
criteria, such as dividend growth, earnings growth, relative
growth of earnings over time (earnings momentum) and the company's
history of meeting earnings targets (earnings surprise), and also
value criteria, such as price-to-earnings, price-to-book and
price-to-cash flow ratios. The team then selects individual stocks
by subjecting the top 10% of the stocks in the screened universe
to a rigorous analysis of company factors, such as strength of
management, competitive industry position, and business prospects,
and financial statement data, such as earnings, cash flows and
profitability. The team may interview company management in making
investment decisions. The Fund's capitalization criteria applies
at the time of investment.
The portfolio management team rescreens the universe frequently
and seeks to consistently achieve a favorable balance of growth
and value characteristics for the Fund. The team sells a stock
when it falls below the median ranking, has negative earnings
surprises, or shows poor price performance relative to all stocks
in the Fund's capitalization range or to companies in the same
business sector. A stock may also be sold if its weighting in the
portfolio becomes excessive (normally above 2% of the Fund's
investments).
The Fund intends to be fully invested in common stock (aside from
certain cash management practices) and will not make defensive
investments in response to unfavorable market and other
conditions.
- --------------------------------------------------------------------------------
Principal Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
. Market Risk . Growth Securities Risk
. Issuer Risk . Credit Risk
. Value Securities Risk . Management Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
- --------------------------------------------------------------------------------
Performance The top of the next page shows summary performance information for
Information the Fund in a bar chart and an Average Annual Total Returns table.
The information provides some indication of the risks of investing
in the Fund by showing changes in its performance from year to
year and by showing how the Fund's average annual returns compare
with the returns of a broad-based securities market index and an
index of similar funds. The bar chart and the information to its
right show performance of the Fund's Class A shares, but the
returns do not reflect the impact of sales charges (loads). If
they did, the returns would be lower than those shown. Unlike the
bar chart, performance for Class A, B and C shares in the Average
Annual Total Returns table reflects the impact of sales charges.
For periods prior to the inception of Class A, B and C shares
(1/20/97), performance information shown in the bar chart and
tables for those classes is based on the performance of the Fund's
Institutional Class shares, which are offered in a different
prospectus. The prior Institutional Class performance has been
adjusted to reflect the actual sales charges (in the Average
Annual Total Returns table only), distribution and/or service
(12b-1) fees, administrative fees and other expenses paid by Class
A, B and C shares. Past performance is no guarantee of future
results.
5 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Capital Appreciation Fund (continued)
Calendar Year Total Returns -- Class A
[CHART APPEARS HERE]
More Recent Return
1992 7.08% Information
1993 17.24% ---------------------------
1994 4.64% 1/1/99-9/30/99 -1.25%
1995 36.61%
1996 26.29%
1997 33.72% Highest and Lowest
1998 17.18% Quarter Returns
(for periods shown
in the bar chart)
---------------------------
Highest (10/1/98-
12/31/98) 19.59%
---------------------------
Lowest (7/1/98-
9/30/98) -14.22%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/98)
<TABLE>
<CAPTION>
Fund Inception
1 Year 5 Years (3/8/91)(/3/)
-------------------------------------------------------------------------
<S> <C> <C> <C>
Class A 10.73% 19.49% 18.42%
-------------------------------------------------------------------------
Class B 11.33% 19.78% 18.48%
-------------------------------------------------------------------------
Class C 15.32% 19.96% 18.40%
-------------------------------------------------------------------------
S&P 500 Index(/1/) 28.58% 24.06% 19.58%
-------------------------------------------------------------------------
Lipper Capital Appreciation Fund Average(/2/) 20.49% 15.02% 14.91%
-------------------------------------------------------------------------
</TABLE>
(1) The S&P 500 Index is an unmanaged index of large
capitalization common stocks. It is not possible to invest
directly in the index.
(2) The Lipper Capital Appreciation Fund Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. that have an investment objective of maximum
capital appreciation. It does not take into account sales
charges.
(3) The Fund began operations on 3/8/91. Index comparisons begin
on 2/28/91.
- --------------------------------------------------------------------------------
Fees and
Expenses These tables describe the fees and expenses you may pay if you buy
of the and hold Class A, B or C shares of the Fund:
Fund
Shareholder Fees (fees paid directly from your investment)
<TABLE>
<CAPTION>
Maximum Sales Charge (Load) Imposed Maximum Contingent Deferred Sales Charge (Load)
on Purchases (as a percentage of offering price) (as a percentage of original purchase price)
------------------------------------------------------------------------------------------------------
<S> <C> <C>
Class A 5.50% 1%(/1/)
------------------------------------------------------------------------------------------------------
Class B None 5%(/2/)
------------------------------------------------------------------------------------------------------
Class C None 1%(/3/)
------------------------------------------------------------------------------------------------------
</TABLE>
(1) Imposed only in certain circumstances where Class A shares are
purchased without a front-end sales charge at the time of
purchase.
(2) The maximum CDSC is imposed on shares redeemed in the first
year. For shares held longer than one year, the CDSC declines
according to the schedule set forth under "Investment
Options--Class A, B and C Shares--Contingent Deferred Sales
Charges (CDSCs)--Class B Shares."
(3) The CDSC on Class C shares is imposed only on shares redeemed
in the first year.
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Share Class Fees (12b-1) Fees(/1/) Expenses(/2/) Expenses
-----------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A 0.45% 0.25% 0.40% 1.10%
-----------------------------------------------------------------
Class B 0.45 1.00 0.40 1.85
-----------------------------------------------------------------
Class C 0.45 1.00 0.40 1.85
-----------------------------------------------------------------
</TABLE>
(1) Due to the 12b-1 distribution fee imposed on Class B and Class
C shares, a Class B or Class C shareholders may, depending
upon the length of time the shares are held, pay more than the
economic equivalent of the maximum front-end sales charges
permitted by relevant rules of the National Association of
Securities Dealers, Inc.
(2) Other Expenses reflects a 0.40% Administrative Fee paid by the
class, which is subject to a reduction of 0.05% on average daily
net assets attributable in the aggregate to the Fund's Class A,
B and C shares in excess of $2.5 billion.
Examples. The Examples are intended to help you compare the cost
of investing in Class A, B or C shares of the Fund with the costs
of investing in other mutual funds. The Examples assume that you
invest $10,000 in the noted class of shares for the time periods
indicated, your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the Fund's
operating expenses remain the same. Although your actual costs may
be higher or lower, the Examples show what your costs would be
based on these assumptions.
<TABLE>
<CAPTION>
Example: Assuming you do not
Example: Assuming you redeem your shares at the end of each period redeem your shares
Share Class Year 1 Year 3 Year 5 Year 10 Year 1 Year 3 Year 5 Year 10
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A $656 $880 $1,123 $1,816 $656 $880 $1,123 $1,816
-----------------------------------------------------------------------------------------------------------
Class B 688 882 1,201 1,876 188 582 1,001 1,876
-----------------------------------------------------------------------------------------------------------
Class C 288 582 1,001 2,169 188 582 1,001 2,169
-----------------------------------------------------------------------------------------------------------
</TABLE>
Prospectus 6
<PAGE>
PIMCO Equity Income Fund
- --------------------------------------------------------------------------------
Principal Investment Objective Fund Focus Approximate
Investments Seek current income Income producing Capitalization Range
and as a primary objective, common stocks More than $2 billion
Strategies and long-term growth with potential
of capital as a for capital
secondary objective appreciation
Dividend Frequency
Approximate Number Quarterly
of Holdings
Fund Category 40-50
Value Stocks
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in income-producing (or
dividend-paying) common stocks of companies with market
capitalizations of more than $2 billion at the time of investment.
The Fund's initial selection universe consists of the 1,000
largest publicly traded companies (in terms of market
capitalization) in the U.S. The portfolio managers classify the
universe by industry. They then identify the most undervalued
stocks in each industry based mainly on relative P/E ratios,
calculated both with respect to trailing operating earnings and
forward earnings estimates. From this group of stocks, the Fund
buys approximately 25 stocks with the highest dividend yields. The
portfolio managers then screen the most undervalued companies in
each industry by dividend yield to identify the highest yielding
stocks in each industry. From this group, the Fund buys
approximately 25 additional stocks with the lowest P/E ratios.
In selecting stocks, the portfolio managers consider quantitative
factors such as price momentum (based on changes in stock price
relative to changes in overall market prices), earnings momentum
(based on analysts' earnings per share estimates and revisions to
those estimates), relative dividend yields, valuation relative to
the overall market and trading liquidity. The portfolio managers
may replace a stock when a stock within the same industry group
has a considerably higher dividend yield or lower valuation than
the Fund's current holding.
Under normal circumstances, the Fund intends to be fully invested
in common stocks (aside from certain cash management practices).
The Fund may temporarily hold up to 10% of its assets in cash and
cash equivalents for defensive purposes in response to unfavorable
market and other conditions. This would be inconsistent with the
Fund's investment objective and principal strategies.
- --------------------------------------------------------------------------------
Principal Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
.Market Risk .Credit Risk
.Issuer Risk .Management Risk
.Value Securities Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
- --------------------------------------------------------------------------------
Performance The top of the next page shows summary performance information for
Information the Fund in a bar chart and an Average Annual Total Returns table.
The information provides some indication of the risks of investing
in the Fund by showing changes in its performance from year to
year and by showing how the Fund's average annual returns compare
with the returns of a broad-based securities market index and an
index of similar funds. The bar chart and the information to its
right show performance of the Fund's Class A shares, but the
returns do not reflect the impact of sales charges (loads). If
they did, the returns would be lower than those shown. Unlike the
bar chart, performance for Class A, B and C shares in the Average
Annual Total Returns table reflects the impact of sales charges.
For periods prior to the inception of Class A, B and C shares
(1/20/97), performance information shown in the bar chart and
tables for those classes is based on the performance of the Fund's
Institutional Class shares, which are offered in a different
prospectus. The prior Institutional Class performance has been
adjusted to reflect the actual sales charges (in the Average
Annual Total Returns table only), distribution and/or service
(12b-1) fees, administrative fees and other expenses paid by Class
A, B and C shares. Past performance is no guarantee of future
results.
7 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Equity Income Fund (continued)
Calendar Year Total Returns -- Class A
[CHART APPEARS HERE] More Recent Return
Information
1992 14.29% -------------------------
1993 8.03% 1/1/99-9/30/99 0.51%
1994 -2.00%
1995 32.94% Highest and Lowest
1996 21.00% Quarter Returns
1997 30.88% (for periods shown
1998 8.03% in the bar chart)
-------------------------
Highest (10/1/98-
12/31/98) 13.92%
-------------------------
Lowest (7/1/98-
9/30/98) -10.98%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/98)
<TABLE>
<CAPTION>
Fund Inception
1 Year 5 Years (3/8/91)(/3/)
---------------------------------------------------------------------
<S> <C> <C> <C>
Class A 2.09% 16.07% 15.22%
---------------------------------------------------------------------
Class B 2.52% 16.30% 15.28%
---------------------------------------------------------------------
Class C 6.36% 16.53% 15.21%
---------------------------------------------------------------------
S&P 500 Index(/1/) 28.58% 24.06% 19.58%
---------------------------------------------------------------------
Lipper Equity Income Fund Average(/2/) 11.90% 16.50% 15.59%
---------------------------------------------------------------------
</TABLE>
(1) The S&P 500 Index is an unmanaged index of large
capitalization common stocks. It is not possible to invest
directly in the index.
(2) The Lipper Equity Income Fund Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. that seek relatively higher growth of income
through investing 60% or more of their portfolios in equities.
It does not take into account sales charges.
(3) The Fund began operations on 3/8/91. Index comparisons begin
on 2/28/91.
- --------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Class A, B or C shares of the Fund:
of the
Fund
Shareholder Fees (fees paid directly from your investment)
<TABLE>
<CAPTION>
Maximum Sales Charge (Load) Imposed Maximum Contingent Deferred Sales Charge (Load)
on Purchases (as a percentage of offering price) (as a percentage of original purchase price)
------------------------------------------------------------------------------------------------------
<S> <C> <C>
Class A 5.50% 1%(/1/)
------------------------------------------------------------------------------------------------------
Class B None 5%(/2/)
------------------------------------------------------------------------------------------------------
Class C None 1%(/3/)
------------------------------------------------------------------------------------------------------
</TABLE>
(1) Imposed only in certain circumstances where Class A shares are
purchased without a front-end sales charge at the time of
purchase.
(2) The maximum CDSC is imposed on shares redeemed in the first
year. For shares held longer than one year, the CDSC declines
according to the schedule set forth under "Investment
Options--Class A, B and C Shares--Contingent Deferred Sales
Charges (CDSCs)--Class B Shares."
(3) The CDSC on Class C shares is imposed only on shares redeemed
in the first year.
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Share Class Fees (12b-1) Fees(/1/) Expenses(/2/) Expenses
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A 0.45% 0.25% 0.40% 1.10%
--------------------------------------------------------------------
Class B 0.45 1.00 0.40 1.85
--------------------------------------------------------------------
Class C 0.45 1.00 0.40 1.85
--------------------------------------------------------------------
</TABLE>
(1) Due to the 12b-1 distribution fee imposed on Class B and Class
C shares, a Class B or Class C shareholders may, depending
upon the length of time the shares are held, pay more than the
economic equivalent of the maximum front-end sales charges
permitted by relevant rules of the National Association of
Securities Dealers, Inc.
(2) Other Expenses reflects a 0.40% Administrative Fee paid by the
class, which is subject to a reduction of 0.05% on average daily
net assets attributable in the aggregate to the Fund's Class A,
B and C shares in excess of $2.5 billion.
Examples. The Examples are intended to help you compare the cost
of investing in Class A, B or C shares of the Fund with the costs
of investing in other mutual funds. The Examples assume that you
invest $10,000 in the noted class of shares for the time periods
indicated, your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the Fund's
operating expenses remain the same. Although your actual costs may
be higher or lower, the Examples show what your costs would be
based on these assumptions.
<TABLE>
<CAPTION>
Example: Assuming you do not
Example: Assuming you redeem your shares at the end of each period redeem your shares
Share Class Year 1 Year 3 Year 5 Year 10 Year 1 Year 3 Year 5 Year 10
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A $656 $880 $1,123 $1,816 $656 $880 $1,123 $1,816
--------------------------------------------------------------------------------------------------------------
Class B 688 882 1,201 1,876 188 582 1,001 1,876
--------------------------------------------------------------------------------------------------------------
Class C 288 582 1,001 2,169 188 582 1,001 2,169
--------------------------------------------------------------------------------------------------------------
</TABLE>
Prospectus 8
<PAGE>
PIMCO Growth Fund
- --------------------------------------------------------------------------------
Principal Investment Fund Focus Approximate
Investments Objective Larger Capitalization
and Seeks long-term capitalization Range
Strategies growth of common At least $5
capital; income stocks billion
is an
incidental
consideration
Dividend Frequency
Approximate Number At least annually
of Holdings
Fund Category 35-40
Growth Stocks
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in common stocks of "growth"
companies with market capitalizations of at least $5 billion at
the time of investment.
The portfolio manager selects stocks for the Fund using a
"growth" style. The portfolio manager seeks to identify companies
with well-defined "wealth creating" characteristics, including
superior earnings growth (relative to companies in the same
industry or the market as a whole), high profitability and
consistent, predictable earnings. In addition, through fundamental
research, the portfolio manager seeks to identify dominant
companies that are gaining market share, have superior management
and possess a sustainable competitive advantage, such as superior
or innovative products, personnel and distribution systems. The
Fund sells stocks when the portfolio manager believes that
earnings, sentiment and relative performance are disappointing or
if an alternative investment is more attractive.
The Fund may also invest in other kinds of equity securities,
including preferred stocks and convertible securities. The Fund
may invest up to 15% of its assets in foreign securities, usually
in the form of American Depository Receipts (ADRs).
In response to unfavorable market and other conditions, the Fund
may make temporary investments of some or all of its assets in
high-quality fixed income securities. This would be inconsistent
with the Fund's investment objective and principal strategies.
- --------------------------------------------------------------------------------
Principal Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
.Market Risk .Foreign Investment Risk .Credit Risk
.Issuer Risk .Currency Risk .Management Risk
.Growth Securities Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
- --------------------------------------------------------------------------------
Performance The top of the next page shows summary performance information for
Information the Fund in a bar chart and an Average Annual Total Returns table.
The information provides some indication of the risks of investing
in the Fund by showing changes in its performance from year to
year and by showing how the Fund's average annual returns compare
with the returns of a broad-based securities market index and an
index of similar funds. The bar chart and the information to its
right show performance of the Fund's Class C shares, but the
returns do not reflect the impact of sales charges (loads). If
they did, the returns would be lower than those shown. Unlike the
bar chart, performance for Class A, B and C shares in the Average
Annual Total Returns table reflects the impact of sales charges.
For periods prior to the inception of Class A shares (10/26/90)
and Class B shares (5/23/95), performance information shown in the
Average Annual Total Returns table for those classes is based on
the performance of the Fund's Class C shares. The prior Class C
performance has been adjusted to reflect the actual sales charges,
distribution and/or service (12b-1) fees, administrative fees and
other expenses paid by Class A and B shares. Prior to March 6,
1999, the Fund had a different sub-adviser and would not
necessarily have achieved the performance results shown on the
next page under its current investment management arrangements.
Past performance is no guarantee of future results.
9 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Growth Fund (continued)
Calendar Year Total Returns -- Class C
[CHART APPEARS HERE]
More Recent Return
Information
1989 37.45% ---------------------------------
1990 0.29% 1/1/99-9/30/99 2.66%
1991 41.88%
1992 2.08% Highest and Lowest Quarter
1993 9.32% Returns
1994 -0.75% (for periods shown in the
1995 27.47% bar chart)
1996 17.52% ---------------------------------
1997 21.84% Highest (10/1/98-12/31/98) 25.12%
1998 38.90% ---------------------------------
Lowest (7/1/90-9/30/90) -13.14%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/98)
<TABLE>
<CAPTION>
Fund Inception
1 Year 5 Years 10 Years (2/24/84)(/3/)
-----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A 32.24% 19.82% 18.77% 18.40%
-----------------------------------------------------------------------
Class B 33.88% 20.08% 18.83% 18.44%
-----------------------------------------------------------------------
Class C 37.90% 20.27% 18.57% 17.98%
-----------------------------------------------------------------------
S&P 500 Index(/1/) 28.58% 24.06% 19.21% 18.44%
-----------------------------------------------------------------------
Lipper Growth Fund Average(/2/) 23.42% 18.74% 16.74% 15.58%
-----------------------------------------------------------------------
</TABLE>
(1) The S&P 500 Index is an unmanaged index of large capitalization
common stocks. It is not possible to invest directly in the index.
(2) The Lipper Growth Fund Average is a total return performance
average of funds tracked by Lipper Analytical Services, Inc. that
invest in companies with long-term earnings expected to grow
significantly faster than the earnings of the stocks represented in
the major unmanaged stock indexes. It does not take into account
sales charges.
(3) The Fund began operations on 2/24/84. Index comparisons begin
on 2/29/84.
- --------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Class A, B or C shares of the Fund:
of the
Fund
Shareholder Fees (fees paid directly from your investment)
<TABLE>
<CAPTION>
Maximum Sales Charge (Load) Imposed Maximum Contingent Deferred Sales Charge (Load)
on Purchases (as a percentage of offering price) (as a percentage of original purchase price)
---------------------------------------------------------------------------------------------------------
<S> <C> <C>
Class A 5.50% 1%(/1/)
---------------------------------------------------------------------------------------------------------
Class B None 5%(/2/)
---------------------------------------------------------------------------------------------------------
Class C None 1%(/3/)
---------------------------------------------------------------------------------------------------------
</TABLE>
(1) Imposed only in certain circumstances where Class A shares are
purchased without a front-end sales charge at the time of
purchase.
(2) The maximum CDSC is imposed on shares redeemed in the first year.
For shares held longer than one year, the CDSC declines according
to the schedule set forth under "Investment Options--Class A, B and
C Shares--Contingent Deferred Sales Charges (CDSCs)--Class B
Shares."
(3) The CDSC on Class C shares is imposed only on shares redeemed
in the first year.
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Share Class Fees (12b-1) Fees(/1/) Expenses(/2/) Expenses
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A 0.50% 0.25% 0.40% 1.15%
--------------------------------------------------------------------
Class B 0.50 1.00 0.40 1.90
--------------------------------------------------------------------
Class C 0.50 1.00 0.40 1.90
--------------------------------------------------------------------
</TABLE>
(1) Due to the 12b-1 distribution fee imposed on Class B and Class C
shares, a Class B or Class C shareholder may, depending upon the
length of time the shares are held, pay more than the economic
equivalent of the maximum front-end sales charges permitted by
relevant rules of the National Association of Securities Dealers,
Inc.
(2) Other Expenses reflects a 0.40% Administrative Fee paid by the
class, which is subject to a reduction of 0.05% on average daily
net assets attributable in the aggregate to the Fund's Class A,
B and C shares in excess of $2.5 billion.
Examples. The Examples are intended to help you compare the cost of
investing in Class A, B or C shares of the Fund with the costs of
investing in other mutual funds. The Examples assume that you
invest $10,000 in the noted class of shares for the time periods
indicated, your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the Fund's
operating expenses remain the same. Although your actual costs may
be higher or lower, the Examples show what your costs would be
based on these assumptions.
<TABLE>
<CAPTION>
Example: Assuming you do not
Example: Assuming you redeem your shares at the end of each period redeem your shares
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Share Class Year 1 Year 3 Year 5 Year 10 Year 1 Year 3 Year 5 Year 10
--------------------------------------------------------------------------------------------------------------
Class A $661 $895 $1,148 $1,871 $661 $895 $1,148 $1,871
--------------------------------------------------------------------------------------------------------------
Class B 693 897 1,226 1,930 193 597 1,026 1,930
--------------------------------------------------------------------------------------------------------------
Class C 293 597 1,026 2,222 193 597 1,026 2,222
--------------------------------------------------------------------------------------------------------------
</TABLE>
Prospectus 10
<PAGE>
PIMCO Innovation Fund
- --------------------------------------------------------------------------------
Principal Investment Fund Focus Approximate
Investments Objective Common stocks of Capitalization Range
and Seeks capital technology- More than $200
Strategies appreciation; no related million
consideration is companies
given to income
Dividend Frequency
Fund Category Approximate Number At least annually
Sector-Related of Holdings
Stocks 40
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in common stocks of companies
which utilize innovative technologies to gain a strategic
competitive advantage in their industry, as well as companies that
provide and service those technologies. The Fund identifies its
investment universe of technology-related companies primarily by
reference to classifications made by independent firms, such as
Standard & Poor's. Although the Fund emphasizes companies which
utilize technologies, it is not required to invest exclusively in
companies in a particular business sector or industry.
The portfolio manager selects stocks for the Fund using a
"growth" style. The portfolio manager seeks to identify
technology-related companies with well-defined "wealth creating"
characteristics, including superior earnings growth (relative to
companies in the same industry or the market as a whole), high
profitability and consistent, predictable earnings. In addition,
through fundamental research, the portfolio manager seeks to
identify dominant companies that are gaining market share, have
superior management and possess a sustainable competitive
advantage, such as superior or innovative products, personnel and
distribution systems. The Fund sells stocks when the portfolio
manager believes that earnings, sentiment and relative performance
are disappointing or if an alternative investment is more
attractive.
The Fund may also invest in other kinds of equity securities,
including preferred stocks and convertible securities. The Fund
may invest up to 15% of its assets in foreign securities, usually
in the form of American Depository Receipts (ADRs).
In response to unfavorable market and other conditions, the Fund
may make temporary investments of some or all of its assets in
high-quality fixed income securities. This would be inconsistent
with the Fund's investment objective and principal strategies.
- --------------------------------------------------------------------------------
Principal Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
.Market Risk .Smaller Company Risk .Currency Risk
.Issuer Risk .Liquidity Risk .Credit Risk
.Concentration Risk .Foreign Investment Risk .Management Risk
.Growth Securities Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
- --------------------------------------------------------------------------------
Performance The top of the next page shows summary performance information for
Information the Fund in a bar chart and an Average Annual Total Returns table.
The information provides some indication of the risks of investing
in the Fund by showing changes in its performance from year to
year and by showing how the Fund's average annual returns compare
with the returns of a broad-based securities market index and an
index of similar funds. The bar chart and the information to its
right show performance of the Fund's Class A shares, but the
returns do not reflect the impact of sales charges (loads). If
they did, the returns would be lower than those shown. Unlike the
bar chart, performance for Class A, B and C shares in the Average
Annual Total Returns table reflects the impact of sales charges.
For periods prior to the inception of Class B shares (5/22/95),
performance information shown in the Average Annual Total Returns
table for that class is based on the performance of the Fund's
Class A shares. The prior Class A performance has been adjusted to
reflect the actual sales charges, distribution and/or service
(12b-1) fees, administrative fees and other expenses paid by Class
B shares. Prior to March 6, 1999, the Fund had a different sub-
adviser and would not necessarily have achieved the performance
results shown on the next page under its current investment
management arrangements. Past performance is no guarantee of
future results.
11 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Innovation Fund (continued)
Calendar Year Total Returns -- Class A
[GRAPH APPEARS HERE] More Recent
Return
1995 45.33% Information
1996 23.60% ------------------
1997 9.03% 1/1/99-
1998 69.54% 9/30/99 32.91%
Highest and
Lowest Quarter
Returns
(for periods
shown in the bar
chart)
------------------
Highest (10/1/98-
12/31/98) 37.19%
------------------
Lowest (1/1/97-
3/31/97) -12.56%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/98)
<TABLE>
<CAPTION>
Fund Inception
1 Year (12/22/94)(/3/)
------------------------------------------------------------------------
<S> <C> <C>
Class A 69.54% 34.67%
------------------------------------------------------------------------
Class B 73.02% 35.35%
------------------------------------------------------------------------
Class C 77.13% 35.55%
------------------------------------------------------------------------
S&P 500 Index(/1/) 28.58% 30.51%
------------------------------------------------------------------------
Lipper Science and Technology Fund Average(/2/) 51.44% 25.21%
------------------------------------------------------------------------
</TABLE>
(1) The S&P 500 Index is an unmanaged index of large
capitalization common stocks. It is not possible to invest
directly in the index.
(2) The Lipper Science and Technology Fund Average is a total
return performance average of funds tracked by Lipper
Analytical Services, Inc. that invest at least 65% of their
assets in science and technology stocks. It does not take into
account sales charges.
(3) The Fund began operations on 12/22/94. Index comparisons begin
on 12/31/94.
- --------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Class A, B or C shares of the Fund:
of the
Fund
Shareholder Fees (fees paid directly from your investment)
<TABLE>
<CAPTION>
Maximum Sales Charge (Load) Imposed Maximum Contingent Deferred Sales Charge (Load)
on Purchases (as a percentage of offering price) (as a percentage of original purchase price)
--------------------------------------------------------------------------------------------------------
<S> <C> <C>
Class A 5.50% 1%(/1/)
------------------------------------------------------------------------------------------------------
Class B None 5%(/2/)
------------------------------------------------------------------------------------------------------
Class C None 1%(/3/)
------------------------------------------------------------------------------------------------------
</TABLE>
(1) Imposed only in certain circumstances where Class A shares are
purchased without a front-end sales charge at the time of
purchase.
(2) The maximum CDSC is imposed on shares redeemed in the first
year. For shares held longer than one year, the CDSC declines
according to the schedule set forth under "Investment
Options--Class A, B and C Shares--Contingent Deferred Sales
Charges (CDSCs)--Class B Shares."
(3) The CDSC on Class C shares is imposed only on shares redeemed
in the first year.
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Share Class Fees (12b-1) Fees(/1/) Expenses(/2/) Expenses
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A 0.65% 0.25% 0.40% 1.30%
--------------------------------------------------------------------
Class B 0.65 1.00 0.40 2.05
--------------------------------------------------------------------
Class C 0.65 1.00 0.40 2.05
--------------------------------------------------------------------
</TABLE>
(1) Due to the 12b-1 distribution fee imposed on Class B and Class
C shares, a Class B or Class C shareholders may, depending
upon the length of time the shares are held, pay more than the
economic equivalent of the maximum front-end sales charges
permitted by relevant rules of the National Association of
Securities Dealers, Inc.
(2) Other Expenses reflects a 0.40% Administrative Fee paid by the
class, which is subject to a reduction of 0.05% on average daily
net assets attributable in the aggregate to the Fund's Class A,
B and C shares in excess of $2.5 billion.
Examples. The Examples are intended to help you compare the cost
of investing in Class A, B or C shares of the Fund with the costs
of investing in other mutual funds. The Examples assume that you
invest $10,000 in the noted class of shares for the time periods
indicated, your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the Fund's
operating expenses remain the same. Although your actual costs may
be higher or lower, the Examples show what your costs would be
based on these assumptions.
<TABLE>
<CAPTION>
Example: Assuming you do not
Example: Assuming you redeem your shares at the end of each period redeem your shares
Year 1 Year 3 Year 5 Year 10 Year 1 Year 3 Year 5 Year 10
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A $675 $939 $1,224 $2,032 $675 $939 $1,224 $2,032
----------------------------------------------------------------------------------------------------------
Class B 708 943 1,303 2,091 208 643 1,103 2,091
----------------------------------------------------------------------------------------------------------
Class C 308 643 1,103 2,379 208 643 1,103 2,379
----------------------------------------------------------------------------------------------------------
</TABLE>
Prospectus 12
<PAGE>
PIMCO International Fund
<TABLE>
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
Principal Investments Investment Objective Fund Focus Approximate Capitalization Range
and Strategies Seeks capital appreciation through Common stocks of foreign (non- More than $500 million
investment in an international U.S.) issuers
portfolio; income is an incidental Dividend Frequency
consideration Approximate Number of Holdings At least annually
200-250
Fund Category
International Stocks
</TABLE>
The Fund seeks to achieve its investment objective by
normally investing at least 65% of its assets in an
international portfolio of common stocks, which may or
may not pay dividends. The Fund normally invests in
securities traded principally in developed foreign
securities markets, but may also invest up to 30% of its
assets in developing or "emerging" markets. The Fund has
no prescribed limits on geographic asset distribution and
may invest in any foreign securities market in the world.
The Fund may also invest in securities of foreign issuers
traded on U.S. securities markets, but will normally not
invest in U.S. issuers. The Fund invests most of its
assets in foreign securities which trade in currencies
other than the U.S. dollar and may invest directly in
foreign currencies.
The portfolio manager uses a "top down" investment
approach. He first determines regional and country
weightings for the Fund by considering such factors as
the condition and growth potential of the various
economies and securities markets, currency and taxation
considerations and other financial, social, national and
political factors. The Sub-Adviser's country specialists
then select individual stocks to fill out the desired
country weightings. In selecting stocks, the specialists
analyze a broad range of company fundamentals, such as
price-to-earnings, price-to-book value and price-to-cash
flow ratios (value factors), earnings, dividend and
profit growth (growth factors) and balance sheet strength
and return on assets (quality factors). The portfolio
manager sells stocks in order to adjust or rebalance the
Fund's regional and country weightings or to replace
companies with weakening fundamentals.
The Fund may utilize foreign currency exchange contracts
and derivative instruments (such as stock index futures
contracts) primarily for risk management or hedging
purposes. The Fund may also invest in equity securities
other than common stocks (such as preferred stocks and
convertible securities) and may invest up to 10% of its
assets in other investment companies. In response to
unfavorable market and other conditions, the Fund may
make temporary investments of some or all of its assets
in foreign and domestic fixed income securities and in
equity securities of U.S. issuers. This would be
inconsistent with the Fund's investment objective and
principal strategies.
- --------------------------------------------------------------------------------
Principal Risks Among the principal risks of investing in the Fund, which
could adversely affect its net asset value, yield and
total return, are:
<TABLE>
<S> <C> <C>
. Foreign Investment Risk . Growth Securities Risk . Concentration Risk
. Currency Risk . Smaller Companies Risk . Leveraging Risk
. Market Risk . Liquidity Risk . Credit Risk
. Issuer Risk . Derivatives Risk . Management Risk
. Value Securities Risk
</TABLE>
Please see "Summary of Principal Risks" following the
Fund Summaries for a description of these and other
risks of investing in the Fund.
- --------------------------------------------------------------------------------
Performance The top of the next page shows summary performance
Information information for the Fund in a bar chart and an Average
Annual Total Returns table. The information provides some
indication of the risks of investing in the Fund by
showing changes in its performance from year to year and
by showing how the Fund's average annual returns compare
with the returns of a broad-based securities market index
and an index of similar funds. The bar chart and the
information to its right show performance of the Fund's
Class C shares, but the returns do not reflect the impact
of sales charges (loads). If they did, the returns would
be lower than those shown. Unlike the bar chart,
performance for Class A, B and C shares in the Average
Annual Total Returns table reflects the impact of sales
charges. For periods prior to the inception of Class A
shares (2/1/91) and Class B shares (5/22/95), performance
information shown in the Average Annual Total Returns
table for those classes is based on the performance of
the Fund's Class C shares. The prior Class C performance
has been adjusted to reflect the actual sales charges,
distribution and/or service (12b-1) fees, administrative
fees and other expenses paid by Class A and B shares. The
Fund had different sub-advisers during the periods prior
to November 15, 1994, and would not necessarily have
achieved the performance results shown on the next page
under its current investment management arrangements.
Past performance is no guarantee of future results.
13 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO International Fund (continued)
Calendar Year Total Returns -- Class C
[CHART APPEARS HERE] More Recent Return
Information
1989 28.51% -------------------------
1990 -15.50% 1/1/99-9/30/99 4.46%
1991 19.92%
1992 -5.84% Highest and Lowest
1993 33.47% Quarter Returns
1994 -8.16% (for periods shown
1995 5.79% in the bar chart)
1996 5.76% -------------------------
1997 1.85% Highest (10/1/98-
1998 8.27% 12/31/98) 16.44%
-------------------------
Lowest (7/1/98-
9/30/98) -22.16%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/98)
<TABLE>
<CAPTION>
Fund Inception
1 Year 5 Years 10 Years (8/25/86)(/3/)
-----------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A 3.30% 2.18% 6.58% 6.74%
-----------------------------------------------------------------
Class B 3.39% 2.22% 6.38% 6.42%
-----------------------------------------------------------------
Class C 7.30% 2.53% 6.37% 6.41%
-----------------------------------------------------------------
MSCI EAFE Index 20.33% 9.50% 5.85% 9.09%
-----------------------------------------------------------------
Lipper International Fund
Average(/2/) 12.99% 7.81% 9.15% 9.77%
-----------------------------------------------------------------
</TABLE>
(1) The Morgan Stanley Capital International EAFE (Europe,
Australasia, Far East) ("MSCI EAFE") Index is a widely
recognized, unmanaged index of issuers in countries of Europe,
Australia and Asia. It is not possible to invest directly in
the index.
(2) The Lipper International Fund Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. that invest their assets in securities whose
primary trading markets are outside of the United States. It
does not take into account sales charges.
(3) The Fund began operations on 8/25/86. Index comparisons begin
on 8/31/86.
- --------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Class A, B or C shares of the Fund:
of the
Fund
Shareholder Fees (fees paid directly from your investment)
<TABLE>
<CAPTION>
Maximum Sales Charge (Load) Imposed Maximum Contingent Deferred Sales Charge (Load)
on Purchases (as a percentage of offering price) (as a percentage of original purchase price)
---------------------------------------------------------------------------------------------------------
<S> <C> <C>
Class A 5.50% 1%(/1/)
---------------------------------------------------------------------------------------------------------
Class B None 5%(/2/)
---------------------------------------------------------------------------------------------------------
Class C None 1%(/3/)
---------------------------------------------------------------------------------------------------------
</TABLE>
(1) Imposed only in certain circumstances where Class A shares are
purchased without a front-end sales charge at the time of
purchase.
(2) The maximum CDSC is imposed on shares redeemed in the first
year. For shares held longer than one year, the CDSC declines
according to the schedule set forth under "Investment
Options--Class A, B and C Shares--Contingent Deferred Sales
Charges (CDSCs)--Class B Shares."
(3) The CDSC on Class C shares is imposed only on shares redeemed
in the first year.
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Share Class Fees (12b-1) Fees (/1/) Expenses(/2/) Expenses
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A 0.55% 0.25% 0.65% 1.45%
---------------------------------------------------------------------
Class B 0.55 1.00 0.65 2.20
---------------------------------------------------------------------
Class C 0.55 1.00 0.65 2.20
---------------------------------------------------------------------
</TABLE>
(1) Due to the 12b-1 distribution fee imposed on Class B and Class
C shares, a Class B or Class C shareholders may, depending
upon the length of time the shares are held, pay more than the
economic equivalent of the maximum front-end sales charges
permitted by relevant rules of the National Association of
Securities Dealers, Inc.
(2) Other Expenses reflects a 0.65% Administrative Fee paid by the
class, which is subject to a reduction of 0.05% on average daily
net assets attributable in the aggregate to the Fund's Class A,
B and C shares in excess of $2.5 billion.
Examples. The Examples are intended to help you compare the cost
of investing in Class A, B or C shares of the Fund with the costs
of investing in other mutual funds. The Examples assume that you
invest $10,000 in the noted class of shares for the time periods
indicated, your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the Fund's
operating expenses remain the same. Although your actual costs may
be higher or lower, the Examples show what your costs would be
based on these assumptions.
<TABLE>
<CAPTION>
Example: Assuming you redeem your shares at the
end of each period Example: Assuming you do not redeem your shares
Share Class Year 1 Year 3 Year 5 Year 10 Year 1 Year 3 Year 5 Year 10
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A $689 $983 $1,299 $2,190 $689 $983 $1,299 $2,190
-------------------------------------------------------------------------------------------------------------
Class B 723 988 1,380 2,249 223 688 1,180 2,249
-------------------------------------------------------------------------------------------------------------
Class C 323 688 1,180 2,534 223 688 1,180 2,534
-------------------------------------------------------------------------------------------------------------
</TABLE>
Prospectus 14
<PAGE>
PIMCO Mid-Cap Growth Fund
- --------------------------------------------------------------------------------
Principal Investment Fund Focus Approximate
Investments Objective Medium Capitalization Range
and Seeks growth of capitalization More than $500
Strategies capital common stocks million
(excluding the
largest 200
companies)
Fund Category Approximate Number
Blend Stocks of Holdings
60-100 Dividend Frequency
At least annually
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in common stocks of companies
with medium market capitalizations that have improving
fundamentals (based on growth criteria) and whose stock is
reasonably valued by the market (based on value criteria).
In making investment decisions for the Fund, the portfolio
management team considers companies in the U.S. market with market
capitalizations of more than $500 million, but excluding the 200
largest capitalization companies. The team screens the stocks in
this universe for a series of growth criteria, such as dividend
growth, earnings growth, relative growth of earnings over time
(earnings momentum) and the company's history of meeting earnings
targets (earnings surprise), and also value criteria, such as
price-to-earnings, price-to-book and price-to-cash flow ratios.
The team then selects individual stocks by subjecting the top 10%
of the stocks in the screened universe to a rigorous analysis of
company factors, such as strength of management, competitive
industry position, and business prospects, and financial statement
data, such as earnings, cash flows and profitability. The team may
interview company management in making investment decisions. The
Fund's capitalization criteria applies at the time of investment.
The portfolio management team rescreens the universe frequently
and seeks to consistently achieve a favorable balance of growth
and value characteristics for the Fund. The team sells a stock
when it falls below the median ranking, has negative earnings
surprises, or shows poor price performance relative to all stocks
in the Fund's capitalization range or to companies in the same
business sector. A stock may also be sold if its weighting in the
portfolio becomes excessive (normally above 2% of the Fund's
investments).
The Fund intends to be fully invested in common stock (aside from
certain cash management practices) and will not make defensive
investments in response to unfavorable market and other
conditions.
- --------------------------------------------------------------------------------
Principal Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
. Market Risk . Growth Securities Risk . Credit Risk
. Issuer Risk . Smaller Company Risk . Management Risk
. Value Securities Risk . Liquidity Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
- --------------------------------------------------------------------------------
Performance The top of the next page shows summary performance information for
Information the Fund in a bar chart and an Average Annual Total Returns table.
The information provides some indication of the risks of investing
in the Fund by showing changes in its performance from year to
year and by showing how the Fund's average annual returns compare
with the returns of a broad-based securities market index and an
index of similar funds. The bar chart and the information to its
right show performance of the Fund's Class A shares, but the
returns do not reflect the impact of sales charges (loads). If
they did, the returns would be lower than those shown. Unlike the
bar chart, performance for Class A, B and C shares in the Average
Annual Total Returns table reflects the impact of sales charges.
For periods prior to the inception of Class A, B and C shares
(1/13/97), performance information shown in the bar chart and
tables for those classes is based on the performance of the Fund's
Institutional Class shares, which are offered in a different
prospectus. The prior Institutional Class performance has been
adjusted to reflect the actual sales charges (in the Average
Annual Total Returns table only), distribution and/or service
(12b-1) fees, administrative fees and other expenses paid by Class
A, B and C shares. Past performance is no guarantee of future
results.
15 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Mid-Cap Growth Fund (continued)
Calendar Year Total Returns -- Class A
[CHART APPEARS HERE]
1992 8.75%
1993 15.32% More Recent Return
1994 -2.75% Information
1995 36.76% --------------------
1996 22.87% 1/1/99-9/30/99
1997 33.62% -8.45%
1998 7.46%
Highest and Lowest
Quarter Returns
(for periods shown
in the bar chart)
--------------------
Highest (10/1/98-
12/31/98) 17.57%
--------------------
Lowest (7/1/98-
9/30/98) -14.50%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/98)
<TABLE>
<CAPTION>
Fund Inception
1 Year 5 Years (8/26/91)(/3/)
-------------------------------------------------------------------------
<S> <C> <C> <C>
Class A 1.55% 17.27% 16.85%
-------------------------------------------------------------------------
Class B 1.66% 17.52% 16.89%
-------------------------------------------------------------------------
Class C 5.66% 17.73% 16.89%
-------------------------------------------------------------------------
Russell Mid-Cap Index(/1/) 10.09% 17.34% 17.18%
-------------------------------------------------------------------------
Lipper Mid-Cap Fund Average(/2/) 12.39% 14.86% 14.76%
-------------------------------------------------------------------------
</TABLE>
(1) The Russell Mid-Cap Index is an unmanaged index of middle
capitalization U.S. stocks. It is not possible to invest
directly in the index.
(2) The Lipper Mid-Cap Fund Average is a total return performance
average of funds tracked by Lipper Analytical Services, Inc.
that invest primarily in companies with market capitalizations
of less than $5 billion at the time of investment. It does not
take into account sales charges.
(3) The Fund began operations on 8/26/91. Index comparisons begin
on 8/31/91.
- --------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Class A, B or C shares of the Fund:
of the
Fund
Shareholder Fees (fees paid directly from your investment)
<TABLE>
<CAPTION>
Maximum Sales Charge (Load) Imposed Maximum Contingent Deferred Sales Charge (Load)
on Purchases (as a percentage of offering price) (as a percentage of original purchase price)
-------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Class A 5.50% 1%(/1/)
-------------------------------------------------------------------------------------------------------------
Class B None 5%(/2/)
-------------------------------------------------------------------------------------------------------------
Class C None 1%(/3/)
-------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Imposed only in certain circumstances where Class A shares are
purchased without a front-end sales charge at the time of
purchase.
(2) The maximum CDSC is imposed on shares redeemed in the first
year. For shares held longer than one year, the CDSC declines
according to the schedule set forth under "Investment
Options--Class A, B and C Shares--Contingent Deferred Sales
Charges (CDSCs)--Class B Shares."
(3) The CDSC on Class C shares is imposed only on shares redeemed
in the first year.
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Share Class Fees (12b-1) Fees(/1/) Expenses(/2/) Expenses
----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A 0.45% 0.25% 0.40% 1.10%
----------------------------------------------------------------------
Class B 0.45 1.00 0.40 1.85
----------------------------------------------------------------------
Class C 0.45 1.00 0.40 1.85
----------------------------------------------------------------------
</TABLE>
(1) Due to the 12b-1 distribution fee imposed on Class B and Class
C shares, a Class B or Class C shareholders may, depending
upon the length of time the shares are held, pay more than the
economic equivalent of the maximum front-end sales charges
permitted by relevant rules of the National Association of
Securities Dealers, Inc.
(2) Other Expenses reflects a 0.40% Administrative Fee paid by the
class, which is subject to a reduction of 0.05% on average daily
net assets attributable in the aggregate to the Fund's Class A,
B and C shares in excess of $2.5 billion.
Examples. The Examples are intended to help you compare the cost
of investing in Class A, B or C shares of the Fund with the costs
of investing in other mutual funds. The Examples assume that you
invest $10,000 in the noted class of shares for the time periods
indicated, your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the Fund's
operating expenses remain the same. Although your actual costs may
be higher or lower, the Examples show what your costs would be
based on these assumptions.
<TABLE>
<CAPTION>
Example: Assuming you do not
Example: Assuming you redeem your shares at the end of each period redeem your shares
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Share Class Year 1 Year 3 Year 5 Year 10 Year 1 Year 3 Year 5 Year 10
----------------------------------------------------------------------------------------------------------
Class A $656 $880 $1,123 $1,816 $656 $880 $1,123 $1,816
----------------------------------------------------------------------------------------------------------
Class B 688 882 1,201 1,876 188 582 1,001 1,876
----------------------------------------------------------------------------------------------------------
Class C 288 582 1,001 2,169 188 582 1,001 2,169
----------------------------------------------------------------------------------------------------------
</TABLE>
Prospectus 16
<PAGE>
PIMCO Opportunity Fund
- --------------------------------------------------------------------------------
Principal Investment Fund Approximate
Investments Objective Focus Capitalization Range
and Seeks capital Smaller Between $100
Strategies appreciation; no capitalization million and $2
consideration common stocks billion
is given to
income
Fund Category Approximate Number Dividend Frequency
Growth Stocks of Holdings At least annually
60-100
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in common stocks of "growth"
companies with market capitalizations of between $100 million and
$2 billion at the time of investment.
The portfolio manager selects stocks for the Fund using a
"growth" style. The portfolio manager seeks to identify companies
with well-defined "wealth creating" characteristics, including
superior earnings growth (relative to companies in the same
industry or the market as a whole), high profitability and
consistent, predictable earnings. In addition, through fundamental
research, the portfolio manager seeks to identify dominant
companies that are gaining market share, have superior management
and possess a sustainable competitive advantage, such as superior
or innovative products, personnel and distribution systems. The
Fund sells stocks when the portfolio manager believes that
earnings, sentiment and relative performance are disappointing or
if an alternative investment is more attractive.
The Fund may also invest in other kinds of equity securities,
including preferred stocks and convertible securities. The Fund
may invest up to 15% of its assets in foreign securities, usually
in the form of American Depository Receipts (ADRs).
In response to unfavorable market and other conditions, the Fund
may make temporary investments of some or all of its assets in
high-quality fixed income securities. This would be inconsistent
with the Fund's investment objective and principal strategies.
- --------------------------------------------------------------------------------
Principal Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
. Market Risk . Smaller Company Risk . Currency Risk
. Issuer Risk . Liquidity Risk . Credit Risk
. Growth Securities . Foreign Investment . Management Risk
Risk Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
- --------------------------------------------------------------------------------
Performance The top of the next page shows summary performance information for
Information the Fund in a bar chart and an Average Annual Total Returns table.
The information provides some indication of the risks of investing
in the Fund by showing changes in its performance from year to
year and by showing how the Fund's average annual returns compare
with the returns of a broad-based securities market index and an
index of similar funds. The bar chart and the information to its
right show performance of the Fund's Class C shares, but the
returns do not reflect the impact of sales charges (loads). If
they did, the returns would be lower than those shown. Unlike the
bar chart, performance for Class A, B and C shares in the Average
Annual Total Returns table reflects the impact of sales charges.
For periods prior to the inception of Class A shares (12/17/90)
and Class B shares (4/1/99), performance information shown in the
Average Annual Total Returns table for those classes is based on
the performance of the Fund's Class C shares. The prior Class C
performance has been adjusted to reflect the actual sales charges,
distribution and/or service (12b-1) fees, administrative fees and
other expenses paid by Class A and B shares. Prior to March 6,
1999, the Fund had a different sub-adviser and would not
necessarily have achieved the performance results shown on the
next page under its current investment management arrangements.
Past performance is no guarantee of future results.
17 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Opportunity Fund (continued)
Calendar Year Total Returns -- Class C
[BAR CHART APPEARS HERE]
1989 30.65% More Recent Return Information
1990 -7.34% -------------------------------
1991 68.08% 1/1/99-9/30/99 12.55%
1992 28.46%
1993 36.16% Highest and Lowest
1994 -4.74% Quarter Returns
1995 41.53% (for periods shown
1996 11.54% in the bar chart)
1997 -4.75% -------------------------------
1998 1.29% Highest (1/1/91-3/31/91) 28.66%
-------------------------------
Lowest (7/1/98-9/30/98) -25.78%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/98)
<TABLE>
<CAPTION>
Fund Inception
1 Year 5 Years 10 Years (2/24/84)(/3/)
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A -3.62% 7.30% 18.03% 16.79%
---------------------------------------------------------------------------------------
Class B -2.82% 7.51% 18.09% 16.82%
---------------------------------------------------------------------------------------
Class C 0.47% 7.73% 17.84% 16.39%
---------------------------------------------------------------------------------------
Russell 2000 Index(/1/) -2.55% 11.86% 12.92% 11.92%
---------------------------------------------------------------------------------------
Lipper Capital Appreciation Fund Average(/2/) 20.49% 15.02% 14.08% 12.85%
---------------------------------------------------------------------------------------
</TABLE>
(1) The Russell 2000 Index is a capitalization weighted broad
based index of 2,000 small capitalization U.S. stocks. It is
not possible to invest directly in the index.
(2) The Lipper Capital Appreciation Fund Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. that have an investment objective of maximum
capital appreciation. It does not take into account sales
charges.
(3) The Fund began operations on 2/24/84. Index comparisons begin
on 2/29/84.
- --------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Class A, B or C shares of the Fund:
of the
Fund
Shareholder Fees (fees paid directly from your investment)
<TABLE>
<CAPTION>
Maximum Sales Charge (Load) Imposed Maximum Contingent Deferred Sales Charge (Load)
on Purchases (as a percentage of offering price) (as a percentage of original purchase price)
---------------------------------------------------------------------------------------------------------
<S> <C> <C>
Class A 5.50% 1%(/1/)
---------------------------------------------------------------------------------------------------------
Class B None 5%(/2/)
---------------------------------------------------------------------------------------------------------
Class C None 1%(/3/)
---------------------------------------------------------------------------------------------------------
</TABLE>
(1) Imposed only in certain circumstances where Class A shares are
purchased without a front-end sales charge at the time of
purchase.
(2) The maximum CDSC is imposed on shares redeemed in the first
year. For shares held longer than one year, the CDSC declines
according to the schedule set forth under "Investment
Options--Class A, B and C Shares--Contingent Deferred Sales
Charges (CDSCs)--Class B Shares."
(3) The CDSC on Class C shares is imposed only on shares redeemed
in the first year.
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Share Class Fees (12b-1) Fees(/1/) Expenses(/2/) Expenses
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A 0.65% 0.25% 0.40% 1.30%
---------------------------------------------------------------------
Class B 0.65 1.00 0.40 2.05
---------------------------------------------------------------------
Class C 0.65 1.00 0.40 2.05
---------------------------------------------------------------------
</TABLE>
(1) Due to the 12b-1 distribution fee imposed on Class B and Class
C shares, a Class B or Class C shareholders may, depending
upon the length of time the shares are held, pay more than the
economic equivalent of the maximum front-end sales charges
permitted by relevant rules of the National Association of
Securities Dealers, Inc.
(2) Other Expenses reflects a 0.40% Administrative Fee paid by the
class, which is subject to a reduction of 0.05% on average daily
net assets attributable in the aggregate to the Fund's Class A,
B and C shares in excess of $2.5 billion.
Examples. The Examples are intended to help you compare the cost
of investing in Class A, B or C shares of the Fund with the costs
of investing in other mutual funds. The Examples assume that you
invest $10,000 in the noted class of shares for the time periods
indicated, your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the Fund's
operating expenses remain the same. Although your actual costs may
be higher or lower, the Examples show what your costs would be
based on these assumptions.
<TABLE>
<CAPTION>
Example: Assuming you do not
Example: Assuming you redeem your shares at the end of each period redeem your shares
Share Class Year 1 Year 3 Year 5 Year 10 Year 1 Year 3 Year 5 Year 10
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A $ 675 $ 939 $1,224 $2,032 $675 $939 $1,224 $2,032
--------------------------------------------------------------------------------------------------------------
Class B 708 943 1,303 2,091 208 643 1,103 2,091
--------------------------------------------------------------------------------------------------------------
Class C 308 643 1,103 2,379 208 643 1,103 2,379
--------------------------------------------------------------------------------------------------------------
</TABLE>
Prospectus 18
<PAGE>
PIMCO Precious Metals Fund
- --------------------------------------------------------------------------------
Principal Investment Objective Fund Focus Approximate
Investments Seeks capital Common stocks Capitalization Range
and appreciation; no of precious Between $50 million
Strategies consideration is metals- related and $7 billion
given to income companies
Dividend Frequency
Fund Category Approximate Number At least annually
Sector-Related Stocks of Holdings
50-60
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in a global portfolio of
common stocks of companies principally engaged in precious metals-
related activities, including mining, processing, distribution and
marketing of precious metals. A company is deemed to be
"principally engaged" in precious metals-related activities if at
the time of investment at least 50% of the company's assets,
revenues or profits are derived from precious metals industries.
The Fund may invest up to 100% of its assets in companies whose
activities relate to a single precious metal, such as gold.
Although the Fund reserves the right to do so at any time, it does
not presently intend to invest more than 10% of its assets
directly in precious metals (such as gold bullion). Because the
Fund concentrates investments in precious metals-related
companies, it is intended for aggressive investors and is not
intended as a complete investment program.
The Fund normally invests a substantial portion of its assets in
foreign securities of developed and emerging markets issuers,
including securities which trade primarily in currencies other
than the U.S. dollar, and may concentrate investments in
particular foreign countries or regions, such as Canada, South
Africa or Australia.
In making investment decisions for the Fund, the portfolio
manager analyses economic factors (such as current and expected
growth in the equity and fixed income markets, forecasts for
interest rates and inflation, and stability in the currency
markets) to identify precious metals and related industry groups
that he believes will perform well under current and future
economic conditions. The portfolio manager then selects individual
stocks that appear to be undervalued relative to stocks of other
companies in the same precious metals industry group. He also
considers company fundamentals, such as strength and depth of
management, financial stability, labor and production costs,
access to inventory, and research and development capabilities
(including those relating to exploration and mining activities).
The portfolio manager sells a stock when its relative valuation
becomes excessive or when the company's fundamentals appear to be
deteriorating.
The Fund may invest in equity securities other than common
stocks, including preferred stocks and convertible securities. In
response to unfavorable market and other conditions, the Fund may
make temporary investments of some or all of its assets in high-
quality fixed income securities. This would be inconsistent with
the Fund's investment objective and principal strategies. The Fund
may also hold a significant portion of its assets in cash and
high-quality fixed income securities in order to satisfy
anticipated liquidity requirements.
- --------------------------------------------------------------------------------
Principal Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
.Concentration Risk .Issuer Risk .Leveraging Risk
.Foreign Investment .Value Securities .Interest Rate Risk
Risk Risk .Credit Risk
.Emerging Markets .Growth Securities .Management Risk
Risk Risk
.Currency Risk .Smaller Company
.Market Risk .Risk
.Liquidity Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
- --------------------------------------------------------------------------------
Performance The top of the next page shows summary performance information for
Information the Fund in a bar chart and an Average Annual Total Returns table.
The information provides some indication of the risks of investing
in the Fund by showing changes in its performance from year to
year and by showing how the Fund's average annual returns compare
with the returns of a broad-based securities market index and an
index of similar funds. The bar chart and the information to its
right show performance of the Fund's Class C shares, but the
returns do not reflect the impact of sales charges (loads). If
they did, the returns would be lower than those shown. Unlike the
bar chart, performance for Class A, B and C shares in the Average
Annual Total Returns table reflects the impact of sales charges.
For periods prior to the inception of Class A shares (2/1/91) and
Class B shares (6/15/95), performance information shown in the
Average Annual Total Returns table for those classes is based on
the performance of the Fund's Class C shares. The prior Class C
performance has been adjusted to reflect the actual sales charges,
distribution and/or service (12b-1) fees, administrative fees and
other expenses paid by Class A and B shares. Past performance is
no guarantee of future results.
19 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Precious Metals Fund (continued)
Calendar Year Total Returns -- Class C
[CHART APPEARS HERE]
More Recent Return
1989 16.19% Information
1990 -25.05% ------------------
1991 5.35% 1/1/99-9/30/99 3.25%
1992 12.32%
1993 89.46% Highest and
1994 -9.66% Lowest Quarter
1995 -4.19% Returns
1996 -2.96% (for periods
1997 -48.04% shown in the bar
1998 8.72% chart)
------------------
Highest (4/1/93-
6/30/93) 36.03%
------------------
Lowest (10/1/97-
12/31/97) -33.81%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/98)
<TABLE>
<CAPTION>
Fund Inception
1 Year 5 Years 10 Years (10/10/88)(/3/)
------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A -12.50% -17.02% -5.64% -6.01%
-------------------------------------------------------------------
Class B -13.00% -17.10% -5.61% -5.98%
-------------------------------------------------------------------
Class C -9.61% -16.81% -5.88% -6.26%
-------------------------------------------------------------------
Philadelphia Gold and Silver
Index(/1/) -12.43% -13.21% -2.88% -3.29%
-------------------------------------------------------------------
Lipper Gold Oriented Fund
Average(/2/) -10.95% -13.81% -3.80% -3.44%
-------------------------------------------------------------------
</TABLE>
(1) The Philadelphia Gold and Silver Index is a widely recognized,
unmanaged index of stocks of companies in the gold and silver
mining industry. It is not possible to invest directly in the
index.
(2) The Lipper Gold Oriented Fund Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. that invest at least 65% of their assets in
shares of gold mines, gold-oriented mining finance houses,
gold coins or gold bullion. It does not take into account
sales charges.
(3) The Fund began operations on 10/10/88. Index comparisons begin
on 9/30/88.
- --------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Class A, B or C shares of the Fund:
of the
Fund
Shareholder Fees (fees paid directly from your investment)
<TABLE>
<CAPTION>
Maximum Sales Charge (Load) Imposed Maximum Contingent Deferred Sales Charge (Load)
on Purchases (as a percentage of offering price) (as a percentage of original purchase price)
-------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Class A 5.50% 1%(/1/)
-------------------------------------------------------------------------------------------------------------
Class B None 5%(/2/)
-------------------------------------------------------------------------------------------------------------
Class C None 1%(/3/)
-------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Imposed only in certain circumstances where Class A shares are
purchased without a front-end sales charge at the time of
purchase.
(2) The maximum CDSC is imposed on shares redeemed in the first
year. For shares held longer than one year, the CDSC declines
according to the schedule set forth under "Investment
Options--Class A, B and C Shares--Contingent Deferred Sales
Charges (CDSCs)--Class B Shares."
(3) The CDSC on Class C shares is imposed only on shares redeemed
in the first year.
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Share Class Fees (12b-1) Fees(/1/) Expenses(/2/) Expenses
-----------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A 0.60% 0.25% 0.45% 1.30%
-----------------------------------------------------------------
Class B 0.60 1.00 0.45 2.05
-----------------------------------------------------------------
Class C 0.60 1.00 0.45 2.05
-----------------------------------------------------------------
</TABLE>
(1) Due to the 12b-1 distribution fee imposed on Class B and Class
C shares, a Class B or Class C shareholders may, depending
upon the length of time the shares are held, pay more than the
economic equivalent of the maximum front-end sales charges
permitted by relevant rules of the National Association of
Securities Dealers, Inc.
(2) Other Expenses reflects a 0.45% Administrative Fee paid by the
class, which is subject to a reduction of 0.05% on average daily
net assets attributable in the aggregate to the Fund's Class A,
B and C shares in excess of $2.5 billion.
Examples. The Examples are intended to help you compare the cost
of investing in Class A, B or C shares of the Fund with the costs
of investing in other mutual funds. The Examples assume that you
invest $10,000 in the noted class of shares for the time periods
indicated, your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the Fund's
operating expenses remain the same. Although your actual costs may
be higher or lower, the Examples show what your costs would be
based on these assumptions.
<TABLE>
<CAPTION>
Example: Assuming you do not
Example: Assuming you redeem your shares at the end of each period redeem your shares
Share Class Year 1 Year 3 Year 5 Year 10 Year 1 Year 3 Year 5 Year 10
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A $675 $939 $1,224 $2,032 $675 $939 $1,224 $2,032
--------------------------------------------------------------------------------------------------------------
Class B 708 943 1,303 2,091 208 643 1,103 2,091
--------------------------------------------------------------------------------------------------------------
Class C 308 643 1,103 2,379 208 643 1,103 2,379
--------------------------------------------------------------------------------------------------------------
</TABLE>
Prospectus 20
<PAGE>
PIMCO Renaissance Fund
- --------------------------------------------------------------------------------
Principal Investment Fund Focus Approximate
Investments Objective Undervalued All capitalizations
and Seeks long-term stocks with
Strategies growth of capital improving
and income business
fundamentals
Dividend Frequency
Fund Category Approximate Number Quarterly
Value Stocks of Holdings
50-80
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in common stocks of companies
with below-average valuations whose business fundamentals are
expected to improve.To achieve income, the Fund invests a portion
of its assets in income-producing (or dividend-paying) stocks.
The portfolio manager selects stocks for the Fund using a "value"
style. The portfolio manager invests primarily in common stocks of
companies having below-average valuations whose business
fundamentals, such as market share, strength of management and
competitive position, are expected to improve. The portfolio
manager determines valuation based on characteristics such as
price-to-earnings, price-to-book, and price-to-cash flow ratios.
The portfolio manager analyzes stocks and seeks to identify the
key drivers of financial results and catalysts for change, such as
new management and new or improved products, that indicate a
company may demonstrate improving fundamentals in the future. The
portfolio manager sells a stock when he believes that the
company's business fundamentals are weakening or when the stock's
valuation has become excessive.
The Fund may also invest in other kinds of equity securities,
including preferred stocks and convertible securities. The Fund
may invest up to 15% of its assets in foreign securities, usually
in the form of American Depository Receipts (ADRs).
In response to unfavorable market and other conditions, the Fund
may make temporary investments of some or all of its assets in
high-quality fixed income securities. This would be inconsistent
with the Fund's investment objective and principal strategies.
- --------------------------------------------------------------------------------
Principal Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
. Market Risk . Foreign Investment . Credit Risk
. Issuer Risk Risk . Management Risk
. Value Securities Risk . Currency Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
- --------------------------------------------------------------------------------
Performance The top of the next page shows summary performance information for
Information the Fund in a bar chart and an Average Annual Total Returns table.
The information provides some indication of the risks of investing
in the Fund by showing changes in its performance from year to
year and by showing how the Fund's average annual returns compare
with the returns of a broad-based securities market index and an
index of similar funds. The bar chart and the information to its
right show performance of the Fund's Class C shares, but the
returns do not reflect the impact of sales charges (loads). If
they did, the returns would be lower than those shown. Unlike the
bar chart, performance for Class A, B and C shares in the Average
Annual Total Returns table reflects the impact of sales charges.
For periods prior to the inception of Class A shares (2/1/91) and
Class B shares (5/22/95), performance information shown in the
Average Annual Total Returns table for those classes is based on
the performance of the Fund's Class C shares. The prior Class C
performance has been adjusted to reflect the actual sales charges,
distribution and/or service (12b-1) fees, administrative fees and
other expenses paid by Class A and B shares. Prior to May 7, 1999,
the Fund had a different sub-adviser and would not necessarily
have achieved the performance results shown on the next page under
its current investment management arrangements. Past performance
is no guarantee of future results.
21 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Renaissance Fund (continued)
Calendar Year Total Returns -- Class C
[CHART APPEARS HERE]
More Recent Return Information
---------------------------------
1/1/99-9/30/99 -0.49%
1989 11.17%
1990 -15.46% Highest and Lowest
1991 33.24% Quarter Returns
1992 7.78% (for periods shown
1993 21.23% in the bar chart)
1994 -5.05% ---------------------------------
1995 27.61% Highest (10/1/98-12/31/98) 18.37%
1996 24.40% ---------------------------------
1997 34.90% Lowest (7/1/98-9/30/98) -16.77%
1998 10.72%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/98)
<TABLE>
<CAPTION>
Fund Inception
1 Year 5 Years 10 Years (4/18/88)(/3/)
-----------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A 5.37% 17.17% 14.14% 13.80%
-----------------------------------------------------------------
Class B 5.73% 17.39% 14.18% 13.84%
-----------------------------------------------------------------
Class C 9.76% 17.62% 13.93% 13.54%
-----------------------------------------------------------------
S&P 500 Index(/1/) 28.58% 24.06% 19.21% 18.87%
-----------------------------------------------------------------
Lipper Equity Income Fund
Average(/2/) 11.90% 16.50% 14.32% 14.23%
-----------------------------------------------------------------
</TABLE>
(1) The S&P 500 Index is an unmanaged index of large
capitalization common stocks. It is not possible to invest
directly in the index.
(2) The Lipper Equity Income Fund Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. that seek relatively higher growth of income
through investing 60% or more of their portfolios in equities.
It does not take into account sales charges.
(3) The Fund began operations on 4/18/88. Index comparisons begin
on 4/30/88.
- --------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Class A, B or C shares of the Fund:
of the
Fund
Shareholder Fees (fees paid directly from your investment)
<TABLE>
<CAPTION>
Maximum Sales Charge (Load) Imposed Maximum Contingent Deferred Sales Charge (Load)
on Purchases (as a percentage of offering price) (as a percentage of original purchase price)
---------------------------------------------------------------------------------------------------------
<S> <C> <C>
Class A 5.50% 1%(/1/)
---------------------------------------------------------------------------------------------------------
Class B None 5%(/2/)
---------------------------------------------------------------------------------------------------------
Class C None 1%(/3/)
---------------------------------------------------------------------------------------------------------
</TABLE>
(1) Imposed only in certain circumstances where Class A shares are
purchased without a front-end sales charge at the time of
purchase.
(2) The maximum CDSC is imposed on shares redeemed in the first
year. For shares held longer than one year, the CDSC declines
according to the schedule set forth under "Investment
Options--Class A, B and C Shares--Contingent Deferred Sales
Charges (CDSCs)--Class B Shares."
(3) The CDSC on Class C shares is imposed only on shares redeemed
in the first year.
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Share Class Fees (12b-1) Fees(/1/) Expenses(/2/) Expenses
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A 0.60% 0.25% 0.40% 1.25%
--------------------------------------------------------------------
Class B 0.60 1.00 0.40 2.00
--------------------------------------------------------------------
Class C 0.60 1.00 0.40 2.00
--------------------------------------------------------------------
</TABLE>
(1) Due to the 12b-1 distribution fee imposed on Class B and Class
C shares, a Class B or Class C shareholders may, depending
upon the length of time the shares are held, pay more than the
economic equivalent of the maximum front-end sales charges
permitted by relevant rules of the National Association of
Securities Dealers, Inc.
(2) Other Expenses reflects a 0.40% Administrative Fee paid by the
class, which is subject to a reduction of 0.05% on average daily
net assets attributable in the aggregate to the Fund's Class A,
B and C shares in excess of $2.5 billion.
Examples. The Examples are intended to help you compare the cost of
investing in Class A, B or C shares of the Fund with the costs of
investing in other mutual funds. The Examples assume that you invest
$10,000 in the noted class of shares for the time periods indicated,
your investment has a 5% return each year, the reinvestment of all
dividends and distributions, and the Fund's operating expenses
remain the same. Although your actual costs may be higher or lower,
the Examples show what your costs would be based on these
assumptions.
<TABLE>
<CAPTION>
Example: Assuming you do not
Example: Assuming you redeem your shares at the end of each period redeem your shares
Share Class Year 1 Year 3 Year 5 Year 10 Year 1 Year 3 Year 5 Year 10
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A $670 $925 $1,199 $1,978 $670 $925 $1,199 $1,978
--------------------------------------------------------------------------------------------------------------
Class B 703 927 1,278 2,038 203 627 1,078 2,038
--------------------------------------------------------------------------------------------------------------
Class C 303 627 1,078 2,327 203 627 1,078 2,327
--------------------------------------------------------------------------------------------------------------
</TABLE>
Prospectus 22
<PAGE>
PIMCO Small-Cap Growth Fund
- --------------------------------------------------------------------------------
Principal Investment Fund Focus Approximate
Investments Objective Smaller Capitalization Range
and Seeks growth of capitalization More than $100
Strategies capital common stocks million
(excluding the
largest 1,000
companies)
Fund Category Approximate Number Dividend Frequency
Blend Stocks of Holdings At least
60-100 annually
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in common stocks of companies
with smaller market capitalizations that have improving
fundamentals (based on growth criteria) and whose stock is
reasonably valued by the market (based on value criteria).
In making investment decisions for the Fund, the portfolio
management team considers companies in the U.S. market with market
capitalizations of more than $100 million, but excluding the 1,000
largest capitalization companies. The team screens the stocks in
this universe for a series of growth criteria, such as dividend
growth, earnings growth, relative growth of earnings over time
(earnings momentum) and the company's history of meeting earnings
targets (earnings surprise), and also value criteria, such as
price-to-earnings, price-to-book and price-to-cash flow ratios.
The team then selects individual stocks by subjecting the top 10%
of the stocks in the screened universe to a rigorous analysis of
company factors, such as strength of management, competitive
industry position, and business prospects, and financial statement
data, such as earnings, cash flows and profitability. The team may
interview company management in making investment decisions. The
Fund's capitalization criteria applies at the time of investment.
The portfolio management team rescreens the universe frequently
and seeks to consistently achieve a favorable balance of growth
and value characteristics for the Fund. The team sells a stock
when it falls below the median ranking, has negative earnings
surprises, or shows poor price performance relative to all stocks
in the Fund's capitalization range or to companies in the same
business sector. A stock may also be sold if its weighting in the
portfolio becomes excessive (normally above 2% of the Fund's
investments).
The Fund intends to be fully invested in common stock (aside from
certain cash management practices) and will not make defensive
investments in response to unfavorable market and other
conditions.
- --------------------------------------------------------------------------------
Principal Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
. Market Risk . Growth Securities . Credit Risk
. Issuer Risk Risk . Management Risk
. Value Securities Risk . Smaller Company
Risk
. Liquidity Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
- --------------------------------------------------------------------------------
Performance The top of the next page shows summary performance information for
Information the Fund in a bar chart and an Average Annual Total Returns table.
The information provides some indication of the risks of investing
in the Fund by showing changes in its performance from year to
year and by showing how the Fund's average annual returns compare
with the returns of a broad-based securities market index and an
index of similar funds. The bar chart, the information to its
right and the Average Annual Total Returns table show performance
of the Fund's Institutional Class shares, which are offered in a
different prospectus. This is because the Fund did not offer Class
A, B or C shares during the periods listed. Although Institutional
Class and Class A, B and C shares would have similar annual
returns (because all of the Fund's shares represent interests in
the same portfolio of securities), Institutional Class performance
would be higher than Class A, B or C performance because of the
lower expenses and no sales charges paid by Institutional Class
shares. The Average Annual Total Returns table also shows
estimated historical performance for Class A, B and C shares based
on the performance of the Fund's Institutional Class shares,
adjusted to reflect the actual sales charges (loads), distribution
and/or service (12b-1) fees, administrative fees and other
expenses paid by Class A, B and C shares. Past performance is no
guarantee of future results.
23 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Small-Cap Growth Fund (continued)
Calendar Year Total Returns -- Institutional Class
[CHART APPEARS HERE] More Recent Return Information
1992 16.69% -------------------------------
1993 24.45% 1/1/99-9/30/99 -10.21%
1994 0.54%
1995 21.85% Highest and Lowest
1996 16.84% Quarter Returns
1997 26.72% (for periods shown
1998 -8.50% in the bar chart)
-------------------------------
Highest (4/1/97-6/30/97) 18.48%
-------------------------------
Lowest (7/1/98-9/30/98) -24.84%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/98)
<TABLE>
<CAPTION>
Fund Inception
1 Year 5 Years (1/7/91)(/3/)
---------------------------------------------------------------
<S> <C> <C> <C>
Institutional Class -8.50% 10.66% 18.44%
---------------------------------------------------------------
Class A -13.89% 8.98% 17.14%
---------------------------------------------------------------
Class B -13.90% 9.23% 17.10%
---------------------------------------------------------------
Class C -10.43% 9.40% 17.10%
---------------------------------------------------------------
Russell 2000 index(/1/) -2.55% 11.86% 17.37%
---------------------------------------------------------------
Lipper Small-Cap Fund Average(/2/) -0.23% 13.12% 17.69%
---------------------------------------------------------------
</TABLE>
(1) The Russell 2000 Index is a capitalization weighted broad
based index of 2,000 small capitalization U.S. stocks. It is
not possible to invest directly in the index.
(2) The Lipper Small-Cap Fund Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. that invest primarily in companies with market
capitalizations of less than $1 billion at the time of
investment. It does not take into account sales charges.
(3) The Fund began operations on 1/7/91. Index comparisons begin
on 12/31/90.
- --------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Class A, B or C shares of the Fund:
of the
Fund
Shareholder Fees (fees paid directly from your investment)
<TABLE>
<CAPTION>
Maximum Sales Charge (Load) Imposed Maximum Contingent Deferred Sales Charge (Load)
on Purchases (as a percentage of offering price) (as a percentage of original purchase price)
------------------------------------------------------------------------------------------------------
<S> <C> <C>
Class A 5.50% 1%(/1/)
------------------------------------------------------------------------------------------------------
Class B None 5%(/2/)
------------------------------------------------------------------------------------------------------
Class C None 1%(/3/)
------------------------------------------------------------------------------------------------------
</TABLE>
(1) Imposed only in certain circumstances where Class A shares are
purchased without a front-end sales charge at the time of
purchase.
(2) The maximum CDSC is imposed on shares redeemed in the first
year. For shares held longer than one year, the CDSC declines
according to the schedule set forth under "Investment
Options--Class A, B and C Shares--Contingent Deferred Sales
Charges (CDSCs)--Class B Shares."
(3) The CDSC on Class C shares is imposed only on shares redeemed
in the first year.
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Share Class Fees (12b-1) Fees(/1/) Expenses(/2/) Expenses
-----------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A 1.00% 0.25% 0.40% 1.65%
-----------------------------------------------------------------
Class B 1.00 1.00 0.40 2.40
-----------------------------------------------------------------
Class C 1.00 1.00 0.40 2.40
-----------------------------------------------------------------
</TABLE>
(1) Due to the 12b-1 distribution fee imposed on Class B and Class
C shares, a Class B or Class C shareholders may, depending
upon the length of time the shares are held, pay more than the
economic equivalent of the maximum front-end sales charges
permitted by relevant rules of the National Association of
Securities Dealers, Inc.
(2) Other Expenses reflects a 0.40% Administrative Fee paid by the
class, which is subject to a reduction of 0.05% on average daily
net assets attributable in the aggregate to the Fund's Class A,
B and C shares in excess of $2.5 billion.
Examples. The Examples are intended to help you compare the cost
of investing in Class A, B or C shares of the Fund with the costs
of investing in other mutual funds. The Examples assume that you
invest $10,000 in the noted class of shares for the time periods
indicated, your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the Fund's
operating expenses remain the same. Although your actual costs may
be higher or lower, the Examples show what your costs would be
based on these assumptions.
<TABLE>
<CAPTION>
Example: Assuming you do not
Example: Assuming you redeem your shares at the end of each period redeem your shares
Share Class Year 1 Year 3 Year 5 Year 10 Year 1 Year 3 Year 5 Year 10
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A $709 $1,042 $1,398 $2,397 $709 $1,042 $1,398 $2,397
-----------------------------------------------------------------------------------------------------------
Class B 743 1,048 1,480 2,456 243 748 1,280 2,456
-----------------------------------------------------------------------------------------------------------
Class C 343 748 1,280 2,736 243 748 1,280 2,736
-----------------------------------------------------------------------------------------------------------
</TABLE>
Prospectus 24
<PAGE>
PIMCO Small-Cap Value Fund
- --------------------------------------------------------------------------------
Principal Investment Fund Focus Approximate
Investments Objective Undervalued Capitalization Range
and Seeks long-term smaller Between $50
Strategies growth of capitalization million and$1.5
capital and common stocks billion
income
Fund Category Approximate Dividend Frequency
Value Stocks Number of At least annually
Holdings
100
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in common stocks of companies
with market capitalizations of between $100 million and $1.5
billion at the time of investment and below average P/E ratios
relative to the market and their respective industry groups. To
achieve income, the Fund invests a portion of its assets in
income-producing (or dividend-paying) common stocks.
The Fund's initial selection universe consists of approximately
4,500 stocks of companies within the Fund's capitalization range.
The portfolio managers screen this universe to identify
approximately 500 undervalued stocks representing approximately
160 industry groups. This screening process is based on a number
of valuation factors, including P/E ratios (calculated both with
respect to trailing operating earnings and forward earnings
estimates) and price-to-sales, price-to-book value, and price-to-
cash flow ratios. These factors are considered both on a relative
basis (compared to other stocks in the same industry group) and on
an absolute basis (compared to the overall market).
From this narrowed universe, the portfolio managers select
approximately 100 stocks for the Fund, each of which has close to
equal weighting in the portfolio. They select stocks based on a
quantitative analysis of factors including price momentum (based
on changes in stock price relative to changes in overall market
prices), earnings momentum (based on analysts' earnings per share
estimates and revisions to those estimates), relative dividend
yields and trading liquidity. The portfolio is also structured to
have a maximum weighting of no more than 10% in any one industry.
The portfolio managers may replace a stock if its market
capitalization becomes excessive, if its valuation exceeds the
average valuation of stocks represented in the S&P 500 Index, or
when a stock within the same industry group has a considerably
lower valuation than the Fund's current holding.
Under normal circumstances, the Fund intends to be fully invested
in common stocks (aside from certain cash management practices).
The Fund may temporarily hold up to 10% of its assets in cash and
cash equivalents for defensive purposes in response to unfavorable
market and other conditions. This would be inconsistent with the
Fund's investment objective and principal strategies.
- --------------------------------------------------------------------------------
Principal Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
.Market Risk .Smaller Company Risk .Credit Risk
.Issuer Risk .Liquidity Risk .Management Risk
.Value Securities Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
- --------------------------------------------------------------------------------
Performance The top of the next page shows summary performance information for
Information the Fund in a bar chart and an Average Annual Total Returns table.
The information provides some indication of the risks of investing
in the Fund by showing changes in its performance from year to
year and by showing how the Fund's average annual returns compare
with the returns of a broad-based securities market index and an
index of similar funds. The bar chart and the information to its
right show performance of the Fund's Class A shares, but the
returns do not reflect the impact of sales charges (loads). If
they did, the returns would be lower than those shown. Unlike the
bar chart, performance for Class A, B and C shares in the Average
Annual Total Returns table reflects the impact of sales charges.
For periods prior to the inception of Class A, B and C shares
(1/20/97), performance information shown in the bar chart and
tables for those classes is based on the performance of the Fund's
Institutional Class shares, which are offered in a different
prospectus. The prior Institutional Class performance has been
adjusted to reflect the actual sales charges (in the Average
Annual Total Returns table only), distribution and/or service
(12b-1) fees, administrative fees and other expenses paid by Class
A, B and C shares. Past performance is no guarantee of future
results.
25 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Small-Cap Value Fund (continued)
Calendar Year Total Returns -- Class A
[CHART APPEARS HERE] More Recent Return
Information
1992 18.27% -------------------------
1993 13.39% 1/1/99-9/30/99 -4.98%
1994 -4.07%
1995 24.98% Highest and Lowest
1996 27.22% Quarter Returns
1997 34.47% (for periods shown
1998 -9.48% in the bar chart)
-------------------------
Highest (7/1/97-
9/30/97) 15.81%
-------------------------
Lowest (7/1/98-
9/30/98) -18.71%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/98)
<TABLE>
<CAPTION>
Fund Inception
1 Year 5 Years (9/30/91)(/3/)
------------------------------------------------------------------
<S> <C> <C> <C>
Class A -14.46% 11.90% 13.44%
------------------------------------------------------------------
Class B -14.50% 12.08% 13.51%
------------------------------------------------------------------
Class C -11.06% 12.33% 13.48%
------------------------------------------------------------------
Russell 2000 Index(/1/) - 2.55% 11.86% 14.13%
------------------------------------------------------------------
Lipper Small-Cap Fund Average(/2/) - 0.23% 13.12% 14.69%
------------------------------------------------------------------
</TABLE>
(1) The Russell 2000 Index is a capitalization weighted broad
based index of 2,000 small capitalization U.S. stock. It is
not possible to invest directly in the index.
(2) The Lipper Small-Cap Fund Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. that invest primarily in companies with market
capitalizations of less than $1 billion at the time of
investment. It does not take into account sales charges.
(3) The Fund began operations on 9/30/91. Index comparisons begin
on 10/1/91.
- --------------------------------------------------------------------------------
Fees and
Expenses These tables describe the fees and expenses you may pay if you buy
of the and hold Class A, B or C shares of the Fund:
Fund
Shareholder Fees (fees paid directly from your investment)
<TABLE>
<CAPTION>
Maximum Sales Charge (Load) Imposed Maximum Contingent Deferred Sales Charge (Load)
on Purchases (as a percentage of offering price) (as a percentage of original purchase price)
---------------------------------------------------------------------------------------------------------
<S> <C> <C>
Class A 5.50% 1%(/1/)
---------------------------------------------------------------------------------------------------------
Class B None 5%(/2/)
---------------------------------------------------------------------------------------------------------
Class C None 1%(/3/)
---------------------------------------------------------------------------------------------------------
</TABLE>
(1) Imposed only in certain circumstances where Class A shares are
purchased without a front-end sales charge at the time of
purchase.
(2) The maximum CDSC is imposed on shares redeemed in the first
year. For shares held longer than one year, the CDSC declines
according to the schedule set forth under "Investment Options--
Class A, B and C Shares--Contingent Deferred Sales Charges
(CDSCs)--Class B Shares."
(3) The CDSC on Class C shares is imposed only on shares redeemed
in the first year.
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Share Class Fees (12b-1) Fees(/1/) Expenses(/2/) Expenses
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A 0.60% 0.25% 0.40% 1.25%
--------------------------------------------------------------------
Class B 0.60 1.00 0.40 2.00
--------------------------------------------------------------------
Class C 0.60 1.00 0.40 2.00
--------------------------------------------------------------------
</TABLE>
(1) Due to the 12b-1 distribution fee imposed on Class B and Class C
shares, a Class B or Class C shareholders may, depending upon
the length of time the shares are held, pay more than the
economic equivalent of the maximum front-end sales charges
permitted by relevant rules of the National Association of
Securities Dealers, Inc.
(2) Other Expenses reflects a 0.40% Administrative Fee paid by the
class, which is subject to a reduction of 0.05% on average daily
net assets attributable in the aggregate to the Fund's Class A,
B and C shares in excess of $2.5 billion.
Examples. The Examples are intended to help you compare the cost of
investing in Class A, B or C shares of the Fund with the costs of
investing in other mutual funds. The Examples assume that you invest
$10,000 in the noted class of shares for the time periods indicated,
your investment has a 5% return each year, the reinvestment of all
dividends and distributions, and the Fund's operating expenses
remain the same. Although your actual costs may be higher or lower,
the Examples show what your costs would be based on these
assumptions.
<TABLE>
<CAPTION>
Example: Assuming you do not
Example: Assuming you redeem your shares at the end of each period redeem your shares
Share Class Year 1 Year 3 Year 5 Year 10 Year 1 Year 3 Year 5 Year 10
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A $670 $925 $1,199 $1,978 $670 $925 $1,199 $1,978
--------------------------------------------------------------------------------------------------------------
Class B 703 927 1,278 2,038 203 627 1,078 2,038
--------------------------------------------------------------------------------------------------------------
Class C 303 627 1,078 2,327 203 627 1,078 2,327
--------------------------------------------------------------------------------------------------------------
</TABLE>
Prospectus 26
<PAGE>
PIMCO Target Fund
- --------------------------------------------------------------------------------
Principal Investment Fund Focus Approximate
Investments Objective Medium Capitalization Range
and Seeks capital capitalization Between $1
Strategies appreciation; no common stocks billion and $10
consideration is billion
given to income
Approximate Number Dividend Frequency
of Holdings At least
Fund Category 40-60 annually
Growth Stocks
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in common stocks of "growth"
companies with market capitalizations of between $1 billion and
$10 billion at the time of investment.
The portfolio managers select stocks for the Fund using a
"growth" style. The portfolio managers seek to identify companies
with well-defined "wealth creating" characteristics, including
superior earnings growth (relative to companies in the same
industry or the market as a whole), high profitability and
consistent, predictable earnings. In addition, through fundamental
research, the portfolio managers seek to identify dominant
companies that are gaining market share, have superior management
and possess a sustainable competitive advantage, such as superior
or innovative products, personnel and distribution systems. The
Fund sells stocks when the portfolio managers believe that
earnings, sentiment and relative performance are disappointing or
if an alternative investment is more attractive.
The Fund may also invest in other kinds of equity securities,
including preferred stocks and convertible securities. The Fund
may invest up to 15% of its assets in foreign securities, usually
in the form of American Depository Receipts (ADRs).
In response to unfavorable market and other conditions, the Fund
may make temporary investments of some or all of its assets in
high-quality fixed income securities. This would be inconsistent
with the Fund's investment objective and principal strategies.
- --------------------------------------------------------------------------------
Principal Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
.Market Risk .Smaller Company Risk .Currency Risk
.Issuer Risk .Liquidity Risk .Credit Risk
.Growth Securities Risk .Foreign Investment Risk .Management Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
- --------------------------------------------------------------------------------
Performance The top of the next page shows summary performance information for
Information the Fund in a bar chart and an Average Annual Total Returns table.
The information provides some indication of the risks of investing
in the Fund by showing changes in its performance from year to
year and by showing how the Fund's average annual returns compare
with the returns of a broad-based securities market index and an
index of similar funds. The bar chart and the information to its
right show performance of the Fund's Class A shares, but the
returns do not reflect the impact of sales charges (loads). If
they did, the returns would be lower than those shown. Unlike the
bar chart, performance for Class A, B and C shares in the Average
Annual Total Returns table reflects the impact of sales charges.
For periods prior to the inception of Class B shares (5/22/95),
performance information shown in the Average Annual Total Returns
table for that class is based on the performance of the Fund's
Class A shares. The prior Class A performance has been adjusted to
reflect the actual sales charges, distribution and/or service
(12b-1) fees, administrative fees and other expenses paid by Class
B shares. Prior to March 6, 1999, the Fund had a different sub-
adviser and would not necessarily have achieved the performance
results shown on the next page under its current investment
management arrangements. Past performance is no guarantee of
future results.
27 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Target Fund (continued)
Calendar Year Total Returns -- Class A
[CHART APPEARS HERE] More Recent Return
Information
1993 24.52% -------------------------
1994 3.09% 1/1/99-9/30/99 8.62%
1995 30.31%
1996 15.68% Highest and Lowest
1997 15.44% Quarter Returns 9
1998 23.27% (for periods shown
in the bar chart)
-------------------------
Highest (10/1/98-
12/31/98) 21.18%
-------------------------
Lowest (7/1/98-
9/30/98) -13.15%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/98)
<TABLE>
<CAPTION>
Fund Inception
1 Year 5 Years (12/17/92)(/3/)
---------------------------------------------------------------------
<S> <C> <C> <C>
Class A 17.32% 16.76% 18.27%
---------------------------------------------------------------------
Class B 18.27% 16.99% 18.48%
---------------------------------------------------------------------
Class C 22.27% 17.20% 18.48%
---------------------------------------------------------------------
S&P Mid-Cap 400 Index(/1/) 19.12% 18.85% 18.02%
---------------------------------------------------------------------
Lipper Mid-Cap Fund Average(/2/) 12.39% 14.86% 14.68%
---------------------------------------------------------------------
</TABLE>
(1) The S&P Mid-Cap 400 Index is an unmanaged index of middle
capitalization U.S. stocks. It is not possible to invest directly
in the index.
(2) The Lipper Mid-Cap Fund Average is a total return performance
average of funds tracked by Lipper Analytical Services, Inc. that
invest primarily in companies with market capitalizations of less
than $5 billion at the time of investment. It does not take into
account sales charges.
(3) The Fund began operations on 12/17/92. Index comparisons begin
on 12/31/92.
- --------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Class A, B or C shares of the Fund:
of the
Fund
Shareholder Fees (fees paid directly from your investment)
<TABLE>
<CAPTION>
Maximum Sales Charge (Load) Imposed Maximum Contingent Deferred Sales Charge (Load)
on Purchases (as a percentage of offering price) (as a percentage of original purchase price)
---------------------------------------------------------------------------------------------------------
<S> <C> <C>
Class A 5.50% 1%(/1/)
---------------------------------------------------------------------------------------------------------
Class B None 5%(/2/)
---------------------------------------------------------------------------------------------------------
Class C None 1%(/3/)
---------------------------------------------------------------------------------------------------------
</TABLE>
(1) Imposed only in certain circumstances where Class A shares are
purchased without a front-end sales charge at the time of
purchase.
(2) The maximum CDSC is imposed on shares redeemed in the first year.
For shares held longer than one year, the CDSC declines according
to the schedule set forth under "Investment Options--Class A, B
and C Shares--Contingent Deferred Sales Charges (CDSCs)--Class B
Shares."
(3) The CDSC on Class C shares is imposed only on shares redeemed in
the first year.
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Share Class Fees (12b-1) Fees(/1/) Expenses(/2/) Expenses
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A 0.55% 0.25% 0.40% 1.20%
--------------------------------------------------------------------
Class B 0.55 1.00 0.40 1.95
--------------------------------------------------------------------
Class C 0.55 1.00 0.40 1.95
--------------------------------------------------------------------
</TABLE>
(1) Due to the 12b-1 distribution fee imposed on Class B and Class C
shares, a Class B or Class C shareholders may, depending upon the
length of time the shares are held, pay more than the economic
equivalent of the maximum front-end sales charges permitted by
relevant rules of the National Association of Securities Dealers,
Inc.
(2) Other Expenses reflects a 0.40% Administrative Fee paid by the
class, which is subject to a reduction of 0.05% on average daily
net assets attributable in the aggregate to the Fund's Class A, B
and C shares in excess of $2.5 billion.
Examples. The Examples are intended to help you compare the cost of
investing in Class A, B or C shares of the Fund with the costs of
investing in other mutual funds. The Examples assume that you invest
$10,000 in the noted class of shares for the time periods indicated,
your investment has a 5% return each year, the reinvestment of all
dividends and distributions, and the Fund's operating expenses remain
the same. Although your actual costs may be higher or lower, the
Examples show what your costs would be based on these assumptions.
<TABLE>
<CAPTION>
Example: Assuming you do not
Example: Assuming you redeem your shares at the end of each period redeem your shares
Share Class Year 1 Year 3 Year 5 Year 10 Year 1 Year 3 Year 5 Year 10
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A $666 $910 $1,173 $1,925 $666 $910 $1,173 $1,925
--------------------------------------------------------------------------------------------------------------
Class B 698 912 1,252 1,984 198 612 1,052 1,984
--------------------------------------------------------------------------------------------------------------
Class C 298 612 1,052 2,275 198 612 1,052 2,275
--------------------------------------------------------------------------------------------------------------
</TABLE>
Prospectus 28
<PAGE>
PIMCO Tax-Efficient Equity Fund
- --------------------------------------------------------------------------------
Principal Investment Fund Focus Approximate
Investments Objective A portion of the Capitalization Range
and Seeks maximum common stocks More than $5 billion
Strategies after-tax growth represented in
of capital the S&P 500 Index
Dividend Frequency
Fund Category Approximate Number At least annually
Enhanced Index of Holdings
More than 200
The Fund attempts to provide a total return which exceeds the
return of the S&P 500 Index by investing in a broadly diversified
portfolio of at least 200 common stocks. The Fund also attempts to
achieve superior after-tax returns for its shareholders by using a
variety of tax-efficient management strategies.
The Fund seeks to achieve its investment objective by normally
investing at least 95% of its assets in stocks represented in the
S&P 500 Index. The Fund's portfolio is designed to have certain
characteristics that are similar to those of the index, including
such measures as dividend yield, P/E ratio, relative volatility,
economic sector exposure, return on equity and market price-to-
book value ratio. The Fund's return is intended to correlate
highly with the return of the S&P 500 Index, but the portfolio
managers attempt to produce a higher total return than the index
by selecting a portion of the stocks represented in the index
using the quantitative techniques described below. The portfolio
managers also use these techniques to make sell decisions.
Notwithstanding these strategies, there is no assurance that the
Fund's investment performance will equal or exceed that of the S&P
500 Index.
The Fund intends to be fully invested in common stock (aside from
certain cash management practices) and will not make defensive
investments in response to unfavorable market and other
conditions.
Quantitative Techniques. The portfolio managers use a proprietary
quantitative model that ranks companies based on long-term (5-10
years) price appreciation potential. They analyze factors such as
growth of sustainable earnings and dividend behavior. Stocks in
the top 50% of the model's ranking are considered for purchase by
the Fund. The Fund sells stocks selected from the bottom 20% of
the model's ranking based on cost, current market value and
anticipated benefit of replacement. The portfolio managers' sell
discipline also focuses on reducing realized capital gains as
indicated below.
Tax-Efficient Strategies. The portfolio managers utilize a range
of active tax management strategies designed to minimize the
Fund's taxable distributions, including low portfolio turnover and
favoring investments in low-dividend, growth-oriented companies.
The portfolio managers also identify specific shares of stock to
be sold that have the lowest tax cost. When prudent, stocks are
also sold to realize capital losses in order to offset realized
capital gains. In limited circumstances, the Fund may also
distribute appreciated securities to shareholders to meet
redemption requests so as to avoid realizing capital gains.
Despite the use of these tax-efficient strategies, the Fund may
realize gains and shareholders will incur tax liability from time
to time.
- --------------------------------------------------------------------------------
Principal Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
.Market Risk .Growth Securities Risk .Currency Risk
.Issuer Risk .Leveraging Risk .Management Risk
.Value Securities Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
- --------------------------------------------------------------------------------
Performance The Fund commenced operations in September 1998 and does not yet
Information have a full calendar year of performance. Thus, no bar chart or
Average Annual Total Returns table is included for the Fund.
29 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Tax-Efficient Equity Fund (continued)
- --------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Class A, B or C shares of the Fund:
of the
Fund Shareholder Fees (fees paid directly from your investment)
<TABLE>
Maximum Sales Charge (Load) Imposed Maximum Contingent Deferred Sales Charge (Load)
on Purchases (as a percentage of offering price) (as a percentage of original purchase price)
------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Class A 5.50% 1%(/1/)
------------------------------------------------------------------------------------------------------------------
Class B None 5%(/2/)
------------------------------------------------------------------------------------------------------------------
Class C None 1%(/3/)
------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Imposed only in certain circumstances where Class A shares are
purchased without a front-end sales charge at the time of
purchase.
(2) The maximum CDSC is imposed on shares redeemed in the first
year. For shares held longer than one year, the CDSC declines
according to the schedule set forth under "Investment
Options--Class A, B and C Shares--Contingent Deferred Sales
Charges (CDSCs)--Class B Shares."
(3) The CDSC on Class C shares is imposed only on shares redeemed
in the first year.
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Share Class Fees (12b-1) Fees(/1/) Expenses(/2/) Expenses
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A 0.45% 0.25% 0.40% 1.10%
----------------------------------------------------------------------------------
Class B 0.45 1.00 0.40 1.85
----------------------------------------------------------------------------------
Class C 0.45 1.00 0.40 1.85
----------------------------------------------------------------------------------
</TABLE>
(1) Due to the 12b-1 distribution fee imposed on Class B and Class
C shares, a Class B or Class C shareholders may, depending
upon the length of time the shares are held, pay more than the
economic equivalent of the maximum front-end sales charges
permitted by relevant rules of the National Association of
Securities Dealers, Inc.
(2) Other Expenses reflects a 0.40% Administrative Fee paid by the
class, which is subject to a reduction of 0.05% on average daily
net assets attributable in the aggregate to the Fund's Class A,
B and C shares in excess of $2.5 billion.
Examples. The Examples are intended to help you compare the cost
of investing in Class A, B or C shares of the Fund with the costs
of investing in other mutual funds. The Examples assume that you
invest $10,000 in the noted class of shares for the time periods
indicated, your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the Fund's
operating expenses remain the same. Although your actual costs may
be higher or lower, the Examples show what your costs would be
based on these assumptions.
<TABLE>
<CAPTION>
Example: Assuming you do not redeem
Example: Assuming you redeem your shares at the end of each period your shares
Share Class Year 1 Year 3 Year 5 Year 10 Year 1 Year 3 Year 5 Year 10
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A $656 $880 $1,123 $1,816 $656 $880 $1,123 $1,816
-----------------------------------------------------------------------------------------------------------------------
Class B 688 882 1,201 1,876 188 582 1,001 1,876
-----------------------------------------------------------------------------------------------------------------------
Class C 288 582 1,001 2,169 188 582 1,001 2,169
-----------------------------------------------------------------------------------------------------------------------
</TABLE>
Prospectus 30
<PAGE>
PIMCO Value Fund
- --------------------------------------------------------------------------------
Principal Investment Fund Focus Approximate
Investments Objective Undervalued Capitalization Range
and Seeks long-term larger More than $2 billion
Strategies growth of capitalization
capital and common stocks
income
Dividend Frequency
Fund Category Approximate Number Quarterly
Value Stocks of Holdings
40
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in common stocks of companies
with market capitalizations of more than $2 billion at the time of
investment and below average P/E ratios relative to the market and
their respective industry groups. To achieve income, the Fund
invests a portion of its assets in income-producing (or dividend-
paying) common stocks.
The Fund's initial selection universe consists of the 1,000
largest publicly traded companies (in terms of market
capitalization) in the U.S. The portfolio managers classify the
universe by industry. They then identify the most undervalued
stocks in each industry based mainly on relative P/E ratios,
calculated both with respect to trailing operating earnings and
forward earnings estimates. After narrowing this universe to
approximately 150 candidates, the portfolio managers select
approximately 40 stocks for the Fund, each representing a
different industry group. The portfolio managers select stocks
based on a quantitative analysis of factors including price
momentum (based on changes in stock price relative to changes in
overall market prices), earnings momentum (based on analysts'
earnings per share estimates and revisions to those estimates),
relative dividend yields, valuation relative to the overall market
and trading liquidity. The Fund's portfolio is generally
rebalanced quarterly. The portfolio managers may also replace a
stock when a stock within the same industry group has a
considerably lower valuation than the Fund's current holding.
Under normal circumstances, the Fund intends to be fully invested
in common stocks (aside from certain cash management practices).
The Fund may temporarily hold up to 10% of its assets in cash and
cash equivalents for defensive purposes in response to unfavorable
market and other conditions. This would be inconsistent with the
Fund's investment objective and principal strategies.
- --------------------------------------------------------------------------------
Principal Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
.Market Risk .Credit Risk
.Issuer Risk .Management Risk
.Value Securities Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
- --------------------------------------------------------------------------------
Performance The top of the next page shows summary performance information for
Information the Fund in a bar chart and an Average Annual Total Returns table.
The information provides some indication of the risks of investing
in the Fund by showing changes in its performance from year to
year and by showing how the Fund's average annual returns compare
with the returns of a broad-based securities market index and an
index of similar funds. The bar chart and the information to its
right show performance of the Fund's Class A shares, but the
returns do not reflect the impact of sales charges (loads). If
they did, the returns would be lower than those shown. Unlike the
bar chart, performance for Class A, B and C shares in the Average
Annual Total Returns table reflects the impact of sales charges.
For periods prior to the inception of Class A, B and C shares
(1/13/97), performance information shown in the bar chart and
tables for those classes is based on the performance of the Fund's
Institutional Class shares, which are offered in a different
prospectus. The prior Institutional Class performance has been
adjusted to reflect the actual sales charges (in the Average
Annual Total Returns table only), distribution and/or service
(12b-1) fees, administrative fees and other expenses paid by Class
A, B and C shares. Past performance is no guarantee of future
results.
31 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Value Fund (continued)
Calendar Year Total Returns -- Class A
[CHART APPEARS HERE] More Recent Return
Information
1992 12.70% -------------------------
1993 15.94% 1/1/99-9/30/99 4.80%
1994 -4.46%
1995 38.37% Highest and Lowest
1996 19.87% Quarter Returns
1997 25.71% (for periods shown
1998 9.76% in the bar chart)
-------------------------
Highest (10/1/98-
12/31/98) 17.10%
-------------------------
Lowest (7/1/98-
9/30/98) -13.27%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/98)
<TABLE>
<CAPTION>
Fund Inception
1 Year 5 Years (12/30/91)(/3/)
--------------------------------------------------------------------------
<S> <C> <C> <C>
Class A 3.72% 15.62% 15.35%
--------------------------------------------------------------------------
Class B 4.14% 15.86% 15.43%
--------------------------------------------------------------------------
Class C 8.06% 16.08% 15.43%
--------------------------------------------------------------------------
S&P 500 Index(/1/) 28.58% 24.06% 19.51%
--------------------------------------------------------------------------
Lipper Growth and Income Fund Average(/2/) 15.80% 18.42% 15.94%
--------------------------------------------------------------------------
</TABLE>
(1) The S&P 500 Index is an unmanaged index of large
capitalization common stocks. It is not possible to invest
directly in the index.
(2) The Lipper Growth and Income Fund Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. that combine a growth-of-earnings orientation
and an income requirement for level and/or rising dividends.
It does not take into account sales charges.
(3) The Fund began operations on 12/30/91. Index comparisons begin
on 12/31/91.
- --------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Class A, B or C shares of the Fund:
of the
Fund
Shareholder Fees (fees paid directly from your investment)
<TABLE>
<CAPTION>
Maximum Sales Charge (Load) Imposed Maximum Contingent Deferred Sales Charge (Load)
on Purchases (as a percentage of offering price) (as a percentage of original purchase price)
---------------------------------------------------------------------------------------------------------
<S> <C> <C>
Class A 5.50% 1%(/1/)
---------------------------------------------------------------------------------------------------------
Class B None 5%(/2/)
---------------------------------------------------------------------------------------------------------
Class C None 1%(/3/)
---------------------------------------------------------------------------------------------------------
</TABLE>
(1) Imposed only in certain circumstances where Class A shares are
purchased without a front-end sales charge at the time of
purchase.
(2) The maximum CDSC is imposed on shares redeemed in the first
year. For shares held longer than one year, the CDSC declines
according to the schedule set forth under "Investment
Options--Class A, B and C Shares--Contingent Deferred Sales
Charges (CDSCs)--Class B Shares."
(3) The CDSC on Class C shares is imposed only on shares redeemed
in the first year.
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Share Class Fees (12b-1) Fees(/1/) Expenses(/2/) Expenses
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A 0.45% 0.25% 0.40% 1.10%
--------------------------------------------------------------------
Class B 0.45 1.00 0.40 1.85
--------------------------------------------------------------------
Class C 0.45 1.00 0.40 1.85
--------------------------------------------------------------------
</TABLE>
(1) Due to the 12b-1 distribution fee imposed on Class B and Class
C shares, a Class B or Class C shareholders may, depending
upon the length of time the shares are held, pay more than the
economic equivalent of the maximum front-end sales charges
permitted by relevant rules of the National Association of
Securities Dealers, Inc.
(2) Other Expenses reflects a 0.40% Administrative Fee paid by the
class, which is subject to a reduction of 0.05% on average daily
net assets attributable in the aggregate to the Fund's Class A,
B and C shares in excess of $2.5 billion.
Examples. The Examples are intended to help you compare the cost
of investing in Class A, B or C shares of the Fund with the costs
of investing in other mutual funds. The Examples assume that you
invest $10,000 in the noted class of shares for the time periods
indicated, your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the Fund's
operating expenses remain the same. Although your actual costs may
be higher or lower, the Examples show what your costs would be
based on these assumptions.
<TABLE>
<CAPTION>
Example: Assuming you do not
Example: Assuming you redeem your shares at the end of each period redeem your shares
Share Class Year 1 Year 3 Year 5 Year 10 Year 1 Year 3 Year 5 Year 10
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A $656 $880 $1,123 $1,816 $656 $880 $1,123 $1,816
--------------------------------------------------------------------------------------------------------------
Class B 688 882 1,201 1,876 188 582 1,001 1,876
--------------------------------------------------------------------------------------------------------------
Class C 288 582 1,001 2,169 188 582 1,001 2,169
--------------------------------------------------------------------------------------------------------------
</TABLE>
Prospectus 32
<PAGE>
PIMCO Value 25 Fund
- --------------------------------------------------------------------------------
Principal Investment Fund Focus Approximate
Investments Objective Undervalued Capitalization
Strategies Seeks long-term medium Range
growth of capitalization Between $1
capital and common stocks billion and $5
income billion
Fund Category Approximate Number Dividend Frequency
Value Stocks of Holdings At least annually
25
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in common stocks of companies
with market capitalizations of between $1 billion and $5 billion
at the time of investment and below average P/E ratios relative to
their respective industry groups. The Fund normally invests in
approximately 25 common stocks. To achieve income, the Fund
invests a portion of its assets in income-producing (or dividend-
paying) common stocks.
The Fund's initial selection universe consists of approximately
600 stocks of companies within the Fund's capitalization range.
The portfolio managers classify the universe by industry. They
then identify the most undervalued stocks in each industry based
mainly on relative P/E ratios, calculated both with respect to
trailing operating earnings and forward earnings estimates. The
portfolio managers then select approximately 25 stocks, each
representing a different industry group. Each stock has close to
equal weighting in the portfolio. The portfolio managers select
stocks based on a quantitative analysis of factors including price
momentum (based on changes in stock price relative to changes in
overall market prices), earnings momentum (based on analysts'
earnings per share estimates and revisions to those estimates),
relative dividend yields and trading liquidity. The Fund's
portfolio is generally rebalanced quarterly. The portfolio
managers may also replace a stock when a stock within the same
industry group has a considerably lower valuation than the Fund's
current holding.
Under normal circumstances, the Fund intends to be fully invested
in common stocks (aside from certain cash management practices).
The Fund may temporarily hold up to 10% of its assets in cash and
cash equivalents for defensive purposes in response to unfavorable
market and other conditions. This would be inconsistent with the
Fund's investment objective and principal strategies.
- --------------------------------------------------------------------------------
Principal Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
.Market Risk .Smaller Company Risk .Credit Risk
.Issuer Risk .Concentration Risk .Management Risk
.Value Securities .Liquidity Risk
Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
- --------------------------------------------------------------------------------
Performance The Fund commenced operations in July 1998 and does not yet have a
Information full calendar year of performance. Thus, no bar chart or Average
Annual Total Returns table is included for the Fund.
33 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Value 25 Fund (continued)
- --------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Class A, B or C shares of the Fund:
of the
Fund Shareholder Fees (fees paid directly from your investment)
<TABLE>
<CAPTION>
Maximum Sales Charge (Load) Imposed Maximum Contingent Deferred Sales Charge (Load)
on Purchases (as a percentage of offering price) (as a percentage of original purchase price)
---------------------------------------------------------------------------------------------------------
<S> <C>
Class A 5.50% 1%(/1/)
---------------------------------------------------------------------------------------------------------
Class B None 5%(/2/)
---------------------------------------------------------------------------------------------------------
Class C None 1%(/3/)
---------------------------------------------------------------------------------------------------------
</TABLE>
(1) Imposed only in certain circumstances where Class A shares are
purchased without a front-end sales charge at the time of
purchase.
(2) The maximum CDSC is imposed on shares redeemed in the first
year. For shares held longer than one year, the CDSC declines
according to the schedule set forth under "Investment
Options--Class A, B and C Shares--Contingent Deferred Sales
Charges (CDSCs)--Class B Shares."
(3) The CDSC on Class C shares is imposed only on shares redeemed
in the first year.
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Share Class Fees (12b-1) Fees(/1/) Expenses(/2/) Expenses
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A 0.50% 0.25% 0.40% 1.15%
--------------------------------------------------------------------
Class B 0.50 1.00 0.40 1.90
--------------------------------------------------------------------
Class C 0.50 1.00 0.40 1.90
--------------------------------------------------------------------
</TABLE>
(1) Due to the 12b-1 distribution fee imposed on Class B and Class
C shares, a Class B or Class C shareholders may, depending
upon the length of time the shares are held, pay more than the
economic equivalent of the maximum front-end sales charges
permitted by relevant rules of the National Association of
Securities Dealers, Inc.
(2) Other Expenses reflects a 0.40% Administrative Fee paid by the
class, which is subject to a reduction of 0.05% on average daily
net assets attributable in the aggregate to the Fund's Class A,
B and C shares in excess of $2.5 billion.
Examples. The Examples are intended to help you compare the cost
of investing in Class A, B or C shares of the Fund with the costs
of investing in other mutual funds. The Examples assume that you
invest $10,000 in the noted class of shares for the time periods
indicated, your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the Fund's
operating expenses remain the same. Although your actual costs may
be higher or lower, the Examples show what your costs would be
based on these assumptions.
<TABLE>
<CAPTION>
Example: Assuming you do not
Example: Assuming you redeem your shares at the end of each period redeem your shares
Share Class Year 1 Year 3 Year 5 Year 10 Year 1 Year 3 Year 5 Year 10
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A $661 $895 $1,148 $1,871 $661 $895 $1,148 $1,871
--------------------------------------------------------------------------------------------------------------
Class B 693 897 1,226 1,930 193 597 1,026 1,930
--------------------------------------------------------------------------------------------------------------
Class C 293 597 1,026 2,222 193 597 1,026 2,222
--------------------------------------------------------------------------------------------------------------
</TABLE>
Prospectus 34
<PAGE>
Summary of Principal Risks
The value of your investment in a Fund changes with the values of
that Fund's investments. Many factors can affect those values. The
factors that are most likely to have a material effect on a
particular Fund's portfolio as a whole are called "principal
risks." The principal risks of each Fund are identified in the
Fund Summaries and are summarized in this section. Each Fund may
be subject to additional principal risks and risks other than
those described below because the types of investments made by a
Fund can change over time. Securities and investment techniques
mentioned in this summary and described in greater detail under
"Characteristics and Risks of Securities and Investment
Techniques" appear in bold type. That section and "Investment
Objectives and Policies" in the Statement of Additional
Information also include more information about the Funds, their
investments and the related risks. There is no guarantee that a
Fund will be able to achieve its investment objective.
Market The market price of securities owned by a Fund may go up or down,
Risk sometimes rapidly or unpredictably. Each of the Funds normally
invests most of its assets in common stocks and/or other equity
securities. A principal risk of investing in each Fund is that the
equity securities in its portfolio will decline in value due to
factors affecting equity securities markets generally or
particular industries represented in those markets. The values of
equity securities may decline due to general market conditions
which are not specifically related to a particular company, such
as real or perceived adverse economic conditions, changes in the
general outlook for corporate earnings, changes in interest or
currency rates or adverse investor sentiment generally. They may
also decline due to factors which affect a particular industry or
industries, such as labor shortages or increased production costs
and competitive conditions within an industry. Equity securities
generally have greater price volatility than fixed income
securities.
Issuer The value of a security may also decline for a number of reasons
Risk which directly relate to the issuer, such as management
performance, financial leverage and reduced demand for the
issuer's goods or services.
Value Each Fund may invest in companies that may not be expected to
Securities experience significant earnings growth, but whose securities its
Risk portfolio manager believes are selling at a price lower than their
true value. The Capital Appreciation, Equity Income, Mid-Cap
Growth, Renaissance, Small-Cap Growth, Small-Cap Value, Value and
Value 25 Funds place particular emphasis on value securities.
Companies that issue value securities may have experienced adverse
business developments or may be subject to special risks that have
caused their securities to be out of favor. If a portfolio
manager's assessment of a company's prospects is wrong, or if the
market does not recognize the value of the company, the price of
its securities may decline or may not approach the value that the
portfolio manager anticipates.
Growth Each Fund may invest in equity securities of companies that its
Securities portfolio manager believes will experience relatively rapid
Risk earnings growth. The Capital Appreciation, Growth, Innovation,
Mid-Cap Growth, Opportunity, Small-Cap Growth and Target Funds
place particular emphasis on growth securities. Growth securities
typically trade at higher multiples of current earnings than other
securities. Therefore, the values of growth securities may be more
sensitive to changes in current or expected earnings than the
values of other securities.
Smaller The general risks associated with equity securities and liquidity
Company risk are particularly pronounced for securities of companies with
Risk smaller market capitalizations. These companies may have limited
product lines, markets or financial resources or they may depend
on a few key employees. Securities of smaller companies may trade
less frequently and in lesser volume than more widely held
securities and their values may fluctuate more sharply than other
securities. They may also trade in the over-the-counter market or
on a regional exchange, or may otherwise have limited liquidity.
The Opportunity, Small-Cap Growth and Small-Cap Value Funds
generally have substantial exposure to this risk. The Mid-Cap
Growth, Target and Value 25 Funds also have significant exposure
to this risk because they invest substantial assets in companies
with medium-sized market capitalizations, which are smaller and
generally less-seasoned than the largest companies.
Liquidity All of the Funds are subject to liquidity risk. Liquidity risk
Risk exists when particular investments are difficult to purchase or
sell, possibly preventing a Fund from selling such illiquid
securities at an advantageous time or price. Funds with principal
investment strategies that involve securities of companies with
smaller market capitalizations, foreign securities, derivatives or
securities with substantial market and/or credit risk tend to have
the greatest exposure to liquidity risk.
35 PIMCO Funds: Multi-Manager Series
<PAGE>
Derivatives All Funds except the Capital Appreciation, Equity Income, Mid-Cap
Risk Growth, Small-Cap Growth, Small-Cap Value, Value and Value 25
Funds may use derivatives, which are financial contracts whose
value depends on, or is derived from, the value of an underlying
asset, reference rate or index. The various derivative
instruments that the Funds may use are referenced under
"Characteristics and Risks of Securities and Investment
Techniques--Derivatives" in this Prospectus and described in more
detail under "Investment Objectives and Policies" in the
Statement of Additional Information. The Funds may sometimes use
derivatives as part of a strategy designed to reduce exposure to
other risks, such as interest rate or currency risk. The Funds
may also use derivatives for leverage, which increases
opportunities for gain but also involves greater risk of loss due
to leveraging risk. A Fund's use of derivative instruments
involves risks different from, or possibly greater than, the
risks associated with investing directly in securities and other
traditional investments. Derivatives are subject to a number of
risks described elsewhere in this section, such as liquidity
risk, market risk, credit risk and management risk. They also
involve the risk of mispricing or improper valuation and the risk
that changes in the value of the derivative may not correlate
perfectly with the underlying asset, rate or index. In addition,
a Fund's use of derivatives may increase or accelerate the amount
of taxes payable by shareholders. A Fund investing in a
derivative instrument could lose more than the principal amount
invested. Also, suitable derivative transactions may not be
available in all circumstances and there can be no assurance that
a Fund will engage in these transactions to reduce exposure to
other risks when that would be beneficial.
Foreign A Fund that invests in foreign securities, and particularly the
Investment International and Precious Metals Funds, may experience more
Risk rapid and extreme changes in value than Funds that invest
exclusively in securities of U.S. issuers or securities that
trade exclusively in U.S. markets. The securities markets of many
foreign countries are relatively small, with a limited number of
companies representing a small number of industries.
Additionally, issuers of foreign securities are usually not
subject to the same degree of regulation as U.S. issuers.
Reporting, accounting and auditing standards of foreign countries
differ, in some cases significantly, from U.S. standards. Also,
nationalization, expropriation or confiscatory taxation, currency
blockage, political changes or diplomatic developments could
adversely affect a Fund's investments in a foreign country. In
the event of nationalization, expropriation or other
confiscation, a Fund could lose its entire investment in foreign
securities. To the extent that a Fund, such as the International
Fund or Precious Metals Fund, invests a significant portion of
its assets in a concentrated geographic area like Eastern Europe,
South Africa, or Asia, the Fund will generally have more exposure
to regional economic risks associated with foreign investments.
Adverse conditions in certain regions (such as Southeast Asia)
can also adversely affect securities of other countries whose
economies appear to be unrelated. In addition, special U.S. tax
considerations may apply to a Fund's investment in foreign
securities.
Emerging Foreign investment risk may be particularly high to the extent
Markets that a Fund invests in emerging market securities of issuers
Risk based in countries with developing economies. These securities
may present market, credit, currency, liquidity, legal, political
and other risks different from, or greater than, the risks of
investing in developed foreign countries. The International and
Precious Metals Funds may invest significant portions of their
assets in emerging market securities.
Currency Funds that invest directly in foreign currencies or in securities
Risk that trade in, and receive revenues in, foreign currencies are
subject to the risk that those currencies will decline in value
relative to the U.S. Dollar, or, in the case of hedging
positions, that the U.S. Dollar will decline in value relative to
the currency being hedged. The International and Precious Metals
Funds are particularly sensitive to currency risk. Currency rates
in foreign countries may fluctuate significantly over short
periods of time for a number of reasons, including changes in
interest rates, intervention (or the failure to intervene) by
U.S. or foreign governments, central banks or supranational
entities such as the International Monetary Fund, or by the
imposition of currency controls or other political developments
in the U.S. or abroad.
Concentration Concentration of investments in a small number of issuers,
Risk industries or foreign currencies increases risk. Funds such as
the Value 25 Fund that invest in a relatively small number of
issuers are more susceptible to risks associated with a single
economic, political or regulatory occurrence than a more
diversified Fund might be. Some of those issuers also may present
substantial credit or other risks. The International and Precious
Metals Funds may be subject to this risk to the extent that they
concentrate their assets in securities denominated in a
particular foreign currency or in a concentrated geographic area
outside the U.S. Similarly, the Precious Metals Fund is
vulnerable to events adversely affecting the precious metals
industries because it concentrates its assets in those
industries. Based on historical
Prospectus 36
<PAGE>
experience, the prices of precious metals and of securities of
companies engaged in precious metals-related activities may be
subject to extreme fluctuations, reflecting wider economic or
political instability or for other reasons. Also, the Innovation
Fund is vulnerable to events affecting companies which use
innovative technologies to gain a strategic, competitive advantage
in their industry and companies that provide and service those
technologies because it normally concentrates its investments in
those companies.
Leveraging Certain Funds may engage in transactions or purchase instruments
Risk that give rise to forms of leverage. Such transactions and
instruments may include, among others, the use of reverse repurchase
agreements and other borrowings, the investment of collateral from
loans of portfolio securities, or the use of when-issued, delayed-
delivery or forward commitment transactions. The use of derivatives
may also involve leverage. Leverage, including borrowing, will cause
the value of a Fund's shares to be more volatile than if the Fund
did not use leverage. This is because leverage tends to exaggerate
the effect of any increase or decrease in the value of a Fund's
portfolio securities. The use of leverage may also cause a Fund to
liquidate portfolio positions when it would not be advantageous to
do so in order to satisfy its obligations or to meet segregation
requirements.
Interest To the extent that Funds purchase fixed income securities for
Rate Risk investment or defensive purposes, they will be subject to interest
rate risk, a market risk relating to investments in fixed income
securities such as bonds and notes. As interest rates rise, the
value of fixed income securities in a Fund's portfolio are likely to
decrease.
Credit All of the Funds are subject to credit risk. This is the risk that
Risk the issuer or the guarantor of a fixed income security, or the
counterparty to a derivatives contract, repurchase agreement or a
loan of portfolio securities, is unable or unwilling to make timely
principal and/or interest payments, or to otherwise honor its
obligations. Securities are subject to varying degrees of credit
risk, which are often reflected in their credit ratings.
Management Each Fund is subject to management risk because it is an actively
Risk managed investment portfolio. PIMCO Advisors, the Sub-Advisers and
each individual portfolio manager will apply investment techniques
and risk analyses in making investment decisions for the Funds, but
there can be no guarantee that these will produce the desired
results.
Management of the Funds
Investment PIMCO Advisors serves as the investment adviser and the
Adviser administrator (serving in its capacity as administrator, the
and "Administrator") for the Funds. Subject to the supervision of the
Adminis- Board of Trustees, PIMCO Advisors is responsible for managing,
trator either directly or through others selected by it, the investment
activities of the Funds and the Funds' business affairs and other
administrative matters.
PIMCO Advisors is located at 800 Newport Center Drive, Newport
Beach, California 92660. Organized in 1987, PIMCO Advisors provides
investment management and advisory services to private accounts of
institutional and individual clients and to mutual funds. As of
September 30, 1999, PIMCO Advisors and its subsidiary partnerships
had more than $256 billion in assets under management.
PIMCO Advisors has retained investment management firms ("Sub-
Advisers") to manage each Fund's investments, except that the PIMCO
Equity Advisors division of PIMCO Advisors manages the investments
of the Growth, Innovation, Opportunity, Renaissance and Target Funds
(PIMCO Equity Advisors is also referred to as a "Sub-Adviser" in
this capacity). See "Sub-Advisers" below.
PIMCO Advisors has retained its affiliate, Pacific Investment
Management Company, to provide various administrative and other
services required by the Funds in its capacity as sub-administrator.
PIMCO Advisors and the sub-administrator may retain other affiliates
to provide certain of these services.
Advisory Each Fund pays PIMCO Advisors fees in return for providing or Fees
Fees arranging for the provision of investment advisory services. In the
case of Funds for which PIMCO Advisors has retained a separate Sub-
Adviser, PIMCO Advisors (and not the Fund) pays a portion of the
advisory fees it receives to the Sub-Adviser in return for its
services.
37 PIMCO Funds: Multi-Manager Series
<PAGE>
For the fiscal year ended June 30, 1999, the Funds paid monthly
advisory fees to PIMCO Advisors at the following annual rates
(stated as a percentage of the average daily net assets of each
Fund taken separately):
<TABLE>
<CAPTION>
Fund Advisory Fees
----------------------------------------------------------------
<S> <C>
Capital Appreciation, Equity Income, Mid-Cap
Growth and Value Funds 0.45%
Growth Fund 0.50%
International and Target Funds 0.55%
Precious Metals, Renaissance and Small-Cap
Value Funds 0.60%
Innovation and Opportunity Funds 0.65%
Small-Cap Growth Fund 1.00%
</TABLE>
The Tax-Efficient Equity and Value 25 Funds were not operational
during the entire fiscal year ended June 30, 1999. The annual
investment advisory fee rates payable by these Funds are as
follows (stated as a percentage of the average daily net assets of
each Fund taken separately): Tax-Efficient Equity--0.45%; Value
25--0.50%.
Adminis- Each Fund pays for the administrative services it requires under a
trative fee structure which is essentially fixed. Class A, Class B and
Fees Class C shareholders of each Fund pay an administrative fee to
PIMCO Advisors, computed as a percentage of the Fund's assets
attributable in the aggregate to those classes of shares. PIMCO
Advisors, in turn, provides or procures administrative services
for Class A, Class B and Class C shareholders and also bears the
costs of various third-party services required by the Funds,
including audit, custodial, portfolio accounting, legal, transfer
agency and printing costs. The result of this fee structure is an
expense level for Class A, Class B and Class C shareholders of
each Fund that, with limited exceptions, is precise and
predictable under ordinary circumstances.
For the fiscal year ended June 30, 1999, Class A, B and C
shareholders of the Funds paid PIMCO Advisors monthly
administrative fees at the following annual rates (stated as a
percentage of the average daily net assets attributable in the
aggregate to the Fund's Class A, Class B and Class C shares):
<TABLE>
<CAPTION>
Fund Administrative Fees*
-------------------------------------------
<S> <C>
Precious Metals Fund 0.45%
International Fund 0.65%
All Other Funds** 0.40%
</TABLE>
* The Administrative Fee rate for each Fund is subject to a
reduction of 0.05% per year on average daily net assets
attributable in the aggregate to the Fund's Class A, B and C
shares in excess of $2.5 billion.
** The Tax-Efficient Equity and Value 25 Funds were not
operational during the entire fiscal year ended June 30, 1999.
Class A, B and C shareholders of these Funds pay administrative
fees at the annual rate of 0.40% based on average daily net
assets attributable in the aggregate to the Fund's Class A,
Class B and Class C shares up to $2.5 billion, and 0.35% based
on such average daily net assets in excess of $2.5 billion.
Sub- Each Sub-Adviser has full investment discretion and makes all
Advisers determinations with respect to the investment of a Fund's assets.
The following provides summary information about each Sub-Adviser,
including the Fund(s) it manages.
<TABLE>
<CAPTION>
Sub-Adviser* Funds
-------------------------------------------------------------------
<S> <C>
PIMCO Equity Advisors division of Growth, Innovation,
PIMCO Advisors ("PIMCO Equity Opportunity, Renaissance
Advisors") and Target
1345 Avenue of the Americas, 50th
Floor
New York, NY 10105
-------------------------------------------------------------------
Cadence Capital Management Capital Appreciation, Mid-Cap
("Cadence") Growth and Small-Cap
Exchange Place, 53 State Street Growth
Boston, MA 02109
--------------------------------------------------------------------
NFJ Investment Group ("NFJ") Equity Income, Small-Cap Value,
2121 San Jacinto, Suite 1840 Value and Value 25
Dallas, TX 75201
--------------------------------------------------------------------
Parametric Portfolio Associates Tax-Efficient Equity
("Parametric")
7310 Columbia Center, 701 Fifth
Avenue
Seattle, WA 98104
--------------------------------------------------------------------
Blairlogie Capital Management International
("Blairlogie")
4th Floor, 125 Princes Street
Edinburgh EH2 4AD, Scotland
--------------------------------------------------------------------
Van Eck Associates Corporation ("Van Precious Metals
Eck")
99 Park Avenue
New York, NY 10001
</TABLE>
* PIMCO Equity Advisors is a division of PIMCO Advisors. With the
exception of Blairlogie and Van Eck, each of the other Sub-
Advisers is an affiliated sub-partnership of PIMCO Advisors.
Prospectus 38
<PAGE>
The following provides additional information about each Sub-
Adviser and the individual portfolio managers who have or share
primary responsibility for managing the Funds' investments.
PIMCO A division of PIMCO Advisors, PIMCO Equity Advisors provides
Equity equity-related advisory services to mutual funds and institutional
Advisors accounts. See "Investment Adviser and Administrator" above for
additional information about PIMCO Advisors.
The following individuals at PIMCO Equity Advisors have primary
responsibility for the noted Funds. A different sub-advisory firm
served as Sub-Adviser for the Growth, Innovation, Opportunity and
Target Funds prior to March 6, 1999 and for the Renaissance Fund
prior to May 7, 1999.
<TABLE>
<CAPTION>
Fund Portfolio Managers Since Recent Professional Experience
-------------------------------------------------------------------------
<S> <C> <C> <C>
Growth Kenneth W. Corba 1999 Managing Director and Chief
Investment Officer of PIMCO Equity
Advisors and a Member of the
Management Board of PIMCO Advisors.
Prior to joining PIMCO Advisors, he
was with Eagle Asset Management
from 1995 to 1998, serving in
various capacities including as
Chief Investment Officer and
Portfolio Manager. He was with
Stein Roe and Farnham Inc. from
1984 to 1995, serving in various
capacities including as Director of
the Capital Management Group,
Senior Vice President and Portfolio
Manager.
Innovation Dennis P. McKechnie 1998 Portfolio Manager of PIMCO Equity
Advisors. Prior to joining PIMCO
Advisors, he was with Columbus
Circle Investors from 1991 to 1999,
where he managed equity accounts
and served in various capacities
including as Portfolio Manager for
the Innovation Fund.
Opportunity Michael F. Gaffney 1999 Managing Director of PIMCO Equity
Advisors, where he manages the
Opportunity Fund and other small-
cap products. Prior to joining
PIMCO Advisors, he was with
Alliance Capital Management L.P.
from 1993 to 1999, serving in
various capacities including as
Senior Vice President and Portfolio
Manager.
Renaissance John K. Schneider 1999 Senior Portfolio Manager of PIMCO
Equity Advisors. Prior to joining
PIMCO Advisors, he was a partner
and Portfolio Manager of Schneider
Capital Management from 1996 to
1999, where he managed equity
accounts for various institutional
clients. Prior to that he was a
member of the Equity Policy
Committee and Director of Research
at Newbold's Asset Management from
1991 to 1996.
Target Mr. Corba 1999 See above.
Jeff Parker 1999 Assistant Portfolio Manager and
Research Analyst for PIMCO Equity
Advisors. Prior to joining PIMCO
Equity Advisors, he managed equity
accounts as an Assistant Portfolio
Manager at Eagle Asset Management
from 1996 to 1998. He was a Senior
Consultant with Andersen
Consulting, specializing in
healthcare and technology, from
1991 to 1994.
</TABLE>
Cadence An affiliated subpartnership of PIMCO Advisors, Cadence provides
advisory services to mutual funds and institutional accounts.
Cadence Capital Management Corporation, the predecessor investment
adviser to Cadence, commenced operations in 1988. Accounts managed
by Cadence had combined assets as of September 30, 1999 of
approximately $6.5 billion.
The following individuals at Cadence share primary responsibility
for each of the noted Funds.
<TABLE>
<CAPTION>
Recent Professional
Fund Portfolio Managers Since Experience
---------------------------------------------------------------------------------
<S> <C> <C> <C>
Capital Appreciation David B. Breed 1991 (Inception) Managing Director, Chief
Executive Officer, Chief
Investment Officer and
founding partner of
Cadence. Member of the
Management Board of
PIMCO Advisors. He is a
research generalist and
has lead the team of
portfolio managers and
analysts since 1988.
Mr. Breed has managed
separate equity accounts
for many institutional
clients and has lead the
team that manages the
PIMCO Funds sub-advised
by Cadence since those
Funds' inception dates.
William B. Bannick 1992 Managing Director and
Executive Vice President
at Cadence. Mr. Bannick
is a research generalist
and Senior Portfolio
Manager for the Cadence
team. He has managed
separately managed
equity accounts for
various Cadence
institutional clients
and has been a member of
the team that manages
the PIMCO Funds sub-
advised by Cadence since
joining Cadence in 1992.
</TABLE>
39 PIMCO Funds: Multi-Manager Series
<PAGE>
<TABLE>
<CAPTION>
Fund Portfolio Managers Since Recent Professional Experience (cont.)
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Katherine A. Burdon 1993 Managing Director and Senior Portfolio Manager
at Cadence. Ms. Burdon is a research generalist
and has managed separately managed equity
accounts for various Cadence institutional
clients and has been a member of the team that
manages the PIMCO Funds sub-advised by Cadence
since joining Cadence in 1993.
Peter B. McManus 1994 Director, Account Management at Cadence. He has
been a member of the investment team at Cadence
and handles client relationships of separately
managed accounts, and has been a member of the
team that manages the PIMCO Funds sub-advised by
Cadence since joining Cadence in 1994.
Previously, he served as a Vice President of Bank
of Boston from 1991 to 1994.
Mid-Cap Growth Messrs. Breed, Bannick and Same as Capital See above.
McManus and Ms. Burdon Appreciation Fund
Small-Cap Growth Messrs. Breed, Bannick and Same as Capital See above.
McManus and Ms. Burdon Appreciation Fund
</TABLE>
NFJ An affiliated sub-partnership of PIMCO Advisors, NFJ provides
advisory services to mutual funds and institutional accounts. NFJ
Investment Group, Inc., the predecessor investment adviser to NFJ,
commenced operations in 1989. Accounts managed by NFJ had combined
assets as of September 30, 1999 of approximately $2.2 billion.
The following individuals at NFJ share primary responsibility for
the noted Funds.
<TABLE>
<CAPTION>
Fund Portfolio Managers Since Recent Professional Experience
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Equity Income Chris Najork 1991 (Inception) Managing Director and founding partner of NFJ.
He has 30 years" experience encompassing equity
research and portfolio management. Prior to the
formation of NFJ in 1989, he was a Senior Vice
President, Senior Portfolio Manager and analyst
at NationsBank, which he joined in 1974.
Benjamin J. Fischer 1991 (Inception) Managing Director and founding partner of NFJ. He
has 32 years' experience in portfolio management,
investment analysis and research. Prior to the
formation of NFJ in 1989, he was Chief Investment
Officer (institutional and fixed income), Senior
Vice President and Senior Portfolio Manager at
NationsBank, which he joined in 1971. Prior to
joining NationsBank, Mr. Fischer was a securities
analyst at Chase Manhattan Bank and Clark, Dodge.
Small-Cap Value Messrs. Najork and Fischer 1991 (Inception) See above.
Paul A. Magnuson 1995 Principal at NFJ. He is a Portfolio Manager and
Senior Research Analyst with 14 years'
experience in equity analysis and portfolio
management. Prior to joining NFJ in 1992, he was
an Assistant Vice President at NationsBank, which
he joined in 1985. Within the Trust Investment
Quantitative Services Division of NationsBank, he
was responsible for equity analytics and
structured fund management.
Value 25 Messrs. Najork and Fischer 1998 (Inception) See above.
E. Clifton Hoover, Jr. 1998 (Inception) Principal at NFJ. He is a Portfolio Manager with
13 years' experience in financial analysis and
portfolio management. Prior to joining NFJ in
1997, he was associated with Credit Lyonnais
from 1991 to 1997, where he served as a Vice
President and was responsible for the financial
analysis and portfolio management of a
diversified portfolio. He began his career as a
financial analyst with NationsBank in 1985.
Value Messrs. Najork and Fischer 1991 (Inception) See above.
Mr. Magnuson 1995 See above.
</TABLE>
Parametric An affiliated sub-partnership of PIMCO Advisors, Parametric provides
advisory services to mutual funds and institutional accounts.
Parametric Portfolio Associates, Inc., the predecessor investment
adviser to Parametric, commenced operations in 1987. Accounts
managed by Parametric had combined assets as of September 30, 1999
of approximately $3.9 billion.
Prospectus 40
<PAGE>
The following individuals at Parametric share primary
responsibility for the Tax-Efficient Equity Fund.
<TABLE>
<CAPTION>
Fund Portfolio Managers Since Recent Professional Experience
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Tax-Efficient David Stein 1998 (Inception) Managing Director of Parametric. He also serves as a Senior
Equity Portfolio Manager of PIMCO Equity Advisors. He has been with
Parametric since 1996 where he leads the investment, research and
product development activities. Previously, he served in
Investment Research at GTE Corporation from 1995 to 1996, in
Equity Research at Vanguard Group from 1994 to 1995 and in
Investment Research at IBM Corporation from 1977 to 1994.
Tom Seto 1998 (Inception) Vice President and Portfolio Manager of Parametric. Since
joining Parametric in 1998, he has been responsible for
management of Parametric's active U.S. equity strategies and
has managed structured equity portfolios. Previously, he was
with Barclays Global Investors from 1991 to 1998, serving in
various capacities including as head of U.S. Equity Index
Investments and Portfolio Manager.
</TABLE>
Blairlogie Blairlogie provides advisory services to mutual funds and
institutional accounts. Blairlogie Capital Management Ltd., the
predecessor investment adviser the Blairlogie, commenced operations
in 1992. Accounts managed by Blairlogie had combined assets as of
September 30, 1999 of approximately $903 million.
Blairlogie is an indirect majority-owned subsidiary of the
Alleghany Corporation, and is not an affiliate of PIMCO Advisors.
Blairlogie was formerly an affiliated sub-partnership of PIMCO
Advisors. On April 30, 1999, PIMCO Advisors sold all of its
ownership interest in Blairlogie to subsidiaries of the Alleghany
Corporation. PIMCO Advisors retained Blairlogie as the Sub-Adviser
of the International Fund both prior and subsequent to this
transaction.
The following individual at Blairlogie has primary responsibility
for the International Fund.
<TABLE>
<CAPTION>
Fund Portfolio Manager Since Recent Professional Experience
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
International James Smith 1994 Chief Investment Officer of Blairlogie since 1992, responsible
for setting investment policy, asset allocation, managing the
investment team and stock selection in Latin America.
</TABLE>
Van Eck Van Eck provides advisory services to mutual funds and institutional
accounts. Van Eck commenced operations in 1955. Accounts managed by
Van Eck had combined assets as of September 30, 1999 of
approximately $1.2 billion. Van Eck is an independent management
firm and is not an affiliate of PIMCO Advisors.
The following individual at Van Eck has primary responsibility
for the Precious Metals Fund.
<TABLE>
<CAPTION>
Fund Portfolio Manager Since Recent Professional Experience
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Precious Metals Henry J. Bingham 1988 (Inception) Executive Managing Director of Van Eck. He is a Portfolio
Manager for several private/institutional gold-oriented accounts
managed by Van Eck. Mr. Bingham has over thirty years'
experience in investment analysis and management and has been
with Van Eck Global since 1984.
</TABLE>
Distributor The Trust's Distributor is PIMCO Funds Distributors LLC, a wholly
owned subsidiary of PIMCO Advisors. The Distributor, located at
2187 Atlantic Street, Stanford, CT 06902, is a broker-dealer
registered with the Securities and Exchange Commission.
41 PIMCO Funds: Multi-Manager Series
<PAGE>
Investment Options -- Class A, B and C Shares
The Trust offers investors Class A, Class B and Class C shares of
each Fund in this Prospectus. Each class of shares is subject to
different types and levels of sales charges than the other classes
and bears a different level of expenses.
The class of shares that is best for you depends upon a number of
factors, including the amount and the intended length of your
investment. The following summarizes key information about each
class to help you make your investment decision, including the
various expenses associated with each class. More extensive
information about the Trust's multi-class arrangements is included
in the PIMCO Funds Shareholders' Guide for Class A, B and C Shares
(the "Guide"), which is included as part of the Statement of
Additional Information and can be obtained free of charge from the
Distributor. See "How to Buy and Sell Shares--PIMCO Funds
Shareholders' Guide" below.
Class A . You pay an initial sales charge of up to 5.50% when you buy
Shares Class A shares. The sales charge is deducted from your
investment so that not all of your purchase payment is invested.
. You may be eligible for a reduction or a complete waiver of the
initial sales charge under a number of circumstances. For example,
you normally pay no sales charge if you purchase $1,000,000 or
more of Class A shares. Please see the Guide for details.
. Class A shares are subject to lower 12b-1 fees than Class B or
Class C shares. Therefore, Class A shareholders generally pay
lower annual expenses and receive higher dividends than Class B
or Class C shareholders.
. You normally pay no contingent deferred sales charge ("CDSC") when
you redeem Class A shares, although you may pay a 1% CDSC if you
purchase $1,000,000 or more of Class A shares (and therefore pay
no initial sales charge) and then redeem the shares during the
first 18 months after your initial purchase. The Class A CDSC is
waived for certain categories of investors and does not apply if
you are otherwise eligible to purchase Class A shares without a
sales charge. Please see the Guide for details.
Class B . You do not pay an initial sales charge when you buy Class B
Shares shares. The full amount of your purchase payment is invested
initially.
. You normally pay a CDSC of up to 5% if you redeem Class B shares
during the first six years after your initial purchase. The
amount of the CDSC declines the longer you hold your Class B
shares. You pay no CDSC if you redeem during the seventh year
and thereafter. The Class B CDSC is waived for certain categories
of investors. Please see the Guide for details.
. Class B shares are subject to higher 12b-1 fees than Class A
shares for the first seven years they are held. During this
time, Class B shareholders normally pay higher annual expenses
and receive lower dividends than Class A shareholders.
. Class B shares automatically convert into Class A shares after
they have been held for seven years. After the conversion takes
place, the shares are subject to the lower 12b-1 fees paid by
Class A shares.
Class C . You do not pay an initial sales charge when you buy Class C
Shares shares. The full amount of your purchase payment is invested
initially.
. You normally pay a CDSC of 1% if you redeem Class C shares
during the first year after your initial purchase. The Class C
CDSC is waived for certain categories of investors. Please see
the Guide for details.
. Class C shares are subject to higher 12b-1 fees than Class A
shares. Therefore, Class C shareholders normally pay higher
annual expenses and receive lower dividends than Class A
shareholders.
. Class C shares do not convert into any other class of shares.
Because Class B shares convert into Class A shares after seven
years, Class C shares will normally be subject to higher
expenses and will pay lower dividends than Class B shares if the
shares are held for more than seven years.
The following provides additional information about the sales
charges and other expenses associated with Class A, Class B and
Class C shares.
- --------------------------------------------------------------------------------
Initial Unless you are eligible for a waiver, the public offering price
Sales you pay when you buy Class A shares of the Funds is the net asset
Charges-- value ("NAV") of the shares plus an initial sales charge. The
Class A initial sales charge varies depending upon the size of your
Shares purchase, as set forth below. No sales charge is imposed where
Class A shares are issued to you pursuant to the automatic
reinvestment of income dividends or capital gains distributions.
Prospectus 42
<PAGE>
All Funds
---------
Initial Sales Charge Initial Sales Charge
Amount of as % of Net as % of Public
Purchase Amount Invested Offering Price
-------------------------------------------------------------------
$0-$49,999 5.82% 5.50%
-------------------------------------------------------------------
$50,000-$99,999 4.71% 4.50%
-------------------------------------------------------------------
$100,000-$249,999 3.63% 3.50%
-------------------------------------------------------------------
$250,000-$499,999 2.56% 2.50%
-------------------------------------------------------------------
$500,000-$999,999 2.04% 2.00%
-------------------------------------------------------------------
$1,000,000 + 0.00%* 0.00%*
-------------------------------------------------------------------
*As shown, investors that purchase $1,000,000 or more of any
Fund's Class A shares will not pay any initial sales charge on the
purchase. However, purchasers of $1,000,000 or more of Class A
shares may be subject to a CDSC of 1% if the shares are redeemed
during the first 18 months after their purchase. See "CDSCs on
Class A Shares" below.
- -------------------------------------------------------------------------------
Contingent Unless you are eligible for a waiver, if you sell (redeem) your
Deferred Class B or Class C shares within the time periods specified below,
Sales you will pay a CDSC according to the following schedules.
Charges
(CDSCs)
- -- Class
B and
Class C
Shares
Class B Years Since Purchase Percentage Contingent
Shares Payment was Made Deferred Sales Charge
-------------------------------------------------------------------
First 5
-------------------------------------------------------------------
Second 4
-------------------------------------------------------------------
Third 3
-------------------------------------------------------------------
Fourth 3
-------------------------------------------------------------------
Fifth 2
-------------------------------------------------------------------
Sixth 1
-------------------------------------------------------------------
Seventh 0*
-------------------------------------------------------------------
*After the seventh year, Class B shares convert into Class A
shares.
Class C Years Since Purchase Percentage Contingent
Shares Payment was Made Deferred Sales Charge
-------------------------------------------------------------------
First 1
-------------------------------------------------------------------
Thereafter 0
-------------------------------------------------------------------
- --------------------------------------------------------------------------------
CDSCs on Unless a waiver applies, investors who purchase $1,000,000 or more
Class A of Class A shares (and, thus, pay no initial sales charge) will be
Shares subject to a 1% CDSC if the shares are redeemed within 18 months
of their purchase. The Class A CDSC does not apply if you are
otherwise eligible to purchase Class A shares without an initial
sales charge or if you are eligible for a waiver of the CDSC. See
"Reductions and Waivers of Initial Sales Charges and CDSCs" below.
- --------------------------------------------------------------------------------
How CDSCs A CDSC is imposed on redemptions of Class B and Class C shares
are (and where applicable, Class A shares) on the amount of the
Calculated redemption which causes the current value of your account for the
particular class of shares of a Fund to fall below the total
dollar amount of your purchase payments subject to the CDSC.
However, no CDSC is imposed if the shares redeemed have been
acquired through the reinvestment of dividends or capital gains
distributions or if the amount redeemed is derived from increases
in the value of your account above the amount of the purchase
payments subject to the CDSC. CDSCs are deducted from the proceeds
of your redemption, not from amounts remaining in your account. In
determining whether a CDSC is payable, it is assumed that the
purchase payment from which the redemption is made is the earliest
purchase payment for the particular class of shares in your
account (from which a redemption or exchange has not already been
effected).
For instance, the following example illustrates the operation of
the Class B CDSC:
. Assume that an individual opens an account and makes a purchase
payment of $10,000 for Class B shares of a Fund and that six
months later the value of the investor's account for that Fund
has grown through investment performance and reinvestment of
distributions to $11,000. The investor then may redeem up to
$1,000 from that Fund ($11,000 minus $10,000) without incurring
a CDSC. If the investor should redeem $3,000, a CDSC would be
imposed on $2,000 of the redemption (the amount by which the
investor's account for the Fund was reduced below the amount of
the purchase payment). At the rate of 5%, the Class B CDSC would
be $100.
43 PIMCO Funds: Multi-Manager Series
<PAGE>
In determining whether an amount is available for redemption
without incurring a CDSC, the purchase payments made for all
shares of a particular class of a Fund in the shareholder's
account are aggregated, and the current value of all such shares
is aggregated.
- --------------------------------------------------------------------------------
Reductions The initial sales charges on Class A shares and the CDSCs on Class
and A, Class B and Class C shares may be reduced or waived under
Waivers certain purchase arrangements and for certain categories of
of investors. Please see the Guide for details. The Guide is
Initial available free of charge from the Distributor. See "How to Buy and
Sales Sell Shares--PIMCO Funds Shareholders' Guide" below.
Charges
and CDSCs
- --------------------------------------------------------------------------------
Distri The Funds pay fees to the Distributor on an ongoing basis as
bution compensation for the services the Distributor renders and the
and expenses it bears in connection with the sale and distribution of
Servicing Fund shares ("distribution fees") and/or in connection with
(12b-1) personal services rendered to Fund shareholders and the
Plans maintenance of shareholder accounts ("servicing fees"). These
payments are made pursuant to Distribution and Servicing Plans
("12b-1 Plans") adopted by each Fund pursuant to Rule 12b-1 under
the Investment Company Act of 1940.
There is a separate 12b-1 Plan for each class of shares offered
in this Prospectus. Class A shares pay only servicing fees. Class
B and Class C shares pay both distribution and servicing fees. The
following lists the maximum annual rates at which the distribution
and/or servicing fees may be paid under each 12b-1 Plan
(calculated as a percentage of each Fund's average daily net
assets attributable to the particular class of shares):
<TABLE>
<CAPTION>
Servicing Distribution
All Funds Fee Fee
----------------------------------------------------------------------------------
<S> <C> <C>
Class A 0.25% None
----------------------------------------------------------------------------------
Class B 0.25% 0.75%
----------------------------------------------------------------------------------
Class C 0.25% 0.75%
----------------------------------------------------------------------------------
</TABLE>
Because 12b-1 fees are paid out of a Fund's assets on an ongoing
basis, over time these fees will increase the cost of your
investment and may cost you more than sales charges which are
deducted at the time of investment. Therefore, although Class B
and Class C shares do not pay initial sales charges, the
distribution fees payable on Class B and Class C shares may, over
time, cost you more than the initial sales charge imposed on Class
A shares. Also, because Class B shares convert into Class A shares
after they have been held for seven years and are not subject to
distribution fees after the conversion, an investment in Class C
shares may cost you more over time than an investment in Class B
shares.
How Fund Shares Are Priced
The net asset value ("NAV") of a Fund's Class A, Class B and Class
C shares is determined by dividing the total value of a Fund's
portfolio investments and other assets attributable to that class,
less any liabilities, by the total number of shares outstanding of
that class.
For purposes of calculating the NAV, portfolio securities and
other assets for which market quotes are available are stated at
market value. Market value is generally determined on the basis of
last reported sales prices, or if no sales are reported, based on
quotes obtained from a quotation reporting system, established
market makers, or pricing services. Certain securities or
investments for which daily market quotes are not readily
available may be valued, pursuant to guidelines established by the
Board of Trustees, with reference to other securities or indices.
Short-term investments having a maturity of 60 days or less are
generally valued at amortized cost. Exchange traded options,
futures and options on futures are valued at the settlement price
determined by the exchange. Other securities for which market
quotes are not readily available are valued at fair value as
determined in good faith by the Board of Trustees or persons
acting at their direction.
Investments initially valued in currencies other than the U.S.
dollar are converted to U.S. dollars using exchange rates obtained
from pricing services. As a result, the NAV of a Fund's shares may
be affected by changes in the value of currencies in relation to
the U.S. dollar. The value of securities traded in markets outside
the United States or denominated in currencies other than the U.S.
dollar may be affected significantly on a day that the New York
Stock Exchange is closed and an investor is not able to purchase,
redeem or exchange shares. In particular, calculation of the NAV
of the International and Precious Metals Funds may not take place
contemporaneously with the determination of the prices of foreign
securities used in NAV calculations.
Prospectus 44
<PAGE>
Fund shares are valued at the close of regular trading (normally
4:00 p.m., Eastern time) (the "NYSE Close") on each day that the
New York Stock Exchange is open. For purposes of calculating the
NAV, the Funds normally use pricing data for domestic equity
securities received shortly after the NYSE Close and do not
normally take into account trading, clearances or settlements that
take place after the NYSE Close. Domestic fixed income and foreign
securities are normally priced using data reflecting the earlier
closing of the principal markets for those securities. Information
that becomes known to the Funds or their agents after the NAV has
been calculated on a particular day will not generally be used to
retroactively adjust the price of a security or the NAV determined
earlier that day.
In unusual circumstances, instead of valuing securities in the
usual manner, the Funds may value securities at fair value or
estimate their value as determined in good faith by the Board of
Trustees, generally based upon recommendations provided by PIMCO
Advisors and/or the relevant Sub-Adviser. Fair valuation may also
be used by the Board of Trustees if extraordinary events occur
after the close of the relevant market but prior to the NYSE
Close.
How to Buy and Sell Shares
The following section provides basic information about how to buy,
sell (redeem) and exchange shares of the Funds.
PIMCO More detailed information about the Trust's purchase, sale and
Funds exchange arrangements for Fund shares is provided in the PIMCO
Share- Funds Shareholders' Guide, which is included in the Statement of
holders' Additional Information and can be obtained free of charge from the
Guide Distributor by written request or by calling 1-800-426-0107. The
Guide provides technical information about the basic arrangements
described below and also describes special purchase, sale and
exchange features and programs offered by the Trust, including:
. Automated telephone and wire transfer procedures
. Automatic purchase, exchange and withdrawal programs
. Programs that establish a link from your Fund account to your
bank account
. Special arrangements for tax-qualified retirement plans
. Investment programs which allow you to reduce or eliminate the
initial sales charges on Class A shares
. Categories of investors that are eligible for waivers or
reductions of initial sales charges and CDSCs
Calculation When you buy shares of the Funds, you pay a price equal to the NAV
of Share of the shares, plus any applicable sales charge. When you sell
Price and (redeem) shares, you receive an amount equal to the NAV of the
Redemption shares, minus any applicable CDSC. NAVs are determined at the
Payments close of regular trading (normally, 4:00 p.m., Eastern time) on
the New York Stock Exchange on each day the New York Stock
Exchange is open. See "How Fund Shares Are Priced" above for
details. Generally, purchase and redemption orders for Fund shares
are processed at the NAV next calculated after your order is
received by the Distributor. There are certain exceptions where an
order is received by a broker or dealer prior to the close of
regular trading on the New York Stock Exchange and then
transmitted to the Distributor after the NAV has been calculated
for that day (in which case the order may be processed at that
day's NAV). Please see the Guide for details.
The Trust does not calculate NAVs or process orders on days when
the New York Stock Exchange is closed. If your purchase or
redemption order is received by the Distributor on a day when the
New York Stock Exchange is closed, it will be processed on the
next succeeding day when the New York Stock Exchange is open (at
the succeeding day's NAV).
Buying You can buy Class A, Class B or Class C shares of the Funds in the
Shares following ways:
. Through your broker, dealer or other financial intermediary.
Your broker, dealer or other intermediary may establish higher
minimum investment requirements than the Trust and may also
independently charge you transaction fees and additional
amounts (which may vary) in return for its services, which will
reduce your return. Shares you purchase through your broker,
dealer or other intermediary will normally be held in your
account with that firm.
45 PIMCO Funds: Multi-Manager Series
<PAGE>
. Directly from the Trust. To make direct investments, you must
open an account with the Distributor and send payment for your
shares either by mail or through a variety of other purchase
options and plans offered by the Trust.
If you wish to invest directly by mail, please send a check
payable to PIMCO Funds Distributors LLC, along with a completed
application form to:
PIMCO Funds Distributors LLC
P.O. Box 9688
Providence, RI 02940-0926
The Trust accepts all purchases by mail subject to collection of
checks at full value and conversion into federal funds. You may
make subsequent purchases by mailing a check to the address above
with a letter describing the investment or with the additional
investment portion of a confirmation statement. Checks for
subsequent purchases should be payable to PIMCO Funds Distributors
LLC and should clearly indicate your account number. Please call
the Distributor at 1-800-426-0107 if you have any questions
regarding purchases by mail.
The Guide describes a number of additional ways you can make
direct investments, including through the PIMCO Funds Auto-Invest
and PIMCO Funds Fund Link programs. You can obtain a Guide free of
charge from the Distributor by written request or by calling
1-800-426-0107. See "PIMCO Funds Shareholders' Guide" above.
The Distributor, in its sole discretion, may accept or reject any
order for purchase of Fund shares. No share certificates will be
issued unless specifically requested in writing.
Investment The following investment minimums apply for purchases of Class A,
Minimums Class B and Class C shares.
<TABLE>
<CAPTION>
Initial Investment Subsequent Investments
------------------ ----------------------
<S> <C>
$2,500 per Fund $100 per Fund
</TABLE>
Lower minimums may apply for certain categories of investors,
including certain tax-qualified retirement plans, and for special
investment programs and plans offered by the Trust, such as the
PIMCO Funds Auto-Invest and PIMCO Funds Fund Link programs. Please
see the Guide for details.
Small Because of the disproportionately high costs of servicing accounts
Account with low balances, if you have a direct account with the
Fee Distributor, you will be charged a fee at the annual rate of $16
if your account balance for any Fund falls below a minimum level
of $2,500. However, you will not be charged this fee if the
aggregate value of all of your PIMCO Funds accounts is at least
$50,000. Any applicable small account fee will be deducted
automatically from your below-minimum Fund account in quarterly
installments and paid to the Administrator. Each Fund account will
normally be valued, and any deduction taken, during the last five
business days of each calendar quarter. Lower minimum balance
requirements and waivers of the small account fee apply for
certain categories of investors. Please see the Guide for details.
Minimum Due to the relatively high cost to the Funds of maintaining small
Account accounts, you are asked to maintain an account balance in each
Size Fund in which you invest of at least the minimum investment
necessary to open the particular type of account. If your balance
for any Fund remains below the minimum for three months or longer,
the Administrator has the right (except in the case of employer-
sponsored retirement accounts) to redeem your remaining shares and
close that Fund account after giving you 60 days to increase your
balance. Your Fund account will not be liquidated if the reduction
in size is due solely to a decline in market value of your Fund
shares or if the aggregate value of all your PIMCO Funds accounts
exceeds $50,000.
Exchanging You may exchange your Class A, Class B or Class C shares of any
Shares Fund for the same Class of shares of any other Fund or of another
series of the Trust or PIMCO Funds: Pacific Investment Management
Series. Shares are exchanged on the basis of their respective NAVs
next calculated after your exchange order is received by the
Distributor. Currently, the Trust does not charge any exchange
fees or charges. Exchanges are subject to the $2,500 minimum
initial purchase requirements for each Fund, except with respect
to tax-qualified programs and exchanges effected through the PIMCO
Funds Auto-Exchange plan. In addition, an exchange is generally a
taxable event which will generate capital gains or losses, and
special rules may apply in computing tax basis when determining
gain or loss. If you maintain your account with the Distributor,
you may exchange shares by completing a written exchange request
and sending it to PIMCO Funds Distributors LLC, P.O. Box 9688,
Providence, RI 02940-0926. You can get an exchange form by calling
the Distributor at 1-800-426-0107.
Prospectus 46
<PAGE>
The Trust reserves the right to refuse exchange purchases if, in
the judgment of PIMCO Advisors, the purchase would adversely
affect a Fund and its shareholders. In particular, a pattern of
exchanges characteristic of "market-timing" strategies may be
deemed by PIMCO Advisors to be detrimental to the Trust or a
particular Fund. Currently, the Trust limits the number of "round
trip" exchanges an investor may make. An investor makes a "round
trip" exchange when the investor purchases shares of a particular
Fund, subsequently exchanges those shares for shares of a
different PIMCO Fund and then exchanges back into the originally
purchased Fund. The Trust has the right to refuse any exchange for
any investor who completes (by making the exchange back into the
shares of the originally purchased Fund) more than six round trip
exchanges in any twelve-month period. Although the Trust has no
current intention of terminating or modifying the exchange
privilege other than as set forth in the preceeding sentence, it
reserves the right to do so at any time. Except as otherwise
permitted by the Securities and Exchange Commission, the Trust
will give you 60 days' advance notice if it exercises its right to
terminate or materially modify the exchange privilege with respect
to Class A, B and C shares.
The Guide provides more detailed information about the exchange
privilege, including the procedures you must follow and additional
exchange options. You can obtain a Guide free of charge from the
Distributor by written request or by calling 1-800-426-0107. See
"PIMCO Funds Shareholders' Guide" above.
Selling You can sell (redeem) Class A, Class B or Class C shares of the
Shares Funds in the following ways:
. Through your broker, dealer or other financial intermediary.
Your broker, dealer or other intermediary may independently charge
you transaction fees and additional amounts (which may vary) in
return for its services, which will reduce your return.
. Directly from the Trust by Written Request. To redeem shares
directly from the Trust by written request (whether or not the
shares are represented by certificates), you must send the
following items to the Trust's Transfer Agent, First Data Investor
Services Group, Inc., P.O. Box 9688, Providence, RI 02940-0926:
(1) a written request for redemption signed by all registered
owners exactly as the account is registered on the Transfer
Agent's records, including fiduciary titles, if any, and
specifying the account number and the dollar amount or number of
shares to be redeemed;
(2) for certain redemptions described below, a guarantee of all
signatures on the written request or on the share certificate or
accompanying stock power, if required, as described under
"Signature Guarantee" below;
(3) any share certificates issued for any of the shares to be
redeemed (see "Certificated Shares" below); and
(4) any additional documents which may be required by the
Transfer Agent for redemption by corporations, partnerships or
other organizations, executors, administrators, trustees,
custodians or guardians, or if the redemption is requested by
anyone other than the shareholder(s) of record. Transfers of
shares are subject to the same requirements.
A signature guarantee is not required for redemptions requested
by and payable to all shareholders of record for the account, and
to be sent to the address of record for that account. To avoid
delay in redemption or transfer, if you have any questions about
these requirements you should contact the Transfer Agent in
writing or call 1-800-426-0107 before submitting a request.
Written redemption or transfer requests will not be honored until
all required documents in the proper form have been received by
the Transfer Agent. You can not redeem your shares by written
request to the Trust if they are held in broker "street name"
accounts--you must redeem through your broker.
If the proceeds of your redemption (i) are to be paid to a person
other than the record owner, (ii) are to be sent to an address
other than the address of the account on the Transfer Agent's
records, and/or (iii) are to be paid to a corporation,
partnership, trust or fiduciary, the signature(s) on the
redemption request and on the certificates, if any, or stock power
must be guaranteed as described under "Signature Guarantee" below.
The Distributor may, however, waive the signature guarantee
requirement for redemptions up to $2,500 by a trustee of a
qualified retirement plan, the administrator for which has an
agreement with the Distributor.
The Guide describes a number of additional ways you can redeem
your shares, including:
. Telephone requests to the Transfer Agent
. PIMCO Funds Automated Telephone System (ATS)
. Expedited wire transfers
. Automatic Withdrawal Plan
. PIMCO Funds Fund Link
47 PIMCO Funds: Multi-Manager Series
<PAGE>
Unless you specifically elect otherwise, your initial account
application permits you to redeem shares by telephone subject to
certain requirements. To be eligible for ATS, expedited wire
transfer, Automatic Withdrawal Plan, and Fund Link privileges, you
must specifically elect the particular option on your account
application and satisfy certain other requirements. The Guide
describes each of these options and provides additional
information about selling shares. You can obtain a Guide free of
charge from the Distributor by written request or by calling
1-800-426-0107.
Other than an applicable CDSC, you will not pay any special fees
or charges to the Trust or the Distributor when you sell your
shares. However, if you sell your shares through your broker,
dealer or other financial intermediary, that firm may charge you a
commission or other fee for processing your redemption request.
Redemptions of Fund shares may be suspended when trading on the
New York Stock Exchange is restricted or during an emergency which
makes it impracticable for the Funds to dispose of their
securities or to determine fairly the value of their net assets,
or during any other period as permitted by the Securities and
Exchange Commission for the protection of investors.
Timing of Redemption proceeds will normally be mailed to the redeeming
Redemption shareholder within seven calendar days or, in the case of wire
Payments transfer or Fund Link redemptions, sent to the designated bank
account within one business day. Fund Link redemptions may be
received by the bank on the second or third business day. In cases
where shares have recently been purchased by personal check,
redemption proceeds may be withheld until the check has been
collected, which may take up to 15 days. To avoid such
withholding, investors should purchase shares by certified or bank
check or by wire transfer. Under unusual circumstances, the Trust
may delay your redemption payments for more than seven days, as
permitted by law.
Redemptions The Trust had agreed to redeem shares of each Fund solely in cash
In Kind up to the lesser of $250,000 or 1% of the Fund's net assets during
any 90-day period for any one shareholder. In consideration of the
best interests of the remaining shareholders, the Trust may pay
any redemption proceeds exceeding this amount in whole or in part
by a distribution in kind of securities held by a Fund in lieu of
cash. Except for Funds with a tax-efficient management strategy,
it is highly unlikely that your shares would ever be redeemed in
kind. If your shares are redeemed in kind, you should expect to
incur transaction costs upon the disposition of the securities
received in the distribution.
Certifi- If you are redeeming shares for which certificates have been
cated issued, the certificates must be mailed to or deposited with the
Shares Trust, duly endorsed or accompanied by a duly endorsed stock power
or by a written request for redemption. Signatures must be
guaranteed as described under "Signature Guarantee" below. The
Trust may request further documentation from institutions or
fiduciary accounts, such as corporations, custodians (e.g., under
the Uniform Gifts to Minors Act), executors, administrators,
trustees or guardians. Your redemption request and stock power
must be signed exactly as the account is registered, including
indication of any special capacity of the registered owner.
Signature When a signature guarantee is called for, you should have
Guarantee "Signature Guaranteed" stamped under your signature and guaranteed
by any of the following entities: U.S. banks, foreign banks having
a U.S. correspondent bank, credit unions, savings associations,
U.S. registered dealers and brokers, municipal securities dealers
and brokers, government securities dealers and brokers, national
securities exchanges, registered securities associations and
clearing agencies (each an "Eligible Guarantor Institution"). The
Distributor reserves the right to reject any signature guarantee
pursuant to its written signature guarantee standards or
procedures, which may be revised in the future to permit it to
reject signature guarantees from Eligible Guarantor Institutions
that do not, based on credit guidelines, satisfy such written
standards or procedures. The Trust may change the signature
guarantee requirements from time to time upon notice to
shareholders, which may be given by means of a new or supplemented
Prospectus.
Fund Distributions
Each Fund distributes substantially all of its net investment
income to shareholders in the form of dividends. You begin earning
dividends on Fund shares the day after the Trust receives your
purchase payment. Dividends paid by each Fund with respect to each
class of shares are calculated in the same manner and at the same
time, but dividends on Class B and Class C shares are expected to
be lower
Prospectus 48
<PAGE>
than dividends on Class A shares as a result of the distribution
fees applicable to Class B and Class C shares. The following shows
when each Fund intends to declare and distribute income dividends
to shareholders of record.
<TABLE>
<CAPTION>
Fund At Least Annually Quarterly
-------------------------------------------------------------
<S> <C> <C>
Equity Income, Renaissance and .
Value Funds
-------------------------------------------------------------
All other Funds .
-------------------------------------------------------------
</TABLE>
In addition, each Fund distributes any net capital gains it earns
from the sale of portfolio securities to shareholders no less
frequently than annually. Net short-term capital gains may be paid
more frequently.
You can choose from the following distribution options:
. Reinvest all distributions in additional shares of the same
class of your Fund at NAV. This will be done unless you elect
another option.
. Invest all distributions in shares of the same class of any
other Fund or another series of the Trust or PIMCO Funds:
Pacific Investment Management Series which offers that class at
NAV. You must have an account existing in the Fund or series
selected for investment with the identical registered name. You
must elect this option on your account application or by a
telephone request to the Transfer Agent at 1-800-426-0107.
. Receive all distributions in cash (either paid directly to you
or credited to your account with your broker or other financial
intermediary). You must elect this option on your account
application or by a telephone request to the Transfer Agent at
1-800-426-0107.
You do not pay any sales charges on shares you receive through
the reinvestment of Fund distributions.
If you elect to receive Fund distributions in cash and the postal
or other delivery service is unable to deliver checks to your
address of record, the Trust's Transfer Agent will hold the
returned checks for your benefit in a non-interest bearing
account.
For further information on distribution options, please contact
your broker or call the Distributor at 1-800-426-0107.
Tax Consequences
. Taxes on Fund distributions. If you are subject to U.S. federal
income tax, you will be subject to tax on Fund distributions
whether you received them in cash or reinvested them in additional
shares of the Funds. For federal income tax purposes, Fund
distributions will be taxable to you as either ordinary income or
capital gains.
Fund dividends (i.e., distributions of investment income) are
taxable to you as ordinary income. Federal taxes on Fund
distributions of gains are determined by how long the Fund owned
the investments that generated the gains, rather than how long you
have owned your shares. Distributions of gains from investments
that a Fund owned for more than 12 months will generally be
taxable to you as capital gains. Distributions of gains from
investments that the Fund owned for 12 months or less will
generally be taxable to you as ordinary income.
Fund distributions are taxable to you even if they are paid from
income or gains earned by a Fund prior to your investment and thus
were included in the price you paid for your shares. For example,
if you purchase shares on or just before the record date of a Fund
distribution, you will pay full price for the shares and may
receive a portion of your investment back as a taxable
distribution.
. Taxes when you sell (redeem) or exchange your shares. Any gain
resulting from the sale of Fund shares will generally be subject
to federal income tax. When you exchange shares of a Fund for
shares of another series, the transaction generally will be
treated as a sale of the Fund shares for these purposes, and any
gain on those shares will generally be subject to federal income
tax.
. A Note on the Tax-Efficient Equity Fund. The Tax-Efficient
Equity Fund utilizes a number of tax-efficient management
techniques designed to minimize taxable distributions. For
instance, the Fund generally seeks to minimize realized gains and,
when realizing gains, attempts to realize gains that will
49 PIMCO Funds: Multi-Manager Series
<PAGE>
be taxed as capital gains (i.e., on investments owned for more
than 12 months). Although the Fund attempts to minimize taxable
distributions, it may be expected to earn and distribute taxable
income and realize and distribute capital gains from time to time.
. A Note on Foreign Investments. A Fund's investment in foreign
securities may be subject to foreign withholding taxes. In that
case, the Fund's yield on those securities would be decreased. In
addition, a Fund's investments in foreign securities or foreign
currencies may increase or accelerate the Fund's recognition of
ordinary income and may affect the timing or amount of the Fund's
distributions. Shareholders of the International and Precious
Metals Funds may be entitled to claim a credit or deduction with
respect to foreign taxes.
This section relates only to federal income tax consequences of
investing in the Funds; the consequences under other tax laws may
differ. You should consult your tax advisor as to the possible
application of foreign, state and local income tax laws to Fund
dividends and capital distributions. Please see the Statement of
Additional Information for additional information regarding the
tax aspects of investing in the Funds.
Characteristics and Risks of Securities and Investment Techniques
This section provides additional information about some of the
principal investments and related risks of the Funds identified
under "Summary Information" above. It also describes
characteristics and risks of additional securities and investment
techniques that are not necessarily principal investments or
strategies but may be used by the Funds from time to time. Most of
these securities and investment techniques are discretionary,
which means that the portfolio managers can decide whether to use
them or not. This Prospectus does not attempt to disclose all of
the various types of securities and investment techniques that may
be used by the Funds. As with any mutual fund, investors in the
Funds must rely on the professional investment judgment and skill
of PIMCO Advisors, the Sub-Advisers and the individual portfolio
managers. Please see "Investment Objectives and Policies" in the
Statement of Additional Information for more detailed information
about the securities and investment techniques described in this
section and about other strategies and techniques that may be used
by the Funds.
Fixed Fixed income securities are obligations of the issuer to make
Income payments of principal and/or interest on future dates, and include
Securities corporate and government bonds, notes, certificates of deposit,
and commercial paper, convertible securities and mortgage-backed and
Defensive other asset-backed securities.
Strategies
The Capital Appreciation, Mid-Cap Growth, Small-Cap Growth and
Tax-Efficient Equity Funds intend to be as fully invested in
common stocks as practicable at all times, although, for cash
management purposes, each of these Funds may maintain a portion of
its assets (normally not more than 10%) in U.S. Government
securities, high quality fixed income securities, money market
obligations and cash to pay certain Fund expenses and to meet
redemption requests. None of these Funds will make defensive
investments in response to unfavorable market and other conditions
and therefore may be particularly vulnerable to general declines
in stock prices and/or other categories of securities in which
they invest.
Under normal circumstances, the Equity Income, Small-Cap Value,
Value and Value 25 Funds each intend to be fully invested in
common stocks (aside from cash management practices), except that
each of these Funds may temporarily hold up to 10% of its assets
in cash and cash equivalents for defensive purposes in response to
unfavorable market and other conditions. The Growth, Innovation,
International, Opportunity, Precious Metals, Renaissance and
Target Funds will each invest primarily in common stocks, and may
also invest in other kinds of equity securities, including
preferred stocks and securities (including fixed income securities
and warrants) convertible into or exercisable for common stocks.
Each of these Funds may invest a portion of its assets in fixed
income securities. These Funds may temporarily hold up to 100% of
their assets in short-term U.S. Government securities and other
money market instruments for defensive purposes in response to
unfavorable market and other conditions. The International Fund
may also hold up to 100% of its assets in other domestic fixed
income, foreign fixed income and equity securities principally
traded in the U.S., including obligations issued or guaranteed by
a foreign government or its agencies, authorities or
instrumentalities, corporate bonds and American Depository
Receipts, for temporary defensive purposes. The temporary
defensive strategies described in this paragraph would be
inconsistent with the investment objective and principal
investment strategies of each of the noted Funds and may adversely
affect the Fund's ability to achieve its investment objective.
Prospectus 50
<PAGE>
Companies Each of the Funds may invest in securities of companies with
With market capitalizations that are small compared to other publicly
Smaller traded companies. The Opportunity, Small-Cap Growth and Small-Cap
Market Value Funds invest primarily in smaller companies and are
Capitali- especially sensitive to the risks described below. The Mid-Cap
zations Growth, Target and Value 25 Funds also have significant exposure
to these risks because they invest primarily in companies with
medium-sized market capitalizations, which are smaller than the
largest companies.
Companies which are smaller and less well-known or seasoned than
larger, more widely held companies may offer greater opportunities
for capital appreciation, but may also involve risks different
from, or greater than, risks normally associated with larger
companies. Larger companies generally have greater financial
resources, more extensive research and development, manufacturing,
marketing and service capabilities, and more stability and greater
depth of management and technical personnel than smaller
companies. Smaller companies may have limited product lines,
markets or financial resources or may depend on a small,
inexperienced management group. Securities of smaller companies
may trade less frequently and in lesser volume than more widely
held securities and their values may fluctuate more abruptly or
erratically than securities of larger companies. They may also
trade in the over-the-counter market or on a regional exchange, or
may otherwise have limited liquidity. These securities may
therefore be more vulnerable to adverse market developments than
securities of larger companies. Also, there may be less publicly
available information about smaller companies or less market
interest in their securities as compared to larger companies, and
it may take longer for the prices of the securities to reflect the
full value of a company's earnings potential or assets.
Because securities of smaller companies may have limited
liquidity, a Fund may have difficulty establishing or closing out
its positions in smaller companies at prevailing market prices. As
a result of owning large positions in this type of security, a
Fund is subject to the additional risk of possibly having to sell
portfolio securities at disadvantageous times and prices if
redemptions require the Fund to liquidate its securities
positions. For these reasons, it may be prudent for a Fund with a
relatively large asset size to limit the number of relatively
small positions it holds in securities having limited liquidity in
order to minimize its exposure to such risks, to minimize
transaction costs, and to maximize the benefits of research. As a
consequence, as a Fund's asset size increases, the Fund may reduce
its exposure to illiquid smaller capitalization securities, which
could adversely affect performance.
Foreign The International Fund normally invests principally in securities
Securities of foreign issuers, securities traded principally in securities
markets outside the United States and/or securities denominated in
foreign currencies (together, "foreign securities"). The Precious
Metals Fund also normally invests a substantial portion of its
assets (up to 100%) in foreign securities and the Growth,
Innovation, Opportunity, Renaissance and Target Funds may invest
up to 15% of their respective assets in foreign securities.
All of the Funds may invest in American Depository Receipts
("ADRs"). In addition, the Growth, Innovation, International,
Opportunity, Precious Metals, Renaissance and Target Funds may
invest in European Depository Receipts (EDRs) and Global
Depository Receipts (GDRs). ADRs are dollar-denominated receipts
issued generally by domestic banks and representing the deposit
with the bank of a security of a foreign issuer, and are publicly
traded on exchanges or over-the-counter in the United States. EDRs
are receipts similar to ADRs and are issued and traded in Europe.
GDRs may be offered privately in the United States and also traded
in public or private markets in other countries.
Investing in foreign securities involves special risks and
considerations not typically associated with investing in U.S.
securities and shareholders should consider carefully the
substantial risks involved for Funds that invest in these
securities. These risks include: differences in accounting,
auditing and financial reporting standards; generally higher
commission rates on foreign portfolio transactions; the
possibility of nationalization, expropriation or confiscatory
taxation; adverse changes in investment or exchange control
regulations; and political instability. Individual foreign
economies may differ favorably or unfavorably from the U.S.
economy in such respects as growth of gross domestic product, rate
of inflation, capital reinvestment, resources, self-sufficiency
and balance of payments position. The securities markets, values
of securities, yields and risks associated with foreign securities
markets may change independently of each other. Also, foreign
securities and dividends and interest payable on those securities
may be subject to foreign taxes, including taxes withheld from
payments on those securities. Foreign securities often trade with
less frequency and volume than domestic securities and therefore
may exhibit greater price volatility. Investments in foreign
securities may also involve higher custodial costs than domestic
investments and additional transaction costs with respect to
foreign currency conversions. Changes in foreign exchange rates
also will affect the value of securities denominated or quoted in
foreign currencies.
51 PIMCO Funds: Multi-Manager Series
<PAGE>
Emerging Each of the Funds that may invest in foreign securities may invest
Market in securities of issuers based in or that trade principally in
Securities countries with developing (or "emerging market") economies. The
International and Precious Metals Funds may invest significant
portions of their assets in emerging market securities. Investing
in emerging market securities imposes risks different from, or
greater than, risks of investing in domestic securities or in
foreign, developed countries. These risks include: smaller market
capitalization of securities markets, which may suffer periods of
relative illiquidity; significant price volatility; restrictions
on foreign investment; and possible repatriation of investment
income and capital. In addition, foreign investors may be required
to register the proceeds of sales, and future economic or
political crises could lead to price controls, forced mergers,
expropriation or confiscatory taxation, seizure, nationalization
or the creation of government monopolies. The currencies of
emerging market countries may experience significant declines
against the U.S. dollar, and devaluation may occur subsequent to
investments in these currencies by a Fund. Inflation and rapid
fluctuations in inflation rates have had, and may continue to
have, negative effects on the economies and securities markets of
certain emerging market countries.
Additional risks of emerging market securities may include:
greater social, economic and political uncertainty and
instability; more substantial governmental involvement in the
economy; less governmental supervision and regulation;
unavailability of currency hedging techniques; companies that are
newly organized and small; differences in auditing and financial
reporting standards, which may result in unavailability of
material information about issuers; and less developed legal
systems. In addition, emerging securities markets may have
different clearance and settlement procedures, which may be unable
to keep pace with the volume of securities transactions or
otherwise make it difficult to engage in such transactions.
Settlement problems may cause a Fund to miss attractive investment
opportunities, hold a portion of its assets in cash pending
investment, or be delayed in disposing of a portfolio security.
Such a delay could result in possible liability to a purchaser of
the security.
Special Risks of Investing in Russian and Other Eastern European
Securities. The International and Precious Metals Funds may invest
a portion of their assets in securities of issuers located in
Russia and in other Eastern European countries. While investments
in securities of such issuers are subject generally to the same
risks associated with investments in other emerging market
countries described above, the political, legal and operational
risks of investing in Russian and other Eastern European issuers,
and of having assets custodied within these countries, may be
particularly acute. A risk of particular note with respect to
direct investment in Russian securities is the way in which
ownership of shares of companies is normally recorded. When a Fund
invests in a Russian issuer, it will normally receive a "share
extract," but that extract is not legally determinative of
ownership. The official record of ownership of a company's share
is maintained by the company's share registrar. Such share
registrars are completely under the control of the issuer, and
investors are provided with few legal rights against such
registrars.
Foreign A Fund that invests directly in foreign currencies or in
Currencies securities that trade in, and receive revenues in, foreign
currencies will be subject to currency risk. The International and
Precious Metals Funds are particularly sensitive to this risk.
Foreign currency exchange rates may fluctuate significantly over
short periods of time. They generally are determined by supply and
demand and the relative merits of investments in different
countries, actual or perceived changes in interest rates and other
complex factors. Currency exchange rates also can be affected
unpredictably by intervention (or the failure to intervene) by
U.S. or foreign governments or central banks, or by currency
controls or political developments. For example, significant
uncertainty surrounds the recent introduction of the euro (a
common currency unit for the European Union) in January 1999 and
the effect it may have on the value of securities denominated in
local European currencies. These and other currencies in which the
Funds' assets are denominated may be devalued against the U.S.
dollar, resulting in a loss to the Funds.
Foreign Currency Transactions. The Growth, Innovation,
International, Opportunity, Precious Metals, Renaissance and
Target Funds may enter into forward foreign currency exchange
contracts to reduce the risks of adverse changes in foreign
exchange rates. In addition, the International and Precious Metals
Funds may buy and sell foreign currency futures contracts and
options on foreign currencies and foreign currency futures. A
forward foreign currency exchange contract, which involves an
obligation to purchase or sell a specific currency at a future
date at a price set at the time of the contract, reduces a Fund's
exposure to changes in the value of the currency it will deliver
and increases its exposure to changes in the value of the currency
it will receive for the duration of the contract. The effect on
the value of a Fund is similar to selling securities denominated
in one currency and purchasing securities denominated in another
currency. Contracts to sell foreign currency would limit any
potential gain which might be realized by a Fund if the value of
the hedged currency increases. A
Prospectus 52
<PAGE>
Fund may enter into these contracts to hedge against foreign
exchange risk arising from the Fund's investment or anticipated
investment in securities denominated in foreign currencies.
Suitable hedging transactions may not be available in all
circumstances and there can be no assurance that a Fund will
engage in such transactions at any given time or from time to
time. Also, such transactions may not be successful and may
eliminate any chance for a Fund to benefit from favorable
fluctuations in relevant foreign currencies.
The International 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 currency to
another. To the extent that it does so, the Fund will be subject
to the additional risk that the relative value of currencies will
be different than anticipated by the Fund's portfolio manager. The
International Fund may use one currency (or a basket of
currencies) to hedge against adverse changes in the value of
another currency (or a basket of currencies) when exchange rates
between the two currencies are positively correlated. The Fund
will segregate assets determined to be liquid by PIMCO Advisors or
the Fund's Sub-Adviser in accordance with procedures established
by the Board of Trustees to cover its obligations under forward
foreign currency exchange contracts entered into for non-hedging
purposes.
Convertible Each Fund may invest in convertible securities. Convertible
Securities securities are generally preferred stocks and other securities,
including fixed income securities and warrants, that are
convertible into or exercisable for common stock at either a
stated price or a stated rate. The price of a convertible security
will normally vary in some proportion to changes in the price of
the underlying common stock because of this conversion or exercise
feature. However, the value of a convertible security may not
increase or decrease as rapidly as the underlying common stock. A
convertible security will normally also provide income and is
subject to interest rate risk. While convertible securities
generally offer lower interest or dividend yields than non-
convertible fixed income securities of similar quality, their
value tends to increase as the market value of the underlying
stock increases and to decrease when the value of the underlying
stock decreases. Also, a Fund may be forced to convert a security
before it would otherwise choose, which may have an adverse effect
on the Fund's ability to achieve its investment objective.
Credit The Funds may invest in securities based on their credit ratings
Ratings assigned by rating agencies such as Moody's Investors Service,
and Inc. ("Moody's") and Standard and Poor's Ratings Services ("S&P").
Unrated Moody's, S&P and other rating agencies are private services that
Securities provide ratings of the credit quality of fixed income securities,
including convertible securities. The Appendix to the Statement of
Additional Information describes the various ratings assigned to
fixed income securities by Moody's and S&P. Ratings assigned by a
rating agency are not absolute standards of credit quality and do
not evaluate market risk. Rating agencies may fail to make timely
changes in credit ratings and an issuer's current financial
condition may be better or worse than a rating indicates. A Fund
will not necessarily sell a security when its rating is reduced
below its rating at the time of purchase. PIMCO Advisors and the
Sub-Advisers do not rely solely on credit ratings, and develop
their own analysis of issuer credit quality.
A Fund may purchase unrated securities (which are not rated by a
rating agency) if its portfolio manager determines that the
security is of comparable quality to a rated security that the
Fund may purchase. Unrated securities may be less liquid than
comparable rated securities and involve the risk that the
portfolio manager may not accurately evaluate the security's
comparative credit rating.
Derivatives Each Fund (except the Capital Appreciation, Equity Income, Mid-Cap
Growth, Small-Cap Growth, Small-Cap Value, Value and Value 25
Funds) may, but is not required to, use a number of derivative
instruments for risk management purposes or as part of its
investment strategies. Generally, derivatives are financial
contracts whose value depends upon, or is derived from, the value
of an underlying asset, reference rate or index, and may relate to
stocks, bonds, interest rates, currencies or currency exchange
rates, commodities, and related indexes. A portfolio manager may
decide not to employ any of these strategies and there is no
assurance that any derivatives strategy used by a Fund will
succeed.
Examples of derivative instruments include options contracts,
futures contracts, options on futures contracts and swap
agreements. The Growth, Innovation, International, Opportunity,
Precious Metals, Renaissance, Target and Tax-Efficient Equity
Funds may purchase and sell (write) call and put options on
securities, securities indexes and foreign currencies. The
Precious Metals Fund may also purchase and write options on
commodities indexes. Each of these Funds may purchase and sell
futures contracts and options thereon with respect to securities,
securities indexes and foreign currencies. The Precious Metals
Fund may use futures contracts and related options on precious
metals (such as gold). The Tax-Efficient Equity Fund may enter
into swap agreements with respect to securities indexes. A
description of these and other derivative instruments that the
Funds may use are described under "Investment Objectives and
Policies" in the Statement of Additional Information.
53 PIMCO Funds: Multi-Manager Series
<PAGE>
A Fund's use of derivative instruments involves risks different
from, or greater than, the risks associated with investing
directly in securities and other more traditional investments. A
description of various risks associated with particular derivative
instruments is included in "Investment Objectives and Policies" in
the Statement of Additional Information. The following provides a
more general discussion of important risk factors relating to all
derivative instruments that may be used by the Funds.
Management Risk Derivative products are highly specialized
instruments that require investment techniques and risk analyses
different from those associated with stocks and bonds. The use of
a derivative requires an understanding not only of the underlying
instrument but also of the derivative itself, without the benefit
of observing the performance of the derivative under all possible
market conditions.
Credit Risk The use of a derivative instrument involves the risk
that a loss may be sustained as a result of the failure of another
party to the contract (usually referred to as a "counterparty") to
make required payments or otherwise comply with the contract's
terms.
Liquidity Risk Liquidity risk exists when a particular derivative
instrument is difficult to purchase or sell. If a derivative
transaction is particularly large or if the relevant market is
illiquid (as is the case with many privately negotiated
derivatives), it may not be possible to initiate a transaction or
liquidate a position at an advantageous time or price.
Leveraging Risk Because many derivatives have a leverage
component, adverse changes in the value or level of the underlying
asset, reference rate or index can result in a loss substantially
greater than the amount invested in the derivative itself. Certain
derivatives have the potential for unlimited loss, regardless of
the size of the initial investment. When a Fund uses derivatives
for leverage, investments in that Fund will tend to be more
volatile, resulting in larger gains or losses in response to
market changes. To limit leverage risk, each Fund will segregate
assets determined to be liquid by PIMCO Advisors or a Sub-Adviser
in accordance with procedures established by the Board of Trustees
(or, as permitted by applicable regulation, enter into certain
offsetting positions) to cover its obligations under derivative
instruments.
Lack of Availability Because the markets for certain derivative
instruments (including markets located in foreign countries) are
relatively new and still developing, suitable derivatives
transactions may not be available in all circumstances for risk
management or other purposes. There is no assurance that a Fund
will engage in derivatives transactions at any time or from time
to time. A Fund's ability to use derivatives may also be limited
by certain regulatory and tax considerations.
Market and Other Risks Like most other investments, derivative
instruments are subject to the risk that the market value of the
instrument will change in a way detrimental to a Fund's interest.
If a portfolio manager incorrectly forecasts the values of
securities, currencies or interest rates or other economic factors
in using derivatives for a Fund, the Fund might have been in a
better position if it had not entered into the transaction at all.
While some strategies involving derivative instruments can reduce
the risk of loss, they can also reduce the opportunity for gain or
even result in losses by offsetting favorable price movements in
other Fund investments. A Fund may also have to buy or sell a
security at a disadvantageous time or price because the Fund is
legally required to maintain offsetting positions or asset
coverage in connection with certain derivatives transactions.
Other risks in using derivatives include the risk of mispricing
or improper valuation of derivatives and the inability of
derivatives to correlate perfectly with underlying assets, rates
and indexes. Many derivatives, in particular privately negotiated
derivatives, are complex and often valued subjectively. Improper
valuations can result in increased cash payment requirements to
counterparties or a loss of value to a Fund. Also, the value of
derivatives may not correlate perfectly, or at all, with the value
of the assets, reference rates or indexes they are designed to
closely track. In addition, a Fund's use of derivatives may cause
the Fund to realize higher amounts of short-term capital gains
(taxed at ordinary income tax rates when distributed to
shareholders who are individuals) than if the Fund had not used
such instruments.
Precious The Precious Metals Fund concentrates its investments in the
Metals securities of companies in precious metals industries. Prices of
precious metals can be expected to respond to changes in rates of
inflation and to perceptions of economic and political
instability. The values of companies engaged in precious metals-
related activities whose securities are principally traded on
foreign securities exchanges may also be affected by changes in
the exchange rate between the relevant foreign currency and the
U.S. dollar. Based on historical experience, the prices of
precious metals and of securities of companies engaged in precious
metals-related activities may be subject to extreme fluctuations,
reflecting wider economic or political instability or for other
reasons.
Prospectus 54
<PAGE>
Equity- The International Fund may invest up to 5% of its assets in
Linked equity-linked securities. Equity-linked securities are privately
Securities issued securities whose investment results are designed to
correspond generally to the performance of a specified stock index
or "basket" of stocks, or sometimes a single stock. To the extent
that the Fund invests in equity-linked securities whose return
corresponds to the performance of a foreign securities index or
one or more of foreign stocks, investing in equity-linked
securities will involve risks similar to the risks of investing in
foreign equity securities. See "Foreign Securities" above. In
addition, the Fund bears the risk that the issuer of an equity-
linked security may default on its obligations under the security.
Equity-linked securities may be considered illiquid and thus
subject to the Fund's restrictions on investments in illiquid
securities.
Loans of For the purpose of achieving income, each Fund may lend its
Portfolio portfolio securities to brokers, dealers, and other financial
Securities institutions provided a number of conditions are satisfied,
including that the loan is fully collateralized. Please see
"Investment Objectives and Policies" in the Statement of
Additional Information for details. When a Fund lends portfolio
securities, its investment performance will continue to reflect
changes in the value of the securities loaned, and the Fund will
also receive a fee or interest on the collateral. Securities
lending involves the risk of loss of rights in the collateral or
delay in recovery of the collateral if the borrower fails to
return the security loaned or becomes insolvent. A Fund may pay
lending fees to the party arranging the loan.
Short Each Fund may make short sales as part of its overall portfolio
Sales management strategies or to offset a potential decline in the
value of a security. A short sale involves the sale of a security
that is borrowed from a broker or other institution to complete
the sale. A Fund may only enter into short selling transactions if
the security sold short is held in the Fund's portfolio or if the
Fund has the right to acquire the security without the payment of
further consideration. For these purposes, a Fund may also hold or
have the right to acquire securities which, without the payment of
any further consideration, are convertible into or exchangeable
for the securities sold short. Short sales expose a Fund to the
risk that it will be required to acquire, convert or exchange
securities to replace the borrowed securities (also known as
"covering" the short position) at a time when the securities sold
short have appreciated in value, thus resulting in a loss to the
Fund.
When- Each Fund may purchase securities which it is eligible to purchase
Issued, on a when-issued basis, may purchase and sell such securities for
Delayed delayed delivery and may make contracts to purchase such
Delivery securities for a fixed price at a future date beyond normal
and settlement time (forward commitments). When-issued transactions,
Forward delayed delivery purchases and forward commitments involve a risk
Commitment of loss if the value of the securities declines prior to the
Transac- settlement date. This risk is in addition to the risk that the
tions Fund's other assets will decline in value. Therefore, these
transactions may result in a form of leverage and increase a
Fund's overall investment exposure. Typically, no income accrues
on securities a Fund has committed to purchase prior to the time
delivery of the securities is made, although a Fund may earn
income on securities it has segregated to cover these positions.
Repurchase Each Fund may enter into repurchase agreements, in which the Fund
Agreements purchases a security from a bank or broker-dealer that agrees to
repurchase the security at the Fund's cost plus interest within a
specified time. If the party agreeing to repurchase should
default, the Fund will seek to sell the securities which it holds.
This could involve procedural costs or delays in addition to a
loss on the securities if their value should fall below their
repurchase price. Those Funds whose investment objectives do not
include the earning of income will invest in repurchase agreements
only as a cash management technique with respect to that portion
of its portfolio maintained in cash. Repurchase agreements
maturing in more than seven days are considered illiquid
securities.
Reverse Each Fund may enter into reverse repurchase agreements, subject to
Repurchase the Fund's limitations on borrowings. A reverse repurchase
Agreements agreement involves the sale of a security by a Fund and its
And Other agreement to repurchase the instrument at a specified time and
Borrowings price, and may be considered a form of borrowing for some
purposes. A Fund will segregate assets determined to be liquid by
PIMCO Advisors or a Sub-Adviser in accordance with procedures
established by the Board of Trustees to cover its obligations
under reverse repurchase agreements. A Fund also may borrow money
for investment purposes subject to any policies of the Fund
currently described in this Prospectus or in the Statement of
Additional Information. Reverse repurchase agreements and other
forms of borrowings may create leveraging risk for a Fund.
Portfolio With the exception of the Tax-Efficient Equity Fund, the length of
Turnover time a Fund has held a particular security is not generally a
consideration in investment decisions. A change in the securities
held by a Fund is known as "portfolio turnover." Each Fund may
engage in active and frequent trading of portfolio securities to
achieve its investment objective and principal investment
strategies, particularly
55 PIMCO Funds: Multi-Manager Series
<PAGE>
during periods of volatile market movements, although the Tax-
Efficient Equity Fund will generally attempt to limit portfolio
turnover as part of its tax-efficient management strategies. High
portfolio turnover (e.g., over 100%) involves correspondingly
greater expenses to a Fund, including brokerage commissions or
dealer mark-ups and other transaction costs on the sale of
securities and reinvestments in other securities. Such sales may
also result in realization of taxable capital gains, including
short-term capital gains (which are taxed at ordinary income tax
rates when distributed to shareholders who are individuals). The
trading costs and tax effects associated with portfolio turnover
may adversely affect a Fund's performance.
Illiquid Each Fund may invest in securities that are illiquid so long as
Securities not more than 15% of the value of the Fund's net assets (taken at
market value at the time of investment) would be invested in such
securities. Certain illiquid securities may require pricing at
fair value as determined in good faith under the supervision of
the Board of Trustees. A portfolio manager may be subject to
significant delays in disposing of illiquid securities held by a
Fund, and transactions in illiquid securities may entail
registration expenses and other transaction costs that are higher
than those for transactions in liquid securities. The term
"illiquid securities" for this purpose means securities that
cannot be disposed of within seven days in the ordinary course of
business at approximately the amount at which a Fund has valued
the securities. Please see "Investment Objectives and Policies" in
the Statement of Additional Information for a listing of various
securities that are generally considered to be illiquid for these
purposes. Restricted securities, i.e., securities subject to legal
or contractual restrictions on resale, may be illiquid. However,
some restricted securities (such as securities issued pursuant to
Rule 144A under the Securities Act of 1933 and certain commercial
paper) may be treated as liquid, although they may be less liquid
than registered securities traded on established secondary
markets.
Investment The International Fund may invest up to 10% of its assets in
in Other securities of other investment companies, such as closed-end
Investment management investment companies, or in pooled accounts or other
Companies investment vehicles which invest in foreign markets. Each of the
other Funds may invest up to 5% of its assets in other investment
companies. As a shareholder of an investment company, a Fund may
indirectly bear service and other fees which are in addition to
the fees the Fund pays its service providers.
Year 2000 Many of the services provided to the Funds depend on the smooth
Readiness functioning of computer systems. Many systems in use today cannot
Disclosure distinguish between the year 1900 and the year 2000. Should any of
the service systems fail to process information properly, this
could have an adverse impact on the Funds' operations and services
provided to shareholders. PIMCO Advisors and its subsidiaries have
surveyed the Funds' material service providers and believe that,
on the basis of the information supplied, the service providers
used by the Funds on January 1, 2000 will not be materially
adversely affected by the so-called "year 2000 problem." However,
there can be no assurance that the problem will be corrected in
all respects and that the Funds' operations and services provided
to shareholders will not be adversely affected, nor can there be
any assurance that the year 2000 problem will not have an adverse
effect on the entities whose securities are held by the Funds or
on domestic or global equity markets or economies, generally.
Accordingly, PIMCO Advisors and the Sub-Advisers reserve the right
to vary, during the fourth quarter of 1999 and/or the first
quarter of 2000, the investments of any Fund to maintain
sufficient liquidity to satisfy actual or anticipated redemption
activity.
Changes The investment objective of each of the Growth, Innovation,
in International, Opportunity, Precious Metals, Renaissance, Target,
Investment Tax-Efficient Equity and Value 25 Funds described in this
Objectives Prospectus may be changed by the Board of Trustees without
and shareholder approval. The investment objective of each other Fund
Policies is fundamental and may not be changed without shareholder
approval. Unless otherwise stated, all other investment policies
of the Funds may be changed by the Board of Trustees without
shareholder approval. If there is a change in a Fund's investment
objective or policies, including a change approved by shareholder
vote, shareholders should consider whether the Fund remains an
appropriate investment in light of their then current financial
position and needs.
Percentage Unless otherwise stated, all percentage limitations on Fund
Investment investments listed in this Prospectus will apply at the time of
Limitations investment. A Fund would not violate these limitations unless an
excess or deficiency occurs or exists immediately after and as a
result of an investment.
Other The Funds may invest in other types of securities and use a
Investments variety of investment techniques and strategies which are not
and described in this Prospectus. These securities and techniques may
Techniques subject the Funds to additional risks. Please see the Statement of
Additional Information for additional information about the
securities and investment techniques described in this Prospectus
and about additional securities and techniques that may be used by
the Funds.
Prospectus 56
<PAGE>
Financial Highlights
The financial highlights table is intended to help you understand
the financial performance of Class A, Class B and Class C shares
of each Fund for the past 5 years or, if the class is less than 5
years old, since the class of shares was first offered. Certain
information reflects financial results for a single Fund share.
The total returns in the table represent the rate that an investor
would have earned or lost on an investment in a particular class
of shares of a Fund, assuming reinvestment of all dividends and
distributions. This information has been audited by
PricewaterhouseCoopers LLP, whose report, along with each Fund's
financial statements, are included in the Trust's annual report to
shareholders. The annual report is incorporated by reference in
the Statement of Additional Information and is available free of
charge upon request from the Distributor.
The information provided for each of the Growth, Innovation,
International, Opportunity, Precious Metals, Renaissance and
Target Funds reflects the operational history of a corresponding
series of PIMCO Advisors Funds which reorganized as a series of
the Trust on January 17, 1997. In connection with the
reorganizations, these Funds changed their fiscal year ends from
September 30 to June 30. The expense ratios provided for these
Funds for periods prior to January 17, 1997 reflect fee
arrangements of PIMCO Advisors Funds previously in effect which
differ from the current fee arrangements of the Trust. The Small-
Cap Growth Fund did not offer Class A, B or C shares during the
periods shown.
<TABLE>
<CAPTION>
Net Realized/ Dividends Dividends in Distributions
Year or Net Asset Value Net Unrealized Total Income From Net Excess of Net From Net
Period Beginning Investment Gain (Loss) on From Investment Investment Investment Realized Capital
Ended of Period Income (Loss) Investments Operations Income Income Gains
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Capital Appreci-
ation Fund
Class A
06/30/99 $26.01 $ 0.06 (a) $2.33 (a) $2.39 $(0.10) $0.00 $(1.65)
06/30/98 21.16 0.07 (a) 6.55 (a) 6.62 (0.09) 0.00 (1.68)
01/20/97-
06/30/97 19.31 0.09 1.76 1.85 0.00 0.00 0.00
Class B
06/30/99 25.75 (0.13)(a) 2.32 (a) 2.19 0.00 0.00 (1.65)
06/30/98 21.10 (0.11)(a) 6.51 (a) 6.40 (0.07) 0.00 (1.68)
01/20/97-
06/30/97 19.31 0.01 1.78 1.79 0.00 0.00 0.00
Class C
06/30/99 25.78 (0.13)(a) 2.31 (a) 2.18 0.00 0.00 (1.65)
06/30/98 21.10 (0.12)(a) 6.53 (a) 6.41 (0.05) 0.00 (1.68)
01/20/97-
06/30/97 19.31 0.02 1.77 1.79 0.00 0.00 0.00
Equity Income
Fund
Class A
06/30/99 $16.04 $ 0.39 (a) $1.29 (a) $1.68 $(0.38) $0.00 $(1.76)
06/30/98 15.39 0.39 (a) 2.73 (a) 3.12 (0.38) 0.00 (2.09)
01/20/97-
06/30/97 13.94 0.15 1.48 1.63 (0.18) 0.00 0.00
Class B
06/30/99 15.99 0.28 (a) 1.27 (a) 1.55 (0.28) 0.00 (1.76)
06/30/98 15.37 0.26 (a) 2.73 (a) 2.99 (0.28) 0.00 (2.09)
01/20/97-
06/30/97 13.94 0.11 1.48 1.59 (0.16) 0.00 0.00
Class C
06/30/99 16.01 0.27 (a) 1.27 (a) 1.54 (0.27) 0.00 (1.76)
06/30/98 15.37 0.26 (a) 2.74 (a) 3.00 (0.27) 0.00 (2.09)
01/20/97-
06/30/97 13.94 0.11 1.48 1.59 (0.16) 0.00 0.00
Growth Fund (i)
Class A
06/30/99 $32.62 $(0.14)(a) $5.56 (a) $5.42 $ 0.00 $0.00 $(3.92)
06/30/98 27.03 (0.08)(a) 9.99 (a) 9.91 0.00 0.00 (4.32)
10/01/96-
06/30/97 26.58 0.69 3.27 3.96 0.00 0.00 (3.51)
09/30/96 25.73 0.06 3.72 3.78 0.00 0.00 (2.93)
09/30/95 22.01 0.12 4.79 4.91 0.00 0.00 (1.19)
09/30/94 23.64 0.12 0.12 0.24 0.00 0.00 (1.87)
Class B
06/30/99 30.34 (0.35)(a) 5.08 (a) 4.73 0.00 0.00 (3.92)
06/30/98 25.59 (0.28)(a) 9.35 (a) 9.07 0.00 0.00 (4.32)
10/01/96-
06/30/97 25.46 0.35 3.29 3.64 0.00 0.00 (3.51)
09/30/96 24.94 (0.07) 3.52 3.45 0.00 0.00 (2.93)
05/23/95-
09/30/95 22.63 (0.03) 2.34 2.31 0.00 0.00 0.00
<CAPTION>
Distributions
Year or in Excess of
Period Net Realized
Ended Capital Gains
- --------------------------------
<S> <C>
Capital Appreci-
ation Fund
Class A
06/30/99 $0.00
06/30/98 0.00
01/20/97-
06/30/97 0.00
Class B
06/30/99 0.00
06/30/98 0.00
01/20/97-
06/30/97 0.00
Class C
06/30/99 0.00
06/30/98 0.00
01/20/97-
06/30/97 0.00
Equity Income
Fund
Class A
06/30/99 $0.00
06/30/98 0.00
01/20/97-
06/30/97 0.00
Class B
06/30/99 0.00
06/30/98 0.00
01/20/97-
06/30/97 0.00
Class C
06/30/99 0.00
06/30/98 0.00
01/20/97-
06/30/97 0.00
Growth Fund (i)
Class A
06/30/99 $0.00
06/30/98 0.00
10/01/96-
06/30/97 0.00
09/30/96 0.00
09/30/95 0.00
09/30/94 0.00
Class B
06/30/99 0.00
06/30/98 0.00
10/01/96-
06/30/97 0.00
09/30/96 0.00
05/23/95-
09/30/95 0.00
</TABLE>
- -------
* Annualized
(a) Per share amounts based upon average number of shares outstanding during
the period.
(i) The information provided for the Growth Fund reflects results of
operations under the Fund's former Sub-Adviser through March 6, 1999; the
Fund would not necessarily have achieved the performance results shown
above under its current investment management arrangements.
57 PIMCO Funds: Multi-Manager Series
<PAGE>
<TABLE>
<CAPTION>
Ratio of Net
Ratio of Investment
Tax Basis Net Asset Expenses to Income (Loss) to
Return of Total Value End of Net Assets End Average Net Average Net Portfolio
Capital Distributions Period Total Return of Period (000s) Assets Assets Turnover Rate
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 0.00 $ (1.75) $ 26.65 10.14% $ 91,296 1.10% 0.24 % 120%
0.00 (1.77) 26.01 32.39 72,803 1.10 0.27 75
0.00 0.00 21.16 9.58 6,534 1.11* 0.59 * 87
0.00 (1.65) 26.29 9.39 55,094 1.85 (0.52) 120
0.00 (1.75) 25.75 31.39 40,901 1.85 (0.47) 75
0.00 0.00 21.10 9.27 3,022 1.85* (0.26)* 87
0.00 (1.65) 26.31 9.34 81,097 1.85 (0.52) 120
0.00 (1.73) 25.78 31.40 71,481 1.85 (0.49) 75
0.00 0.00 21.10 9.27 13,093 1.86* (0.23)* 87
$ 0.00 $ (2.14) $ 15.58 12.26% $ 17,342 1.10% 2.64 % 76%
0.00 (2.47) 16.04 21.35 12,954 1.11 2.39 45
0.00 (0.18) 15.39 11.77 1,756 1.13* 2.85 * 45
0.00 (2.04) 15.50 11.35 21,732 1.85 1.89 76
0.00 (2.37) 15.99 20.47 15,178 1.85 1.63 45
0.00 (0.16) 15.37 11.45 2,561 1.87* 2.11 * 45
0.00 (2.03) 15.52 11.28 26,016 1.85 1.86 76
0.00 (2.36) 16.01 20.51 23,122 1.85 1.60 45
0.00 (0.16) 15.37 11.42 6,624 1.87* 2.15 * 45
$ 0.00 $ (3.92) $ 34.12 18.65% $227,638 1.16% (0.44)% 131%
0.00 (4.32) 32.62 41.03 180,119 1.16 (0.27) 123
0.00 (3.51) 27.03 15.93 147,276 1.11* 0.13 * 94
0.00 (2.93) 26.58 16.11 151,103 1.11 0.24 104
0.00 (1.19) 25.73 23.70 134,819 1.10 0.50 111
0.00 (1.87) 22.01 1.30 107,269 1.10 0.60 115
0.00 (3.92) 31.15 17.72 133,850 1.90 (1.19) 131
0.00 (4.32) 30.34 39.97 80,719 1.91 (1.02) 123
0.00 (3.51) 25.59 15.32 55,626 1.86* (0.62)* 94
0.00 (2.93) 25.46 15.22 37,256 1.86 (0.51) 104
0.00 0.00 24.94 10.20 7,671 1.90* (0.40)* 111
</TABLE>
Prospectus 58
<PAGE>
Financial Highlights (continued)
<TABLE>
<CAPTION>
Net Realized/ Dividends Dividends in Distributions
Year or Net Asset Value Net Unrealized Total Income From Net Excess of Net From Net
Period Beginning Investment Gain (Loss) on From Investment Investment Investment Realized Capital
Ended of Period Income (Loss) Investments Operations Income Income Gains
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Growth Fund
(Cont.)
Class C
06/30/99 $30.33 $(0.35)(a) $ 5.09 (a) $ 4.74 $ 0.00 $0.00 $(3.92)
06/30/98 25.58 (0.28)(a) 9.35 (a) 9.07 0.00 0.00 (4.32)
10/01/96-
06/30/97 25.46 0.45 3.18 3.63 0.00 0.00 (3.51)
09/30/96 24.94 (0.12) 3.57 3.45 0.00 0.00 (2.93)
09/30/95 21.52 (0.04) 4.65 4.61 0.00 0.00 (1.19)
09/30/94 23.32 (0.04) 0.11 0.07 0.00 0.00 (1.87)
Innovation Fund
(ii)
Class A
06/30/99 $24.28 $(0.28)(a) $14.72 (a) $14.44 $ 0.00 $0.00 $(1.26)
06/30/98 17.43 (0.19)(a) 8.21 (a) 8.02 0.00 0.00 (0.99)
10/01/96-
06/30/97 17.26 0.07 0.36 0.43 0.00 0.00 (0.26)
9/30/96 14.74 (0.07) 2.94 2.87 0.00 0.00 (0.35)
12/22/94-
9/30/95 10.00 (0.06) 4.80 4.74 0.00 0.00 0.00
Class B
06/30/99 23.60 (0.49)(a) 14.24 (a) 13.75 0.00 0.00 (1.26)
06/30/98 17.10 (0.33)(a) 8.00 (a) 7.67 0.00 0.00 (0.99)
10/01/96-
06/30/97 17.04 (0.03) 0.35 0.32 0.00 0.00 (0.26)
9/30/96 14.66 (0.11) 2.84 2.73 0.00 0.00 (0.35)
5/22/95-
9/30/95 11.81 (0.08) 2.93 2.85 0.00 0.00 0.00
Class C
06/30/99 23.59 (0.48)(a) 14.23 (a) 13.75 0.00 0.00 (1.26)
06/30/98 17.09 (0.33)(a) 8.00 (a) 7.67 0.00 0.00 (0.99)
10/01/96-
06/30/97 17.04 (0.02) 0.33 0.31 0.00 0.00 (0.26)
9/30/96 14.65 (0.15) 2.89 2.74 0.00 0.00 (0.35)
12/22/94-
9/30/95 10.00 (0.13) 4.78 4.65 0.00 0.00 0.00
International
Fund (iii)
Class A
06/30/99 $14.33 $ 0.01 (a) $(0.74)(a) $(0.73) $ 0.00 $0.00 $(1.15)
06/30/98 14.26 0.06 (a) 1.13 (a) 1.19 0.00 0.00 (0.82)
10/01/96-
06/30/97 13.03 0.29 1.33 1.62 0.00 0.00 (0.39)
9/30/96 12.19 0.07 0.77 0.84 0.00 0.00 0.00
9/30/95 12.92 0.07 (0.56) (0.49) 0.00 0.00 (0.24)
9/30/94 12.17 0.04 0.94 0.98 0.00 0.00 (0.23)
Class B
06/30/99 13.46 (0.08)(a) (0.72)(a) (0.80) 0.00 0.00 (1.15)
06/30/98 13.56 (0.05)(a) 1.07 (a) 1.02 0.00 0.00 (0.82)
10/01/96-
06/30/97 12.48 0.16 1.31 1.47 0.00 0.00 (0.39)
9/30/96 11.75 0.00 (a) 0.73 (a) 0.73 0.00 0.00 0.00
5/22/95-
9/30/95 11.30 0.00 0.45 0.45 0.00 0.00 0.00
Class C
06/30/99 13.45 (0.09)(a) (0.71)(a) (0.80) 0.00 0.00 (1.15)
06/30/98 13.55 (0.06)(a) 1.08 (a) 1.02 0.00 0.00 (0.82)
10/01/96-
06/30/97 12.47 0.18 1.29 1.47 0.00 0.00 (0.39)
9/30/96 11.75 (0.05) 0.77 0.72 0.00 0.00 0.00
9/30/95 12.56 (0.02) (0.55) (0.57) 0.00 0.00 (0.24)
9/30/94 11.92 (0.06) 0.93 0.87 0.00 0.00 (0.23)
Mid-Cap Growth
Fund
Class A
06/30/99 $24.00 $ 0.03 (a) $(0.13)(a) $(0.10) $(0.01) $0.00 $(1.07)
06/30/98 20.24 0.02 (a) 5.11 (a) 5.13 (0.04) 0.00 (1.33)
01/13/97-
06/30/97 18.14 (0.04) 2.14 2.10 0.00 0.00 0.00
Class B
06/30/99 23.77 (0.13)(a) (0.14)(a) (0.27) 0.00 0.00 (1.07)
06/30/98 20.17 (0.16)(a) 5.09 (a) 4.93 0.00 0.00 (1.33)
01/13/97-
06/30/97 18.14 (0.11) 2.14 2.03 0.00 0.00 0.00
<CAPTION>
Distributions
Year or in Excess of
Period Net Realized
Ended Capital Gains
- ---------------------------------
<S> <C>
Growth Fund
(Cont.)
Class C
06/30/99 $ 0.00
06/30/98 0.00
10/01/96-
06/30/97 0.00
09/30/96 0.00
09/30/95 0.00
09/30/94 0.00
Innovation Fund
(ii)
Class A
06/30/99 $0.00
06/30/98 (0.18)
10/01/96-
06/30/97 0.00
9/30/96 0.00
12/22/94-
9/30/95 0.00
Class B
06/30/99 0.00
06/30/98 (0.18)
10/01/96-
06/30/97 0.00
9/30/96 0.00
5/22/95-
9/30/95 0.00
Class C
06/30/99 0.00
06/30/98 (0.18)
10/01/96-
06/30/97 0.00
9/30/96 0.00
12/22/94-
9/30/95 0.00
International
Fund (iii)
Class A
06/30/99 $0.00
06/30/98 (0.30)
10/01/96-
06/30/97 0.00
9/30/96 0.00
9/30/95 0.00
9/30/94 0.00
Class B
06/30/99 0.00
06/30/98 (0.30)
10/01/96-
06/30/97 0.00
9/30/96 0.00
5/22/95-
9/30/95 0.00
Class C
06/30/99 0.00
06/30/98 (0.30)
10/01/96-
06/30/97 0.00
9/30/96 0.00
9/30/95 0.00
9/30/94 0.00
Mid-Cap Growth
Fund
Class A
06/30/99 $0.00
06/30/98 0.00
01/13/97-
06/30/97 0.00
Class B
06/30/99 0.00
06/30/98 0.00
01/13/97-
06/30/97 0.00
</TABLE>
- -------
* Annualized
(a) Per share amounts based upon average number of shares outstanding during
the period.
(b) Ratio of expenses to average net assets excluding interest expense is
1.45%.
(c) Ratio of expenses to average net assets excluding interest expense is
2.20%.
(d) Ratio of expenses to average net assets excluding interest expense is
2.20%.
(ii) The information provided for the Innovation Fund reflects results of
operations under the Fund's former Sub-Adviser through March 6, 1999; the
Fund would not necessarily have achieved the performance results shown
above under its current investment management arrangements.
(iii) The information provided for the International Fund reflects results of
operations under the Fund's former Sub-Advisers through November 15,
1994; the Fund would not necessarily have achieved the performance
results shown above under its current investment management
arrangements.
59 PIMCO Funds: Multi-Manager Series
<PAGE>
<TABLE>
<CAPTION>
Ratio of Net
Ratio of Investment
Tax Basis Net Asset Expenses to Income (Loss) to
Return of Total Value End of Net Assets End Average Net Average Net Portfolio
Capital Distributions Period Total Return of Period (000s) Assets Assets Turnover Rate
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 0.00 $ (3.92) $ 31.15 17.76 % $2,064,450 1.90% (1.18)% 131%
0.00 (4.32) 30.33 39.99 1,853,002 1.91 (1.02) 123
0.00 (3.51) 25.58 15.27 1,514,432 1.86* (0.61)* 94
0.00 (2.93) 25.46 15.22 1,450,216 1.86 (0.51) 104
0.00 (1.19) 24.94 22.80 1,290,152 1.90 (0.20) 111
0.00 (1.87) 21.52 0.50 1,085,427 1.90 (0.20) 115
$ 0.00 $ (1.26) $ 37.46 61.36 % $ 313,946 1.30% (0.90)% 119%
0.00 (1.17) 24.28 48.10 85,800 1.31 (0.94) 100
0.00 (0.26) 17.43 2.41 56,215 1.28* (0.68)* 80
0.00 (0.35) 17.26 19.86 50,067 1.31 (0.61) 123
0.00 0.00 14.74 47.40 28,239 1.40* (0.60)* 86
0.00 (1.26) 36.09 60.17 351,876 2.05 (1.64) 119
0.00 (1.17) 23.60 46.95 81,130 2.06 (1.69) 100
0.00 (0.26) 17.10 1.79 51,472 2.03* (1.43)* 80
0.00 (0.35) 17.04 18.99 33,778 2.06 (1.36) 123
0.00 0.00 14.66 24.10 6,509 2.30* (1.70)* 86
0.00 (1.26) 36.08 60.20 580,251 2.05 (1.65) 119
0.00 (1.17) 23.59 46.97 219,258 2.06 (1.69) 100
0.00 (0.26) 17.09 1.73 162,889 2.03* (1.43)* 80
0.00 (0.35) 17.04 19.08 137,752 2.06 (1.36) 123
0.00 0.00 14.65 46.50 63,952 2.20* (1.40)* 86
$ 0.00 $ (1.15) $ 12.45 (4.31)% $ 18,865 1.55%(b) 0.05% 55%
0.00 (1.12) 14.33 9.95 12,510 1.48 0.41 60
0.00 (0.39) 14.26 12.82 18,287 1.51* 0.58* 59
0.00 0.00 13.03 6.89 20,056 1.41 0.49 110
0.00 (0.24) 12.19 (3.70) 17,951 1.50 0.60 170
0.00 (0.23) 12.92 8.20 23,289 1.40 0.30 55
0.00 (1.15) 11.51 (5.15) 9,478 2.29 (c) (0.67) 55
0.00 (1.12) 13.46 9.17 8,956 2.22 (0.37) 60
0.00 (0.39) 13.56 12.17 8,676 2.26* 0.18* 59
0.00 0.00 12.48 6.21 5,893 2.16 (0.26) 110
0.00 0.00 11.75 4.00 503 2.30* (0.10)* 170
0.00 (1.15) 11.50 (5.15) 101.320 2.30 (d) (0.75) 55
0.00 (1.12) 13.45 9.18 132,986 2.22 (0.43) 60
0.00 (0.39) 13.55 12.18 168,446 2.25* (0.25)* 59
0.00 0.00 12.47 6.13 203,544 2.16 (0.26) 110
0.00 (0.24) 11.75 (4.50) 215,349 2.20 (0.20) 170
0.00 (0.23) 12.56 7.40 294,492 2.20 (0.50) 55
$ 0.00 $ (1.08) $ 22.82 (0.13)% $ 124,680 1.10% 0.15% 85%
0.00 (1.37) 24.00 25.71 57,164 1.11 0.07 66
0.00 0.00 20.24 11.58 12,184 1.11* 0.17* 82
0.00 (1.07) 22.43 (0.86) 84,698 1.85 (0.62) 85
0.00 (1.33) 23.77 24.76 84,535 1.86 (0.68) 66
0.00 0.00 20.17 11.19 28,259 1.85* (0.58)* 82
</TABLE>
Prospectus 60
<PAGE>
Financial Highlights (continued)
<TABLE>
<CAPTION>
Net Realized/ Dividends Dividends in Distributions
Year or Net Asset Value Net Unrealized Total Income From Net Excess of Net From Net
Period Beginning Investment Gain (Loss) on From Investment Investment Investment Realized Capital
Ended of Period Income (Loss) Investments Operations Income Income Gains
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Mid-Cap Growth
Fund (Cont.)
Class C
06/30/99 $23.77 $(0.13)(a) $(0.13)(a) $(0.26) $0.00 $0.00 $(1.07)
06/30/98 20.18 (0.16)(a) 5.08 (a) 4.92 0.00 0.00 (1.33)
01/13/97-
06/30/97 18.14 (0.10) 2.14 2.04 0.00 0.00 0.00
Opportunity Fund
(iv)
Class A
06/30/99 $31.33 $(0.21)(a) $0.46 (a) $0.25 $0.00 $0.00 $(4.62)
06/30/98 29.35 (0.27)(a) 4.19 (a) 3.92 0.00 0.00 (1.94)
10/01/96-
06/30/97 37.36 0.00 (3.10) (3.10) 0.00 0.00 (4.91)
09/30/96 39.08 (0.11) 6.12 6.01 0.00 0.00 (7.73)
09/30/95 28.87 (0.11) 11.19 11.08 0.00 0.00 (0.87)
09/30/94 33.43 (0.17) (2.02) (2.19) 0.00 0.00 (2.26)
Class B
03/31/99-
06/30/99 21.40 (0.09)(a) 2.89 (a) 2.80 0.00 0.00 0.00
Class C
06/30/99 28.86 (0.37)(a) 0.32 (a) (0.05) 0.00 0.00 (4.62)
06/30/98 27.38 (0.46)(a) 3.88 (a) 3.42 0.00 0.00 (1.94)
10/01/96-
06/30/97 35.38 (0.04) (3.05) (3.09) 0.00 0.00 (4.91)
09/30/96 37.64 (0.35) 5.82 5.47 0.00 0.00 (7.73)
09/30/95 28.04 (0.34) 10.81 10.47 0.00 0.00 (0.87)
09/30/94 32.77 (0.38) (1.98) (2.36) 0.00 0.00 (2.26)
Precious Metals
Fund (v)
Class A
06/30/99 $5.33 $0.13 (a) $(0.45)(a) $(0.32) $(0.09) $(0.02) $0.00
06/30/98 8.83 0.04 (a) (3.54)(a) (3.50) 0.00 0.00 0.00
10/01/96-
06/30/97 12.12 0.17 (3.29) (3.12) 0.00 0.00 0.00
09/30/96 12.33 0.03 (0.24) (0.21) 0.00 0.00 0.00
09/30/95 14.14 0.07 (1.88) (1.81) 0.00 0.00 0.00
09/30/94 10.32 0.08 3.74 3.82 0.00 0.00 0.00
Class B
06/30/99 5.01 0.08 (a) (0.42)(a) (0.34) (0.09) (0.03) 0.00
06/30/98 8.42 (0.01)(a) (3.40)(a) (3.41) 0.00 0.00 0.00
10/01/96-
06/30/97 11.62 0.00 (3.03) (3.03) 0.00 0.00 0.00
9/30/96 11.90 (0.03) (0.25) (0.28) 0.00 0.00 0.00
6/15/95-
9/30/95 11.61 (0.01) 0.30 0.29 0.00 0.00 0.00
Class C
06/30/99 5.00 0.10 (a) (0.43)(a) (0.33) (0.11) (0.03) 0.00
06/30/98 8.43 0.00 (a) (3.43)(a) (3.43) 0.00 0.00 0.00
10/01/96-
06/30/97 11.62 (0.03) (2.99) (3.02) 0.00 0.00 0.00
09/30/96 11.90 (0.07) (0.21) (0.28) 0.00 0.00 0.00
09/30/95 13.75 (0.02) (1.83) (1.85) 0.00 0.00 0.00
09/30/94 10.11 (0.02) 3.66 3.64 0.00 0.00 0.00
Renaissance Fund
(vi)
Class A
06/30/99 $19.10 $(0.01)(a) $1.45 (a) $1.44 $0.00 $0.00 $(2.33)
06/30/98 17.73 0.07 (a) 4.91 (a) 4.98 (0.08) 0.00 (3.53)
10/01/96-
06/30/97 16.08 0.12 (a) 3.90 (a) 4.02 (0.12) 0.00 (2.25)
09/30/96 14.14 0.23 2.79 3.02 (0.23) (0.07) (0.78)
09/30/95 12.50 0.36 1.61 1.97 (0.33) 0.00 0.00
09/30/94 12.88 0.34 (0.17) 0.17 (0.33) 0.00 (0.22)
Class B
06/30/99 19.06 (0.13)(a) 1.39 (a) 1.26 0.00 0.00 (2.33)
06/30/98 17.77 (0.07)(a) 4.91 (a) 4.84 (0.02) 0.00 (3.53)
10/01/96-
06/30/97 16.12 0.03 (a) 3.92 (a) 3.95 (0.05) 0.00 (2.25)
09/30/96 14.13 0.09 2.83 2.92 (0.11) (0.04) (0.78)
05/22/95-
09/30/95 12.55 0.11 1.55 1.66 (0.08) 0.00 0.00
<CAPTION>
Distributions
Year or in Excess of
Period Net Realized
Ended Capital Gains
- ----------------------------------
<S> <C>
Mid-Cap Growth
Fund (Cont.)
Class C
06/30/99 $0.00
06/30/98 0.00
01/13/97-
06/30/97 0.00
Opportunity Fund
(iv)
Class A
06/30/99 $0.00
06/30/98 0.00
10/01/96-
06/30/97 0.00
09/30/96 0.00
09/30/95 0.00
09/30/94 0.00
Class B
03/31/99-
06/30/99 0.00
Class C
06/30/99 0.00
06/30/98 0.00
10/01/96-
06/30/97 0.00
09/30/96 0.00
09/30/95 0.00
09/30/94 0.00
Precious Metals
Fund (v)
Class A
06/30/99 $0.00
06/30/98 0.00
10/01/96-
06/30/97 (0.17)
09/30/96 0.00
09/30/95 0.00
09/30/94 0.00
Class B
06/30/99 0.00
06/30/98 0.00
10/01/96-
06/30/97 (0.17)
9/30/96 0.00
6/15/95-
9/30/95 0.00
Class C
06/30/99 0.00
06/30/98 0.00
10/01/96-
06/30/97 (0.17)
09/30/96 0.00
09/30/95 0.00
09/30/94 0.00
Renaissance Fund
(vi)
Class A
06/30/99 $0.00
06/30/98 0.00
10/01/96-
06/30/97 0.00
09/30/96 0.00
09/30/95 0.00
09/30/94 0.00
Class B
06/30/99 0.00
06/30/98 0.00
10/01/96-
06/30/97 0.00
09/30/96 0.00
05/22/95-
09/30/95 0.00
</TABLE>
- -------
* Annualized
(a) Per share amounts based upon average number of shares outstanding during
the period.
(b) Ratio of expenses to average net assets excluding interest expense is
1.26%.
(c) Ratio of expenses to average net assets excluding interest expense is
2.06%.
(d) Ratio of expenses to average net assets excluding interest expense is
2.06%.
(e) Ratio of expenses to average net assets excluding interest expense is
1.25%.
(f) Ratio of expenses to average net assets excluding interest expense is
2.05%.
(g) Ratio of expenses to average net assets excluding interest expense is
2.05%.
(iv) The information provided for the Opportunity Fund reflects results of
operations under the Fund's former Sub-Adviser through March 6, 1999; the
Fund would not necessarily have achieved the performance results shown
above under its current investment management arrangements.
(v) The information provided for the Precious Metals Fund reflects results of
operations under the Fund's former investment objective and policies
through November 14, 1994; such results would not necessarily have been
achieved had the Fund's current objective and policies then been in
effect.
(vi) The information provided for the Renaissance Fund reflects results of
operations under the Fund's former Sub-Adviser through May 7, 1999; the
Fund would not necessarily have achieved the performance results shown
above under its current investment management arrangements.
61 PIMCO Funds: Multi-Manager Series
<PAGE>
<TABLE>
<CAPTION>
Ratio of Net
Ratio of Investment
Tax Basis Net Asset Expenses to Income to
Return of Total Value End of Net Assets End Average Net Average Net Portfolio
Capital Distributions Period Total Return of Period (000s) Assets Assets Turnover Rate
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$0.00 $(1.07) $22.44 (0.82)% $112,507 1.85% (0.63)% 85%
0.00 (1.33) 23.77 24.70 140,438 1.86 (0.68) 66
0.00 0.00 20.18 11.25 53,686 1.86* (0.58)* 82
$0.00 $(4.62) $26.96 3.98 % $121,507 1.31% (0.86)% 175%
0.00 (1.94) 31.33 13.87 200,935 1.31 (0.88) 86
0.00 (4.91) 29.35 (8.87) 213,484 1.25* (0.12)* 69
0.00 (7.73) 37.36 18.35 134,859 1.13 (0.32) 91
0.00 (0.87) 39.08 39.70 120,830 1.20 (0.40) 102
(0.11) (2.37) 28.87 (6.70) 95,261 1.10 (0.60) 78
0.00 0.00 24.20 13.08 251 2.03* (1.65)* 175
0.00 (4.62) 24.19 3.20 308,877 2.06 (1.62) 175
0.00 (1.94) 28.86 13.01 500,011 2.06 (1.63) 86
0.00 (4.91) 27.38 (9.40) 629,446 1.97* (0.95)* 69
0.00 (7.73) 35.38 17.47 800,250 1.88 (1.07) 91
0.00 (0.87) 37.64 38.60 715,191 1.90 (1.10) 102
(0.11) (2.37) 28.04 (7.40) 553,460 1.90 (1.40) 78
$0.00 $(0.11) $4.90 (6.06)% $7,826 1.46% (e) 2.40 % 62%
0.00 0.00 5.33 (39.64) 4,709 1.31 (b) 0.70 56
0.00 (0.17) 8.83 (26.05) 4,016 1.37* 0.33* 46
0.00 0.00 12.12 (1.70) 6,245 1.32 0.19 35
0.00 0.00 12.33 (12.80) 7,670 1.40 0.60 9
0.00 0.00 14.14 37.00 11,229 1.30 0.60 11
0.00 (0.12) 4.55 (6.89) 3,921 2.21 (f) 1.63 62
0.00 0.00 5.01 (40.50) 3,889 2.11 (c) (0.07) 56
0.00 (0.17) 8.42 (26.40) 4,248 2.13* (0.33)* 46
0.00 0.00 11.62 (2.35) 2,218 2.07 (0.56) 35
0.00 0.00 11.90 2.50 251 2.20* (0.20)* 9
0.00 (0.14) 4.53 (6.73) 11,491 2.20 (g) 1.92 62
0.00 0.00 5.00 (40.69) 16,943 2.11 (d) (0.07) 56
0.00 (0.17) 8.43 (26.31) 25,113 2.15* (0.41)* 46
0.00 0.00 11.62 (2.35) 37,609 2.07 (0.56) 35
0.00 0.00 11.90 (13.50) 42,341 2.20 (0.20) 9
0.00 0.00 13.75 36.00 62,825 2.10 (0.20) 11
$0.00 $(2.33) $18.21 9.94 % $90,445 1.26% (0.04)% 221%
0.00 (3.61) 19.10 30.98 85,562 1.26 0.35 192
0.00 (2.37) 17.73 27.53 33,606 1.23* 0.95* 131
0.00 (1.08) 16.08 22.37 20,631 1.25 1.60 203
0.00 (0.33) 14.14 16.10 12,933 1.30 2.90 177
0.00 (0.55) 12.50 1.40 14,942 1.30 2.70 175
0.00 (2.33) 17.99 8.94 126,576 2.00 (0.78) 221
0.00 (3.55) 19.06 29.99 100,688 2.01 (0.39) 192
0.00 (2.30) 17.77 26.88 37,253 1.97* 0.20* 131
0.00 (0.93) 16.12 21.54 15,693 2.00 0.85 203
0.00 (0.08) 14.13 13.30 1,760 2.10* 2.20* 177
</TABLE>
Prospectus 62
<PAGE>
Financial Highlights (continued)
<TABLE>
<CAPTION>
Net Realized/ Dividends Dividends in Distributions
Year or Net Asset Value Net Unrealized Total Income From Net Excess of Net From Net
Period Beginning Investment Gain (Loss) on From Investment Investment Investment Realized Capital
Ended of Period Income (Loss) Investments Operations Income Income Gains
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Renaissance Fund
(Cont.)
Class C
06/30/99 $18.96 $(0.13)(a) $1.41 (a) $1.28 $0.00 $0.00 $(2.33)
06/30/98 17.69 (0.07)(a) 4.88 (a) 4.81 (0.01) 0.00 (3.53)
10/01/96-
06/30/97 16.05 0.03 (a) 3.90 (a) 3.93 (0.04) 0.00 (2.25)
09/30/96 14.09 0.12 2.78 2.90 (0.13) (0.03) (0.78)
09/30/95 12.47 0.27 1.59 1.86 (0.24) 0.00 0.00
09/30/94 12.85 0.24 (0.16) 0.08 (0.24) 0.00 (0.22)
Small-Cap Value
Fund
Class A
06/30/99 $17.58 $0.26 (a) $(1.29)(a) $(1.03) $(0.17) $0.00 $0.00
06/30/98 15.75 0.23 (a) 2.49 (a) 2.72 (0.13) 0.00 (0.76)
01/20/97-
06/30/97 14.02 0.10 1.63 1.73 0.00 0.00 0.00
Class B
06/30/99 17.43 0.14 (a) (1.27)(a) (1.13) (0.06) 0.00 0.00
06/30/98 15.71 0.09 (a) 2.48 (a) 2.57 (0.09) 0.00 (0.76)
01/20/97-
06/30/97 14.02 0.08 1.61 1.69 0.00 0.00 0.00
Class C
06/30/99 17.44 0.14 (a) (1.27)(a) (1.13) (0.04) 0.00 0.00
06/30/98 15.71 0.09 (a) 2.49 (a) 2.58 (0.09) 0.00 (0.76)
01/20/97-
06/30/97 14.02 0.08 1.61 1.69 0.00 0.00 0.00
Target Fund
(vii)
Class A
06/30/99 $16.35 $(0.09)(a) $2.44 (a) $2.35 $0.00 $0.00 $(0.98)
06/30/98 16.82 (0.08)(a) 4.06 (a) 3.98 0.00 0.00 (4.45)
10/01/96-
06/30/97 17.11 (0.04)(a) 1.82 (a) 1.78 0.00 0.00 (2.07)
09/30/96 16.40 (0.05) 2.54 2.49 0.00 0.00 (1.78)
09/30/95 13.13 (0.02) 3.45 3.43 0.00 0.00 (0.16)
09/30/94 12.72 (0.04) 0.57 0.53 0.00 0.00 (0.12)
Class B
06/30/99 15.34 (0.19)(a) 2.27 (a) 2.08 0.00 0.00 (0.98)
06/30/98 16.14 (0.19)(a) 3.84 (a) 3.65 0.00 0.00 (4.45)
10/01/96-
06/30/97 16.58 (0.12)(a) 1.75 (a) 1.63 0.00 0.00 (2.07)
09/30/96 16.06 (0.09) 2.39 2.30 0.00 0.00 (1.78)
05/22/95-
09/30/95 13.93 (0.05) 2.18 2.13 0.00 0.00 0.00
Class C
06/30/99 15.34 (0.19)(a) 2.26 (a) 2.07 0.00 0.00 (0.98)
06/30/98 16.13 (0.19)(a) 3.85 (a) 3.66 0.00 0.00 (4.45)
10/01/96-
06/30/97 16.58 (0.12)(a) 1.74 (a) 1.62 0.00 0.00 (2.07)
09/30/96 16.05 (0.16) 2.47 2.31 0.00 0.00 (1.78)
09/30/95 12.95 (0.12) 3.38 3.26 0.00 0.00 (0.16)
09/30/94 12.65 (0.14) 0.56 0.42 0.00 0.00 (0.12)
Tax-Efficient
Equity Fund
Class A
07/10/98-
06/30/99 $10.00 $0.03 (a) $1.56 (a) $1.59 $0.00 $0.00 $0.00
Class B
07/10/98-
06/30/99 10.00 (0.05)(a) 1.56 (a) 1.51 0.00 0.00 0.00
Class C
07/10/98-
06/30/99 10.00 (0.05)(a) 1.56 (a) 1.51 0.00 0.00 0.00
Value Fund
Class A
06/30/99 $15.64 $0.24 (a) $1.35 (a) $1.59 $(0.22) $0.00 $(1.72)
06/30/98 14.80 0.19 (a) 2.46 (a) 2.65 (0.18) 0.00 (1.63)
01/13/97-
06/30/97 13.17 0.47 1.26 1.73 (0.10) 0.00 0.00
Class B
06/30/99 15.63 0.12 (a) 1.35 (a) 1.47 (0.12) 0.00 (1.72)
06/30/98 14.80 0.07 (a) 2.46 (a) 2.53 (0.07) 0.00 (1.63)
01/13/97-
06/30/97 13.16 0.44 1.26 1.70 (0.06) 0.00 0.00
<CAPTION>
Distributions
Year or in Excess of
Period Net Realized
Ended Capital Gains
- ---------------------------------
<S> <C>
Renaissance Fund
(Cont.)
Class C
06/30/99 $0.00
06/30/98 0.00
10/01/96-
06/30/97 0.00
09/30/96 0.00
09/30/95 0.00
09/30/94 0.00
Small-Cap Value
Fund
Class A
06/30/99 $(0.45)
06/30/98 0.00
01/20/97-
06/30/97 0.00
Class B
06/30/99 (0.45)
06/30/98 0.00
01/20/97-
06/30/97 0.00
Class C
06/30/99 (0.45)
06/30/98 0.00
01/20/97-
06/30/97 0.00
Target Fund
(vii)
Class A
06/30/99 $0.00
06/30/98 0.00
10/01/96-
06/30/97 0.00
09/30/96 0.00
09/30/95 0.00
09/30/94 0.00
Class B
06/30/99 0.00
06/30/98 0.00
10/01/96-
06/30/97 0.00
09/30/96 0.00
05/22/95-
09/30/95 0.00
Class C
06/30/99 0.00
06/30/98 0.00
10/01/96-
06/30/97 0.00
09/30/96 0.00
09/30/95 0.00
09/30/94 0.00
Tax-Efficient
Equity Fund
Class A
07/10/98-
06/30/99 $0.00
Class B
07/10/98-
06/30/99 0.00
Class C
07/10/98-
06/30/99 0.00
Value Fund
Class A
06/30/99 $0.00
06/30/98 0.00
01/13/97-
06/30/97 0.00
Class B
06/30/99 0.00
06/30/98 0.00
01/13/97-
06/30/97 0.00
</TABLE>
- -------
* Annualized
(a) Per share amounts based upon average number of shares outstanding during
the period.
(vii) The information provided for the Target Fund reflects results of
operations under the Fund's former Sub-Adviser through March 6, 1999; the Fund
would not necessarily have achieved the performance results shown above under
its current investment management arrangements.
63 PIMCO Funds: Multi-Manager Series
<PAGE>
<TABLE>
<CAPTION>
Ratio of Net
Ratio of Investment
Tax Basis Net Asset Expenses to Income (Loss) to
Return of Total Value End of Net Assets End Average Net Average Net Portfolio
Capital Distributions Period Total Return of Period (000s) Assets Assets Turnover Rate
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 0.00 $ (2.33) $ 17.91 9.12 % $442,049 2.00% (0.79)% 221%
0.00 (3.54) 18.96 29.98 469,797 2.01 (0.37) 192
0.00 (2.29) 17.69 26.86 313,226 1.97* 0.21* 131
0.00 (0.94) 16.05 21.52 230,058 2.00 0.85 203
0.00 (0.24) 14.09 15.20 174,316 2.10 2.10 177
0.00 (0.46) 12.47 0.70 178,892 2.00 2.00 175
$ 0.00 $ (0.62) $ 15.93 (5.50)% $107,569 1.25% 1.74 % 60%
0.00 (0.89) 17.58 17.33 75,070 1.25 1.27 41
0.00 0.00 15.75 12.34 6,563 1.30* 1.94* 48
0.00 (0.51) 15.79 (6.22) 96,994 2.00 0.95 60
0.00 (0.85) 17.43 16.40 110,833 2.00 0.53 41
0.00 0.00 15.71 12.05 11,077 2.04* 1.23* 48
0.00 (0.49) 15.82 (6.21) 112,926 2.00 0.95 60
0.00 (0.85) 17.44 16.42 130,466 2.00 0.52 41
0.00 0.00 15.71 12.05 20,637 2.05* 1.13* 48
$ 0.00 $ (0.98) $ 17.72 15.69 % $170,277 1.21% (0.57)% 229%
0.00 (4.45) 16.35 27.49 157,277 1.22 (0.49) 226
0.00 (2.07) 16.82 11.19 150,689 1.20* (0.31)* 145
0.00 (1.78) 17.11 16.50 156,027 1.18 (0.34) 141
0.00 (0.16) 16.40 26.50 121,915 1.20 (0.10) 128
0.00 (0.12) 13.13 4.20 90,527 1.20 (0.30) 104
0.00 (0.98) 16.44 14.93 78,659 1.95 (1.31) 229
0.00 (4.45) 15.34 26.45 76,194 1.96 (1.24) 226
0.00 (2.07) 16.14 10.58 67,531 1.94* (1.05)* 145
0.00 (1.78) 16.58 15.58 49,851 1.93 (1.09) 141
0.00 0.00 16.06 15.30 7,554 2.00* (0.90)* 128
0.00 (0.98) 16.43 14.86 910,494 1.95 (1.31) 229
0.00 (4.45) 15.34 26.53 952,728 1.96 (1.24) 226
0.00 (2.07) 16.13 10.52 969,317 1.94* (1.06)* 145
0.00 (1.78) 16.58 15.66 974,948 1.93 (1.09) 141
0.00 (0.16) 16.05 25.60 780,355 2.00 (0.90) 128
0.00 (0.12) 12.95 3.40 556,043 2.00 (1.10) 104
$ 0.00 $ 0.00 $ 11.59 15.90 % $ 6,579 1.11%* 0.25%* 13%
0.00 0.00 11.51 15.10 6,370 1.85* (0.50)* 13
0.00 0.00 11.51 15.10 10,742 1.84* (0.52)* 13
$ 0.00 $ (1.94) $ 15.29 11.93 % $ 22,267 1.11% 1.68 % 101%
0.00 (1.81) 15.64 18.86 21,742 1.11 1.19 77
0.00 (0.10) 14.80 13.19 15,648 1.11* 1.71* 71
0.00 (1.84) 15.26 11.05 36,314 1.85 0.85 101
0.00 (1.70) 15.63 17.98 35,716 1.86 0.45 77
0.00 (0.06) 14.80 12.93 25,433 1.86* 0.96* 71
</TABLE>
Prospectus 64
<PAGE>
Financial Highlights (continued)
<TABLE>
<CAPTION>
Net Realized/ Dividends Dividends in Distributions
Year or Net Asset Value Net Unrealized Total Income From Net Excess of Net From Net
Period Beginning Investment Gain (Loss) on From Investment Investment Investment Realized Capital
Ended of Period Income (Loss) Investments Operations Income Income Gains
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Value Fund
(Cont.)
Class C
06/30/99 $ 15.63 $ 0.12 (a) $ 1.35 (a) $ 1.47 $ (0.12) $ 0.00 $ (1.72)
06/30/98 14.80 0.07 (a) 2.46 (a) 2.53 (0.07) 0.00 (1.63)
01/13/97-
06/30/97 13.15 0.43 1.28 1.71 (0.06) 0.00 0.00
Value 25 Fund
Class A
07/10/98-
06/30/99 $ 10.00 $ 0.13 (a) $(1.12)(a) $ (0.99) $ (0.05) $ 0.00 $ 0.00
Class B
07/10/98-
06/30/99 10.00 0.07 (a) (1.12)(a) (1.05) (0.03) 0.00 0.00
Class C
07/10/98-
06/30/99 10.00 0.07 (a) (1.12)(a) (1.05) (0.02) 0.00 0.00
<CAPTION>
Distributions
Year or in Excess of
Period Net Realized
Ended Capital Gains
- -------------------------------------
<S> <C>
Value Fund
(Cont.)
Class C
06/30/99 $ 0.00
06/30/98 0.00
01/13/97-
06/30/97 0.00
Value 25 Fund
Class A
07/10/98-
06/30/99 $ 0.00
Class B
07/10/98-
06/30/99 0.00
Class C
07/10/98-
06/30/99 0.00
</TABLE>
______________
* Annualized.
(a) Per share amounts based upon average number of shares outstanding during
the period.
(b) Ratio of expenses to average net assets excluding interest expense is
1.90%.
(c) Ratio of expenses to average net assets excluding interest expense is
1.90%.
(d) Ratio of expenses to average net assets excluding interest expense is
1.15%.
65 PIMCO Funds: Multi-Manager Series
<PAGE>
<TABLE>
<CAPTION>
Tax Ratio of Net
Basis Ratio of Investment
Return Net Asset Expenses to Income (Loss) to
of Total Value End of Net Assets End Average Net Average Net Portfolio
Capital Distributions Period Total Return of Period (000s) Assets Assets Turnover Rate
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$0.00 $(1.84) $15.26 11.04 % $80,594 1.85% 0.83% 101%
0.00 (1.70) 15.63 17.98 88,235 1.86 0.45 77
0.00 (0.06) 14.80 13.02 64,110 1.86* 0.97* 71
$0.00 $(0.05) $ 8.96 (9.85)% $ 287 1.23%(d)* 1.60*% 1.82%
0.00 (0.03) 8.92 (10.47) 840 1.99 (b)* 0.88* 1.82
0.00 (0.02) 8.93 (10.50) 833 1.99 (c)* 0.89* 1.82
</TABLE>
Prospectus 66
<PAGE>
PIMCO Funds: Multi-Manager Series
The Trust's Statement of Additional Information ("SAI") and annual
and semi-annual reports to shareholders include additional
information about the Funds. The SAI and the financial statements
included in the Funds' most recent annual report to shareholders
are incorporated by reference into this Prospectus, which means
they are part of this Prospectus for legal purposes. The Funds'
annual report discusses the market conditions and investment
strategies that significantly affected each Fund's performance
during its last fiscal year.
The SAI includes the PIMCO Funds Shareholders' Guide for Class A,
B and C Shares, a separate booklet which contains more detailed
information about Fund purchase, redemption and exchange options
and procedures and other information about the Funds. You can get
a free copy of the Guide together with or separately from the rest
of the SAI.
You may get free copies of any of these materials, request other
information about a Fund, or make shareholder inquiries by calling
1-800-426-0107, or by writing to:
PIMCO Funds Distributors LLC
2187 Atlantic Street
Stamford, Connecticut 06902
You may review and copy information about the Trust, including its
SAI, at the Securities and Exchange Commission's public reference
room in Washington, D.C. You may call the Commission at 1-800-SEC-
0330 for information about the operation of the public reference
room. You may also access reports and other information about the
Trust on the Commission's Web site at www.sec.gov. You may get
copies of this information, with payment of a duplication fee, by
writing the Public Reference Section of the Commission,
Washington, D.C. 20549-6009. You may need to refer to the Trust's
file number under the Investment Company Act, which is 811-6161.
You can also visit our Web site at www.pimcofunds.com for
additional information about the Funds.
[LOGO OF PIMCO FUNDS APPEARS HERE]
File No. 811-6161
<PAGE>
Rule 497(c)
33-36528
811-6161
PIMCO Funds Prospectus
PIMCO This Prospectus describes 8 mutual funds offered by PIMCO Funds:
Funds: Multi-Manager Series. The Funds provide access to the professional
Multi- investment advisory services offered by PIMCO Advisors L.P. and
Manager its investment management affiliates. As of September 30, 1999,
Series PIMCO Advisors and its affiliates managed approximately
$256 billion, including assets for 67 of the 200 largest U.S.
corporations.
November
1, 1999
The Prospectus explains what you should know about the Funds
Share before you invest. Please read it carefully.
Class
D
The Securities and Exchange Commission has not approved or
disapproved these securities or determined if this Prospectus is
truthful or complete. Any representation to the contrary is a
criminal offense.
1 PIMCO Funds: Multi-Manager Series
<PAGE>
Table of Contents
<TABLE>
<S> <C>
Summary Information.............................................. 3
Fund Summaries
Capital Appreciation Fund...................................... 5
Equity Income Fund............................................. 7
Growth Fund.................................................... 9
Innovation Fund................................................ 11
Mid-Cap Growth Fund............................................ 13
Renaissance Fund............................................... 15
Tax-Efficient Equity Fund...................................... 17
Value Fund..................................................... 19
Summary of Principal Risks....................................... 21
Management of the Funds.......................................... 23
How Fund Shares Are Priced....................................... 26
How to Buy and Sell Shares....................................... 27
Fund Distributions............................................... 29
Tax Consequences................................................. 30
Characteristics and Risks of Securities and Investment
Techniques...................................................... 30
Financial Highlights............................................. 37
</TABLE>
Prospectus 2
<PAGE>
Summary Information
The table below lists the investment objectives and compares
certain investment characteristics of the Funds. Other important
characteristics are described in the individual Fund Summaries
beginning on page 5.
<TABLE>
<CAPTION>
Approximate
PIMCO Investment Main Number of
Fund Objective Investments Holdings
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Growth Stock Growth Long-term growth of Common stocks of companies with 35-40
Funds capital; income is market capitalizations of at least $5 billion
an incidental
consideration
- ------------------------------------------------------------------------------------------------------------------------
Blend Stock Capital Appreciation Growth of capital Common stocks of companies with market 60-100
Funds capitalizations of at least $1 billion that
have improving fundamentals and whose stock is
reasonably valued by the market
-----------------------------------------------------------------------------------------------------------
Mid-Cap Growth Growth of capital Common stocks of companies with market 60-100
capitalizations of more than $500 million
(excluding the largest 200 companies) that have
improving fundamentals and whose stock is
reasonably valued by the market
- ------------------------------------------------------------------------------------------------------------------------
Value Stock Equity Income Current income as a Income-producing common stocks of 40-50
Funds primary objective; companies with market capitalizations of
long-term growth of more than $2 billion
capital as a secondary
objective
-----------------------------------------------------------------------------------------------------------
Renaissance Long-term growth of Common stocks having below-average valuations 50-80
capital and income where the company's business fundamentals are
expected to improve
-----------------------------------------------------------------------------------------------------------
Value Long-term growth of Common stocks of companies with market 40
capital and income capitalizations of more than $2 billion that are
undervalued relative to the market and their
industry groups
- ------------------------------------------------------------------------------------------------------------------------
Enhanced Index Tax-Efficient Equity Maximum after-tax A broadly diversified portfolio of at least 200 More than
Stock Funds growth of capital common stocks of companies represented in 200
the S&P 500 Index with market capitalizations
of more than $5 billion
- ------------------------------------------------------------------------------------------------------------------------
Sector-Related Innovation Capital appreciation; Common stocks of technology-related 40
Stock Funds no consideration is companies with market capitalizations of more
given to income than $200 million
<CAPTION>
Approximate
Capitalization
Range
- ------------------------------------------------------------------------------------------------------------------------
<S> <C>
Growth Stock At least $5 billion
Funds
- ------------------------------------------------------------------------------------------------------------------------
Blend Stock At least $1 billion
Funds
-----------------------------------------------------------------------------------------------------------
More than $500 million
(excluding the largest
200 companies)
- ------------------------------------------------------------------------------------------------------------------------
Value Stock More than $2 billion
Funds
-----------------------------------------------------------------------------------------------------------
All capitalizations
-----------------------------------------------------------------------------------------------------------
More than $2 billion
- ------------------------------------------------------------------------------------------------------------------------
Enhanced Index More than $5 billion
Stock Funds
- ------------------------------------------------------------------------------------------------------------------------
Sector-Related More than $200 million
Stock Funds
</TABLE>
Fund The Funds provide a broad range of investment choices. The
Descriptions,following Fund Summaries identify each Fund's investment
Performance objective, principal investments and strategies, principal risks,
and Fees performance information and fees and expenses. A more detailed
"Summary of Principal Risks" describing principal risks of
investing in the Funds begins after the Fund Summaries.
It is possible to lose money on investments in the Funds. An
investment in a Fund is not a deposit of a bank and is not
guaranteed or insured by the Federal Deposit Insurance
Corporation or any other government agency.
3 PIMCO Funds: Multi-Manager Series
<PAGE>
(This page left blank intentionally.)
Prospectus 4
<PAGE>
PIMCO Capital Appreciation Fund
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Principal Investment Fund Focus Approximate Capitalization Range
Investments Objective Larger At least $1
and Seeks growth of capitalization billion
Strategies capital common stocks
Dividend
Fund Category Approximate Frequency
Blend Stocks Number of At least
</TABLE> Holdings annually
60-100
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in common stocks of companies
with larger market capitalizations that have improving
fundamentals (based on growth criteria) and whose stock is
reasonably valued by the market (based on value criteria).
In making investment decisions for the Fund, the portfolio
management team considers the 1,000 largest publicly traded
companies (in terms of market capitalization) in the U.S. The team
screens the stocks in this universe for a series of growth
criteria, such as dividend growth, earnings growth, relative
growth of earnings over time (earnings momentum) and the company's
history of meeting earnings targets (earnings surprise), and also
value criteria, such as price-to-earnings, price-to-book and
price-to-cash flow ratios. The team then selects individual stocks
by subjecting the top 10% of the stocks in the screened universe
to a rigorous analyses of company factors, such as strength of
management, competitive industry position, and business prospects,
and financial statement data, such as earnings, cash flows and
profitability. The team may interview company management in making
investment decisions. The Fund's capitalization criteria applies
at the time of investment.
The portfolio management team rescreens the universe frequently
and seeks to consistently achieve a favorable balance of growth
and value characteristics for the Fund. The team sells a stock
when it falls below the median ranking, has negative earnings
surprises, or shows poor price performance relative to all stocks
in the Fund's capitalization range or to companies in the same
business sector. A stock may also be sold if its weighting in the
portfolio becomes excessive (normally above 2% of the Fund's
investments).
The Fund intends to be fully invested in common stock (aside from
certain cash management practices) and will not make defensive
investments in response to unfavorable market and other
conditions.
- --------------------------------------------------------------------------------
Principal Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
. Market Risk . Growth Securities Risk
. Issuer Risk . Credit Risk
. Value Securities Risk. Management Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
- --------------------------------------------------------------------------------
Performance The top of the next page shows summary performance information for
Information the Fund in a bar chart and an Average Annual Total Returns table.
The information provides some indication of the risks of investing
in the Fund by showing changes in its performance from year to
year and by showing how the Fund's average annual returns compare
with the returns of a broad-based securities market index and an
index of similar funds. The bar chart, the information to its
right and the Average Annual Total Returns table show performance
of the Fund's Institutional Class shares, which are offered in a
different prospectus. This is because the Fund has not offered
Class D shares for a full calendar year. Although Class D and
Institutional Class shares would have similar annual returns
(because all the Fund's shares represent interests in the same
portfolio of securities), Class D performance would be lower than
Institutional Class performance because of the higher expenses
paid by Class D shares.
The Average Annual Total Returns table also shows estimated
historical performance for Class D shares. Prior to the inception
of Class D shares (4/8/98), the performance is based on the
performance of the Fund's Institutional Class shares, adjusted to
reflect the actual distribution and/or service (12b-1) fees and
other expenses paid by Class D shares. Past performance is no
guarantee of future results.
5 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Capital Appreciation Fund (continued)
Calendar Year Total Returns -- Institutional Class
[ANNUAL RETURN CHART APPEARS HERE] More Recent Return
1992 7.51% Information
1993 17.70% --------------------
1994 -4.26% 1/1/99-9/30/99-0.92%
1995 37.14%
1996 26.79% Highest and Lowest
1997 39.22% Quarter Returns
1998 17.59% for periods shown
in the bar chart)
--------------------
Highest (10/1/98-
12/31/98) 19.68%
--------------------
Lowest (7/1/98-
9/30/98) -14.16%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/98)
<TABLE>
<S> <C> <C> <C>
Fund Inception
1 Year 5 Years (3/8/91)(/3/)
-------------------------------------------------------------------------
Institutional Class 17.59% 21.32% 19.74%
-------------------------------------------------------------------------
Class D 17.14% 20.84% 19.27%
-------------------------------------------------------------------------
S&P 500 Index(/1/) 28.58% 24.06% 19.58%
-------------------------------------------------------------------------
Lipper Capital Appreciation Fund Average(/2/) 20.49% 15.02% 14.91%
-------------------------------------------------------------------------
</TABLE>
(1) The S&P 500 Index is an unmanaged index of large
capitalization common stocks. It is not possible to invest
directly in the index.
(2) The Lipper Capital Appreciation Fund Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. that have an investment objective of maximum
capital appreciation. It does not take into account sales
charges.
(3) The Fund began operations on 3/8/91. Index comparisons begin
on 2/28/91.
- --------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Class D shares of the Fund:
of the
Fund
Shareholder Fees (fees paid directly from your investment) None
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Fees (12b-1) Fees(/1/) Expenses(/2/) Expenses
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class D 0.45% 0.25% 0.40% 1.10%
--------------------------------------------------------------------
(1) The Fund's administration agreement includes a plan for Class
D shares that has been adopted in conformity with the
requirements set forth in Rule 12b-1 under the Investment
Company Act of 1940. Up to 0.25% per year of the total
Administrative Fee paid under the administration agreement may
be Distribution and/or Service (12b-1) Fees. The Fund will pay
a total of 0.65% per year under the administration agreement
regardless of whether a portion or none of the 0.25%
authorized under the plan is paid under the plan. Please see
"Management of the Funds--Investment Adviser and
Administrator--Administrative Fees" for details. The Fund
intends to treat any fees paid under the plan as "service
fees" for purposes of applicable rules of the National
Association of Securities Dealers, Inc. (the "NASD"). To the
extent that such fees are deemed not to be "service fees,"
Class D shareholders may, depending on the length of time the
shares are held, pay more than the economic equivalent of the
maximum front-end sales charges permitted by relevant rules of
the NASD.
(2) Other Expenses reflects the portion of the Administrative Fee
paid by the class that its not reflected under Distribution
and/or Service (12b-1) Fees.
Examples. The Examples are intended to help you compare the cost
of investing in Class D shares of the Fund with the costs of
investing in other mutual funds. The Examples assume that you
invest $10,000 in Class D shares for the time periods indicated,
and then redeem all your shares at the end of those periods. The
Examples also assume that your investment has a 5% return each
year, the reinvestment of all dividends and distributions, and the
Fund's operating expenses remain the same. Although your actual
costs may be higher or lower, the Examples show what your costs
would be based on these assumptions.
<CAPTION>
Year 1 Year 3 Year 5 Year 10
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class D $112 $350 $606 $1,340
--------------------------------------------------------------------
</TABLE>
Prospectus 6
<PAGE>
PIMCO Equity Income Fund
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Principal Investment Fund Focus Approximate Capitalization Range
Investments Objective Income More than $2
and Seeks current producing billion
Strategies income as a common
primary stocks with
objective, and potential
long-term for capital
growth of appreciation
capital as a
secondary
objective
Dividend
Frequency
Quarterly
Approximate Number of Holdings
40-50
Fund
Category
Value Stocks
</TABLE>
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in income-producing (or
dividend-paying) common stocks of companies with market
capitalizations of more than $2 billion at the time of investment.
The Fund's initial selection universe consists of the 1,000
largest publicly traded companies (in terms of market
capitalization) in the U.S. The portfolio managers classify the
universe by industry. They then identify the most undervalued
stocks in each industry based mainly on relative P/E ratios,
calculated both with respect to trailing operating earnings and
forward earnings estimates. From this group of stocks, the Fund
buys approximately 25 stocks with the highest dividend yields. The
portfolio managers then screen the most undervalued companies in
each industry by dividend yield to identify the highest yielding
stocks in each industry. From this group, the Fund buys
approximately 25 additional stocks with the lowest P/E ratios.
In selecting stocks, the portfolio managers consider quantitative
factors such as price momentum (based on changes in stock price
relative to changes in overall market prices), earnings momentum
(based on analysts' earnings per share estimates and revisions to
those estimates), relative dividend yields, valuation relative to
the overall market and trading liquidity. The portfolio managers
may replace a stock when a stock within the same industry group
has a considerably higher dividend yield or lower valuation than
the Fund's current holding.
Under normal circumstances, the Fund intends to be fully invested
in common stocks (aside from certain cash management practices).
The Fund may temporarily hold up to 10% of its assets in cash and
cash equivalents for defensive purposes in response to unfavorable
market and other conditions. This would be inconsistent with the
Fund's investment objective and principal strategies.
- --------------------------------------------------------------------------------
Principal Risks
Among the principal risks of investing in the Fund, which could
adversely affect its net asset value, yield and total return, are:
.Market Risk .Value Securities Risk.Management Risk
.Issuer Risk .Credit Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
- --------------------------------------------------------------------------------
Performance The top of the next page shows summary performance information for
Information the Fund in a bar chart and an Average Annual Total Returns table.
The information provides some indication of the risks of investing
in the Fund by showing changes in its performance from year to
year and by showing how the Fund's average annual returns compare
with the returns of a broad-based securities market index and an
index of similar funds. The bar chart, the information to its
right and the Average Annual Total Returns table show performance
of the Fund's Institutional Class shares, which are offered in a
different prospectus. This is because the Fund has not offered
Class D shares for a full calendar year. Although Class D and
Institutional Class shares would have similar annual returns
(because all the Fund's shares represent interests in the same
portfolio of securities), Class D performance would be lower than
Institutional Class performance because of the higher expenses
paid by Class D shares.
The Average Annual Total Returns table also shows estimated
historical performance for Class D shares. Prior to the inception
of Class D shares (4/8/98), the performance is based on the
performance of the Fund's Institutional Class shares, adjusted to
reflect the actual distribution and/or service (12b-1) fees and
other expenses paid by Class D shares. Past performance is no
guarantee of future results.
7 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Equity Income Fund (continued)
Calendar Year Total Returns -- Institutional Class
[BAR CHART APPEARS HERE] More Recent Return
1992 14.75 Information
1993 8.47 --------------------
1994 -1.61 1/1/99-9/30/99 0.80%
1995 33.47
1996 21.48 Highest and Lowest
1997 31.38 Quarter Returns
1998 8.37 (for periods shown
in the bar chart)
--------------------
Highest (10/1/98-
12/31/98) 13.98%
--------------------
Lowest (7/1/98-
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/98)
<TABLE>
<S> <C> <C> <C>
Fund Inception
1 Year 5 Years (3/8/91)(/3/)
------------------------------------------------------------------
Institutional Class 8.37% 17.83% 16.51%
------------------------------------------------------------------
Class D 8.07% 17.39% 16.06%
------------------------------------------------------------------
S&P 500 Index(/1/) 28.58% 24.06% 19.58%
------------------------------------------------------------------
Lipper Equity Income Fund Average(/2/) 11.90% 16.50% 15.59%
------------------------------------------------------------------
</TABLE>
(1) The S&P 500 Index is an unmanaged index of large
capitalization common stocks. It is not possible to invest
directly in the index.
(2) The Lipper Equity Income Fund Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. that seek relatively higher growth of income
through investing 60% or more of their portfolios in equities.
It does not take into account sales charges.
(3) The Fund began operations on 3/8/91. Index comparisons begin
on 2/28/91.
- --------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Class D shares of the Fund:
of the
Fund
Shareholder Fees (fees paid directly from your investment)None
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Fees (12b-1) Fees(/1/) Expenses(/2/) Expenses
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class D 0.45% 0.25% 0.40% 1.10%
--------------------------------------------------------------------
(1) The Fund's administration agreement includes a plan for Class
D shares that has been adopted in conformity with the
requirements set forth in Rule 12b-1 under the Investment
Company Act of 1940. Up to 0.25% per year of the total
Administrative Fee paid under the administration agreement may
be Distribution and/or Service (12b-1) Fees. The Fund will pay
a total of 0.65% per year under the administration agreement
regardless of whether a portion or none of the 0.25%
authorized under the plan is paid under the plan. Please see
"Management of the Funds--Investment Adviser and
Administrator--Administrative Fees" for details. The Fund
intends to treat any fees paid under the plan as "service
fees" for purposes of applicable rules of the National
Association of Securities Dealers, Inc. (the "NASD"). To the
extent that such fees are deemed not to be "service fees,"
Class D shareholders may, depending on the length of time the
shares are held, pay more than the economic equivalent of the
maximum front-end sales charges permitted by relevant rules of
the NASD.
(2) Other Expenses reflects the portion of the Administrative Fee
paid by the class that is not reflected under Distribution
and/or Service (12b-1) Fees.
Examples. The Examples are intended to help you compare the cost
of investing in Class D shares of the Fund with the costs of
investing in other mutual funds. The Examples assume that you
invest $10,000 in Class D shares for the time periods indicated,
and then redeem all your shares at the end of those periods. The
Examples also assume that your investment has a 5% return each
year, the reinvestment of all dividends and distributions, and the
Fund's operating expenses remain the same. Although your actual
costs may be higher or lower, the Examples show what your costs
would be based on these assumptions.
<CAPTION>
Year 1 Year 3 Year 5 Year 10
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class D $112 $350 $606 $1,340
--------------------------------------------------------------------
</TABLE>
Prospectus 8
<PAGE>
PIMCO Growth Fund
- --------------------------------------------------------------------------------
Principal Investment Objective Fund Focus Approximate Capitalization
Investments Seeks long-term Larger Range
and growth of capitalization At least $5 billion
Strategies capital; income common stocks
is an incidental
consideration
Dividend Frequency
At least annually
Approximate Number of Holdings
35-40
Fund Category
Growth Stocks
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in common stocks of "growth"
companies with market capitalizations of at least $5 billion at
the time of investment.
The portfolio manager selects stocks for the Fund using a
"growth" style. The portfolio manager seeks to identify companies
with well-defined "wealth creating" characteristics, including
superior earnings growth (relative to companies in the same
industry or the market as a whole), high profitability and
consistent, predictable earnings. In addition, through fundamental
research, the portfolio manager seeks to identify dominant
companies that are gaining market share, have superior management
and possess a sustainable competitive advantage, such as superior
or innovative products, personnel and distribution systems. The
Fund sells stocks when the portfolio manager believes that
earnings, sentiment and relative performance are disappointing or
if an alternative investment is more attractive.
The Fund may also invest in other kinds of equity securities,
including preferred stocks and convertible securities. The Fund
may invest up to 15% of its assets in foreign securities, usually
in the form of American Depository Receipts (ADRs).
In response to unfavorable market and other conditions, the Fund
may make temporary investments of some or all of its assets in
high-quality fixed income securities. This would be inconsistent
with the Fund's investment objective and principal strategies.
- --------------------------------------------------------------------------------
Principal Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
. Market Risk . Foreign Investment Risk
. Credit Risk
. Issuer Risk . Currency Risk . Management Risk
. Growth Securities Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
- --------------------------------------------------------------------------------
Performance The top of the next page shows summary performance information for
Information the Fund in a bar chart and an Average Annual Total Returns table.
The information provides some indication of the risks of investing
in the Fund by showing changes in its performance from year to
year and by showing how the Fund's average annual returns compare
with the returns of a broad-based securities market index and an
index of similar funds. The bar chart, the information to its
right and the Average Annual Total Returns table show performance
of the Fund's Class C shares, which are offered in a different
prospectus. This is because the Fund did not offer Class D shares
during the periods listed. Although Class D and Class C shares
would have similar annual returns (because all of the Fund's
shares represent interests in the same portfolio of securities),
Class D performance would be higher than Class C performance
because of the lower expenses paid by Class D shares. The Class C
performance in the bar chart and the information to its right do
not reflect the impact of sales charges (loads). If they did, the
returns would be lower than those shown. Unlike the bar chart,
performance figures for Class C shares in the Average Annual Total
Returns table reflect the impact of sales charges.
The Average Annual Total Returns table also shows estimated
historical performance for Class D shares based on the performance
of Class C shares, adjusted to reflect that there are no sales
charges and lower distribution and/or service (12b-1) fees paid by
Class D shares. Prior to March 6, 1999, the Fund had a different
sub-adviser and would not necessarily have achieved the
performance results shown on the next page under its current
investment management arrangements. Past performance is no
guarantee of future results.
9 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Growth Fund (continued)
Calendar Year Total Returns -- Class C
[BAR CHART OF CALENDAR YEAR TOTAL RETURNS APPEARS HERE] More Recent Return
1989 37.45% 1994 -0.75% Information
1990 0.29% 1995 27.47% --------------------
1991 41.88% 1996 17.52% 1/1/99-9/30/99
1992 2.08% 1997 21.84% 2.66%
1993 9.32% 1998 38.90%
Highest and Lowest
Quarter Returns
(for periods shown
in the bar chart)
--------------------
Highest (10/1/98-
12/31/98) 25.12%
--------------------
Lowest (7/1/90-
9/30/90) -13.14%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/98)
<TABLE>
<S> <C> <C> <C> <C>
Fund Inception
1 Year 5 Years 10 Years (2/24/84)(/3/)
--------------------------------------------------------------------
Class C 37.90% 20.27% 18.57% 17.98%
--------------------------------------------------------------------
Class D 39.92% 21.16% 19.45% 18.86%
--------------------------------------------------------------------
S&P 500 Index(/1/) 28.58% 24.06% 19.21% 18.44%
--------------------------------------------------------------------
Lipper Growth Fund Average(/2/) 23.42% 18.74% 16.74% 15.58%
--------------------------------------------------------------------
</TABLE>
(1) The S&P 500 Index is an unmanaged index of large
capitalization common stocks. It is not possible to invest
directly in the index.
(2) The Lipper Growth Fund Average is a total return performance
average of funds tracked by Lipper Analytical Services, Inc.
that invest in companies with long-term earnings expected to
grow significantly faster than the earnings of the stocks
represented in the major unmanaged stock indexes. It does not
take into account sales charges.
(3) The Fund began operations on 2/24/84. Index comparisons begin
on 2/29/84.
- --------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Class D shares of the Fund:
of the
Fund
Shareholder Fees (fees paid directly from your investment) None
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Fees (12b-1) Fees(/1/) Expenses(/2/) Expenses
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class D 0.50% 0.25% 0.40% 1.15%
--------------------------------------------------------------------
(1) The Fund's administration agreement includes a plan for Class
D shares that has been adopted in conformity with the
requirements set forth in Rule 12b-1 under the Investment
Company Act of 1940. Up to 0.25% per year of the total
Administrative Fee paid under the administration agreement may
be Distribution and/or Service (12b-1) Fees. The Fund will pay
a total of 0.65% per year under the administration agreement
regardless of whether a portion or none of the 0.25%
authorized under the plan is paid under the plan. Please see
"Management of the Funds--Investment Adviser and
Administrator--Administrative Fees" for details. The Fund
intends to treat any fees paid under the plan as "service
fees" for purposes of applicable rules of the National
Association of Securities Dealers, Inc. (the "NASD"). To the
extent that such fees are deemed not to be "service fees,"
Class D shareholders may, depending on the length of time the
shares are held, pay more than the economic equivalent of the
maximum front-end sales charges permitted by relevant rules of
the NASD.
(2) Other Expenses reflects the portion of the Administrative Fee
paid by the class that is not reflected under Distribution
and/or Service (12b-1) Fees.
Examples. The Examples are intended to help you compare the cost
of investing in Class D shares of the Fund with the costs of
investing in other mutual funds. The Examples assume that you
invest $10,000 in Class D shares for the time periods indicated,
and then redeem all your shares at the end of those periods. The
Examples also assume that your investment has a 5% return each
year, the reinvestment of all dividends and distributions, and the
Fund's operating expenses remain the same. Although your actual
costs may be higher or lower, the Examples show what your costs
would be based on these assumptions.
<CAPTION>
Year 1 Year 3 Year 5 Year 10
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class D $117 $365 $633 $1,398
--------------------------------------------------------------------
</TABLE>
Prospectus 10
<PAGE>
PIMCO Innovation Fund
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Principal Investment Fund Focus Approximate Capitalization Range
Investments Objective Common stocks More than $200 million
and Seeks capital of
Strategies appreciation; technology-related
no companies
consideration
is given to
income
Dividend
Frequency
At least annually
Approximate Number of Holdings
40
Fund
Category
Sector-Related
</TABLE> Stocks
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in common stocks of companies
which utilize innovative technologies to gain a strategic
competitive advantage in their industry, as well as companies that
provide and service those technologies. The Fund identifies its
investment universe of technology-related companies primarily by
reference to classifications made by independent firms, such as
Standard & Poor's. Although the Fund emphasizes companies which
utilize technologies, it is not required to invest exclusively in
companies in a particular business sector or industry.
The portfolio manager selects stocks for the Fund using a
"growth" style. The portfolio manager seeks to identify
technology-related companies with well-defined "wealth creating"
characteristics, including superior earnings growth (relative to
companies in the same industry or the market as a whole), high
profitability and consistent, predictable earnings. In addition,
through fundamental research, the portfolio manager seeks to
identify dominant companies that are gaining market share, have
superior management and possess a sustainable competitive
advantage, such as superior or innovative products, personnel and
distribution systems. The Fund sells stocks when the portfolio
manager believes that earnings, sentiment and relative performance
are disappointing or if an alternative investment is more
attractive.
The Fund may also invest in other kinds of equity securities,
including preferred stocks and convertible securities. The Fund
may invest up to 15% of its assets in foreign securities, usually
in the form of American Depository Receipts (ADRs).
In response to unfavorable market and other conditions, the Fund
may make temporary investments of some or all of its assets in
high-quality fixed income securities. This would be inconsistent
with the Fund's investment objective and principal strategies.
- --------------------------------------------------------------------------------
Principal Risks
Among the principal risks of investing in the Fund, which could
adversely affect its net asset value, yield and total return, are:
.Market Risk .Smaller Company Risk .Currency Risk
.Issuer Risk .Liquidity Risk .Credit Risk
.Concentration Risk .Foreign Investment Risk
.Management Risk
.Growth Securities Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
- --------------------------------------------------------------------------------
Performance The top of the next page shows summary performance information for
Information the Fund in a bar chart and an Average Annual Total Returns table.
The information provides some indication of the risks of investing
in the Fund by showing changes in its performance from year to
year and by showing how the Fund's average annual returns compare
with the returns of a broad-based securities market index and an
index of similar funds. The bar chart, the information to its
right and the Average Annual Total Returns table show performance
of the Fund's Class A shares, which are offered in a different
prospectus. This is because the Fund has not offered Class D
shares for a full calendar year. Although Class D and Class A
shares would have similar annual returns (because all the Fund's
shares represent interests in the same portfolio of securities),
Class D performance would be higher than Class A performance
because Class D shares do not pay any sales charges (loads). The
Class A performance in the bar chart and the information to its
right do not reflect the impact of sales charges. It they did, the
returns would be lower than those shown. Unlike the bar chart,
performance figures for Class A shares in the Average Annual Total
Returns table reflect the impact of sales charges.
The Average Annual Total Returns table also shows estimated
historical performance for Class D shares. Prior to the inception
of Class D shares (4/8/98), the performance is based on the
performance of the Fund's Class A shares, adjusted to reflect that
there are no sales charges paid by Class D shares. Prior to March
6, 1999, the Fund had a different sub-adviser and would not
necessarily have achieved the performance results shown on the
next page under its current investment management arrangements.
Past performance is no guarantee of future results.
11 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Innovation Fund (continued)
Calendar Year Total Returns -- Class A
[BAR CHART APPEARS HERE] More Recent Return
1995 45.33% Information
1996 23.60% --------------------
1997 9.03% 1/1/99-9/30/99
1998 79.41% 32.91%
Highest and Lowest
Quarter Returns
(for periods shown
in the bar chart)
--------------------
Highest (10/1/98-
12/31/98) 37.19%
--------------------
Lowest (1/1/97-
3/31/97) -12.56%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/98)
<TABLE>
<S> <C> <C>
Fund Inception
1 Year (12/22/94)(/3/)
--------------------------------------------------------------------
Class A 69.54% 34.67%
--------------------------------------------------------------------
Class D 79.65% 36.63%
--------------------------------------------------------------------
S&P 500 Index(/1/) 28.58% 30.51%
--------------------------------------------------------------------
Lipper Science and Technology Fund Average(/2/) 51.44% 25.21%
--------------------------------------------------------------------
</TABLE>
(1) The S&P 500 Index is an unmanaged index of large
capitalization common stocks. It is not possible to invest
directly in the index.
(2) The Lipper Science and Technology Fund Average is a total
return performance average of funds tracked by Lipper
Analytical Services, Inc. that invest at least 65% of their
assets in science and technology stocks. It does not take into
account sales charges.
(3) The Fund began operations on 12/22/94. Index comparisons begin
on 12/31/94.
- --------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Class D shares of the Fund:
of the
Fund
Shareholder Fees (fees paid directly from your investment) None
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Fees (12b-1) Fees(/1/) Expenses(/2/) Expenses
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class D 0.65% 0.25% 0.40% 1.30%
--------------------------------------------------------------------
(1) The Fund's administration agreement includes a plan for Class
D shares that has been adopted in conformity with the
requirements set forth in Rule 12b-1 under the Investment
Company Act of 1940. Up to 0.25% per year of the total
Administrative Fees paid under the administration agreement
may be Distribution and/or Service (12b-1) Fees. The Fund will
pay a total of 0.65% per year under the administration
agreement regardless of whether a portion or none of the 0.25%
authorized under the plan is paid under the plan. Please see
"Management of the Funds--Investment Adviser and
Administrator--Administrative Fees" for details. The Fund
intends to treat any fees paid under the plan as "service
fees" for purposes of applicable rules of the National
Association of Securities Dealers, Inc. (the "NASD"). To the
extent that such fees are deemed not to be "service fees,"
Class D shareholders may, depending on the length of time the
shares are held, pay more than the economic equivalent of the
maximum front-end sales charges permitted by relevant rules of
the NASD.
(2) Other Expenses reflects the portion of the Administrative Fee
paid by the class that is not reflected under Distribution
and/or Service (12b-1) Fees.
Examples. The Examples are intended to help you compare the cost
of investing in Class D shares of the Fund with the costs of
investing in other mutual funds. The Examples assume that you
invest $10,000 in Class D shares for the time periods indicated,
and then redeem all your shares at the end of those periods. The
Examples also assume that your investment has a 5% return each
year, the reinvestment of all dividends and distributions, and the
Fund's operating expenses remain the same. Although your actual
costs may be higher or lower, the Examples show what your costs
would be based on these assumptions.
<CAPTION>
Year 1 Year 3 Year 5 Year 10
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class D $132 $412 $713 $1,568
--------------------------------------------------------------------
</TABLE>
Prospectus 12
<PAGE>
PIMCO Mid-Cap Growth Fund
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Principal Investment Fund Focus Approximate Capitalization Range
Investments Objective Medium More than $500
and Seeks growth of capitalization million
Strategies capital common stocks (excluding the
largest 200
companies)
Fund Approximate Number of Holdings
Category
60-100
Blend Stocks Dividend
Frequency
</TABLE> At least
annually
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in common stocks of companies
with medium market capitalizations that have improving
fundamentals (based on growth criteria) and whose stock is
reasonably valued by the market (based on value criteria).
In making investment decisions for the Fund, the portfolio
management team considers companies in the U.S. market with market
capitalizations of more than $500 million, but excluding the 200
largest capitalization companies. The team screens the stocks in
this universe for a series of growth criteria, such as dividend
growth, earnings growth, relative growth of earnings over time
(earnings momentum) and the company's history of meeting earnings
targets (earnings surprise), and also value criteria, such as
price-to-earnings, price-to-book and price-to-cash flow ratios.
The team then selects individual stocks by subjecting the top 10%
of the stocks in the screened universe to a rigorous analyses of
company factors, such as strength of management, competitive
industry position, and business prospects, and financial statement
data, such as earnings, cash flows and profitability. The team may
interview company management in making investment decisions. The
Fund's capitalization criteria applies at the time of investment.
The portfolio management team rescreens the universe frequently
and seeks to consistently achieve a favorable balance of growth
and value characteristics for the Fund. The team sells a stock
when it falls below the median ranking, has negative earnings
surprises, or shows poor price performance relative to all stocks
in the Fund's capitalization range or to companies in the same
business sector. A stock may also be sold if its weighting in the
portfolio becomes excessive (normally above 2% of the Fund's
investments).
The Fund intends to be fully invested in common stock (aside from
certain cash management practices) and will not make defensive
investments in response to unfavorable market and other
conditions.
- --------------------------------------------------------------------------------
Principal Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
.Market Risk .Growth Securities Risk
.Credit Risk
.Issuer Risk .Smaller Company Risk .Management Risk
.Value Securities Risk.Liquidity Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
- --------------------------------------------------------------------------------
Performance Information
The top of the next page shows summary performance information for
the Fund in a bar chart and an Average Annual Total Returns table.
The information provides some indication of the risks of investing
in the Fund by showing changes in its performance from year to
year and by showing how the Fund's average annual returns compare
with the returns of a broad-based securities market index and an
index of similar funds. The bar chart, the information to its
right and the Average Annual Total Returns table show performance
of the Fund's Institutional Class shares, which are offered in a
different prospectus. This is because the Fund has not offered
Class D shares for a full calendar year. Although Class D and
Institutional Class shares would have similar annual returns
(because all the Fund's shares represent interests in the same
portfolio of securities), Class D performance would be lower than
Institutional Class performance because of the higher expenses
paid by Class D shares.
The Average Annual Total Returns table also shows estimated
historical performance for Class D shares. Prior to the inception
of Class D shares (4/8/98), the performance is based on the
performance of the Fund's Institutional Class shares, adjusted to
reflect the actual distribution and/or service (12b-1) fees and
other expenses paid by Class D shares. Past performance is no
guarantee of future results.
13 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Mid-Cap Growth Fund (continued)
Calendar Year Total Returns -- Institutional Class
[BAR CHART APPEARS HERE] More Recent Return
1992 9.18% Information
1993 15.77% ---------------------
1994 -2.36% 1/1/99-9/30/99 -8.22%
1995 37.29%
1996 23.36% Highest and Lowest
1997 34.17% Quarter Returns
1998 7.93% (for periods shown
in the bar chart)
---------------------
Highest (10/1/98-
12/31/98) 17.77%
---------------------
Lowest (7/1/98-
9/30/98) -14.40%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/98)
<TABLE>
<S> <C> <C> <C>
Fund Inception
1 Year 5 Years (8/26/91)(/3/)
-----------------------------------------------------------------
Institutional Class 7.93% 19.08% 18.23%
-----------------------------------------------------------------
Class D 7.80% 18.68% 17.81%
-----------------------------------------------------------------
Russell Mid-Cap Index(/1/) 10.09% 17.34% 17.18%
-----------------------------------------------------------------
Lipper Mid-Cap Fund Average(/2/) 12.39% 14.86% 14.76%
-----------------------------------------------------------------
</TABLE>
(1) The Russell Mid-Cap Index is an unmanaged index of middle
capitalization U.S. stocks. It is not possible to invest
directly in the index.
(2) The Lipper Mid-Cap Fund Average is a total return performance
average of funds tracked by Lipper Analytical Services, Inc.
that invest primarily in companies with market capitalizations
of less than $5 billion at the time of investment. It does not
take into account sales charges.
(3) The Fund began operations on 8/26/91. Index comparisons begin
on 8/31/91.
- --------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Class D shares of the Fund:
of the
Fund
Shareholder Fees (fees paid directly from your investment)None
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Fees (12b-1) Fees(/1/) Expenses(/2/) Expenses
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class D 0.45% 0.25% 0.40% 1.10%
--------------------------------------------------------------------
(1) The Fund's administration agreement includes a plan for Class
D shares that has been adopted in conformity with the
requirements set forth in Rule 12b-1 under the Investment
Company Act of 1940. Up to 0.25% per year of the total
Administrative Fees paid under the administration agreement
may be Distribution and/or Service (12b-1) Fees. The Fund will
pay a total of 0.65% per year under the administration
agreement regardless of whether a portion or none of the 0.25%
authorized under the plan is paid under the plan. Please see
"Management of the Funds--Investment Adviser and
Administrator--Administrative Fees" for details. The Fund
intends to treat any fees paid under the plan as "service
fees" for purposes of applicable rules of the National
Association of Securities Dealers, Inc. (the "NASD"). To the
extent that such fees are deemed not to be "service fees,"
Class D shareholders may, depending on the length of time the
shares are held, pay more than the economic equivalent of the
maximum front-end sales charges permitted by relevant rules of
the NASD.
(2) Other Expenses reflects the portion of the Administrative Fee
paid by the class that is not reflected under Distribution
and/or Service (12b-1) Fees.
Examples. The Examples are intended to help you compare the cost
of investing in Class D shares of the Fund with the costs of
investing in other mutual funds. The Examples assume that you
invest $10,000 in Class D shares for the time periods indicated,
and then redeem all your shares at the end of those periods. The
Examples also assume that your investment has a 5% return each
year, the reinvestment of all dividends and distributions, and the
Fund's operating expenses remain the same. Although your actual
costs may be higher or lower, the Examples show what your costs
would be based on these assumptions.
<CAPTION>
Year 1 Year 3 Year 5 Year 10
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class D $112 $350 $606 $1,340
--------------------------------------------------------------------
</TABLE>
Prospectus 14
<PAGE>
PIMCO Renaissance Fund
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Principal Investment Fund Focus Approximate Capitalization Range
Investments Objective Undervalued All
and Seeks long-term stocks with capitalizations
Strategies growth of improving
capital and business
income fundamentals
Dividend
Frequency
Quarterly
Fund Approximate Number of Holdings
Category 50-80
Value Stocks
</TABLE>
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in common stocks of companies
with below-average valuations whose business fundamentals are
expected to improve. To achieve income, the Fund invests a portion
of its assets in income-producing (or dividend-paying) stocks.
The portfolio manager selects stocks for the Fund using a "value"
style. The portfolio manager invests primarily in common stocks of
companies having below-average valuations whose business
fundamentals, such as market share, strength of management and
competitive position, are expected to improve. The portfolio
manager determines valuation based on characteristics such as
price-to-earnings, price-to-book, and price-to-cash flow ratios.
The portfolio manager analyzes stocks and seeks to identify the
key drivers of financial results and catalysts for change, such as
new management and new or improved products, that indicate a
company may demonstrate improving fundamentals in the future. The
portfolio manager sells a stock when he believes that the
company's business fundamentals are weakening or when the stock's
valuation has become excessive.
The Fund may also invest in other kinds of equity securities,
including preferred stocks and convertible securities. The Fund
may invest up to 15% of its assets in foreign securities, usually
in the form of American Depository Receipts (ADRs).
In response to unfavorable market and other conditions, the Fund
may make temporary investments of some or all of its assets in
high-quality fixed income securities. This would be inconsistent
with the Fund's investment objective and principal strategies.
- --------------------------------------------------------------------------------
Principal Risks
Among the principal risks of investing in the Fund, which could
adversely affect its net asset value, yield and total return, are:
.Market Risk .Foreign Investment Risk
.Credit Risk
.Issuer Risk .Currency Risk .Management Risk
.Value Securities Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
- --------------------------------------------------------------------------------
Performance The top of the next page shows summary performance information for
Information the Fund in a bar chart and an Average Annual Total Returns table.
The information provides some indication of the risks of investing
in the Fund by showing changes in its performance from year to
year and by showing how the Fund's average annual returns compare
with the returns of a broad-based securities market index and an
index of similar funds. The bar chart, the information to its
right and the Average Annual Total Returns table show performance
of the Fund's Class C shares, which are offered in a different
prospectus. This is because the Fund has not offered Class D
shares for a full calendar year. Although Class D and Class C
shares would have similar annual returns (because all the Fund's
shares represent interests in the same portfolio of securities),
Class D performance would be higher than Class C performance
because of the lower expenses paid by Class D shares. The Class C
performance in the bar chart and the information to its right do
not reflect the impact of sales charges (loads). It they did, the
returns would be lower than those shown. Unlike the bar chart,
performance figures for Class C shares in the Average Annual Total
Returns table reflect the impact of sales charges.
The Average Annual Total Returns table also shows estimated
historical performance for Class D shares. Prior to the inception
of Class D shares (4/8/98), the performance is based on the
performance of the Fund's Class C shares, adjusted to reflect that
there are no sales charges and lower distribution and/or service
(12b-1) fees paid by Class D shares. Prior to March 6, 1999, the
Fund had a different sub-adviser and would not necessarily have
achieved the performance results shown on the next page under its
current investment management arrangements. Past performance is no
guarantee of future results.
15 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Renaissance Fund (continued)
Calendar Year Total Returns -- Class C
[BAR CHART APPEARS HERE] More Recent Return
1989 11.17% 1994 -5.05% Information
1990 -15.46% 1995 27.61% --------------------
1991 33.24% 1996 24.40% 11/1/99-9/30/99
1992 7.78% 1997 34.90% -0.49%
1993 21.23% 1998 10.72%
Highest and Lowest
Quarter Returns
(for periods shown
in the bar chart)
--------------------
Highest (10/1/98-
12/31/98) 18.37%
--------------------
Lowest (7/1/98-
9/30/98) -16.77%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/98)
<TABLE>
<S> <C> <C> <C> <C>
Fund Inception
1 Year 5 Years 10 Years (4/18/88)(/3/)
--------------------------------------------------------------
Class C 9.76% 17.62% 13.93% 13.54%
--------------------------------------------------------------
Class D 11.66% 18.52% 14.79% 14.40%
--------------------------------------------------------------
S&P 500 Index(/1/) 28.58% 24.06% 19.21% 18.87%
--------------------------------------------------------------
Lipper Equity Income Fund
Average(/2/) 11.90% 16.50% 14.32% 14.23%
--------------------------------------------------------------
</TABLE>
(1) The S&P 500 Index is an unmanaged index of large
capitalization common stocks. It is not possible to invest
directly in the index.
(2) The Lipper Equity Income Fund Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. that seek relatively higher growth of income
through investing 60% or more of their portfolios in equities.
It does not take into account sales charges.
(3) The Fund began operations on 4/18/88. Index comparisons begin
on 4/30/88.
- --------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Class D shares of the Fund:
of the
Fund
Shareholder Fees (fees paid directly from your investment)None
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Fees (12b-1) Fees(/1/) Expenses(/2/) Expenses
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class D 0.60% 0.25% 0.40% 1.25%
--------------------------------------------------------------------
(1) The Fund's administration agreement includes a plan for Class
D shares that has been adopted in conformity with the
requirements set forth in Rule 12b-1 under the Investment
Company Act of 1940. Up to 0.25% per year of the total
Administrative Fee paid under the administration agreement may
be Distribution and/or Service (12b-1) Fees. The Fund will pay
a total of 0.65% per year under the administration agreement
regardless of whether a portion or none of the 0.25%
authorized under the plan is paid under the plan. Please see
"Management of the Funds--Investment Adviser and
Administrator--Administrative Fees" for details. The Fund
intends to treat any fees paid under the plan as "service
fees" for purposes of applicable rules of the National
Association of Securities Dealers, Inc. (the "NASD"). To the
extent that such fees are deemed not to be "service fees,"
Class D shareholders may, depending on the length of time the
shares are held, pay more than the economic equivalent of the
maximum front-end sales charges permitted by relevant rules of
the NASD.
(2) Other Expenses reflects the portion of the Administrative Fee
paid by the class that is not reflected under Distribution
and/or Service (12b-1) Fees.
Examples. The Examples are intended to help you compare the cost
of investing in Class D shares of the Fund with the costs of
investing in other mutual funds. The Examples assume that you
invest $10,000 in Class D shares for the time periods indicated,
and then redeem all your shares at the end of those periods. The
Examples also assume that your investment has a 5% return each
year, the reinvestment of all dividends and distributions, and the
Fund's operating expenses remain the same. Although your actual
costs may be higher or lower, the Examples show what your costs
would be based on these assumptions.
<CAPTION>
Year 1 Year 3 Year 5 Year 10
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class D $127 $397 $686 $1,511
--------------------------------------------------------------------
</TABLE>
Prospectus 16
<PAGE>
PIMCO Tax-Efficient Equity Fund
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Principal Investment Fund Focus Approximate Capitalization Range
Investments Objective A portion of More than $5
and Seeks maximum the common billion
Strategies after-tax stocks
growth of represented in
capital the S&P 500
Index
Dividend
Frequency
At least
annually
Fund
Category Approximate Number of Holdings
Enhanced Index More than
</TABLE> 200
The Fund attempts to provide a total return which exceeds the
return of the S&P 500 Index by investing in a broadly diversified
portfolio of at least 200 common stocks. The Fund also attempts to
achieve superior after-tax returns for its shareholders by using a
variety of tax-efficient management strategies.
The Fund seeks to achieve its investment objective by normally
investing at least 95% of its assets in stocks represented in the
S&P 500 Index. The Fund's portfolio is designed to have certain
characteristics that are similar to those of the index, including
such measures as dividend yield, P/E ratio, relative volatility,
economic sector exposure, return on equity and market price-to-
book value ratio. The Fund's return is intended to correlate
highly with the return of the S&P 500 Index, but the portfolio
managers attempt to produce a higher total return than the index
by selecting a portion of the stocks represented in the index
using the quantitative techniques described below. The portfolio
managers also use these techniques to make sell decisions.
Notwithstanding these strategies, there is no assurance that the
Fund's investment performance will equal or exceed that of the S&P
500 Index.
The Fund intends to be fully invested in common stock (aside from
certain cash management practices) and will not make defensive
investments in response to unfavorable market and other
conditions.
Quantitative Techniques. The portfolio managers use a proprietary
quantitative model that ranks companies based on long-term (5-10
years) price appreciation potential. They analyze factors such as
growth of sustainable earnings and dividend behavior. Stocks in
the top 50% of the model's ranking are considered for purchase by
the Fund. The Fund sells stocks selected from the bottom 20% of
the model's ranking based on cost, current market value and
anticipated benefit of replacement. The portfolio managers' sell
discipline also focuses on reducing realized capital gains as
indicated below.
Tax-Efficient Strategies. The portfolio managers utilize a range
of active tax management strategies designed to minimize the
Fund's taxable distributions, including low portfolio turnover and
favoring investments in low-dividend, growth-oriented companies.
The portfolio managers also identify specific shares of stock to
be sold that have the lowest tax cost. When prudent, stocks are
also sold to realize capital losses in order to offset realized
capital gains. In limited circumstances, the Fund may also
distribute appreciated securities to shareholders to meet
redemption requests so as to avoid realizing capital gains.
Despite the use of these tax-efficient strategies, the Fund may
realize gains and shareholders will incur tax liability from time
to time.
- --------------------------------------------------------------------------------
Principal Risks
Among the principal risks of investing in the Fund, which could
adversely affect its net asset value, yield and total return, are:
<TABLE>
<S> <C>
. Market Risk . Growth Securities Risk
. Credit Risk
. Issuer Risk . Leveraging Risk . Management Risk
. Value Securities Risk
</TABLE>
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
- --------------------------------------------------------------------------------
Performance The Fund commenced operations in September 1998 and does not yet
Information have a full calendar year of performance. Thus, no bar chart or
Average Annual Total Returns table is included for the Fund.
17 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Tax-Efficient Equity Fund (continued)
- --------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Class D shares of the Fund:
of the
Fund
Shareholder Fees (fees paid directly from your investment) None
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Fees (12b-1) Fees(/1/) Expenses(/2/) Expenses
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class D 0.45% 0.25% 0.40% 1.10%
--------------------------------------------------------------------
(1) The Fund's administration agreement includes a plan for Class
D shares that has been adopted in conformity with the
requirements set forth in Rule 12b-1 under the Investment
Company Act of 1940. Up to 0.25% per year of the total
Administrative Fee paid under the administration agreement may
be Distribution and/or Service (12b-1) Fees. The Fund will pay
a total of 0.65% per year under the administration agreement
regardless of whether a portion or none of the 0.25%
authorized under the plan is paid under the plan. Please see
"Management of the Funds--Investment Adviser and
Administrator--Administrative Fees" for details. The Fund
intends to treat any fees paid under the plan as "service
fees" for purposes of applicable rules of the National
Association of Securities Dealers, Inc. (the "NASD"). To the
extent that such fees are deemed not to be "service fees,"
Class D shareholders may, depending on the length of time the
shares are held, pay more than the economic equivalent of the
maximum front-end sales charges permitted by relevant rules of
the NASD.
(2) Other Expenses reflects the portion of the Administrative Fee
paid by the class that is not reflected under Distribution
and/or Service (12b-1) Fees.
Examples. The Examples are intended to help you compare the cost
of investing in Class D shares of the Fund with the costs of
investing in other mutual funds. The Examples assume that you
invest $10,000 in Class D shares for the time periods indicated,
and then redeem all your shares at the end of those periods. The
Examples also assume that your investment has a 5% return each
year, the reinvestment of all dividends and distributions, and the
Fund's operating expenses remain the same. Although your actual
costs may be higher or lower, the Examples show what your costs
would be based on these assumptions.
<CAPTION>
Year 1 Year 3 Year 5 Year 10
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class D $112 $350 $606 $1,340
--------------------------------------------------------------------
</TABLE>
Prospectus 18
<PAGE>
PIMCO Value Fund
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Principal Investment Fund Focus Approximate Capitalization Range
Investments Objective Undervalued More than $2
and Seeks long-term larger billion
Strategies growth of capitalization
capital and common stocks
income
Dividend
Frequency
Approximate Quarterly
Fund Number of
Category Holdings
Value Stocks 40
</TABLE>
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in common stocks of companies
with market capitalizations of more than $2 billion at the time of
investment and below average P/E ratios relative to the market and
their respective industry groups. To achieve income, the Fund
invests a portion of its assets in income-producing (or dividend-
paying) common stocks.
The Fund's initial selection universe consists of the 1,000
largest publicly traded companies (in terms of market
capitalization) in the U.S. The portfolio managers classify the
universe by industry. They then identify the most undervalued
stocks in each industry based mainly on relative P/E ratios,
calculated both with respect to trailing operating earnings and
forward earnings estimates. After narrowing this universe to
approximately 150 candidates, the portfolio managers select
approximately 40 stocks for the Fund, each representing a
different industry group. The portfolio managers select stocks
based on a quantitative analysis of factors including price
momentum (based on changes in stock price relative to changes in
overall market prices), earnings momentum (based on analysts'
earnings per share estimates and revisions to those estimates),
relative dividend yields, valuation relative to the overall market
and trading liquidity. The Fund's portfolio is generally
rebalanced quarterly. The portfolio managers may also replace a
stock when a stock within the same industry group has a
considerably lower valuation than the Fund's current holding.
Under normal circumstances, the Fund intends to be fully invested
in common stocks (aside from certain cash management practices).
The Fund may temporarily hold up to 10% of its assets in cash and
cash equivalents for defensive purposes in response to unfavorable
market and other conditions. This would be inconsistent with the
Fund's investment objective and principal strategies.
- --------------------------------------------------------------------------------
Principal Risks
Among the principal risks of investing in the Fund, which could
adversely affect its net asset value, yield and total return, are:
. Market Risk . Credit Risk
. Issuer Risk . Management Risk
. Value Securities Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
- --------------------------------------------------------------------------------
Performance The top of the next page shows summary performance information for
Information the Fund in a bar chart and an Average Annual Total Returns table.
The information provides some indication of the risks of investing
in the Fund by showing changes in its performance from year to
year and by showing how the Fund's average annual returns compare
with the returns of a broad-based securities market index and an
index of similar funds. The bar chart, the information to its
right and the Average Annual Total Returns table show performance
of the Fund's Institutional Class shares, which are offered in a
different prospectus. This is because the Fund has not offered
Class D shares for a full calendar year. Although Class D and
Institutional Class shares would have similar annual returns
(because all the Fund's shares represent interests in the same
portfolio of securities), Class D performance would be lower than
Institutional Class performance because of the higher expenses
paid by Class D shares.
The Average Annual Total Returns table also shows estimated
historical performance for Class D shares. Prior to the inception
of Class D shares (4/8/98), the performance is based on the
performance of the Fund's Institutional Class shares, adjusted to
reflect the actual distribution and/or service (12b-1) fees and
other expenses paid by Class D shares. Past performance is no
guarantee of future results.
19 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Value Fund (continued)
Calendar Year Total Returns -- Institutional Class
[ANNUAL CHART APPEARS HERE] More Recent Return
Information
1992 13.15% 1996 20.34% --------------------
1993 16.41% 1997 26.21% 1/1/99-9/30/99 5.18%
1994 -4.07% 1998 10.17%
1995 38.91% Highest and Lowest
Quarter Returns
(for periods shown
in the bar chart)
--------------------
Highest (10/1/98-
12/31/98) 17.19%
--------------------
Lowest (7/1/98-
9/30/98) -13.23%
[BAR CHART APPEARS HERE]
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/98)
<TABLE>
<S> <C> <C> <C>
Fund Inception
1 Year 5 Years (12/30/91)(/3/)
-----------------------------------------------------------------------
Institutional Class 10.17% 17.39% 16.74%
-----------------------------------------------------------------------
Class D 9.86% 16.96% 16.30%
-----------------------------------------------------------------------
S&P 500 Index(/1/) 28.58% 24.06% 19.51%
-----------------------------------------------------------------------
Lipper Growth and Income Fund Average(/2/) 15.80% 18.42% 15.94%
-----------------------------------------------------------------------
</TABLE>
(1) The S&P 500 Index is an unmanaged index of large
capitalization common stocks. It is not possible to invest
directly in the index.
(2) The Lipper Growth and Income Fund Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. that combine a growth-of-earnings orientation
and an income requirement for level and/or rising dividends.
It does not take into account sales charges.
(3) The Fund began operations on 12/30/91. Fund comparisons begin
on 12/31/91.
- --------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Class D shares of the Fund:
of the
Fund
Shareholder Fees (fees paid directly from your investment) None
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Fees (12b-1) Fees(/1/) Expenses(/2/) Expenses
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class D 0.45% 0.25% 0.40% 1.10%
--------------------------------------------------------------------
(1) The Fund's administration agreement includes a plan for Class
D shares that has been adopted in conformity with the
requirements set forth in Rule 12b-1 under the Investment
Company Act of 1940. Up to 0.25% per year of the total
Administrative Fee paid under the administration agreement may
be Distribution and/or Service (12b-1) Fees. The Fund will pay
a total of 0.65% per year under the administration agreement
regardless of whether a portion or none of the 0.25%
authorized under the plan is paid under the plan. Please see
"Management of the Funds--Investment Adviser and
Administrator--Administrative Fees" for details. The Fund
intends to treat any fees paid under the plan as "service
fees" for purposes of applicable rules of the National
Association of Securities Dealers, Inc. (the "NASD"). To the
extent that such fees are deemed not to be "service fees,"
Class D shareholders may, depending on the length of time the
shares are held, pay more than the economic equivalent of the
maximum front-end sales charges permitted by relevant rules of
the NASD.
(2) Other Expenses reflects the portion of the Administrative Fee
paid by the class that is not reflected under Distribution
and/or Service (12b-1) Fees.
Examples. The Examples are intended to help you compare the cost
of investing in Class D shares of the Fund with the costs of
investing in other mutual funds. The Examples assume that you
invest $10,000 in Class D shares for the time periods indicated,
and then redeem all your shares at the end of those periods. The
Examples also assume that your investment has a 5% return each
year, the reinvestment of all dividends and distributions, and the
Fund's operating expenses remain the same. Although your actual
costs may be higher or lower, the Examples show what your costs
would be based on these assumptions.
<CAPTION>
Year 1 Year 3 Year 5 Year 10
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class D $112 $350 $606 $1,340
--------------------------------------------------------------------
</TABLE>
Prospectus 20
<PAGE>
Summary of Principal Risks
The value of your investment in a Fund changes with the values of
that Fund's investments. Many factors can affect those values. The
factors that are most likely to have a material effect on a
particular Fund's portfolio as a whole are called "principal
risks." The principal risks of each Fund are identified in the
Fund Summaries and are summarized in this section. Each Fund may
be subject to additional principal risks and risks other than
those described below because the types of investments made by
each Fund can change over time. Securities and investment
techniques mentioned in this summary and described in greater
detail under "Characteristics and Risks of Securities and
Investment Techniques" appear in bold type. That section and
"Investment Objectives and Policies" in the Statement of
Additional Information also include more information about the
Funds, their investments and the related risks. There is no
guarantee that a Fund will be able to achieve its investment
objective.
Market The market price of securities owned by a Fund may go up or down,
Risk sometimes rapidly or unpredictably. Each of the Funds normally
invests most of its assets in common stocks and/or other equity
securities. A principal risk of investing in each Fund is that the
equity securities in its portfolio will decline in value due to
factors affecting equity securities markets generally or
particular industries represented in those markets. The values of
equity securities may decline due to general market conditions
which are not specifically related to a particular company, such
as real or perceived adverse economic conditions, changes in the
general outlook for corporate earnings, changes in interest or
currency rates or adverse investor sentiment generally. They may
also decline due to factors which affect a particular industry or
industries, such as labor shortages or increased production costs
and competitive conditions within an industry. Equity securities
generally have greater price volatility than fixed income
securities.
Issuer The value of a security may decline for a number of reasons which
Risk directly relate to the issuer, such as management performance,
financial leverage and reduced demand for the issuer's goods or
services.
Value Each Fund may invest in companies that may not be expected to
Securities experience significant earnings growth, but whose securities its
Risk portfolio manager believes are selling at a price lower than their
true value. The Capital Appreciation, Equity Income, Mid-Cap
Growth, Renaissance and Value Funds place particular emphasis on
value securities. Companies that issue value securities may have
experienced adverse business developments or may be subject to
special risks that have caused their securities to be out of
favor. If a portfolio manager's assessment of a company's
prospects is wrong, or if the market does not recognize the value
of the company, the price of its securities may decline or may not
approach the value that the portfolio manager anticipates.
Growth Each Fund may invest in equity securities of companies that its
Securities portfolio manager believes will experience relatively rapid
Risk earnings growth. The Capital Appreciation, Growth, Mid-Cap Growth
and Innovation Funds place particular emphasis on growth
securities. Growth securities typically trade at higher multiples
of current earnings than other securities. Therefore, the values
of growth securities may be more sensitive to changes in current
or expected earnings than the values of other securities.
Smaller The general risks associated with equity securities and liquidity
Company risk are particularly pronounced for securities of companies with
Risk smaller market capitalizations. These companies may have limited
product lines, markets or financial resources or they may depend
on a few key employees. Securities of smaller companies may trade
less frequently and in lesser volume than more widely held
securities and their values may fluctuate more sharply than other
securities. They may also trade in the over-the-counter market or
on a regional exchange, or may otherwise have limited liquidity.
The Mid-Cap Growth Fund has significant exposure to this risk
because it invests primarily in companies with medium-sized market
capitalizations, which are smaller and generally less-seasoned
than the largest companies.
Liquidity All of the Funds are subject to liquidity risk. Liquidity risk
Risk exists when particular investments are difficult to purchase or
sell, possibly preventing a Fund from selling such illiquid
securities at an advantageous time or price. Funds with principal
investment strategies that involve securities of companies with
smaller market capitalizations, foreign securities, derivatives or
securities with substantial market and/or credit risk tend to have
the greatest exposure to liquidity risk.
Derivatives
Risk
The Growth, Innovation, Renaissance and Tax-Efficient Equity Funds
may use derivatives, which are financial contracts whose value
depends on, or is derived from, the value of an underlying asset,
reference rate or index. The various derivative instruments that
the Funds may use are referenced under "Characteristics and Risks
of Securities and Investment Techniques--Derivatives" in this
Prospectus and described in more detail under "Investment
Objectives and Policies" in the Statement of Additional
Information. The Funds may sometimes use derivatives as part of a
strategy designed to reduce exposure to other risks, such as
interest rate or currency risk. The Funds may also use derivatives
21 PIMCO Funds: Multi-Manager Series
<PAGE>
for leverage, which increases opportunities for gain but also
involves greater risk of loss due to leveraging risk. A Fund's use
of derivative instruments involves risks different from, or
possibly greater than, the risks associated with investing
directly in securities and other traditional investments.
Derivatives are subject to a number of risks described elsewhere
in this section, such as liquidity risk, market risk, credit risk
and management risk. They also involve the risk of mispricing or
improper valuation and the risk that changes in the value of the
derivative may not correlate perfectly with the underlying asset,
rate or index. In addition, a Fund's use of derivatives may
increase or accelerate the amount of taxes payable by
shareholders. A Fund investing in a derivative instrument could
lose more than the principal amount invested. Also, suitable
derivative transactions may not be available in all circumstances
and there can be no assurance that a Fund will engage in these
transactions to reduce exposure to other risks when that would be
beneficial.
Foreign A Fund that invests in foreign securities may experience more
Investment rapid and extreme changes in value than Funds that invest
Risk exclusively in securities of U.S. issuers or securities that trade
exclusively in U.S. markets. The securities markets of many
foreign countries are relatively small, with a limited number of
companies representing a small number of industries. Additionally,
issuers of foreign securities are usually not subject to the same
degree of regulation as U.S. issuers. Reporting, accounting and
auditing standards of foreign countries differ, in some cases
significantly, from U.S. standards. Also, nationalization,
expropriation or confiscatory taxation, currency blockage,
political changes or diplomatic developments could adversely
affect a Fund's investments in a foreign country. In the event of
nationalization, expropriation or other confiscation, a Fund could
lose its entire investment in foreign securities. To the extent
that a Fund invests a significant portion of its assets in a
concentrated geographic area like Eastern Europe, South Africa, or
Asia, the Fund will generally have more exposure to regional
economic risks associated with foreign investments. Adverse
developments in certain regions (such as Southeast Asia) can also
adversely affect securities of other countries whose economies
appear to be unrelated. In addition, special U.S. tax
considerations may apply to a Fund's investment in foreign
securities.
Emerging Foreign investment risk may be particularly high to the extent
Markets that a Fund invests in emerging market securities of issuers based
Risk in countries with developing economies. These securities may
present market, credit, currency, liquidity, legal, political and
other risks different from, or greater than, the risks of
investing in developed foreign countries.
Currency Funds that invest directly in foreign currencies and in securities
Risk that trade in, or receive revenues in, foreign currencies are
subject to the risk that those currencies will decline in value
relative to the U.S. Dollar, or, in the case of hedging positions,
that the U.S. Dollar will decline in value relative to the
currency being hedged. Currency rates in foreign countries may
fluctuate significantly over short periods of time for a number of
reasons, including changes in interest rates, intervention (or the
failure to intervene) by U.S. or foreign governments, central
banks or supranational entities such as the International Monetary
Fund, or by the imposition of currency controls or other political
developments in the U.S. or abroad.
Concentration
Risk
Concentration of investments in a small number of issuers,
industries or foreign currencies increases risk. To the extent
that a Fund invests in a relatively small number of issuers it
will be more susceptible to risks associated with a single
economic, political or regulatory occurrence than a more
diversified Fund might be. Some of those issuers also may present
substantial credit or other risks. The Innovation Fund is
vulnerable to events affecting companies which use innovative
technologies to gain a strategic, competitive advantage in their
industry and companies that provide and service those technologies
because it normally concentrates its investments in those
companies.
Leveraging Certain Funds may engage in transactions or purchase instruments
Risk that give rise to forms of leverage. Such transactions and
instruments may include, among others, the use of reverse
repurchase agreements and other borrowings, the investment of
collateral from loans of portfolio securities, or the use of when-
issued, delayed-delivery or forward commitment transactions. The
use of derivatives may also involve leverage. Leverage, including
borrowing, will cause the value of a Fund's shares to be more
volatile than if the Fund did not use leverage. This is because
leverage tends to exaggerate the effect of any increase or
decrease in the value of a Fund's portfolio securities. The use of
leverage may also cause a Fund to liquidate portfolio positions
when it would not be advantageous to do so in order to satisfy its
obligations or to meet segregation requirements.
Interest
Rate Risk
To the extent that Funds purchase fixed income securities for
investment or defensive purposes, they will be subject to interest
rate risk, a market risk relating to investments in fixed income
securities such
Prospectus 22
<PAGE>
as bonds and notes. As interest rates rise, the value of fixed
income securities in a Fund's portfolio are likely to decrease.
Credit All of the Funds are subject to credit risk. This is the risk that
Risk the issuer or the guarantor of a fixed income security, or the
counterparty to a derivatives contract, repurchase agreement or a
loan of portfolio securities, is unable or unwilling to make
timely principal and/or interest payments, or to otherwise honor
its obligations. Securities are subject to varying degrees of
credit risk, which are often reflected in their credit ratings.
Management Each Fund is subject to management risk because it is an actively
Risk managed investment portfolio. PIMCO Advisors, the Sub-Advisers and
each individual portfolio manager will apply investment techniques
and risk analyses in making investment decisions for the Funds,
but there can be no guarantee that these will produce the desired
results.
Management of the Funds
Investment
Adviser
and
Administrator
PIMCO Advisors serves as the investment adviser and the
administrator (serving in its capacity as administrator, the
"Administrator") for the Funds. Subject to the supervision of the
Board of Trustees, PIMCO Advisors is responsible for managing,
either directly or through others selected by it, the investment
activities of the Funds and the Funds' business affairs and other
administrative matters.
PIMCO Advisors is located at 800 Newport Center Drive, Newport
Beach, California 92660. Organized in 1987, PIMCO Advisors
provides investment management and advisory services to private
accounts of institutional and individual clients and to mutual
funds. As of September 30, 1999, PIMCO Advisors and its subsidiary
partnerships had more than $256 billion in assets under
management.
PIMCO Advisors has retained investment management firms ("Sub-
Advisers") to manage each Fund's investments, except that the
PIMCO Equity Advisors division of PIMCO Advisors manages the
investments of the Growth, Innovation and Renaissance Funds (PIMCO
Equity Advisors is also referred to as a "Sub-Adviser" in this
capacity). See "Sub-Advisers" below.
PIMCO Advisors has retained its affiliate, Pacific Investment
Management Company, to provide various administrative and other
services required by the Funds in its capacity as sub-
administrator. PIMCO Advisors and the sub-administrator may retain
other affiliates to provide certain of these services.
Advisory Each Fund pays PIMCO Advisors fees in return for providing or
Fees arranging for the provision of investment advisory services. In
the case of Funds for which PIMCO Advisors has retained a separate
Sub-Adviser, PIMCO Advisors (and not the Fund) pays a portion of
the advisory fees it receives to the Sub-Adviser in return for its
services.
For the fiscal year ended June 30, 1999, the Funds paid monthly
advisory fees to PIMCO Advisors at the following annual rates
(stated as a percentage of the average daily net assets of each
Fund taken separately):
<TABLE>
<CAPTION>
Fund Advisory Fees
-------------------------------------------------------------------
<S> <C>
Capital Appreciation, Equity Income, Mid-Cap Growth and
Value Funds 0.45%
Growth Fund 0.50%
Renaissance Fund 0.60%
Innovation Fund 0.65%
</TABLE>
The Tax-Efficient Equity Fund was not operational during the
entire fiscal year ended June 30, 1999. The annual investment
advisory fee rate payable by the Tax-Efficient Equity Fund is
0.45%, stated as a percentage of the average daily net assets of
the Fund.
Administrative
Fees
Each Fund pays for the administrative services it requires under a
fee structure which is essentially fixed. Class D shareholders of
each Fund pay an administrative fee to PIMCO Advisors, computed as
a percentage of the Fund's assets attributable in the aggregate to
Class D shares. PIMCO Advisors, in turn, provides or procures
administrative services for Class D shareholders and also bears
the costs of various third-party services required by the Funds,
including audit, custodial, portfolio accounting, legal, transfer
agency and printing costs. The result of this fee structure is an
expense level for Class D shareholders of each Fund that, with
limited exceptions, is precise and predictable under ordinary
circumstances.
23 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Advisors or an affiliate may pay financial service firms a
portion of the Class D administrative fees in return for the
firms' services (normally not to exceed an annual rate of 0.35% of
a Fund's average daily net assets attributable to Class D shares
purchased through such firms).
For the fiscal year ended June 30, 1999, Class D shareholders of
the Funds paid PIMCO Advisors monthly administrative fees at the
following annual rates (stated as a percentage of the average
daily net assets attributable in the aggregate to the Fund's Class
D shares):
<TABLE>
<CAPTION>
Fund Administrative Fees*
-------------------------------------------------------------------
<S> <C>
Capital Appreciation, Equity Income, Innovation,
Mid-Cap Growth, Renaissance and Value Funds 0.65%
</TABLE>
*As described below under "12b-1 Plan for Class D Shares," the
administration agreement includes a plan adopted in conformity
with Rule 12b-1 under the Investment Company Act of 1940 (the
"1940 Act") which provides for the payment of up to 0.25% of the
0.65% Administrative Fees as reimbursement for expenses in
respect of activities that may be deemed to be primarily
intended to result in the sale of Class D shares. In the Fund
Summaries above, the "Annual Fund Operating Expenses" table
provided under "Fees and Expenses of the Fund" for each Fund
shows the 0.65% Administrative Fees rate under two separate
columns entitled "Distribution and/or Service (12b-1) Fees"
(0.25%) and "Other Expenses" (0.40%).
The Growth and Tax-Efficient Equity Funds did not offer Class D
shares during the entire fiscal year ended June 30, 1999. Class D
shareholders of each of these Funds pay administrative fees at the
annual rate of 0.65%, stated as a percentage of the average daily
net assets attributable in the aggregate to the Fund's Class D
shares.
12b-1 The Funds' administration agreement includes a plan for Class D
Plan for shares that has been adopted in conformity with the requirements
Class D set forth in Rule 12b-1 under the 1940 Act. The plan provides that
Shares up to 0.25% per annum of the Class D administrative fees paid
under the administration agreement may represent reimbursement for
expenses in respect of activities that may be deemed to be
primarily intended to result in the sale of Class D shares. The
principal types of activities for which such payments may be made
are services in connection with the distribution of Class D shares
and/or the provision of shareholder services. Because 12b-1 fees
would be paid out of a Fund's Class D share assets on an ongoing
basis, over time these fees would increase the cost of your
investment in Class D shares and may cost you more than other
types of sales charges.
Sub- Each Sub-Adviser has full investment discretion and makes all
Advisers determinations with respect to the investment of a Fund's assets.
The following provides summary information about each Sub-Adviser,
including the Fund(s) it manages.
<TABLE>
<CAPTION>
Sub-Adviser* Funds
------------------------------------------------------------------------
<S> <C>
PIMCO Equity Advisors division of PIMCO Growth, Innovation and Renaissance
Advisors ("PIMCO Equity Advisors")
1345 Avenue of the Americas, 50th Floor
New York, NY 10105
------------------------------------------------------------------------
Cadence Capital Management ("Cadence") Capital Appreciation and
Exchange Place, 53 State Street Mid-Cap Growth
Boston, MA 02109
------------------------------------------------------------------------
NFJ Investment Group ("NFJ") Equity Income and Value
2121 San Jacinto, Suite 1840
Dallas, TX 75201
------------------------------------------------------------------------
Parametric Portfolio Associates Tax-Efficient Equity
("Parametric")
7310 Columbia Center, 701 Fifth Avenue
Seattle, WA 98104
</TABLE>
*PIMCO Equity Advisors is a division of PIMCO Advisors. Each of
the other Sub-Advisers is an affiliated sub-partnership of PIMCO
Advisors.
The following provides additional information about each Sub-
Adviser and the individual portfolio managers who have or share
primary responsibility for managing the Funds' investments.
PIMCO
Equity
Advisors
A division of PIMCO Advisors, PIMCO Equity Advisors provides
equity-related advisory services to mutual funds and institutional
accounts. See "Investment Adviser and Administrator" above for
additional information about PIMCO Advisors.
Prospectus 24
<PAGE>
The following individuals at PIMCO Equity Advisors have primary
responsibility for the noted Funds. A different sub-advisory firm
served as Sub-Adviser for the Growth and Innovation Funds prior to
March 6, 1999 and for the Renaissance Fund prior to May 7, 1999.
<TABLE>
<CAPTION>
Fund Portfolio Managers Since Recent Professional Experience
-------------------------------------------------------------------
<C> <C> <C> <S>
Growth Kenneth W. Corba 1999 Managing Director and Chief
Investment Officer of PIMCO
Equity Advisors and a Member of
the Management Board of PIMCO
Advisors. Prior to joining
PIMCO Advisors, he was with
Eagle Asset Management from
1995 to 1998, serving in
various capacities including as
Chief Investment Officer and
Portfolio Manager. He was with
Stein Roe and Farnham Inc. from
1984 to 1995, serving in
various capacities including as
Director of the Capital
Management Group, Senior Vice
President and Portfolio
Manager.
Innovation Dennis P. McKechnie 1998 Portfolio Manager of PIMCO
Equity Advisors. Prior to
joining PIMCO Advisors, he was
with Columbus Circle Investors
from 1991 to 1999, where he
managed equity accounts and
served in various capacities
including as Portfolio Manager
for the Innovation Fund.
Renaissance John K. Schneider 1999 Senior Portfolio Manager of
PIMCO Equity Advisors. Prior to
joining PIMCO Advisors, he was
a partner and Portfolio Manager
of Schneider Capital Management
from 1996 to 1999, where he
managed equity accounts for
various institutional clients.
Prior to that he was a member
of the Equity Policy Committee
and Director of Research at
Newbold's Asset Management from
1991 to 1996.
</TABLE>
Cadence An affiliated sub-partnership of PIMCO Advisors, Cadence provides
advisory services to mutual funds and institutional accounts.
Cadence Capital Management Corporation, the predecessor investment
adviser to Cadence, commenced operations in 1988. Accounts managed
by Cadence had combined assets as of September 30, 1999 of
approximately $6.5 billion.
The following individuals at Cadence share primary responsibility
for each of the noted Funds.
<TABLE>
<CAPTION>
Recent Professional
Fund Portfolio Managers Since Experience
--------------------------------------------------------------------
<C> <C> <C> <S>
Capital David B. Breed 1991 Managing Director, Chief
Appreciation (Inception) Executive Officer, Chief
Investment Officer and
founding partner of
Cadence. Member of the
Management Board of
PIMCO Advisors. He is a
research generalist and
has lead the team of
portfolio managers and
analysts since 1988. Mr.
Breed has managed
separate equity accounts
for many institutional
clients and has lead the
team that manages the
PIMCO Funds sub-advised
by Cadence since those
Funds' inception dates.
William B. Bannick 1992 Managing Director and
Executive Vice President
at Cadence. Mr. Bannick
is a research generalist
and Senior Portfolio
Manager for the Cadence
team. He has managed
separately managed
equity accounts for
various Cadence
institutional clients
and has been a member of
the team that manages
the PIMCO Funds sub-
advised by Cadence since
joining Cadence in 1992.
Katherine A. Burdon 1993 Managing Director and
Senior Portfolio Manager
at Cadence. Ms. Burdon
is a research generalist
and has managed
separately managed
equity accounts for
various Cadence
institutional clients
and has been a member of
the team that manages
the PIMCO Funds sub-
advised by Cadence since
joining Cadence in 1993.
Peter B. McManus 1994 Director, Account
Management at Cadence.
He has been a member of
the investment team at
Cadence and handles
client relationships of
separately managed
accounts, and has been a
member of the team that
manages the PIMCO Funds
sub-advised by Cadence
since joining Cadence in
1994. Previously, he
served as a Vice
President of Bank of
Boston from 1991 to
1994.
Mid-Cap Messrs. Breed, Same as See above.
Growth Bannick and Capital
McManus and Appreciation
Ms. Burdon Fund
An affiliated sub-partnership of PIMCO Advisors, NFJ provides
advisory services to mutual funds and institutional accounts. NFJ
Investment Group, Inc., the predecessor investment adviser to NFJ,
commenced operations in 1989. Accounts managed by NFJ had combined
assets as of September 30, 1999 of approximately $2.2 billion.
</TABLE>
NFJ
25 PIMCO Funds: Multi-Manager Series
<PAGE>
The following individuals at NFJ share primary responsibility for
the noted Funds.
<TABLE>
<CAPTION>
Fund Portfolio Managers Since
-------------------------------------------------------------------------------------
<S> <C> <C>
Equity Income Chris Najork 1991 (Inception)
<CAPTION>
Fund Recent Professional Experience
<S> <C>
Equity Income Managing Director and founding partner of NFJ. He has 30 years' experience
encompassing equity research and portfolio management. Prior to the formation
of NFJ in 1989, he was a Senior Vice President, Senior Portfolio Manager and
analyst at NationsBank, which he joined in 1974.
Benjamin J. Fischer 1991 (Inception)
Managing Director and founding partner of NFJ. He has 32 years" experience in
portfolio management, investment analysis and research. Prior to the formation
of NFJ in 1989, he was Chief Investment Officer (institutional and fixed income),
Senior Vice President and Senior Portfolio Manager at NationsBank, which he
joined in 1971. Prior to joining NationsBank, Mr. Fischer was a securities analyst
at Chase Manhattan Bank and Clark, Dodge.
Value Messrs. Najork and Fischer 1991 (Inception)
See above.
Paul A. Magnuson 1995
Principal at NFJ. He is a Portfolio Manager and Senior Research Analyst with 14
years' experience in equity analysis and portfolio management. Prior to joining
NFJ in 1992, he was an Assistant Vice President at NationsBank, which he joined
in 1985. Within the Trust Investment Quantitative Services Division of
NationsBank, he was responsible for equity analytics and structured fund
management.
</TABLE>
Parametric An affiliated sub-partnership of PIMCO Advisors, Parametric
provides advisory services to mutual funds and institutional
accounts. Parametric Portfolio Associates, Inc., the predecessor
investment adviser to Parametric, commenced operations in 1987.
Accounts managed by Parametric had combined assets as of September
30, 1999 of approximately $3.9 billion.
The following individuals at Parametric share primary
responsibility for the Tax-Efficient Equity Fund.
<TABLE>
<CAPTION>
Fund Portfolio Managers Since
------------------------------------------------------------------------------------
<S> <C> <C>
Tax-Efficient David Stein 1998 (Inception)
Equity
<CAPTION>
Fund Recent Professional Experience
------------------------------------------------------------------------------------
<S> <C>
Managing Director of Parametric. He also serves as a Senior Porfolio Manager
of PIMCO Equity Advisors. He has been with Parametric since 1996 where he
leads the investment, research and product development activities. Previously,
he served in Investment Research at GTE Corporation from 1995 to 1996, in
Equity Research at Vanguard Group from 1994 to 1995 and in Investment
Research at IBM Corporation from 1977 to 1994.
Tom Seto 1998 (Inception)
Vice President and Portfolio Manager of Parametric. Since joining Parametric in
1998, he has been responsible for management of Parametric's active U.S. equity
strategies and has managed structured equity portfolios. Previously, he was
with Barclays global Investors from 1991 to 1998, serving in various capacities
including as head of U.S. Equity Index Investments and Portfolio Manager.
</TABLE>
Disbributor
The Trust's Distributor is PIMCO Funds Distributors LLC, a wholly
owned subsidiary of PIMCO Advisors. The Distributor, located at
2187 Atlantic Street, Stamford, CT 06902, is a broker-dealer
registered with the Securities and Exchange Commission.
How Fund Shares Are Priced
The net asset value ("NAV") of a Fund's Class D shares is
determined by dividing the total value of a Fund's portfolio
investments and other assets attributable to that class, less any
liabilities, by the total number of shares outstanding of that
class.
For purposes of calculating NAV, portfolio securities and other
assets for which market quotes are available are stated at market
value. Market value is generally determined on the basis of last
reported sales prices, or if no sales are reported, based on
quotes obtained from a quotation reporting system, established
market makers, or pricing services. Certain securities or
investments for which daily market quotes are not readily
available may be valued, pursuant to guidelines established by the
Board of Trustees, with reference to other securities or indices.
Short-term investments having a maturity of 60 days or less are
generally valued at amortized cost. Exchange traded options,
futures and options on futures are valued at the settlement price
determined by the exchange. Other securities for
Prospectus 26
<PAGE>
which market quotes are not readily available are valued at fair
value as determined in good faith by the Board of Trustees or
persons acting at their direction.
Investments initially valued in currencies other than the U.S.
dollar are converted to U.S. dollars using exchange rates obtained
from pricing services. As a result, the NAV of a Fund's shares may
be affected by changes in the value of currencies in relation to
the U.S. dollar. The value of securities traded in markets outside
the United States or denominated in currencies other than the U.S.
dollar may be affected significantly on a day that the New York
Stock Exchange is closed and an investor is not able to purchase,
redeem or exchange shares.
Fund shares are valued at the close of regular trading (normally
4:00 p.m., Eastern time)(the "NYSE Close") on each day that the
New York Stock Exchange is open. For purposes of calculating the
NAV, the Funds normally use pricing data for domestic equity
securities received shortly after the NYSE Close and do not
normally take into account trading, clearances or settlements that
take place after the NYSE Close. Domestic fixed income and foreign
securities are normally priced using data reflecting the earlier
closing of the principal markets for those securities. Information
that becomes known to the Funds or their agents after the NAV has
been calculated on a particular day will not generally be used to
retroactively adjust the price of a security or the NAV determined
earlier that day.
In unusual circumstances, instead of valuing securities in the
usual manner, the Funds may value securities at fair value or
estimate their value as determined in good faith by the Board of
Trustees, generally based upon recommendations provided by PIMCO
Advisors and/or the relevant Sub-Adviser. Fair valuation may also
be used by the Board of Trustees if extraordinary events occur
after the close of the relevant market but prior to the NYSE
Close.
How to Buy and Sell Shares
The following section provides basic information about how to buy,
sell (redeem) and exchange Class D shares of the Funds.
General . Financial Service Firms. Broker-dealers, registered investment
Information advisers and other financial service firms provide varying
investment products, programs or accounts, pursuant to
arrangements with the Distributor, through which their clients may
purchase and redeem Class D shares of the Funds. Firms will
generally provide or arrange for the provision of some or all of
the shareholder servicing and account maintenance services
required by your account, including, without limitation, transfers
of registration and dividend payee changes. Firms may also perform
other functions, including generating confirmation statements and
disbursing cash dividends, and may arrange with their clients for
other investment or administrative services. Your firm may
independently establish and charge you transaction fees and/or
other additional amounts for such services, which may change over
time. These fees and additional amounts could reduce your
investment returns on Class D shares of the Funds.
Your financial service firm may have omnibus accounts and similar
arrangements with the Trust and may be paid for providing sub-
transfer agency and other services. A firm may be paid for its
services directly or indirectly by the Funds, PIMCO Advisors or an
affiliate (normally not to exceed an annual rate of 0.35% of a
Fund's average daily net assets attributable to its Class D shares
and purchased through such firm for its clients). Your firm may
establish various minimum investment requirements for Class D
shares of the Funds and may also establish certain privileges with
respect to purchases, redemptions and exchanges of Class D shares
or the reinvestment of dividends. Please contact your firm for
information.
This Prospectus should be read in connection with your firm's
materials regarding its fees and services.
. Calculation of Share Price and Redemption Payments. When you
buy or sell (redeem) Class D shares of the Funds, you pay or
receive a price equal to the NAV of the shares. NAVs are
determined at the close of regular trading (normally, 4:00 p.m.,
Eastern time) on each day the New York Stock Exchange is open. See
"How Fund Shares Are Priced" above for details. Generally,
purchase and redemption orders for Fund shares are processed at
the NAV next calculated after your order is received by the
Distributor. In addition, orders received by the Distributor from
financial service firms after NAV is determined that day will be
processed at that day's NAV if the orders were received by the
firm from its customer prior to such determination and were
transmitted to and received by the Distributor prior to its close
of business that day (normally 7:00 p.m., Eastern time).
27 PIMCO Funds: Multi-Manager Series
<PAGE>
The Trust does not calculate NAVs or process orders on days when
the New York Stock Exchange is closed. If your purchase or
redemption order is received by the Distributor on a day when the
New York Stock Exchange is closed, it will be processed on the
next succeeding day when the New York Stock Exchange is open
(according to the succeeding day's NAV).
Buying Class D shares of each Fund are continuously offered through
Shares financial service firms, such as broker-dealers or registered
investment advisers, with which the Distributor has an agreement
for the use of the Funds in particular investment products,
programs or accounts for which a fee may be charged. See
"Financial Service Firms" above.
You may purchase Class D shares only through your financial
service firm. In connection with purchases, your financial service
firm is responsible for forwarding all necessary documentation to
the Distributor, and may charge you for such services. If you wish
to purchase shares of the Funds directly from the Trust or the
Distributor, you should inquire about the other classes of shares
offered by the Trust. Please call the Distributor at 1-888-87-
PIMCO for information about other investment options.
Class D shares of the Funds will be held in your account with
your financial service firm and, generally, your firm will hold
your Class D shares in nominee or street name as your agent. In
most cases, the Trust's transfer agent will have no information
with respect to or control over accounts of specific Class D
shareholders and you may obtain information about your accounts
only through your financial service firm. In certain
circumstances, your firm may arrange to have your shares held in
your own name or you may subsequently become a holder of record
for some other reason (for instance, if you terminate your
relationship with your firm). In such circumstances, please
contact the Distributor at 1-888-87-PIMCO for information about
your account. In the interest of economy and convenience,
certificates for Class D shares will not be issued.
The Distributor, in its sole discretion, may accept or reject any
order for purchase of Fund shares. The sale of shares will be
suspended during any period in which the New York Stock Exchange
is closed for other than weekends or holidays, or if permitted by
the rules of the Securities and Exchange Commission, when trading
on the New York Stock Exchange is restricted or during an
emergency which makes it impracticable for the Funds to dispose of
their securities or to determine fairly the value of their net
assets, or during any other period as permitted by the Securities
and Exchange Commission for the protection of investors.
Investment The following investment minimums apply for purchases of Class D
Minimums shares.
<TABLE>
<CAPTION>
Initial Investment Subsequent Investments
-----------------------------------------------------
<S> <C>
$2,500 per Fund $100 per Fund
</TABLE>
Your financial service firm may impose different investment
minimums than the Trust. For example, if your firm maintains an
omnibus account with a particular Fund, the firm may impose higher
or lower investment minimums than the Trust when you invest in
Class D shares of the Fund through your firm. Please contact your
firm for information.
Exchanging You may exchange your Class D shares of any Fund for Class D
Shares shares of any other Fund or series of PIMCO Funds: Pacific
Investment Management Series that offers Class D shares. Shares
are exchanged on the basis of their respective NAVs next
calculated after your exchange order is received by the
Distributor. Currently, the Trust does not charge any exchange
fees or charges. Your financial service firm may impose various
fees and charges, investment minimums and other requirements with
respect to exchanges. In addition, an exchange is generally a
taxable event which will generate capital gains or losses, and
special rules may apply in computing tax basis when determining
gain or loss. Please contact your financial service firm to
exchange your shares and for additional information about the
exchange privilege.
The Trust reserves the right to refuse exchange purchases if, in
the judgment of PIMCO Advisors, the purchase would adversely
affect a Fund and its shareholders. In particular, a pattern of
exchanges characteristic of "market-timing" strategies may be
deemed by PIMCO Advisors to be detrimental to the Trust or a
particular Fund. Currently, the Trust limits the number of "round
trip" exchanges an investor may make. An investor makes a "round
trip" exchange when the investor purchases shares of a particular
Fund, subsequently exchanges those shares for shares of a
different PIMCO Fund and then exchanges back into the originally
purchased Fund. The Trust has the right to refuse any exchange for
any investor who completes (by making the exchange back into the
shares of the originally purchased Fund) more than six round trip
exchanges in any twelve-month period. Although the Trust has no
current intention of terminating or modifying the exchange
privilege other than as set forth in the
Prospectus 28
<PAGE>
preceding sentence, it reserves the right to do so at any time.
Except as otherwise permitted by Securities and Exchange
Commission regulations, the Trust will give 60 days' advance
notice to your financial service firm of any termination or
material modification of the exchange privilege with respect to
Class D shares.
Selling You can sell (redeem) Class D shares through your financial
Shares service firm on any day the New York Stock Exchange is open. You
do not pay any fees or other charges to the Trust or the
Distributor when you sell your shares, although your financial
service firm may charge you for its services in processing your
redemption request. Please contact your firm for details. If you
are the holder of record of your Class D shares, you may contact
the Distributor at 1-888-87-PIMCO for information regarding how to
sell your shares directly to the Trust.
Your financial service firm is obligated to transmit your
redemption orders to the Distributor promptly and is responsible
for ensuring that your redemption request is in proper form. Your
financial service firm will be responsible for furnishing all
necessary documentation to the Distributor or the Trust's transfer
agent and may charge you for its services. Redemption proceeds
will be forwarded to your financial service firm as promptly as
possible and in any event within seven days after the redemption
request is received by the Distributor in good order. Redemptions
of Fund shares may be suspended when trading on the Exchange is
restricted or during an emergency which makes it impracticable for
the Funds to dispose of their securities or to determine fairly
the value of their net assets, or during any other period as
permitted by the Securities and Exchange Commission for the
protection of investors. Under these and other unusual
circumstances, the Trust may suspend redemptions or postpone
payment for more than seven days, as permitted by law.
Redemptions The Trust had agreed to redeem shares of each Fund solely in cash
In Kind up to the lesser of $250,000 or 1% of the Fund's net assets during
any 90-day period for any one shareholder. In consideration of the
best interests of the remaining shareholders, the Trust may pay
any redemption proceeds exceeding this amount in whole or in part
by a distribution in kind of securities held by a Fund in lieu of
cash. Except for Funds with a tax-efficient management strategy,
it is highly unlikely that your shares would ever be redeemed in
kind. If your shares are redeemed in kind, you should expect to
incur transaction costs upon the disposition of the securities
received in the distribution.
Fund Distributions
Each Fund distributes substantially all of its net investment
income to shareholders in the form of dividends. You begin earning
dividends on Fund shares the day after the Trust receives your
purchase payment. Dividends paid by each Fund with respect to its
Class D shares are calculated in the same manner and at the same
time. The following shows when each Fund intends to declare and
distribute income dividends to shareholders of record.
<TABLE>
<CAPTION>
Fund At Least Annually Quarterly
-------------------------------------------------------------
<S> <C> <C>
Equity Income, Renaissance and .
Value Funds
-------------------------------------------------------------
All other Funds .
-------------------------------------------------------------
</TABLE>
In addition, each Fund distributes any net capital gains it earns
from the sale of portfolio securities to shareholders no less
frequently than annually. Net short-term capital gains may be paid
more frequently.
You can choose from the following distribution options:
. Reinvest all distributions in additional Class D shares of your
Fund at NAV. This will be done unless you elect another option.
. Invest all distributions in Class D shares of any other Fund or
another series of the Trust or PIMCO Funds: Pacific Investment
Management Series which offers Class D shares at NAV. You must
have an account existing in the Fund or series selected for
investment with the identical registered name. This option must be
elected when your account is set up.
. Receive all distributions in cash (either paid directly to you
or credited to your account with your financial service firm).
This option must be elected when your account is set up.
Your financial service firm may offer additional distribution
reinvestment programs or options. Please contact your firm for
details.
29 PIMCO Funds: Multi-Manager Series
<PAGE>
You do not pay any sales charges on shares you receive through
the reinvestment of Fund distributions. If you elect to receive
Fund distributions in cash and the postal or other delivery
service is unable to deliver checks to your address of record, the
Trust's Transfer Agent will hold the returned checks for your
benefit in a non-interest bearing account.
For further information on distribution options, please contact
your financial service firm or call the Distributor at 1-888-87-
PIMCO.
Tax Consequences
. Taxes on Fund distributions. If you are subject to U.S.
federal income tax, you will be subject to tax on Fund
distributions whether you received them in cash or reinvested them
in additional shares of the Funds. For federal income tax
purposes, Fund distributions will be taxable to you as either
ordinary income or capital gains.
Fund dividends (i.e., distributions of investment income) are
taxable to you as ordinary income. Federal taxes on Fund
distributions of gains are determined by how long the Fund owned
the investments that generated the gains, rather than how long you
have owned your shares. Distributions of gains from investments
that a Fund owned for more than 12 months will generally be
taxable to you as capital gains. Distributions of gains from
investments that the Fund owned for 12 months or less will
generally be taxable to you as ordinary income.
Fund distributions are taxable to you even if they are paid from
income or gains earned by a Fund prior to your investment and thus
were included in the price you paid for your shares. For example,
if you purchase shares on or just before the record date of a Fund
distribution, you will pay full price for the shares and may
receive a portion of your investment back as a taxable
distribution.
. Taxes when you sell (redeem) or exchange your shares. Any gain
resulting from the sale of Fund shares will generally be subject
to federal income tax. When you exchange shares of a Fund for
shares of another series, the transaction will generally be
treated as a sale of the Fund shares for these purposes, and any
gain on those shares will generally be subject to federal income
tax.
. A Note on the Tax-Efficient Equity Fund. The Tax-Efficient
Equity Fund utilizes a number of tax-efficient management
techniques designed to minimize taxable distributions. For
instance, the Fund generally seeks to minimize realized gains and,
when realizing gains, attempts to realize gains that will be taxed
as capital gains (i.e., on investments owned for more than 12
months). Although the Fund attempts to minimize taxable
distributions, it may be expected to earn and distribute taxable
income and realize and distribute capital gains from time to time.
. A Note on Foreign Investments. A Fund's investment in foreign
securities may be subject to foreign withholding taxes. In that
case, the Fund's yield on those securities would be decreased. In
addition, a Fund's investments in foreign securities or foreign
currencies may increase or accelerate the Fund's recognition of
ordinary income and may affect the timing or amount of the Fund's
distributions.
This section relates only to federal income tax consequences of
investing in the Funds; the consequences under other tax laws may
differ. You should consult your tax advisor as to the possible
application of foreign, state and local income tax laws to Fund
dividends and capital distributions. Please see the Statement of
Additional Information for additional information regarding the
tax aspects of investing in the Funds.
Characteristics and Risks of Securities
and Investment Techniques
This section provides additional information about some of the
principal investments and related risks of the Funds identified
under "Summary Information" above. It also describes
characteristics and risks of additional securities and investment
techniques that are not necessarily principal investment
strategies but may be used by the Funds from time to time. Most of
these securities and investment techniques are discretionary,
which means that the portfolio managers can decide whether to use
them or not. This Prospectus does not attempt to disclose all of
the various types of securities and investment techniques that may
be used by the Funds. As with any mutual fund, investors in the
Funds must rely on the professional investment judgment and skill
of PIMCO Advisors, the Sub-Advisers and the individual portfolio
managers. Please see "Investment Objectives and Policies" in the
Statement of Additional Information for more detailed information
about the securities and investment techniques described in this
section and about other strategies and techniques that may be used
by the Funds.
Prospectus 30
<PAGE>
Fixed Fixed income securities are obligations of the issuer to make
Income payments of principal and/or interest on future dates, and include
Securities corporate and government bonds, notes, certificates of deposit,
and commercial paper, convertible securities and mortgage-backed and
Defensive other asset-backed securities.
Strategies
The Capital Appreciation, Mid-Cap Growth and Tax-Efficient Equity
Funds intend to be as fully invested in common stocks as
practicable at all times, although, for cash management purposes,
each of these Funds may maintain a portion of its assets (normally
not more than 10%) in U.S. Government securities, high quality
fixed income securities, money market obligations and cash to pay
certain Fund expenses and to meet redemption requests. None of
these Funds will make defensive investments in response to
unfavorable market and other conditions and therefore may be
particularly vulnerable to general declines in stock prices and/or
other categories of securities in which they invest.
Under normal conditions, the Equity Income and Value Funds each
intend to be fully invested in common stocks (aside from cash
management practices), except that each of these Funds may
temporarily hold up to 10% of its assets in cash and cash
equivalents for defensive purposes in response to unfavorable
market and other conditions. The Growth, Innovation and
Renaissance Funds will each invest primarily in common stocks, and
may also invest in other kinds of equity securities, including
preferred stocks and securities (including fixed income securities
and warrants) convertible into or exercisable for common stocks.
Each of these Funds may also invest a portion of its assets in
fixed income securities. These Funds may temporarily hold up to
100% of their assets in short-term U.S. Government securities and
other money market instruments for defensive purposes in response
to unfavorable market and other conditions. The temporary
defensive strategies described in this paragraph would be
inconsistent with the investment objective and principal
investment strategies of each of the noted Funds and may adversely
affect the Fund's ability to achieve its investment objective.
Companies
With
Smaller
Market
Capitalizations
Each of the Funds may invest in securities of companies with
market capitalizations that are small compared to other publicly
traded companies. The Mid-Cap Growth Fund has significant exposure
to the risks described below because it invests primarily in
companies with medium-sized market capitalizations, which are
smaller than the largest companies.
Companies which are smaller and less well-known or seasoned than
larger, more widely held companies may offer greater opportunities
for capital appreciation, but may also involve risks different
from, or greater than, risks normally associated with larger
companies. Larger companies generally have greater financial
resources, more extensive research and development, manufacturing,
marketing and service capabilities, and more stability and greater
depth of management and technical personnel than smaller
companies. Smaller companies may have limited product lines,
markets or financial resources or may depend on a small,
inexperienced management group. Securities of smaller companies
may trade less frequently and in lesser volume than more widely
held securities and their values may fluctuate more abruptly or
erratically than securities of larger companies. They may also
trade in the over-the-counter market or on a regional exchange, or
may otherwise have limited liquidity. These securities may
therefore be more vulnerable to adverse market developments than
securities of larger companies. Also, there may be less publicly
available information about smaller companies or less market
interest in their securities as compared to larger companies, and
it may take longer for the prices of the securities to reflect the
full value of a company's earnings potential or assets.
Because securities of smaller companies may have limited
liquidity, a Fund may have difficulty establishing or closing out
its positions in smaller companies at prevailing market prices. As
a result of owning large positions in this type of security, a
Fund is subject to the additional risk of possibly having to sell
portfolio securities at disadvantageous times and prices if
redemptions require the Fund to liquidate its securities
positions. For these reasons, it may be prudent for a Fund with a
relatively large asset size to limit the number of relatively
small positions it holds in securities having limited liquidity in
order to minimize its exposure to such risks, to minimize
transaction costs, and to maximize the benefits of research. As a
consequence, as a Fund's asset size increases, the Fund may reduce
its exposure to illiquid smaller capitalization securities, which
could adversely affect performance.
Foreign
Securities
The Growth, Innovation and Renaissance Funds may invest up to 15%
of their respective assets in securities of foreign issuers,
securities traded principally in securities markets outside the
United States and/or securities denominated in foreign currencies
(together, "foreign securities").
All of the Funds may invest in American Depository Receipts
("ADRs"). In addition, the Growth, Innovation and Renaissance
Funds may invest in European Depository Receipts (EDRs) and Global
Depository Receipts (GDRs). ADRs are dollar-denominated receipts
issued generally by domestic banks and representing the deposit
with the bank of a security of a foreign issuer, and are publicly
traded on
31 PIMCO Funds: Multi-Manager Series
<PAGE>
exchanges or over-the-counter in the United States. EDRs are
receipts similar to ADRs and are issued and traded in Europe. GDRs
may be offered privately in the United States and also traded in
public or private markets in other countries.
Investing in foreign securities involves special risks and
considerations not typically associated with investing in U.S.
securities and shareholders should consider carefully the
substantial risks involved for Funds that invest in these
securities. These risks include: differences in accounting,
auditing and financial reporting standards; generally higher
commission rates on foreign portfolio transactions; the
possibility of nationalization, expropriation or confiscatory
taxation; adverse changes in investment or exchange control
regulations; and political instability. Individual foreign
economies may differ favorably or unfavorably from the U.S.
economy in such respects as growth of gross domestic product, rate
of inflation, capital reinvestment, resources, self-sufficiency
and balance of payments position. The securities markets, values
of securities, yields and risks associated with foreign securities
markets may change independently of each other. Also, foreign
securities and dividends and interest payable on those securities
may be subject to foreign taxes, including taxes withheld from
payments on those securities. Foreign securities often trade with
less frequency and volume than domestic securities and therefore
may exhibit greater price volatility. Investments in foreign
securities may also involve higher custodial costs than domestic
investments and additional transaction costs with respect to
foreign currency conversions. Changes in foreign exchange rates
also will affect the value of securities denominated or quoted in
foreign currencies.
Emerging Each of the Funds that may invest in foreign securities may invest
Market in securities of issuers based in countries with developing (or
Securities "emerging market") economies. Investing in emerging market
securities imposes risks different from, or greater than, risks of
investing in domestic securities or in foreign, developed
countries. These risks include: smaller market capitalization of
securities markets, which may suffer periods of relative
illiquidity; significant price volatility; restrictions on foreign
investment; and possible repatriation of investment income and
capital. In addition, foreign investors may be required to
register the proceeds of sales and future economic or political
crises could lead to price controls, forced mergers, expropriation
or confiscatory taxation, seizure, nationalization or the creation
of government monopolies. The currencies of emerging market
countries may experience significant declines against the U.S.
dollar, and devaluation may occur subsequent to investments in
these currencies by a Fund. Inflation and rapid fluctuations in
inflation rates have had, and may continue to have, negative
effects on the economies and securities markets of certain
emerging market countries.
Additional risks of emerging market securities may include:
greater social, economic and political uncertainty and
instability; more substantial governmental involvement in the
economy; less governmental supervision and regulation;
unavailability of currency hedging techniques; companies that are
newly organized and small; differences in auditing and financial
reporting standards, which may result in unavailability of
material information about issuers; and less developed legal
systems. In addition, emerging securities markets may have
different clearance and settlement procedures, which may be unable
to keep pace with the volume of securities transactions or
otherwise make it difficult to engage in such transactions.
Settlement problems may cause a Fund to miss attractive investment
opportunities, hold a portion of its assets in cash pending
investment, or be delayed in disposing of a portfolio security.
Such a delay could result in possible liability to a purchaser of
the security.
Foreign A Fund that invests directly in foreign currencies or in
Currencies securities that trade in, and receive revenues in, foreign
currencies will be subject to currency risk.
Foreign currency exchange rates may fluctuate significantly over
short periods of time. They generally are determined by supply and
demand and the relative merits of investments in different
countries, actual or perceived changes in interest rates and other
complex factors. Currency exchange rates also can be affected
unpredictably by intervention (or the failure to intervene) by
U.S. or foreign governments or central banks, or by currency
controls or political developments. For example, significant
uncertainty surrounds the recent introduction of the euro (a
common currency unit for the European Union) in January 1999 and
the effect it may have on the value of securities denominated in
local European currencies. These and other currencies in which the
Funds' assets are denominated may be devalued against the U.S.
dollar, resulting in a loss to the Funds.
Foreign Currency Transactions. The Growth, Innovation and
Renaissance Funds may enter into forward foreign currency exchange
contracts to reduce the risks of adverse changes in foreign
exchange rates. A forward foreign currency exchange contract,
which involves an obligation to purchase or sell a specific
currency at a future date at a price set at the time of the
contract, reduces a Fund's exposure to
Prospectus 32
<PAGE>
changes in the value of the currency it will deliver and increases
its exposure to changes in the value of the currency it will
receive for the duration of the contract. The effect on the value
of a Fund is similar to selling securities denominated in one
currency and purchasing securities denominated in another
currency. Contracts to sell foreign currency would limit any
potential gain which might be realized by a Fund if the value of
the hedged currency increases. A Fund may enter into these
contracts to hedge against foreign exchange risk arising from the
Fund's investment or anticipated investment in securities
denominated in foreign currencies. Suitable hedging transactions
may not be available in all circumstances and there can be no
assurance that a Fund will engage in such transactions at any
given time or from time to time. Also, such transactions may not
be successful and may eliminate any chance for a Fund to benefit
from favorable fluctuations in relevant foreign currencies.
Convertible Each Fund may invest in convertible securities. Convertible
Securities securities are generally preferred stocks and other securities,
including fixed income securities and warrants, that are
convertible into or exercisable for common stock at either a
stated price or a stated rate. The price of a convertible security
will normally vary in some proportion to changes in the price of
the underlying common stock because of this conversion or exercise
feature. However, the value of a convertible security may not
increase or decrease as rapidly as the underlying common stock. A
convertible security will normally also provide income and is
subject to interest rate risk. While convertible securities
generally offer lower interest or dividend yields than non-
convertible fixed income securities of similar quality, their
value tends to increase as the market value of the underlying
stock increases and to decrease when the value of the underlying
stock decreases. Also, a Fund may be forced to convert a security
before it would otherwise choose, which may have an adverse effect
on the Fund's ability to achieve its investment objective.
Credit The Funds may invest in securities based on their credit ratings
Ratings assigned by rating agencies such as Moody's Investors Service,
and Inc. ("Moody's") and Standard & Poor's Ratings Services ("S&P").
Unrated Moody's, S&P and other rating agencies are private services that
Securities provide ratings of the credit quality of fixed income securities,
including convertible securities. The Appendix to the Statement of
Additional Information describes the various ratings assigned to
fixed income securities by Moody's and S&P. Ratings assigned by a
rating agency are not absolute standards of credit quality and do
not evaluate market risk. Rating agencies may fail to make timely
changes in credit ratings and an issuer's current financial
condition may be better or worse than a rating indicates. A Fund
will not necessarily sell a security when its rating is reduced
below its rating at the time of purchase. PIMCO Advisors and the
Sub-Advisers do not rely solely on credit ratings, and develop
their own analysis of issuer credit quality.
A Fund may purchase unrated securities (which are not rated by a
rating agency) if its portfolio manager determines that the
security is of comparable quality to a rated security that the
Fund may purchase. Unrated securities may be less liquid than
comparable rated securities and involve the risk that the
portfolio manager may not accurately evaluate the security's
comparative credit rating.
Derivatives Each Fund (except the Capital Appreciation, Equity Income, Mid-Cap
Growth and Value Funds) may, but is not required to, use a number
of derivative instruments for risk management purposes or as part
of its investment strategies. Generally, derivatives are financial
contracts whose value depends upon, or is derived from, the value
of an underlying asset, reference rate or index, and may relate to
stocks, bonds, interest rates, currencies or currency exchange
rates, commodities, and related indexes. A portfolio manager may
decide not to employ any of these strategies and there is no
assurance that any derivatives strategy used by a Fund will
succeed.
Examples of derivative instruments that the Funds may use include
options contracts, futures contracts, options on futures contracts
and swap agreements. The Growth, Innovation, Renaissance and Tax-
Efficient Equity Funds may purchase and sell (write) call and put
options on securities, securities indexes and foreign currencies.
Each of these Funds may purchase and sell futures contracts and
options thereon with respect to securities, securities indexes and
foreign currencies. The Tax-Efficient Equity Fund may enter into
swap agreements with respect to securities indexes. A description
of these and other derivative instruments that the Funds may use
are described under "Investment Objectives and Policies" in the
Statement of Additional Information.
A Fund's use of derivative instruments involves risks different
from, or greater than, the risks associated with investing
directly in securities and other more traditional investments. A
description of various risks associated with particular derivative
instruments is included in "Investment Objectives and Policies" in
the Statement of Additional Information. The following provides a
more general discussion of important risk factors relating to all
derivative instruments that may be used by the Funds.
33 PIMCO Funds: Multi-Manager Series
<PAGE>
Management Risk Derivative products are highly specialized
instruments that require investment techniques and risk analyses
different from those associated with stocks and bonds. The use of
a derivative requires an understanding not only of the underlying
instrument but also of the derivative itself, without the benefit
of observing the performance of the derivative under all possible
market conditions.
Credit Risk The use of a derivative instrument involves the risk
that a loss may be sustained as a result of the failure of another
party to the contract (usually referred to as a "counterparty") to
make required payments or otherwise comply with the contract's
terms.
Liquidity Risk Liquidity risk exists when a particular derivative
instrument is difficult to purchase or sell. If a derivative
transaction is particularly large or if the relevant market is
illiquid (as is the case with many privately negotiated
derivatives), it may not be possible to initiate a transaction or
liquidate a position at an advantageous time or price.
Leveraging Risk Because many derivatives have a leverage
component, adverse changes in the value or level of the underlying
asset, reference rate or index can result in a loss substantially
greater than the amount invested in the derivative itself. Certain
derivatives have the potential for unlimited loss, regardless of
the size of the initial investment. When a Fund uses derivatives
for leverage, investments in that Fund will tend to be more
volatile, resulting in larger gains or losses in response to
market changes. To limit leverage risk, each Fund will segregate
assets determined to be liquid by PIMCO Advisors or a Sub-Adviser
in accordance with procedures established by the Board of Trustees
(or, as permitted by applicable regulation, enter into certain
offsetting positions) to cover its obligations under derivative
instruments.
Lack of Availability Because the markets for certain derivative
instruments (including markets located in foreign countries) are
relatively new and still developing, suitable derivatives
transactions may not be available in all circumstances for risk
management or other purposes. There is no assurance that a Fund
will engage in derivatives transactions at any time or from time
to time. A Fund's ability to use derivatives may also be limited
by certain regulatory and tax considerations.
Market and Other Risks Like most other investments, derivative
instruments are subject to the risk that the market value of the
instrument will change in a way detrimental to a Fund's interest.
If a portfolio manager incorrectly forecasts the values of
securities, currencies or interest rates or other economic factors
in using derivatives for a Fund, the Fund might have been in a
better position if it had not entered into the transaction at all.
While some strategies involving derivative instruments can reduce
the risk of loss, they can also reduce the opportunity for gain or
even result in losses by offsetting favorable price movements in
other Fund investments. A Fund may also have to buy or sell a
security at a disadvantageous time or price because the Fund is
legally required to maintain offsetting positions or asset
coverage in connection with certain derivatives transactions.
Other risks in using derivatives include the risk of mispricing
or improper valuation of derivatives and the inability of
derivatives to correlate perfectly with underlying assets, rates
and indexes. Many derivatives, in particular privately negotiated
derivatives, are complex and often valued subjectively. Improper
valuations can result in increased cash payment requirements to
counterparties or a loss of value to a Fund. Also, the value of
derivatives may not correlate perfectly, or at all, with the value
of the assets, reference rates or indexes they are designed to
closely track. In addition, a Fund's use of derivatives may cause
the Fund to realize higher amounts of short-term capital gains
(taxed at ordinary income tax rates when distributed to
shareholders who are individuals) than if the Fund had not used
such instruments.
Loans of For the purpose of achieving income, each Fund may lend its
Portfolio portfolio securities to brokers, dealers, and other financial
Securities institutions provided a number of conditions are satisfied,
including that the loan is fully collateralized. Please see
"Investment Objectives and Policies" in the Statement of
Additional Information for details. When a Fund lends portfolio
securities, its investment performance will continue to reflect
changes in the value of the securities loaned, and the Fund will
also receive a fee or interest on the collateral. Securities
lending involves the risk of loss of rights in the collateral or
delay in recovery of the collateral if the borrower fails to
return the security loaned or becomes insolvent. A Fund may pay
lending fees to the party arranging the loan.
Short
Sales
Each Fund may make short sales as part of its overall portfolio
management strategies or to offset a potential decline in the
value of a security. A short sale involves the sale of a security
that is borrowed from a broker or other institution to complete
the sale. A Fund may only enter into short selling
Prospectus 34
<PAGE>
transactions if the security sold short is held in the Fund's
portfolio or if the Fund has the right to acquire the security
without the payment of further consideration. For these purposes,
a Fund may also hold or have the right to acquire securities
which, without the payment of any further consideration, are
convertible into or exchangeable for the securities sold short.
Short sales expose a Fund to the risk that it will be required to
acquire, convert or exchange securities to replace the borrowed
securities (also known as "covering" the short position) at a time
when the securities sold short have appreciated in value, thus
resulting in a loss to the Fund.
When- Each Fund may purchase securities which it is eligible to purchase
Issued, on a when-issued basis, may purchase and sell such securities for
Delayed delayed delivery and may make contracts to purchase such
Delivery securities for a fixed price at a future date beyond normal
and settlement time (forward commitments). When-issued transactions,
Forward delayed delivery purchases and forward commitments involve a risk
Commitment of loss if the value of the securities declines prior to the
Transactionssettlement date. This risk is in addition to the risk that the
Fund's other assets will decline in value. Therefore, these
transactions may result in a form of leverage and increase a
Fund's overall investment exposure. Typically, no income accrues
on securities a Fund has committed to purchase prior to the time
delivery of the securities is made, although a Fund may earn
income on securities it has segregated to cover these positions.
Repurchase Each Fund may enter into repurchase agreements, in which the Fund
Agreements purchases a security from a bank or broker-dealer that agrees to
repurchase the security at the Fund's cost plus interest within a
specified time. If the party agreeing to repurchase should
default, the Fund will seek to sell the securities which it holds.
This could involve procedural costs or delays in addition to a
loss on the securities if their value should fall below their
repurchase price. Those Funds whose investment objectives do not
include the earning of income will invest in repurchase agreements
only as a cash management technique with respect to that portion
of its portfolio maintained in cash. Repurchase agreements
maturing in more than seven days are considered illiquid
securities.
Reverse Each Fund may enter into reverse repurchase agreements, subject to
Repurchase the Fund's limitations on borrowings. A reverse repurchase
Agreements agreement involves the sale of a security by a Fund and its
And Other agreement to repurchase the instrument at a specified time and
Borrowings price, and may be considered a form of borrowing for some
purposes. A Fund will segregate assets determined to be liquid by
PIMCO Advisors or a Sub-Adviser in accordance with procedures
established by the Board of Trustees to cover its obligations
under reverse repurchase agreements. A Fund also may borrow money
for investment purposes subject to any policies of the Fund
currently described in this Prospectus or in the Statement of
Additional Information. Reverse repurchase agreements and other
forms of borrowings may create leveraging risk for a Fund.
Portfolio With the exception of the Tax-Efficient Equity Fund, the length of
Turnover time a Fund has held a particular security is not generally a
consideration in investment decisions. A change in the securities
held by a Fund is known as "portfolio turnover." Each Fund may
engage in active and frequent trading of portfolio securities to
achieve its investment objective and principal investment
strategies, particularly during periods of volatile market
movements, although the Tax-Efficient Equity Fund will generally
attempt to limit portfolio turnover as part of its tax-efficient
management strategies. High portfolio turnover (e.g., over 100%)
involves correspondingly greater expenses to a Fund, including
brokerage commissions or dealer mark-ups and other transaction
costs on the sale of securities and reinvestments in other
securities. Such sales may also result in realization of taxable
capital gains, including short-term capital gains (which are taxed
at ordinary income tax rates when distributed to shareholders who
are individuals). The trading costs and tax effects associated
with portfolio turnover may adversely affect a Fund's performance.
Illiquid Each Fund may invest in securities that are illiquid so long as
Securities not more than 15% of the value of the Fund's net assets (taken at
market value at the time of investment) would be invested in such
securities. Certain illiquid securities may require pricing at
fair value as determined in good faith under the supervision of
the Board of Trustees. A portfolio manager may be subject to
significant delays in disposing of illiquid securities held by a
Fund, and transactions in illiquid securities may entail
registration expenses and other transaction costs that are higher
than those for transactions in liquid securities. The term
"illiquid securities" for this purpose means securities that
cannot be disposed of within seven days in the ordinary course of
business at approximately the amount at which a Fund has valued
the securities. Please see "Investment Objectives and Policies" in
the Statement of Additional Information for a listing of various
securities that are generally considered to be illiquid for these
purposes. Restricted securities, i.e., securities subject to legal
or contractual restrictions on resale, may
35 PIMCO Funds: Multi-Manager Series
<PAGE>
be illiquid. However, some restricted securities (such as
securities issued pursuant to Rule 144A under the Securities Act
of 1933 and certain commercial paper) may be treated as liquid,
although they may be less liquid than registered securities traded
on established secondary markets.
Investment Each of the Funds may invest up to 5% of its assets in other
in Other investment companies. As a shareholder of an investment company, a
Investment Fund may indirectly bear service and other fees which are in
Companies addition to the fees the Fund pays its service providers.
Year 2000 Many of the services provided to the Funds depend on the smooth
Readiness functioning of computer systems. Many systems in use today cannot
Disclosure distinguish between the year 1900 and the year 2000. Should any of
the service systems fail to process information properly, this
could have an adverse impact on the Funds' operations and services
provided to shareholders. PIMCO Advisors and its subsidiaries have
surveyed the Funds' material service providers and believe that,
on the basis of the information supplied, the service providers
used by the Funds on January 1, 2000 will not be materially
adversely affected by the so-called "year 2000 problem." However,
there can be no assurance that the problem will be corrected in
all respects and that the Funds' operations and services provided
to shareholders will not be adversely affected, nor can there be
any assurance that the year 2000 problem will not have an adverse
effect on the entities whose securities are held by the Funds or
on domestic or global equity markets or economies, generally.
Accordingly, PIMCO Advisors and the Sub-Advisers reserve the right
to vary, during the fourth quarter of 1999 and/or the first
quarter of 2000, the investments of any Fund to maintain
sufficient liquidity to satisfy actual or anticipated redemption
activity.
Changes The investment objective of each of the Growth, Innovation,
in Renaissance and Tax-Efficient Equity Funds described in this
Investment Prospectus may be changed by the Board of Trustees without
Objectives shareholder approval. The investment objective of each other Fund
and is fundamental and may not be changed without shareholder
Policies approval. Unless otherwise stated, all other investment policies
of the Funds may be changed by the Board of Trustees without
shareholder approval. If there is a change in a Fund's investment
objective or policies, including a change approved by shareholder
vote, shareholders should consider whether the Fund remains an
appropriate investment in light of their then current financial
position and needs.
Percentage Unless otherwise stated, all percentage limitations on Fund
Investment investments listed in this Prospectus will apply at the time of
Limitations investment. A Fund would not violate these limitations unless an
excess or deficiency occurs or exists immediately after and as a
result of an investment.
Other The Funds may invest in other types of securities and use a
Investments variety of investment techniques and strategies which are not
and described in this Prospectus. These securities and techniques may
Techniques subject the Funds to additional risks. Please see the Statement of
Additional Information for additional information about the
securities and investment techniques described in this Prospectus
and about additional securities and techniques that may be used by
the Funds.
Prospectus 36
<PAGE>
Financial Highlights
The financial highlights table is intended to help you understand
the financial performance of Class D shares of each Fund since the
class of shares was first offered. Certain information reflects
financial results for a single Fund share. The total returns in
the table represent the rate that an investor would have earned or
lost on an investment in Class D shares of a Fund, assuming
reinvestment of all dividends and distributions. This information
has been audited by PricewaterhouseCoopers LLP, whose report,
along with each Fund's financial statements, are included in the
Trust's annual report to shareholders. The annual report is
incorporated by reference in the Statement of Additional
Information and is available free of charge upon request from the
Distributor. The Growth Fund did not offer Class D shares during
the periods shown.
<TABLE>
<CAPTION>
Net Realized/ Total Income Dividends Distributions
Year or Net Asset Value Net Unrealized (Loss) From Net From Net
Period Beginning Investment Gain (Loss) on From Investment Investment Realized Capital
Ended of Period Income (Loss) Investments Operations Income Gains
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Capital Appreciation Fund
06/30/99 $ 26.01 $ 0.06 (a) $ 2.34 (a) $ 2.40 $ (0.13) $ (1.65)
04/08/98-06/30/98 25.41 0.02 (a) 0.58 (a) 0.60 0.00 0.00
Equity Income Fund
06/30/99 $ 16.04 $ 0.40 (a) $ 1.27 (a) $ 1.67 $ (0.36) $ (1.76)
04/08/98-06/30/98 16.71 0.09 (a) (0.66)(a) (0.57) (0.10) 0.00
Innovation Fund (i)
06/30/99 $ 24.28 $ (0.29)(a) $ 14.79 (a) $ 14.50 $ 0.00 $ (1.26)
04/08/98-06/30/98 21.50 (0.05)(a) 2.83 (a) 2.78 0.00 0.00
Mid-Cap Growth Fund
06/30/99 $ 23.99 $ 0.03 (a) $ (0.04)(a) $ (0.01) $ (0.01) $ (1.07)
04/08/98-06/30/98 23.97 0.00 (a) 0.02 (a) 0.02 0.00 0.00
Renaissance Fund (i)
06/30/99 $ 19.10 $ 0.00 (a) $ 1.45 (a) $ 1.45 $ 0.00 $ (2.33)
04/08/98-06/30/98 18.99 0.01 (a) 0.10 (a) 0.11 0.00 0.00
Tax-Efficient Equity Fund
07/10/98-06/30/99 $ 10.00 $ 0.03 (a) $ 1.56 (a) $ 1.59 $ 0.00 $ 0.00
Value Fund
06/30/99 $ 15.64 $ 0.23 (a) $ 1.37 (a) $ 1.60 $ (0.23) $ (1.72)
04/08/98-06/30/98 15.99 0.04 (a) (0.34)(a) (0.30) (0.05) 0.00
</TABLE>
- -------
* Annualized
(a)Per share amounts based upon average number of shares outstanding during the
period.
(i) The information provided for the Innovation and Renaissance Funds reflects
results of operations under the Funds' former Sub-Adviser through March 6,
1999 and May 7, 1999, respectively; the Funds would not necessarily have
achieved the performance results shown above under their current investment
management arrangements.
37 PIMCO Funds: Multi-Manager Series
<PAGE>
<TABLE>
<CAPTION>
Ratio of Net
Ditributionss Ratio of Investment
i Excess ofn Net Asset Expenses to Income (Loss) to
Nt Realizede Total Value End of Net Assets End Average Net Average Net Portfolio
Caital Gainsp Distributions Period Total Return of Period (000s) Assets Assets Turnover Rate
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 0.00 $ (1.78) $ 26.63 10.17% $ 339 1.10% 0.24% 120%
0.00 0.00 26.01 2.36 118 1.10* 0.27* 75
$ 0.00 $ (2.12) $ 15.59 12.21% $ 106 1.10% 2.73% 76%
0.00 (0.10) 16.04 (3.43) 104 1.10* 2.23* 45
$ 0.00 $ (1.26) $ 37.52 61.62% $ 18,366 1.30% (0.89)% 119%
0.00 0.00 24.28 12.93 139 1.30* (0.99)* 100
$ 0.00 $ (1.08) $ 22.90 0.25% $ 359 1.10% 0.16% 85%
0.00 0.00 23.99 0.08 142 1.10* 0.03* 66
$ 0.00 $ (2.33) $ 18.22 10.01% $ 192 1.25% (0.02)% 221%
0.00 0.00 19.10 0.58 126 1.25* 0.21* 192
$ 0.00 $ 0.00 $ 11.59 15.90% $ 869 1.11%* 0.30%* 13%
$ 0.00 $ (1.95) $ 15.29 12.00% $ 118 1.10% 1.61% 101%
0.00 (0.05) 15.64 (1.85) 98 1.10* 1.23* 77
</TABLE>
Prospectus 38
<PAGE>
PIMCO Funds: Multi-Manager Series
The Trust's Statement of Additional Information ("SAI") and annual
and semi-annual reports to shareholders include additional
information about the Funds. The SAI and the financial statements
included in the Funds' most recent annual report to shareholders
are incorporated by reference into this Prospectus, which means
they are part of this Prospectus for legal purposes. The Funds'
annual report discusses the market conditions and investment
strategies that significantly affected each Fund's performance
during its last fiscal year.
You may get free copies of any of these materials, request other
information about a Fund, or make shareholder inquiries by calling
1-888-87-PIMCO, or by writing to:
PIMCO Funds Distributors LLC
2187 Atlantic Street
Stamford, CT 06902
You may also contact your financial service firm for additional
information.
You may review and copy information about the Trust, including its
SAI, at the Securities and Exchange Commission's public reference
room in Washington, D.C. You may call the Commission at 1-800-SEC-
0330 for information about the operation of the public reference
room. You may also access reports and other information about the
Trust on the Commission's Web site at www.sec.gov. You may get
copies of this information, with payment of a duplication fee, by
writing the Public Reference Section of the Commission,
Washington, D.C. 20549-6009. You may need to refer to the Trust's
file number under the Investment Company Act, which is 811-6161.
You can also visit our Web site at www.pimcofunds.com for
additional information about the Funds.
[LOGO OF PIMCO FUNDS APPEARS HERE]
File No. 811-6161
<PAGE>
---------------------------------------------------------------------
PIMCO INVESTMENT ADVISER AND ADMINISTRATOR
Funds: PIMCO Advisors L.P., 800 Newport Center Drive, Newport Beach, CA
Multi- 92660
Manager ---------------------------------------------------------------------
Series SUB-ADVISERS
PIMCO Equity Advisors division of PIMCO Advisors L.P., Cadence
CapitalManagement, NFJ Investment Group, Parametric Portfolio Asso-
ciates
---------------------------------------------------------------------
DISTRIBUTOR
PIMCO Funds Distributors LLC, 2187 Atlantic Street, Stamford, CT
06902
---------------------------------------------------------------------
CUSTODIAN
Investors Fiduciary Trust Company, 801 Pennsylvania, Kansas City, MO
64105
---------------------------------------------------------------------
SHAREHOLDER SERVICING AGENT AND TRANSFER AGENT
First Data Investor Services Group, Inc., P.O. Box 9688, Providence,
RI 02940
---------------------------------------------------------------------
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP, 1055 Broadway, Kansas City, MO 64105
---------------------------------------------------------------------
LEGAL COUNSEL
Ropes & Gray, One International Place, Boston, MA 02110
---------------------------------------------------------------------
For further information about the PIMCO Funds, call 1-800-426-0107
or visit our Web site at www.pimcofunds.com.
<PAGE>
Rule 497(c)
33-36528
811-6161
PIMCO Funds Prospectus
PIMCO This Prospectus describes 22 mutual funds offered by PIMCO Funds:
Funds: Multi-Manager Series. The Funds provide access to the professional
Multi- investment advisory services offered by PIMCO Advisors L.P. and
Manager its investment management affiliates. As of September 30, 1999,
Series PIMCO Advisors and its affiliates managed approximately
$256 billion in assets. PIMCO Advisors' institutional heritage is
reflected in the PIMCO Funds offered in this Prospectus.
November This Prospectus explains what you should know about the Funds
1, 1999 before you invest. Please read it carefully.
Share
Classes
Institutional
and
Administrative
The Securities and Exchange Commission has not approved or
disapproved these securities or determined if this Prospectus is
truthful or complete. Any representation to the contrary is a
criminal offense.
1 PIMCO Funds: Multi-Manager Series
<PAGE>
Table of Contents
<TABLE>
<S> <C>
Summary Information.............................................. 3
Fund Summaries
Renaissance Fund............................................... 5
Growth Fund.................................................... 7
Core Equity Fund............................................... 9
Target Fund.................................................... 11
Mid-Cap Equity Fund............................................ 13
Opportunity Fund............................................... 15
Innovation Fund................................................ 17
International Growth Fund...................................... 19
Mega-Cap Fund.................................................. 21
Capital Appreciation Fund...................................... 23
Mid-Cap Growth Fund............................................ 25
Small-Cap Growth Fund.......................................... 27
Micro-Cap Growth Fund.......................................... 29
Equity Income Fund............................................. 31
Value Fund..................................................... 33
Value 25 Fund.................................................. 35
Small-Cap Value Fund........................................... 37
Enhanced Equity Fund........................................... 39
Tax-Efficient Equity Fund...................................... 41
Structured Emerging Markets Fund............................... 43
Tax-Efficient Structured Emerging Markets Fund................. 45
International Fund............................................. 47
Summary of Principal Risks....................................... 49
Management of the Funds.......................................... 52
Investment Options -- Institutional Class and Administrative
Class Shares ................................................... 58
Purchases, Redemptions and Exchanges............................. 59
How Fund Shares Are Priced....................................... 64
Fund Distributions............................................... 65
Tax Consequences................................................. 66
Characteristics and Risks of Securities and Investment
Techniques...................................................... 66
Financial Highlights............................................. 77
</TABLE>
Prospectus 2
<PAGE>
Summary Information
The table below lists the investment objectives and certain investment
characteristics of the Funds. Other important characteristics are described
in the individual Fund Summaries beginning on page 5.
<TABLE>
<CAPTION>
Approximate
Number of
Sub-Adviser Fund Investment Objective Main Investments Holdings
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PIMCO Equity Renaissance Long-term growth of Common stocks having below-average 50-80
Advisors capital and income valuations where the company's
business fundamentals are expected to
improve
------------------------------------------------------------------------------------------
Growth Long-term growth of Common stocks of companies with market 35-40
capital; income is an capitalizations of at least $5 billion
incidental consideration
------------------------------------------------------------------------------------------
Core Equity Long-term growth of Common stocks of companies with market 40
capital, with income as capitalizations of more than $10
a secondary objective billion
------------------------------------------------------------------------------------------
Target Capital appreciation; no Common stocks of companies with market 40-60
consideration is given capitalizations of between $1 billion
to income and $10 billion
------------------------------------------------------------------------------------------
Mid-Cap Equity Long-term growth of Common stocks of companies with market 40
capital capitalizations of $1 billion to $10
billion
------------------------------------------------------------------------------------------
Opportunity Capital appreciation; no Common stocks of companies with market 60-100
consideration is given capitalizations of between $100
to income million and $2 billion
------------------------------------------------------------------------------------------
Innovation Capital appreciation; no Common stocks of technology-related 40
consideration is given companies with market capitalizations
to income of more than $200 million
------------------------------------------------------------------------------------------
International Long-term capital An international portfolio of common 50-100
Growth appreciation stocks
------------------------------------------------------------------------------------------------------------
Cadence Capital Mega-Cap Long-term growth of Common stocks of companies with very 40-60
Management capital large market capitalizations that have
improving fundamentals and whose stock
is reasonably valued by the market
------------------------------------------------------------------------------------------
Capital Growth of capital Common stocks of companies with market 60-100
Appreciation capitalizations of at least $1 billion
that have improving fundamentals and
whose stock is reasonably valued by
the market
------------------------------------------------------------------------------------------
Mid-Cap Growth Growth of capital Common stocks of companies with market 60-100
capitalizations of more than $500
million (excluding the largest 200
companies) that have improving
fundamentals and whose stock is
reasonably valued by the market
------------------------------------------------------------------------------------------
Small-Cap Growth of capital Common stocks of companies with market 60-100
Growth capitalizations of more than $100
million (excluding the largest 1,000
companies) that have improving
fundamentals and whose stock is
reasonably valued by the market
------------------------------------------------------------------------------------------
Micro-Cap Long-term growth of Common stocks of companies with market 60-100
Growth capital capitalizations of less than $250
million that have improving
fundamentals and whose stock is
reasonably valued by the market
------------------------------------------------------------------------------------------------------------
NFJ Investment Equity Income Current income as a Income producing common stocks of 40-50
Group primary objective; long- companies with market capitalizations
term growth of capital of more than $2 billion
as a secondary objective
------------------------------------------------------------------------------------------
Value Long-term growth of Common stocks of companies with market 40
capital and income capitalizations of more than $2
billion that are undervalued relative
to the market and their industry
groups
------------------------------------------------------------------------------------------
Value 25 Long-term growth of Approximately 25 common stocks of 25
capital and income companies with market capitalizations
of between $1 billion and $5 billion
and below-average price to earnings
ratios relative to their industry
groups
------------------------------------------------------------------------------------------
Small-Cap Long-term growth of Common stocks of companies with market 100
Value capital and income capitalizations of between $100
million and $1.5 billion and below-
average price to earnings ratios
relative to the market and their
industry groups
------------------------------------------------------------------------------------------------------------
</TABLE>
3 PIMCO Funds: Multi-Manager Series
<PAGE>
Summary Information (continued)
<TABLE>
<CAPTION>
Approximate
Number of
Sub-Adviser Fund Investment Objective Main Investments Holdings
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Parametric Portfolio Enhanced A total return which Common stocks represented in the S&P 100-200
Associates Equity equals or exceeds the 500 Index with market capitalizations
total return performance of more than $5 billion
of an index (currently
the S&P 500 Index) that
represents the
performance of a
reasonably broad
spectrum of common
stocks that are publicly
traded in the U.S.
------------------------------------------------------------------------------------------
Tax-Efficient Maximum after-tax growth A broadly diversified portfolio of at More
Equity of capital least 200 common stocks of companies than
represented in the S&P 500 Index with 200
market capitalizations of more than $5
billion
------------------------------------------------------------------------------------------
Structured Long-term growth of Common stocks of companies located in, More
Emerging capital or whose business relates to, emerging than
Markets markets 300
------------------------------------------------------------------------------------------
Tax-Efficient Long-term growth of Common stocks of companies located in, More
Structured capital. The Fund also or whose business relates to, emerging than
Emerging seeks to achieve markets 300
Markets superior after-tax
returns for its
shareholders by using a
variety of tax-efficient
management strategies
-----------------------------------------------------------------------------------------------------------------
Blairlogie Capital International Capital appreciation Common stocks of foreign (non-U.S.) 200-250
Management through investment in an issuers (developed and emerging
international portfolio; markets) with market capitalizations
income is an incidental of more than $500 million
consideration
-----------------------------------------------------------------------------------------------------------------
</TABLE>
Fund The Funds provide a broad range of investment choices. The
Descriptions, following Fund Summaries identify each Fund's investment
Performance objective, principal investments and strategies, principal risks,
and Fees performance information and fees and expenses. A more detailed
"Summary of Principal Risks" describing principal risks of
investing in the Funds begins after the Fund Summaries.
It is possible to lose money on investments in the Funds. An
investment in a Fund is not a deposit of a bank and is not
insured or guaranteed by the Federal Deposit Insurance
Corporation or any other government agency.
Prospectus 4
<PAGE>
PIMCO Renaissance Fund
<TABLE>
<CAPTION>
Ticker Symbols: PRNIX (Inst. Class)
PRFAX (Admin. Class)
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Principal Investments Investment Objective Fund Focus Approximate Capitalization Range
and Strategies Seeks long-term growth of Undervalued stocks with All capitalizations
capital and income improving business fundamentals
Approximate Number of Holdings Dividend Frequency
50-80 Quarterly
</TABLE>
The Fund seeks to achieve its investment objectie by normally
investing at least 65% of its assets in common stocks of companies.
with below-average valuations whose business fundamentals are
expected to improve. To achieve income, the Fund invests a portion
of its assets in income-producing (or dividend-paying) stocks.
The portfolio manager selects stocks for the Fund using a "value"
style. The portfolio manager invests primarily in common stocks of
companies having below-average valuations whose business
fundamentals, such as market share, strength of management and
competitive position, are expected to improve. The portfolio
manager determines valuation based on characteristics such as
price-to-earnings, price-to-book, and price-to-cash flow ratios.
The portfolio manager analyzes stocks and seeks to identify the
key drivers of financial results and catalysts for change, such as
new management and new or improved products, that indicate a
company may demonstrate improving fundamentals in the future. The
portfolio manager sells a stock when he believes that the
company's business fundamentals are weakening or when the stock's
valuation has become excessive.
The Fund may also invest in other kinds of equity securities,
including preferred stocks and convertible securities. The Fund
may invest up to 15% of its assets in foreign securities, usually
in the form of American Depository Receipts (ADRs).
In response to unfavorable market and other conditions, the Fund
may make temporary investments of some or all of its assets in
high-quality fixed income securities. This would be inconsistent
with the Fund's investment objective and principal strategies.
- --------------------------------------------------------------------------------
Principal Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
. Market Risk . Foreign Investment Risk . Credit Risk
. Issuer Risk . Currency Risk . Management Risk
. Value Securities
Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
- --------------------------------------------------------------------------------
Performance The top of the next page shows summary performance information for
Information the Fund in a bar chart and an Average Annual Total Returns table.
The information provides some indication of the risks of investing
in the Fund by showing changes in its performance from year to
year and by showing how the Fund's average annual returns compare
with the returns of a broad-based securities market index and an
index of similar funds. The bar chart and the information to its
right show performance of the Fund's Institutional Class shares.
For periods prior to the inception of Institutional Class shares
(12/30/97) and Administrative Class shares (8/31/98), performance
information shown in the bar chart (including the information to
its right) and in the Average Annual Total Returns table for those
classes is based on the performance of the Fund's Class C shares,
which are offered in a different prospectus. The prior Class C
performance has been adjusted to reflect the actual fees and
expenses paid by Institutional Class and Administrative Class
shares, including no sales charges (loads) and lower distribution
and/or service (12b-1 fees) (if any) and administrative fees.
Prior to May 7, 1999, the Fund had a different sub-adviser and
would not necessarily have achieved the performance results shown
on the next page under its current investment management
arrangements. Past performance is no guarantee of future results.
5 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Renaissance Fund (continued)
Calendar Year Total Returns -- Institutional Class
[CHART APPEARS HERE] More Recent Return
Information
--------------------
1989 12.45% 1/1/99-9/30/9 0.37%
1990 -14.47%
1991 34.75% Highest and Lowest
1992 9.02% Quarter Returns
1993 22.62% (for periods shown
1994 -3.95% in the bar chart)
1995 29.06% --------------------
1996 25.82% Highest (4th Qtr.
1997 36.42% '98) 18.51%
1998 11.83% --------------------
Lowest (3rd Qtr.
'98) -16.52%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/98)
<TABLE>
<CAPTION>
Fund Inception
1 Year 5 Years 10 Years (4/18/88)(/3/)
-----------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional Class 11.83% 18.93% 15.22% 14.83%
-----------------------------------------------------------------
Administrative Class 11.58% 18.64% 14.93% 14.55%
-----------------------------------------------------------------
S&P 500 Index(/1/) 28.58% 24.06% 19.21% 18.87%
-----------------------------------------------------------------
Lipper Equity Income Fund
Average(/2/) 11.90% 16.50% 14.32% 14.23%
-----------------------------------------------------------------
</TABLE>
(1) The S&P 500 Index is an unmanaged index of large
capitalization common stocks. It is not possible to invest
directly in the index.
(2) The Lipper Equity Income Fund Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. that seek relatively higher growth of income
through investing 60% or more of their portfolios in
equities. It does not take into account sales charges.
(3) The Fund began operations on 4/18/88. Index comparisons
begin on 4/30/88.
- --------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Institutional Class or Administrative Class shares of the
of the Fund:
Fund
Shareholder Fees (fees paid directly from your investment) None
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Share Class Fees (12b-1) Fees Expenses(/1/) Expenses
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional 0.60% None 0.25% 0.85%
--------------------------------------------------------------------
Administrative 0.60 0.25% 0.25 1.10
--------------------------------------------------------------------
</TABLE>
(1) Other Expenses reflects a 0.25% Administrative Fee paid by
the class.
Examples. The Examples below are intended to help you compare the
cost of investing in Institutional Class or Administrative Class
shares of the Fund with the costs of investing in other mutual
funds. The Examples assume that you invest $10,000 in the noted
class of shares for the time periods indicated, and then redeem
all your shares at the end of those periods. The Examples also
assume that your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the Fund's
operating expenses remain the same. Although your actual costs may
be higher or lower, the Examples show what your costs would be
based on these assumptions.
<TABLE>
<CAPTION>
Share Class Year 1 Year 3 Year 5 Year 10
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional $ 87 $271 $471 $1,049
--------------------------------------------------------------------------------------
Administrative 112 350 606 1,340
--------------------------------------------------------------------------------------
</TABLE>
Prospectus 6
<PAGE>
PIMCO Growth Fund
<TABLE>
<CAPTION>
Ticker Symbols: N/A . Class)
PGFAX (Admin. Class)
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Principal Investments Investment Objective Fund Focus Approximate Capitalization Range
and Strategies Seeks long-term growth of Larger capitalization At least $5 billion
capital and income common stocks
is an incidental
consideration
Approximate Number of Holdings Dividend Frequency
35-40 At least annually
</TABLE>
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in common stocks of "growth"
companies with market capitalizations of at least $5 billion at
the time of investment.
The portfolio manager selects stocks for the Fund using a
"growth" style. The portfolio manager seeks to identify companies
with well-defined "wealth creating" characteristics, including
superior earnings growth (relative to companies in the same
industry or the market as a whole), high profitability and
consistent, predictable earnings. In addition, through fundamental
research, the portfolio manager seeks to identify dominant
companies that are gaining market share, have superior management
and possess a sustainable competitive advantage, such as superior
or innovative products, personnel and distribution systems. The
Fund sells stocks when the portfolio manager believes that
earnings, sentiment and relative performance are disappointing or
if an alternative investment is more attractive.
The Fund may also invest in other kinds of equity securities,
including preferred stocks and convertible securities. The Fund
may invest up to 15% of its assets in foreign securities, usually
in the form of American Depository Receipts (ADRs).
In response to unfavorable market and other conditions, the Fund
may make temporary investments of some or all of its assets in
high-quality fixed income securities. This would be inconsistent
with the Fund's investment objective and principal strategies.
- --------------------------------------------------------------------------------
Principal Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
. Market Risk . Foreign Investment Risk . Credit Risk
. Issuer Risk . Currency Risk . Management Risk
. Growth Securities
Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
- --------------------------------------------------------------------------------
Performance The top of the next page shows summary performance information for
Information the Fund in a bar chart and an Average Annual Total Returns table.
The information provides some indication of the risks of investing
in the Fund by showing changes in its performance from year to
year and by showing how the Fund's average annual returns compare
with the returns of a broad-based securities market index and an
index of similar funds. The bar chart, the information to its
right and the Average Annual Total Returns table show performance
of the Fund's Class C shares, which are offered in a different
prospectus. This is because the Fund did not offer Institutional
Class or Administrative Class shares during the periods shown.
Although Class C, Institutional Class and Administrative Class
shares would have similar annual returns (because all the Fund's
shares represent interests in the same portfolio of securities),
Class C performance would be lower than Institutional Class or
Administrative Class performance because of the higher sales
charges and expenses paid by Class C shares. The returns in the
bar chart and the information to its right do not reflect the
impact of sales charges (loads). If they did, the returns would be
lower than those shown. Unlike the bar chart, performance figures
for Class C shares in the Average Annual Total Returns table
reflect the impact of sales charges. The Average Annual Total
Returns table also shows estimated historical performance for
Institutional Class and Administrative Class shares based on the
performance of the Fund's Class C shares. The Class C performance
has been adjusted to reflect that there are no sales charges and
lower distribution and/or service (12b-1 fees) fees (if any),
administrative fees and other expenses paid by Institutional Class
and Administrative Class shares. Prior to March 6, 1999, the Fund
had a different sub-adviser and would not necessarily have
achieved the performance results shown on the next page under its
current investment management arrangements. Past performance is no
guarantee of future results.
7 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Growth Fund (continued)
Calendar Year Total Returns -- Class C
[BAR CHART APPEARS HERE]
More Recent Return
Information
--------------------
1989 37.45% 1/1/99-9/30/99 2.66%
1990 0.29%
1991 41.88% Highest and Lowest
1992 2.08% Quarter Returns
1993 9.32% (for periods shown
1994 -0.75% in the bar chart)
1995 27.47% --------------------
1996 17.52% Highest (4th Qtr.
1997 21.84% '98) 25.12%
1998 38.90% --------------------
Lowest (3rd Qtr.
'90) -13.14%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/98)
<TABLE>
<CAPTION>
Fund Inception
1 Year 5 Years 10 Years (2/24/84)(/3/)
------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class C 37.90% 20.27% 18.57% 17.98%
------------------------------------------------------------------------------
Institutional Class 40.47% 21.64% 19.92% 19.33%
------------------------------------------------------------------------------
Administrative Class 40.13% 21.34% 19.63% 19.03%
------------------------------------------------------------------------------
S&P 500 Index(/1/) 28.58% 24.06% 19.21% 18.44%
------------------------------------------------------------------------------
Lipper Growth Fund Average(/2/) 23.42% 18.74% 16.74% 15.58%
------------------------------------------------------------------------------
</TABLE>
(1) The S&P 500 Index is an unmanaged index of large capitalization
common stocks. It is not possible to invest directly in the
index.
(2) The Lipper Growth Fund Average is a total return performance
average of funds tracked by Lipper Analytical Services, Inc.
that invest in companies with long-term earnings expected to
grow significantly faster than the earnings of the stocks
represented in the major unmanaged stock indexes. It does not
take into account sales charges.
(3) The Fund began operations on 2/24/84. Index comparisons begin on
2/29/84.
- --------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Institutional Class or Administrative Class shares of the
of the Fund:
Fund
Shareholder Fees (fees paid directly from your investment) None
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Share Class Fees (12b-1) Fees Expenses(/1/) Expenses
------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional 0.50% None 0.25% 0.75%
------------------------------------------------------------------------------
Administrative 0.50 0.25% 0.25 1.00
------------------------------------------------------------------------------
</TABLE>
(1) Other Expenses reflects a 0.25% Administrative Fee paid by
the class.
Examples. The Examples below are intended to help you compare the
cost of investing in Institutional Class or Administrative Class
shares of the Fund with the costs of investing in other mutual
funds. The Examples assume that you invest $10,000 in the noted
class of shares for the time periods indicated, and then redeem
all your shares at the end of those periods. The Examples also
assume that your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the Fund's
operating expenses remain the same. Although your actual costs may
be higher or lower, the Examples show what your costs would be
based on these assumptions.
<TABLE>
<CAPTION>
Share Class Year 1 Year 3 Year 5 Year 10
------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional $ 77 $240 $417 $ 930
------------------------------------------------------------------------------
Administrative 102 318 552 1,225
------------------------------------------------------------------------------
</TABLE>
Prospectus 8
<PAGE>
PIMCO Core Equity Fund
<TABLE>
<CAPTION>
Ticker Symbols: PCFIX (Inst. Class)
PCEAX (Admin. Class)
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Principal Investments Investment Objective Fund Focus Approximate Capitalization Range
and Strategies Seeks long-term growth of Larger capitalization More than $10 billion
capital and income common stocks
as a Secondary Dividend Frequency
Objective Approximate Number of Holdings At least annually
40
</TABLE>
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in common stocks of companies
with market capitalizations of more than $10 billion at the time
of investment. To achieve income, the Fund invests a portion of
its assets in income-producing (or dividend-paying) stocks.
The Fund usually invests in approximately 40 common stocks. The
Fund attempts to achieve a higher total return performance than
the S&P 500 Index over a reasonable measurement period. In
selecting stocks, the portfolio managers use two distinct
investment disciplines. Approximately 50% of the value of the
Fund's portfolio will be selected using a "Growth" style. The
portfolio manager of this Growth segment seeks to identify
companies with well-defined "wealth creating" characteristics,
including superior earnings growth, high profitability and
consistent, predictable earnings. In addition, through fundamental
research, the portfolio manager seeks to identify dominant
companies that are gaining market share, have superior management
and possess a sustainable competitive advantage, such as superior
or innovative products, personnel and distribution systems. The
Fund sells stocks in the Growth segment when the portfolio manager
believes that earnings, sentiment and relative performance are
disappointing or if an alternative investment is more attractive.
The remainder of the Fund's portfolio (approximately 50% of its
value) will be selected using a "Value" style. The portfolio
manager of this Value segment invests primarily in stocks of
companies having below-average valuations whose business
fundamentals are expected to improve. The portfolio manager
determines valuation based on characteristics such as price to
earnings, price to book, and price to cash flow ratios. The
portfolio manager analyzes stocks and seeks to identify the key
drivers of financial results and catalysts for change, such as new
management and new or improved products, that indicate a company
may demonstrate improving fundamentals in the future. The
portfolio manager sells a stock in the Value segment when he
believes that the company's business fundamentals are weakening or
when the stock's valuation has become excessive.
The Fund may invest up to 15% of its assets in foreign
securities, usually in the form of American Depository Receipts
(ADRs). In response to unfavorable market and other conditions,
the Fund may make temporary investments of some or all of its
assets in high-quality fixed income securities. This would be
inconsistent with the Fund's investment objective and principal
strategies.
- --------------------------------------------------------------------------------
Principal Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
.Market Risk .Growth Securities Risk .Credit Risk
.Issuer Risk .Foreign Investment Risk .Management Risk
.Value Securities .Currency Risk
Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
- --------------------------------------------------------------------------------
Performance The top of the next page shows summary performance information for
Information the Fund in a bar chart and an Average Annual Total Returns table.
The information provides some indication of the risks of investing
in the Fund by showing changes in its performance from year to
year and by showing how the Fund's average annual returns compare
with the returns of a broad-based securities market index and an
index of similar funds. The bar chart and the information to its
right show performance of the Fund's Institutional Class shares.
For periods prior to the inception of Administrative Class shares
(5/31/95), performance information shown in the Average Annual
Total Returns table for that class is based on the performance of
the Fund's Institutional Class shares. The prior Institutional
Class performance has been adjusted to reflect the actual
distribution and/or service (12b-1 fees) and other expenses paid
by Administrative Class shares. Prior to July 1, 1999, the Fund
had a different sub-adviser and would not necessarily have
achieved the performance results shown on the next page under its
current investment management arrangements. Past performance is no
guarantee of future results.
9 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Core Equity Fund (continued)
Calendar Year Total Returns -- Institutional Class
More Recent Return
[BAR CHART APPEARS HERE] Information
--------------------
1/1/99-9/30/99 5.33%
1995 27.96%
1996 17.95% Highest and Lowest
1997 25.32% Quarter Returns
1998 41.06% (for periods shown
in the bar chart)
--------------------
Highest (4th Qtr.
'98) 24.90%
--------------------
Lowest (3rd Qtr.
'98) -11.38%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/98)
<TABLE>
<CAPTION>
Fund Inception
1 Year (12/28/94)(/3/)
----------------------------------------------------------------------------
<S> <C> <C>
Institutional Class 41.06% 27.77%
----------------------------------------------------------------------------
Administrative Class 40.47% 27.41%
----------------------------------------------------------------------------
S&P 500 Index(/1/) 28.58% 30.51%
----------------------------------------------------------------------------
Lipper Growth Fund Average(/2/) 23.42% 24.41%
----------------------------------------------------------------------------
</TABLE>
(1) The S&P 500 Index is an unmanaged index of large
capitalization common stocks. It is not possible to invest
directly in the index.
(2) The Lipper Growth Fund Average is a total return performance
average of funds tracked by Lipper Analytical Services, Inc.
that invest in companies with long-term earnings expected to
grow significantly faster than the earnings of the stocks
represented in the major unmanaged stock indexes. It does not
take into account sales charges.
(3) The Fund began operations on 12/28/94. Index comparisons begin
on 12/31/94.
- --------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Institutional Class or Administrative Class shares of the
of the Fund:
Fund
Shareholder Fees (fees paid directly from your investment) None
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Share Class Fees (12b-1) Fees Expenses(/1/) Expenses
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional 0.57% None 0.25% 0.82%
---------------------------------------------------------------------
Administrative 0.57 0.25% 0.25 1.07
---------------------------------------------------------------------
</TABLE>
(1) Other Expenses reflects a 0.25% Administrative Fee paid by
the class.
Examples. The Examples below are intended to help you compare the
cost of investing in Institutional Class or Administrative Class
shares of the Fund with the costs of investing in other mutual
funds. The Examples assume that you invest $10,000 in the noted
class of shares for the time periods indicated, and then redeem
all your shares at the end of those periods. The Examples also
assume that your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the Fund's
operating expenses remain the same. Although your actual costs may
be higher or lower, the Examples show what your costs would be
based on these assumptions.
<TABLE>
<CAPTION>
Share Class Year 1 Year 3 Year 5 Year 10
------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional $ 84 $262 $455 $1,014
------------------------------------------------------------------
Administrative 109 340 590 1,306
------------------------------------------------------------------
</TABLE>
Prospectus 10
<PAGE>
PIMCO Target Fund
Ticker Symbols: N/A (Inst. Class)
N/A (Admin. Class)
- --------------------------------------------------------------------------------
Principal Investment Fund Focus Approximate
Investments Objective Medium Capitalization Range
and Seeks capital capitalization Between $1 billion and
Strategies appreciation; no common stocks $10 billion
consideration is
given to income Approximate Number Dividend Frequency
of Holdings At least annually
40-60
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in common stocks of "growth"
companies with market capitalizations of between $1 billion and
$10 billion at the time of investment.
The portfolio managers select stocks for the Fund using a
"growth" style. The portfolio managers seek to identify companies
with well-defined "wealth creating" characteristics, including
superior earnings growth (relative to companies in the same
industry or the market as a whole), high profitability and
consistent, predictable earnings. In addition, through fundamental
research, the portfolio managers seek to identify dominant
companies that are gaining market share, have superior management
and possess a sustainable competitive advantage, such as superior
or innovative products, personnel and distribution systems. The
Fund sells stocks when the portfolio managers believe that
earnings, sentiment and relative performance are disappointing or
if an alternative investment is more attractive.
The Fund may also invest in other kinds of equity securities,
including preferred stocks and convertible securities. The Fund
may invest up to 15% of its assets in foreign securities, usually
in the form of American Depository Receipts (ADRs).
In response to unfavorable market and other conditions, the Fund
may make temporary investments of some or all of its assets in
high-quality fixed income securities. This would be inconsistent
with the Fund's investment objective and principal strategies.
- --------------------------------------------------------------------------------
Principal Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
.Market Risk .Smaller Company Risk .Currency Risk
.Issuer Risk .Liquidity Risk .Credit Risk
.Growth Securities Risk .Foreign Investment .Management Risk
Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
- --------------------------------------------------------------------------------
Performance The top of the next page shows summary performance information for
Information the Fund in a bar chart and an Average Annual Total Returns table.
The information provides some indication of the risks of investing
in the Fund by showing changes in its performance from year to
year and by showing how the Fund's average annual returns compare
with the returns of a broad-based securities market index and an
index of similar funds. The bar chart, the information to its
right and the Annual Total Returns table show performance of the
Fund's Class A shares, which are offered in a different
prospectus. This is because the Fund did not offer Institutional
Class or Administrative Class shares during the periods shown.
Although Class A, Institutional Class and Administrative Class
shares would have similar annual returns (because all the Fund's
shares represent interests in the same portfolio of securities),
Class A performance would be lower than Institutional Class or
Administrative Class performance because of the higher sales
charges and/or expenses paid by Class A shares. The returns in the
bar chart and the information to its right do not reflect the
impact of sales charges (loads). If they did, the returns would be
lower than those shown. Unlike the bar chart, performance figures
for Class A shares in the Average Annual Total Returns table
reflect the impact of sales charges. The Average Annual Total
Returns table also shows estimated historical performance for
Institutional Class and Administrative Class shares based on the
performance of the Fund's Class A shares. The Class A performance
has been adjusted to reflect that there are no sales charges and
lower distribution and/or service (12b-1 fees) fees (if any),
administrative fees and other expenses paid by Institutional Class
and Administrative Class shares. Prior to March 6, 1999, Fund had
a different sub-adviser and would not necessarily have achieved
the performance results shown on the next page under its current
investment management arrangements. Past performance is no
guarantee of future results.
11 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Target Fund (continued)
Calendar Year Total Returns -- Class A
[BAR CHART APPEARS HERE]
More Recent Return
Information
1993 24.52% --------------------
1994 3.09% 1/1/99-9/30/99_8.62%
1995 30.31%
1996 15.68% Highest and Lowest
1997 15.44% Quarter Returns
1998 23.27% (for periods shown
in the bar chart)
--------------------
Highest (4th Qtr.
'98) 21.18%
--------------------
Lowest (3rd Qtr.
'98) -13.15%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/98)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Fund Inception
1 Year 5 Years (12/17/92)(/3/)
---------------------------------------------------------------------
Class A 17.32% 16.76% 18.27%
---------------------------------------------------------------------
Institutional Class 24.64% 18.67% 19.94%
---------------------------------------------------------------------
Administrative Class 24.33% 18.37% 19.65%
---------------------------------------------------------------------
S&P Mid-Cap 400 Index(/1/) 19.12% 18.85% 18.02%
---------------------------------------------------------------------
Lipper Mid-Cap Fund Average(/2/) 12.39% 14.86% 14.68%
---------------------------------------------------------------------
</TABLE>
(1) The S&P Mid-Cap 400 Index is an unmanaged index of middle
capitalization U.S. stocks. It is not possible to invest
directly in the index.
(2) The Lipper Mid-Cap Fund Average is a total return performance
average of funds tracked by Lipper Analytical Services, Inc.
that invest primarily in companies with market capitalizations
of less than $5 billion at the time of investment. It does not
take into account sales charges.
(3) The Fund began operations on 12/17/92. Index comparisons begin
on 12/31/92.
- --------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Institutional Class or Administrative Class shares of the
of the Fund:
Fund
Shareholder Fees (fees paid directly from your investment) None
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Share Class Fees (12b-1) Fees Expenses(/1/) Expenses
---------------------------------------------------------------------
Institutional 0.55% None 0.25% 0.80
---------------------------------------------------------------------
Administrative 0.55 0.25% 0.25 1.05
---------------------------------------------------------------------
</TABLE>
(1) Other Expenses reflects a 0.25% Administrative Fee paid by
the class.
Examples. The Examples below are intended to help you compare the
cost of investing in Institutional Class or Administrative Class
shares of the Fund with the costs of investing in other mutual
funds. The Examples assume that you invest $10,000 in the noted
class of shares for the time periods indicated, and then redeem
all your shares at the end of those periods. The Examples also
assume that your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the Fund's
operating expenses remain the same. Although your actual costs may
be higher or lower, the Examples show what your costs would be
based on these assumptions.
<TABLE>
<S> <C> <C> <C> <C>
Share Class Year 1 Year 3 Year 5 Year 10
--------------------------------------------------------------------
Institutional $ 82 $255 $444 $ 990
--------------------------------------------------------------------
Administrative 107 334 579 1,283
--------------------------------------------------------------------
</TABLE>
Prospectus 12
<PAGE>
PIMCO Mid-Cap Equity Fund
Ticker Symbols: PMEIX (Inst. Class)
N/A (Admin. Class)
- --------------------------------------------------------------------------------
Principal Investment Objective Fund Focus Approximate
Investments Seeks long-term Medium and large Capitalization Range
and growth of capitalization $1 billion to $10
Strategies capital common stocks billion
Dividend Frequency
Approximate At least annually
Number of Holdings
40
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in common stocks of companies
with market capitalizations of $1 billion to $10 billion at the
time of investment.
The Fund usually invests in approximately 40 common stocks. In
selecting stocks, the portfolio managers use two distinct
investment disciplines. Approximately 50% of the value of the
Fund's portfolio will be selected using a "Growth" style. The
portfolio manager of this Growth segment seeks to identify
companies with well-defined "wealth creating" characteristics,
including superior earnings growth, high profitability and
consistent, predictable earnings. In addition, through fundamental
research, the portfolio manager seeks to identify dominant
companies that are gaining market share, have superior management
and possess a sustainable competitive advantage, such as superior
or innovative products, personnel and distribution systems. The
Fund sells stocks in the Growth segment when the portfolio manager
believes that earnings, sentiment and relative performance are
disappointing or if an alternative investment is more attractive.
The remainder of the Fund's portfolio (approximately 50% of its
value) will be selected using a "Value" style. The portfolio
manager of this Value segment invests primarily in stocks of
companies having below-average valuations whose business
fundamentals are expected to improve. The portfolio manager
determines valuation based on characteristics such as price to
earnings, price to book, and price to cash flow ratios. The
portfolio manager analyzes stocks and seeks to identify the key
drivers of financial results and catalysts for change, such as new
management and new or improved products, that indicate a company
may demonstrate improving fundamentals in the future. The
portfolio manager sells a stock in the Value segment when he
believes that the company's business fundamentals are weakening or
when the stock's valuation has become excessive.
The Fund may invest up to 15% of its assets in foreign
securities, usually in the form of American Depository Receipts
(ADRs). In response to unfavorable market and other conditions,
the Fund may make temporary investments of some or all of its
assets in high-quality fixed income securities. This would be
inconsistent with the Fund's investment objective and principal
strategies.
- --------------------------------------------------------------------------------
Principal Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
. Market Risk . Smaller Company Risk . Currency Risk
. Issuer Risk . Liquidity Risk . Credit Risk
. Value Securities Risk . Foreign Investment . Management Risk
. Growth Securities Risk Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
- --------------------------------------------------------------------------------
Performance The top of the next page shows summary performance information for
Information the Fund in a bar chart and an Average Annual Total Returns table.
The information provides some indication of the risks of investing
in the Fund by showing changes in its performance from year to
year and by showing how the Fund's average annual returns compare
with the returns of a broad-based securities market index and an
index of similar funds. The bar chart and the information to its
right show performance of the Fund's Institutional Class Shares.
For periods prior to the inception date of Administrative Class
shares (8/21/97), performance information shown in the Average
Annual Total Returns table for that class is based on the
performance of the Fund's Institutional Class shares. The prior
Institutional Class performance has been adjusted to reflect the
actual distribution and/or service (12b-1 fees) and other expenses
paid by Administrative Class shares. Prior to July 1, 1999, the
Fund had a different sub-adviser and would not necessarily have
achieved the performance results shown on the next page under its
current investment management arrangements. Past performance is no
guarantee of future results.
13 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Mid-Cap Equity Fund (continued)
Calendar Year Total Returns -- Institutional Class
[BAR CHART APPEARS HERE]
More Recent Return
Information
--------------------
1995 31.72% 1/1/99-9/30/99 8.34%
1996 17.31%
1997 16.22% Highest and Lowest
1998 29.89% Quarter Returns
(for periods shown
in the bar chart)
--------------------
Highest (4th Qtr.
'98) 22.19%
--------------------
Lowest (3rd Qtr.
'98) -11.53%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/98)
<TABLE>
<CAPTION>
Fund Inception
1 Year (12/28/94)(/3/)
--------------------------------------------------------------------------
<S> <C> <C>
Institutional Class 29.89% 23.53%
--------------------------------------------------------------------------
Administrative Class 29.56% 23.23%
--------------------------------------------------------------------------
S&P Mid-Cap 400 Index(/1/) 19.12% 25.22%
--------------------------------------------------------------------------
Lipper Mid-Cap Fund Average(/2/) 12.39% 19.91%
--------------------------------------------------------------------------
</TABLE>
(1) The S&P Mid-Cap 400 Index is an unmanaged index of middle
capitalization U.S. stocks. It is not possible to invest
directly in the index.
(2) The Lipper Mid-Cap Fund Average is a total return performance
average of funds tracked by Lipper Analytical Services, Inc.
that invest primarily in companies with market capitalizations
of less than $5 billion at the time of investment. It does not
take into account sales charges.
(3) The Fund began operations on 12/28/94. Index comparisons begin
on 12/31/94.
- --------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Institutional Class or Administrative Class shares of the
of the Fund:
Fund
Shareholder Fees (fees paid directly from your investment) None
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Share Class Fees (12b-1) Fees Expenses(/1/) Expenses
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional 0.63% None 0.25% 0.88%
---------------------------------------------------------------------
Administrative 0.63 0.25% 0.25 1.13
---------------------------------------------------------------------
</TABLE>
(1) Other Expenses reflects a 0.25% Administrative Fee paid by
the class.
Examples. The Examples below are intended to help you compare the
cost of investing in Institutional Class or Administrative Class
shares of the Fund with the costs of investing in other mutual
funds. The Examples assume that you invest $10,000 in the noted
class of shares for the time periods indicated, and then redeem
all your shares at the end of those periods. The Examples also
assume that your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the Fund's
operating expenses remain the same. Although your actual costs may
be higher or lower, the Examples show what your costs would be
based on these assumptions.
<TABLE>
<S> <C> <C> <C> <C>
Share Class Year 1 Year 3 Year 5 Year 10
---------------------------------------------------------------------
Institutional $ 90 $281 $488 $1,084
---------------------------------------------------------------------
Administrative 115 359 622 1,375
---------------------------------------------------------------------
</TABLE>
Prospectus 14
<PAGE>
PIMCO Opportunity Fund
Ticker Symbols: N/A (Inst. Class)
N/A (Admin. Class)
- --------------------------------------------------------------------------------
Principal Investment Objective Fund Focus Approximate
Investments Seeks capital Smaller Capitalization Range
and appreciation; no capitalization Between $100 million
Strategies consideration is common stocks and $2 billion
given to income
Approximate Dividend Frequency
Number of Holdings At least annually
60-100
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in common stocks of "growth"
companies with market capitalizations of between $100 million and
$2 billion at the time of investment.
The portfolio manager selects stocks for the Fund using a
"growth" style. The portfolio manager seeks to identify companies
with well-defined "wealth creating" characteristics, including
superior earnings growth (relative to companies in the same
industry or the market as a whole), high profitability and
consistent, predictable earnings. In addition, through fundamental
research, the portfolio manager seeks to identify dominant
companies that are gaining market share, have superior management
and possess a sustainable competitive advantage, such as superior
or innovative products, personnel and distribution systems. The
Fund sells stocks when the portfolio manager believes that
earnings, sentiment and relative performance are disappointing or
if an alternative investment is more attractive.
The Fund may also invest in other kinds of equity securities,
including preferred stocks and convertible securities. The Fund
may invest up to 15% of its assets in foreign securities, usually
in the form of American Depository Receipts (ADRs).
In response to unfavorable market and other conditions, the Fund
may make temporary investments of some or all of its assets in
high-quality fixed income securities. This would be inconsistent
with the Fund's investment objective and principal strategies.
- --------------------------------------------------------------------------------
Principal Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
. Market Risk . Smaller Company Risk . Currency Risk
. Issuer Risk . Liquidity Risk . Credit Risk
. Growth Securities . Foreign Investment Risk . Management Risk
Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
- --------------------------------------------------------------------------------
Performance The top of the next page shows summary performance information for
Information the Fund in a bar chart and an Average Annual Total Returns table.
The information provides some indication of the risks of investing
in the Fund by showing changes in its performance from year to
year and by showing how the Fund's average annual returns compare
with the returns of a broad-based securities market index and an
index of similar funds. The bar chart, the information to its
right and the Annual Total Returns table show performance of the
Fund's Class C shares, which are offered in a different
prospectus. This is because the Fund did not offer Institutional
Class or Administrative Class shares during the periods shown.
Although Class C, Institutional Class and Administrative Class
shares would have similar annual returns (because all the Fund's
shares represent interests in the same portfolio of securities),
Class C performance would be lower than Institutional Class or
Administrative Class performance because of the higher sales
charges and expenses paid by Class C shares. The returns in the
bar chart and the information to its right do not reflect the
impact of sales charges (loads). If they did, the returns would be
lower than those shown. Unlike the bar chart, performance figures
for Class C shares in the Average Annual Total Returns table
reflect the impact of sales charges. The Average Annual Total
Returns table also shows estimated historical performance for
Institutional Class and Administrative Class shares based on the
performance of the Fund's Class C shares. The Class C performance
has been adjusted to reflect that there are no sales charges and
lower distribution and/or service (12b-1 fees) fees (if any),
administrative fees and other expenses paid by Institutional Class
and Administrative Class shares. Prior to March 6, 1999, the Fund
had a different sub-adviser and would not necessarily have
achieved the performance results shown on the next page under its
current investment management arrangements. Past performance is no
guarantee of future results.
15 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Opportunity Fund (continued)
Calendar Year Total Returns -- Class C
[BAR CHART APPEARS HERE]
More Recent Return
Information
---------------------
1989 30.65% 1/1/99-
1990 -7.34% 9/30/99 12.55%
1991 68.08%
1992 28.46% Highest and Lowest
1993 36.16% Quarter Returns
1994 -4.74% (for periods shown
1995 41.43% in the bar chart)
1996 11.54% ---------------------
1997 -4.75% Highest (1st Qtr.
1998 1.29% '91) 28.66%
---------------------
Lowest (3rd Qtr.
'98) -25.78%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/98)
<TABLE>
<CAPTION>
Fund Inception
1 Year 5 Years 10 Years (2/24/84)(/3/)
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class C 0.47% 7.73% 17.84% 16.39%
--------------------------------------------------------------------
Institutional Class 2.48% 8.97% 19.19% 17.72%
--------------------------------------------------------------------
Administrative Class 2.22% 8.70% 18.90% 17.43%
--------------------------------------------------------------------
Russell 2000 Index(/1/) -2.55% 11.86% 12.92% 11.92%
--------------------------------------------------------------------
Lipper Capital Appreciation
Fund Average(/2/) 20.49% 15.02% 14.08% 12.85%
--------------------------------------------------------------------
</TABLE>
(1) The Russell 2000 Index is a capitalization weighted broad
based index of 2,000 small capitalization U.S. stocks. It is
not possible to invest directly in the index.
(2) The Lipper Capital Appreciation Fund Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. that have an investment objective of maximum
capital appreciation. It does not take into account sales
charges.
(3) The Fund began operations on 2/24/84. Index comparisons begin
on 2/29/84.
- --------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Institutional Class or Administrative Class shares of the
of the Fund:
Fund
Shareholder Fees (fees paid directly from your investment) None
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Share Class Fees (12b-1) Fees Expenses(/1/) Expenses
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional 0.65% None 0.25% 0.90%
--------------------------------------------------------------------
Administrative 0.65 0.25% 0.25 1.15
--------------------------------------------------------------------
</TABLE>
(1) Other Expenses reflects a 0.25% Administrative Fee paid by
the class.
Examples. The Examples below are intended to help you compare the
cost of investing in Institutional Class or Administrative Class
shares of the Fund with the costs of investing in other mutual
funds. The Examples assume that you invest $10,000 in the noted
class of shares for the time periods indicated, and then redeem
all your shares at the end of those periods. The Examples also
assume that your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and that the
Fund's operating expenses remain the same. Although your actual
costs may be higher or lower, the Examples show what your costs
would be based on these assumptions.
<TABLE>
<S> <C> <C> <C> <C>
Share Class Year 1 Year 3 Year 5 Year 10
--------------------------------------------------------------------
Institutional $ 92 $287 $498 $1,108
--------------------------------------------------------------------
Administrative 117 365 633 1,398
--------------------------------------------------------------------
</TABLE>
Prospectus 16
<PAGE>
PIMCO Innovation Fund
Ticker Symbols: N/A (Inst. Class)
N/A (Admin. Class)
- --------------------------------------------------------------------------------
Principal Investment Fund Focus Approximate
Investments Objective Common stocks of Capitalization Range
and Seeks capital technology- More than $200 million
Strategies appreciation; no related
consideration companies
given to income
Dividend Frequency
Approximate Number At least annually
of Holdings
40
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in common stocks of companies
which utilize innovative technologies to gain a strategic
competitive advantage in their industry, as well as companies that
provide and service those technologies. The Fund identifies its
investment universe of technology-related companies primarily by
reference to classifications made by independent firms, such as
Standard & Poor's. Although the Fund emphasizes companies which
utilize technologies, it is not required to invest exclusively in
companies in a particular business sector or industry.
The portfolio manager selects stocks for the Fund using a
"growth" style. The portfolio manager seeks to identify
technology-related companies with well-defined "wealth creating"
characteristics, including superior earnings growth (relative to
companies in the same industry or the market as a whole), high
profitability and consistent, predictable earnings. In addition,
through fundamental research, the portfolio manager seeks to
identify dominant companies that are gaining market share, have
superior management and possess a sustainable competitive
advantage, such as superior or innovative products, personnel and
distribution systems. The Fund sells stocks when the portfolio
manager believes that earnings, sentiment and relative performance
are disappointing or if an alternative investment is more
attractive.
The Fund may also invest in other kinds of equity securities,
including preferred stocks and convertible securities. The Fund
may invest up to 15% of its assets in foreign securities, usually
in the form of American Depository Receipts (ADRs).
In response to unfavorable market and other conditions, the Fund
may make temporary investments of some or all of its assets in
high-quality fixed income securities. This would be inconsistent
with the Fund's investment objective and principal strategies.
- --------------------------------------------------------------------------------
Principal Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
.Market Risk .Smaller Company Risk .Currency Risk
.Issuer Risk .Liquidity Risk .Credit Risk
.Concentration Risk .Foreign Investment Risk .Management Risk
.Growth Securities Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
- --------------------------------------------------------------------------------
Performance The top of the next page shows summary performance information for
Information the Fund in a bar chart and an Average Annual Total Returns table.
The information provides some indication of the risks of investing
in the Fund by showing changes in its performance from year to
year and by showing how the Fund's average annual returns compare
with the returns of a broad-based securities market index and an
index of similar funds. The bar chart, the information to its
right and the Annual Total Returns table show performance of the
Fund's Class A shares, which are offered in a different
prospectus. This is because the Fund did not offer Institutional
Class or Administrative Class shares during the periods shown.
Although Class A, Institutional Class and Administrative Class
shares would have similar returns (because all the Fund's shares
represent interests in the same portfolio of securities), Class A
performance would be lower than Institutional Class or
Administrative Class performance because of the higher sales
charges and/or expenses paid by Class A shares. The returns in the
bar chart and the information to its right do not reflect the
impact of sales charges (loads). If they did, the returns would be
lower than those shown. Unlike the bar chart, performance figures
for Class A shares in the Average Annual Total Returns table
reflect the impact of sales charges. The Average Annual Total
Returns table also shows estimated historical performance for
Institutional Class and Administrative Class shares based on the
performance of the Fund's Class A shares. The Class A performance
has been adjusted to reflect that there are no sales charges and
lower distribution and/or service (12b-1 fees) fees (if any),
administrative fees and other expenses paid by Institutional Class
and Administrative Class shares. Prior to March 6, 1999, the Fund
had a different sub-adviser and would not necessarily have
achieved the performance results shown on the next page under its
current investment management arrangements. Past performance is no
guarantee of future results.
17 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Innovation Fund (continued)
Calendar Year Total Returns -- Class A
[BAR CHART APPEARS HERE]
More Recent Return
Information
--------------------
1995 45.33% 1/1/99-
1996 23.60% 9/30/99 32.91%
1997 9.03%
1998 79.41% Highest and Lowest
Quarter Returns
(for periods shown
in the bar chart)
--------------------
Highest (4th Qtr.
'98) 37.19%
--------------------
Lowest (1st Qtr.
'97) -12.56%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/98)
<TABLE>
<CAPTION>
Fund Inception
1 Year (12/22/94)(/3/)
-----------------------------------------------------------------------
<S> <C> <C>
Class A 69.54% 34.67%
-----------------------------------------------------------------------
Institutional Class 80.11% 37.12%
-----------------------------------------------------------------------
Administrative Class 79.67% 36.78%
-----------------------------------------------------------------------
S&P 500 Index(/1/) 28.58% 30.51%
-----------------------------------------------------------------------
Lipper Science and Technology Fund Average(/2/) 51.44% 25.21%
-----------------------------------------------------------------------
</TABLE>
(1) The S&P 500 Index is an unmanaged index of large
capitalization common stocks. It is not possible to invest
directly in the index.
(2) The Lipper Science and Technology Fund Average is a total
return performance average of funds tracked by Lipper
Analytical Services, Inc. that invest 65% of their assets in
science and technology stocks. It does not take into account
sales charges.
(3) The Fund began operations on 12/22/94. Index comparisons begin
on 12/31/94.
- --------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Institutional Class or Administrative Class shares of the
of the Fund:
Fund
Shareholder Fees (fees paid directly from your investment) None
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Share Class Fees (12b-1) Fees Expenses(/1/) Expenses
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional 0.65% None 0.25% 0.90%
---------------------------------------------------------------------
Administrative 0.65 0.25% 0.25 1.15
---------------------------------------------------------------------
</TABLE>
(1) Other Expenses reflects a 0.25% Administrative Fee paid by
the class.
Examples. The Examples below are intended to help you compare the
cost of investing in Institutional Class or Administrative Class
shares of the Fund with the costs of investing in other mutual
funds. The Examples assume that you invest $10,000 in the noted
class of shares for the time periods indicated, and then redeem
all your shares at the end of those periods. The Examples also
assume that your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the Fund's
operating expenses remain the same. Although your actual costs may
be higher or lower, the Examples show what your costs would be
based on these assumptions.
<TABLE>
<CAPTION>
Share Class Year 1 Year 3 Year 5 Year 10
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional $ 92 $287 $498 $1,108
---------------------------------------------------------------------
Administrative 117 365 633 1,398
---------------------------------------------------------------------
</TABLE>
Prospectus 18
<PAGE>
PIMCO International Growth Fund
Ticker Symbols: PIGIX (Inst. Class)
N/A (Admin. Class)
- --------------------------------------------------------------------------------
Principal Investment Fund Focus Approximate
Investments Objective Common stocks of Capitalization Range
and Seeks long-term foreign (non- At least $2 billion
Strategies capital U.S.) issuers
appreciation
Dividend Frequency
Approximate Number At least annually
of Holdings
50-100
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in an international portfolio
of common stocks. Although the Fund normally invests in securities
traded principally in developed foreign securities markets, the
Fund has no prescribed limits on geographic asset distribution and
may invest in any foreign securities market in the world. The Fund
may also invest in securities of foreign issuers traded on U.S.
securities markets.
In making investment decisions for the Fund, the portfolio
managers attempt to identify growth companies whose securities are
trading at a reasonable price. They first rank the companies in
the Fund's international investment universe according to a number
of growth characteristics, including earnings growth, dividend
growth, profit growth and the company's history of meeting
earnings targets. The portfolio managers then screen this ranking
in order to eliminate stocks that appear to be overvalued, based
on factors such as price-to-earnings, price-to-book and price-to-
cash flow ratios. They then construct a portfolio for the Fund
that is reasonably diversified across countries, industries and
market capitalizations. The portfolio managers sell a stock when
the company's growth characteristics are deteriorating or when the
stock's valuation becomes excessive. Stocks are also sold in order
to rebalance the Fund's country, industry and/or market
capitalization weightings.
The Fund invests most of its assets in foreign securities which
trade primarily in currencies other than the U.S. dollar. It may
also invest directly in foreign currencies and invest up to 10% of
its assets in other investment companies.
The Fund intends to be fully invested in the securities discussed
above (aside from certain cash management practices) and will not
make defensive investments in response to unfavorable market and
other conditions.
- --------------------------------------------------------------------------------
Principal
Risks Among the principal risks of investing in the Fund, which could
adversely affect its net asset value, yield and total return, are:
.Foreign Investment .Growth Securities Risk .Concentration Risk
Risk Risk
.Currency Risk .Value Securities Risk .Credit Risk
.Market Risk .Smaller Company Risk .Management Risk
.Issuer Risk .Liquidity Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
- --------------------------------------------------------------------------------
Performance The top of the next page shows summary performance information for
Information the Fund in a bar chart and an Average Annual Total Returns table.
The information provides some indication of the risks of investing
in the Fund by showing changes in its performance from year to
year and by showing how the Fund's average annual returns compare
with the returns of a broad-based securities market index and an
index of similar funds. The bar chart and the information to its
right show performance of the Fund's Institutional Class shares.
The Fund's Administrative Class shares do not have a performance
history. Performance information shown in the Average Annual Total
Returns table for Administrative Class shares is based on the
performance of the Fund's Institutional Class shares, adjusted to
reflect the actual distribution and/or service (12b-1) fees and
other expenses paid by Administrative Class shares. Prior to July
1, 1999, the Fund had a different sub-adviser and would not
necessarily have achieved the performance results shown on the
next page under its current investment management arrangements.
Past performance is no guarantee of future results.
19 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO International Growth Fund (continued)
Calendar Year Total Returns -- Institutional Class
[BAR CHART OF TOTAL RETURNS APPEARS HERE]
1998 39.40% More Recent Return
Information
--------------------
1/1/99-
9/30/99______42.56%
Highest and Lowest
Quarter Returns
(for periods shown
in the bar chart)
--------------------
Highest (4th Qtr.
'98) 25.14%
--------------------
Lowest (3rd Qtr.
'98) -17.79%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/98)
<TABLE>
<CAPTION>
<S> <C> <C>
Fund Inception
1 Year (12/31/97)(/3/)
-----------------------------------------------------------------------
Institutional Class 39.40% 39.40%
-----------------------------------------------------------------------
Administrative Class 39.06% 39.06%
-----------------------------------------------------------------------
MSCI EAFE Index(/1/) 20.34% 20.34%
-----------------------------------------------------------------------
Lipper International Fund Average(/2/) 12.99% 12.99%
-----------------------------------------------------------------------
</TABLE>
(1) The Morgan Stanley Capital International EAFE (Europe,
Australasia, Far East) ("MSCI EAFE") Index is a widely
recognized, unmanaged index of issuers in countries of
Europe, Australia and the Far East. It is not possible to
invest directly in the index.
(2) The Lipper International Fund Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. that invest their assets in securities whose
primary trading markets are outside of the United States. It does
not take into account sales charges.
(3) The Fund began operations on 12/31/97. Index comparisons begin
on 12/31/97.
- --------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Institutional Class or Administrative Class shares of the
of the Fund:
Fund
Shareholder Fees (fees paid directly from your investment)None
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Share Class Fees (12b-1) Fees Expenses(/1/) Expenses
---------------------------------------------------------------------
Institutional 0.85% None 0.50% 1.35%
---------------------------------------------------------------------
Administrative 0.85 0.25% 0.50 1.60
---------------------------------------------------------------------
</TABLE>
(1) Other Expenses reflects a 0.50% Administrative Fee paid by
the class.
Examples. The Examples below are intended to help you compare the
cost of investing in Institutional Class or Administrative Class
shares of the Fund with the costs of investing in other mutual
funds. The Examples assume that you invest $10,000 in the noted
class of shares for the time periods indicated, and then redeem
all your shares at the end of those periods. The Examples also
assume that your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the Fund's
operating expenses remain the same. Although your actual costs may
be higher or lower, the Examples show what your costs would be
based on these assumptions.
<TABLE>
<CAPTION>
Share Class Year 1 Year 3 Year 5 Year 10
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional $137 $428 $739 $1,624
---------------------------------------------------------------------
Administrative 163 505 871 1,900
---------------------------------------------------------------------
</TABLE>
Prospectus
20
<PAGE>
PIMCO Mega-Cap Fund
Ticker Symbols: N/A (Inst. Class)
N/A (Admin. Class)
- --------------------------------------------------------------------------------
Principal Investment Fund Focus
Investments Objective Very large Approximate
and Seeks long-term capitalization Capitalization Range
Strategies growth of capital common stocks The largest 250
publicly traded
Approximate Number companies (in terms
of Holdings of market
40-60 capitalizations)
Dividend Frequency
At least annually
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in common stocks of companies
with very large market capitalizations that have improving
fundamentals (based on growth criteria) and whose stock is
reasonably valued by the market (based on value criteria).
In making investment decisions for the Fund, the portfolio
management team considers the 250 largest publicly traded
companies (in terms of market capitalization) in the U.S. The team
screens the stocks in this universe for a series of growth
criteria, such as dividend growth, earnings growth, relative
growth of earnings over time (earnings momentum) and the company's
history of meeting earnings targets (earnings surprise), and also
value criteria, such as price-to-earnings, price-to-book and
price-to-cash flow ratios. The team then selects individual stocks
by subjecting the top portion of the stocks in the screened
universe to a rigorous analysis of company factors, such as
strength of management, competitive industry position, and
business prospects, and financial statement data, such as
earnings, cash flows and profitability. The team may interview
company management in making investment decisions. The Fund's
capitalization criteria applies at the time of investment.
The portfolio management team rescreens the universe frequently
and seeks to consistently achieve a favorable balance of growth
and value characteristics for the Fund. The team sells a stock
when it falls below the median ranking, has negative earnings
surprises, or shows poor price performance relative to all stocks
in the Fund's capitalization range or to companies in the same
business sector. A stock may also be sold if its weighting in the
portfolio becomes excessive (normally above 2% of the Fund's
investments).
The Fund intends to be fully invested in common stock (aside from
certain cash management practices) and will not make defensive
investments in response to unfavorable market and other
conditions.
- --------------------------------------------------------------------------------
Principal Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
.Market Risk .Value Securities Risk .Credit Risk
.Issuer Risk .Growth Securities Risk .Management Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
- --------------------------------------------------------------------------------
Performance The Fund commenced operations in September 1999 and does not yet
Information have a full calendar year of performance. Thus, no bar chart or
Average Annual Total Returns table is included for the Fund.
21 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Mega-Cap Fund (continued)
- --------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Institutional Class or Administrative Class shares of the
of the Fund:
Fund
Shareholder Fees (fees paid directly from your investment) None
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating Fee Net
Share Class Fees (12b-1) Fees Expenses(/1/) Expenses Waiver(/2/) Expenses(/2/)
-------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Institutional 0.45% None 0.55% 1.00% 0.30% 0.70%
-------------------------------------------------------------------------------------------
Administrative 0.45 0.25% 0.55 1.25 0.30 0.95
-------------------------------------------------------------------------------------------
</TABLE>
(1) Other Expenses, which are based on estimated amounts for the
Fund's initial fiscal year, reflect a 0.25% Administrative Fee
paid by the class and 0.30% representing the Fund's
organizational expenses as attributed to the class
("Organizational Expenses").
(2) Net Expenses reflect the effect of a contractual agreement by
PIMCO Advisors to waive, reduce or reimburse its
Administrative Fees for each class in an amount that, in
essence, is equal to the Fund's Organizational Expenses
attributed to the class. Because the Organizational Expenses
will all be accounted for in the Fund's initial fiscal year,
the Fund's reasonable expectation is that the relevant
conditions will not continue after the Fund's fiscal year
ending June 30, 2000.
Examples. The Examples below are intended to help you compare the
cost of investing in Institutional Class or Administrative Class
shares of the Fund with the costs of investing in other mutual
funds. The Examples assume that you invest $10,000 in the noted
class of shares for the time periods indicated, and then redeem
all your shares at the end of those periods. The Examples also
assume that your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the Fund's
operating expenses remain the same. Although your actual costs may
be higher or lower, the Examples show what your costs would be
based on these assumptions.(/1/)
<TABLE>
<CAPTION>
Share Class Year 1 Year 3
-----------------------------------------------------------------------------------
<S> <C> <C>
Institutional $72 $224
-----------------------------------------------------------------------------------
Administrative 97 303
-----------------------------------------------------------------------------------
</TABLE>
(1) The Examples are based on the Net Expenses shown in the
preceding table.
Prospectus 22
<PAGE>
PIMCO Capital Appreciation Fund
Ticker Symbols: PAPIX (Inst. Class)
PICAX (Admin. Class)
- --------------------------------------------------------------------------------
Principal Investment Fund Focus
Investments Objective Larger Approximate
and Seeks growth of capitalization Capitalization Range
Strategies capital common stocks At least $1 billion
Dividend Frequency
Approximate Number At least annually
of Holdings
60-100
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in common stocks of companies
with larger market capitalizations that have improving
fundamentals (based on growth criteria) and whose stock is
reasonably valued by the market (based on value criteria).
In making investment decisions for the Fund, the portfolio
management team considers the 1,000 largest publicly traded
companies (in terms of market capitalization) in the U.S. The team
screens the stocks in this universe for a series of growth
criteria, such as dividend growth, earnings growth, relative
growth of earnings over time (earnings momentum) and the company's
history of meeting earnings targets (earnings surprise), and also
value criteria, such as price-to-earnings, price-to-book and
price-to-cash flow ratios. The team then selects individual stocks
by subjecting the top 10% of the stocks in the screened universe
to a rigorous analysis of company factors, such as strength of
management, competitive industry position, and business prospects,
and financial statement data, such as earnings, cash flows and
profitability. The team may interview company management in making
investment decisions. The Fund's capitalization criteria applies
at the time of investment.
The portfolio management team rescreens the universe frequently
and seeks to consistently achieve a favorable balance of growth
and value characteristics for the Fund. The team sells a stock
when it falls below the median ranking, has negative earnings
surprises, or shows poor performance relative to all stocks in the
Fund's capitalization range or to companies in the same business
sector. A stock may also be sold if its weighting in the portfolio
becomes excessive (normally above 2% of the Fund's investments).
The Fund intends to be fully invested in common stock (aside from
certain cash management practices) and will not make defensive
investments in response to unfavorable market and other
conditions.
- --------------------------------------------------------------------------------
Principal Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
.Market Risk .Value Securities Risk .Credit Risk
.Issuer Risk .Growth Securities Risk .Management Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
- --------------------------------------------------------------------------------
Performance The top of the next page shows summary performance information for
Information the Fund in a bar chart and an Average Annual Total Returns table.
The information provides some indication of the risks of investing
in the Fund by showing changes in its performance from year to
year and by showing how the Fund's average annual returns compare
with the returns of a broad-based securities market index and an
index of similar funds. The bar chart and the information to its
right show performance of the Fund's Institutional Class shares.
For periods prior to the inception of Administrative Class shares
(7/31/96), performance information shown in the Average Annual
Total Returns table for that class is based on the performance of
the Fund's Institutional Class shares. The prior Institutional
Class performance has been adjusted to reflect the actual
distribution and/or service (12b-1 fees) and other expenses paid
by Administrative Class shares. Past performance is no guarantee
of future results.
23 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Capital Appreciation Fund (continued)
Calendar Year Total Returns -- Institutional Class
[BAR CHART APPEARS HERE] More Recent Return
Information
-------------------------------
1992 7.51% 1/1/99-9/30/9 -0.92%
1993 17.70%
1994 -4.26% Highest and Lowest Quarter
1995 37.14% Returns (for periods shown
1996 26.79% in the bar chart)
1997 34.22% -------------------------------
1998 17.59% Highest (4th Qtr. '98) 19.68%
-------------------------------
Lowest (3rd Qtr. '98) -14.16%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/98)
<TABLE>
<CAPTION>
Fund Inception
1 Year 5 Years (3/8/91)(/3/)
----------------------------------------------------------------------------
<S> <C> <C> <C>
Institutional Class 17.59% 21.32% 19.74%
----------------------------------------------------------------------------
Administrative Class 17.26% 21.02% 19.45%
----------------------------------------------------------------------------
S&P 500 Index(/1/) 28.58% 24.06% 19.58%
----------------------------------------------------------------------------
Lipper Capital Appreciation Fund Average(/2/) 20.49% 15.02% 14.91%
----------------------------------------------------------------------------
</TABLE>
(1) The S&P 500 Index is an unmanaged index of large
capitalization common stocks. It is not possible to invest
directly in the index.
(2) The Lipper Capital Appreciation Fund Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. that have an investment objective of maximum
capital appreciation. It does not take into account sales
charges.
(3) The Fund began operations on 3/8/91. Index comparisons begin
on 2/28/91.
- --------------------------------------------------------------------------------
Fees and
Expenses These tables describe the fees and expenses you may pay if you buy
of the and hold Institutional Class or Administrative Class shares of the
Fund Fund:
Shareholder Fees (fees paid directly from your investment)None
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Share Class Fees (12b-1) Fees Expenses(/1/) Expenses
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional 0.45% None 0.25% 0.70%
---------------------------------------------------------------------
Administrative 0.45 0.25% 0.25 0.95
---------------------------------------------------------------------
</TABLE>
(1) Other Expenses reflects a 0.25% Administrative Fee paid by the
class.
Examples. The Examples below are intended to help you compare the
cost of investing in Institutional Class or Administrative Class
shares of the Fund with the costs of investing in other mutual
funds. The Examples assume that you invest $10,000 in the noted
class of shares for the time periods indicated, and then redeem
all your shares at the end of those periods. The Examples also
assume that your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the Fund's
operating expenses remain the same. Although your actual costs may
be higher or lower, the Examples show what your costs would be
based on these assumptions.
<TABLE>
<CAPTION>
Share Class Year 1 Year 3 Year 5 Year 10
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional $72 $224 $390 $ 871
---------------------------------------------------------------------
Administrative 97 303 525 1,166
---------------------------------------------------------------------
</TABLE>
Prospectus 24
<PAGE>
PIMCO Mid-Cap Growth Fund
Ticker Symbols: PMGIX (Inst. Class)
PMCGX (Admin. Class)
- --------------------------------------------------------------------------------
Principal Investment Fund Focus Approximate
Investments Objective Medium Capitalization Range
and Seeks growth of capitalization More than $500 million
Strategies capital common stocks (excluding the largest
200 companies)
Approximate Number Dividend Frequency
of Holdings At least annually
60-100
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in common stocks of companies
with medium market capitalizations that have improving
fundamentals (based on growth criteria) and whose stock is
reasonably valued by the market (based on value criteria).
In making investment decisions for the Fund, the portfolio
management team considers companies in the U.S. market with market
capitalizations of more than $500 million, but excluding the 200
largest capitalization companies. The team screens the stocks in
this universe for a series of growth criteria, such as dividend
growth, earnings growth, relative growth of earnings over time
(earnings momentum) and the company's history of meeting earnings
targets (earnings surprise), and also value criteria, such as
price-to-earnings, price-to-book and price-to-cash flow ratios.
The team then selects individual stocks by subjecting the top 10%
of the stocks in the screened universe to a rigorous analysis of
company factors, such as strength of management, competitive
industry position, and business prospects, and financial statement
data, such as earnings, cash flows and profitability. The team may
interview company management in making investment decisions. The
Fund's capitalization criteria applies at the time of investment.
The portfolio management team rescreens the universe frequently
and seeks to consistently achieve a favorable balance of growth
and value characteristics for the Fund. The team sells a stock
when it falls below the median ranking, has negative earnings
surprises, or shows poor price performance relative to all stocks
in the Fund's capitalization range or to companies in the same
business sector. A stock may also be sold if its weighting in the
portfolio becomes excessive (normally above 2% of the Fund's
investments).
The Fund intends to be fully invested in common stock (aside from
certain cash management practices) and will not make defensive
investments in response to unfavorable market and other
conditions.
- --------------------------------------------------------------------------------
Principal Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
.Market Risk .Growth Securities Risk .Credit Risk
.Issuer Risk .Smaller Company Risk .Management Risk
.Value Securities Risk .Liquidity Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
- --------------------------------------------------------------------------------
Performance The top of the next page shows summary performance information for
Information the Fund in a bar chart and an Average Annual Total Returns table.
The information provides some indication of the risks of investing
in the Fund by showing changes in its performance from year to
year and by showing how the Fund's average annual returns compare
with the returns of a broad-based securities market index and an
index of similar funds. The bar chart and the information to its
right show performance of the Fund's Institutional Class shares.
For periods prior to the inception of Administrative Class shares
(11/30/94), performance information shown in the Average Annual
Total Returns table for that class is based on the performance of
the Fund's Institutional Class shares. The prior Institutional
Class performance has been adjusted to reflect the actual
distribution and/or service (12b-1 fees) and other expenses paid
by Administrative Class shares. Past performance is no guarantee
of future results.
25 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Mid-Cap Growth Fund (continued)
Calendar Year Total Returns -- Institutional Class
[BAR CHART APPEARS HERE]
More Recent Return
1992 9.18% Information
1993 15.77% --------------------
1994 -2.36% 1/1/99-9/30/99 -8.22
1995 37.29%
1996 23.36% Highest and Lowest
1997 34.17% Quarter Returns
1998 7.93% (for periods shown
in the bar chart)
--------------------
Highest (4th Qtr.
'98) 17.77%
--------------------
Lowest (3rd Qtr.
'98) -14.40%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/98)
<TABLE>
<CAPTION>
Fund Inception
1 Year 5 Years (8/26/91)(/3/)
--------------------------------------------------------------------
<S> <C> <C> <C>
Institutional Class 7.93% 19.08% 18.23%
--------------------------------------------------------------------
Administrative Class 7.81% 18.81% 17.95%
--------------------------------------------------------------------
Russell Mid-Cap Index(/1/) 10.09% 17.34% 17.18%
--------------------------------------------------------------------
Lipper Mid-Cap Fund Average(/2/) 12.39% 14.86% 14.76%
--------------------------------------------------------------------
</TABLE>
(1) The Russell Mid-Cap Index is an unmanaged index of middle
capitalization U.S. stocks. It is not possible to invest
directly in the index.
(2) The Lipper Mid-Cap Fund Average is a total return performance
average of funds tracked by Lipper Analytical Services, Inc.
that invest primarily in companies with market capitalizations
of less than $5 billion at the time of investment. It does not
take into account sales charges.
(3) The Fund began operations on 8/26/91. Index comparisons begin
on 8/31/91.
- --------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Institutional Class or Administrative Class shares of the
of the Fund:
Fund
Shareholder Fees (fees paid directly from your investment)None
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Share Class Fees (12b-1) Fees Expenses(/1/) Expenses
----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional 0.45% None 0.25% 0.70%
----------------------------------------------------------------------
Administrative 0.45 0.25% 0.25 0.95
----------------------------------------------------------------------
</TABLE>
(1) Other Expenses reflects a 0.25% Administrative Fee paid by
the class.
Examples. The Examples below are intended to help you compare the
cost of investing in Institutional Class or Administrative Class
shares of the Fund with the costs of investing in other mutual
funds. The Examples assume that you invest $10,000 in the noted
class of shares for the time periods indicated, and then redeem
all your shares at the end of those periods. The Examples also
assume that your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the Fund's
operating expenses remain the same. Although your actual costs may
be higher or lower, the Examples show what your costs would be
based on these assumptions.
<TABLE>
<CAPTION>
Share Class Year 1 Year 3 Year 5 Year 10
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional $72 $224 $390 $ 871
--------------------------------------------------------------------
Administrative 97 303 525 1,166
--------------------------------------------------------------------
</TABLE>
Prospectus 26
<PAGE>
PIMCO Small-Cap Growth Fund
Ticker Symbols: PSCIX (Inst. Class)
PSGAX (Admin. Class)
- --------------------------------------------------------------------------------
Principal Investment Fund Focus Approximate
Investments Objective Smaller Capitalization Range
and Seeks growth of capitalization More than $100 million
Strategies capital common stocks (excluding the largest
1,000 companies)
Approximate Number Dividend Frequency
of Holdings At least annually
60-100
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in common stocks of companies
with smaller market capitalizations that have improving
fundamentals (based on growth criteria) and whose stock is
reasonably valued by the market (based on value criteria).
In making investment decisions for the Fund, the portfolio
management team considers companies in the U.S. market with market
capitalizations of more than $100 million, but excluding the 1,000
largest capitalization companies. The team screens the stocks in
this universe for a series of growth criteria, such as dividend
growth, earnings growth, relative growth of earnings over time
(earnings momentum) and the company's history of meeting earnings
targets (earnings surprise), and also value criteria, such as
price-to-earnings, price-to-book and price-to-cash flow ratios.
The team then selects individual stocks by subjecting the top 10%
of the stocks in the screened universe to a rigorous analysis of
company factors, such as strength of management, competitive
industry position, and business prospects, and financial statement
data, such as earnings, cash flows and profitability. The team may
interview company management in making investment decisions. The
Fund's capitalization criteria applies at the time of investment.
The portfolio management team rescreens the universe frequently
and seeks to consistently achieve a favorable balance of growth
and value characteristics for the Fund. The team sells a stock
when it falls below the median ranking, has negative earnings
surprises, or shows poor price performance relative to all stocks
in the Fund's capitalization range or to companies in the same
business sector. A stock may also be sold if its weighting in the
portfolio becomes excessive (normally above 2% of the Fund's
investments).
The Fund intends to be fully invested in common stock (aside from
certain cash management practices) and will not make defensive
investments in response to unfavorable market and other
conditions.
- --------------------------------------------------------------------------------
Principal Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
. Market Risk . Growth Securities Risk . Credit Risk
. Issuer Risk . Smaller Company Risk . Management
. Value Securities Risk . Liquidity Risk Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
- --------------------------------------------------------------------------------
Performance The top of the next page shows summary performance information for
Information the Fund in a bar chart and an Average Annual Total Returns table.
The information provides some indication of the risks of investing
in the Fund by showing changes in its performance from year to
year and by showing how the Fund's average annual returns compare
with the returns of a broad-based securities market index and an
index of similar funds. The bar chart and the information to its
right show performance of the Fund's Institutional Class shares.
For periods prior to the inception of Administrative Class shares
(9/27/95), performance information shown in the Average Annual
Total Returns table for that class is based on the performance of
the Fund's Institutional Class shares. The prior Institutional
Class performance has been adjusted to reflect the actual
distribution and/or service (12b-1 fees) and other expenses paid
by Administrative Class shares. Past performance is no guarantee
of future results.
27 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Small-Cap Growth Fund (continued)
Calendar Year Total Returns -- Institutional Class
[BAR CHART APPEARS HERE] More Recent Return
Information
-----------------------------
1992 16.69% 1/1/99-9/30/9 10.21%
1993 24.45%
1994 0.54% Highest and Lowest Quarter
1995 21.85% Returns (for periods shown
1996 16.84% in the bar chart)
1997 26.72% -----------------------------
1998 -8.50% Highest (2nd Qtr. '97) 18.48%
-----------------------------
Lowest (3rd Qtr. '98) -24.84%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/98)
<TABLE>
<CAPTION>
Fund Inception
1 Year 5 Years (1/7/91)(/3/)
----------------------------------------------------------------------
<S> <C> <C> <C>
Institutional Class -8.50% 10.66% 18.44%
----------------------------------------------------------------------
Administrative Class -8.89% 10.49% 18.22%
----------------------------------------------------------------------
Russell 2000 Index(/1/) -2.55% 11.86% 17.37%
----------------------------------------------------------------------
Lipper Small-Cap Fund Average(/2/) -0.23% 13.12% 17.69%
----------------------------------------------------------------------
</TABLE>
(1) The Russell 2000 Index is a capitalization weighted broad
based index of 2,000 small capitalization U.S. stocks. It is
not possible to invest directly in the index.
(2) The Lipper Small-Cap Fund Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. that invest primarily in companies with market
capitalizations of less than $1 billion at the time of
investment. It does not take into account sales charges.
(3) The Fund began operations on 1/7/91. Index comparisons begin
on 12/31/90.
- --------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Institutional Class or Administrative Class shares of the
of the Fund:
Fund
Shareholder Fees (fees paid directly from your investment)None
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Share Class Fees (12b-1) Fees Expenses(/1/) Expenses
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional 1.00% None 0.25% 1.25%
---------------------------------------------------------------------
Administrative 1.00 0.25% 0.25 1.50
---------------------------------------------------------------------
</TABLE>
(1) Other Expenses reflects a 0.25% Administrative Fee paid by
the class.
Examples. The Examples below are intended to help you compare the
cost of investing in Institutional Class or Administrative Class
shares of the Fund with the costs of investing in other mutual
funds. The Examples assume that you invest $10,000 in the noted
class of shares for the time periods indicated, and then redeem
all your shares at the end of those periods. The Examples also
assume that your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the Fund's
operating expenses remain the same. Although your actual costs may
be higher or lower, the Examples show what your costs would be
based on these assumptions.
<TABLE>
<CAPTION>
Share Class Year 1 Year 3 Year 5 Year 10
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional $127 $397 $686 $1,511
---------------------------------------------------------------------
Administrative 153 474 818 1,791
---------------------------------------------------------------------
</TABLE>
Prospectus 28
<PAGE>
PIMCO Micro-Cap Growth Fund
Ticker Symbols: PMCIX (Inst. Class)
PMGAX (Admin. Class)
- --------------------------------------------------------------------------------
Principal Investment Objective Fund Focus Approximate
Investments Seeks long-term Very small Capitalization Range
and growth of capital capitalization Less than $250
Strategies common stocks million
Dividend Frequency
Approximate Number At least annually
of Holdings
60-100
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in common stocks of companies
with very small market capitalizations that have improving
fundamentals (based on growth criteria) and whose stock is
reasonably valued by the market (based on value criteria).
In making investment decisions for the Fund, the portfolio
management team considers companies in the U.S. market with market
capitalizations less than $250 million. The team screens the
stocks in this universe for a series of growth criteria, such as
dividend growth, earnings growth, relative growth of earnings over
time (earnings momentum) and the company's history of meeting
earnings targets (earnings surprise), and also value criteria,
such as price-to-earnings, price-to-book and price-to-cash flow
ratios. The team then selects individual stocks by subjecting the
top 10% of the stocks in the screened universe to a rigorous
analysis of company factors, such as strength of management,
competitive industry position, and business prospects, and
financial statement data, such as earnings, cash flows and
profitability. The team may interview company management in making
investment decisions. The Fund's capitalization criteria applies
at the time of investment.
The portfolio management team rescreens the universe frequently
and seeks to consistently achieve a favorable balance of growth
and value characteristics for the Fund. The team sells a stock
when it falls below the median ranking, has negative earnings
surprises, or shows poor price performance relative to all stocks
in the Fund's capitalization range or to companies in the same
business sector. A stock may also be sold if its weighting in the
portfolio becomes excessive (normally above 3% of the Fund's
investments).
The Fund intends to be fully invested in common stock (aside from
certain cash management practices) and will not make defensive
investments in response to unfavorable market and other
conditions.
- --------------------------------------------------------------------------------
Principal Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
. Market Risk . Growth Securities Risk . Credit Risk
. Issuer Risk . Smaller Company Risk . Management
. Value Securities Risk . Liquidity Risk Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
- --------------------------------------------------------------------------------
Performance The top of the next page shows summary performance information for
Information the Fund in a bar chart and an Average Annual Total Returns table.
The information provides some indication of the risks of investing
in the Fund by showing changes in its performance from year to
year and by showing how the Fund's average annual returns compare
with the returns of a broad-based securities market index and an
index of similar funds. The bar chart and the information to its
right show performance of the Fund's Institutional Class shares.
For periods prior to the inception of Administrative Class shares
(4/1/96), performance information shown in the Average Annual
Total Returns table for that class is based on the performance of
the Fund's Institutional Class shares. The prior Institutional
Class performance has been adjusted to reflect the actual
distribution and/or service (12b-1 fees) and other expenses paid
by Administrative Class shares. Past performance is no guarantee
of future results.
29 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Micro-Cap Growth Fund (continued)
Calendar Year Total Returns -- Institutional Class
BAR CHART APPEARS HERE] More Recent Return
Information
--------------------
1994 1.02% 1/1/99-9/30/9
1995 36.25% -6.99%
1996 23.83%
1997 36.69% Highest and Lowest
1998 -3.88% Quarter Returns
(for periods shown
in the bar chart)
--------------------
Highest (3rd Qtr.
'97) 21.61%
--------------------
Lowest (3rd Qtr.
'98) -20.71%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/98)
<TABLE>
<CAPTION>
Fund Inception
1 Year 5 Years (6/25/93)(/3/)
----------------------------------------------------------------------
<S> <C> <C> <C>
Institutional Class -3.88% 17.50% 19.21%
----------------------------------------------------------------------
Administrative Class -4.08% 17.21% 18.92%
----------------------------------------------------------------------
Russell 2000 Index(/1/) -2.55% 11.86% 12.95%
----------------------------------------------------------------------
Lipper Micro-Cap Fund Average(/2/) 3.87% 11.94% 13.11%
----------------------------------------------------------------------
</TABLE>
(1) The Russell 2000 Index is a capitalized weighted broad based
index of small capitalization U.S. stocks. It is not possible
to invest directly in the index.
(2) The Lipper Micro-Cap Fund Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. that invest primarily in companies with market
capitalizations of less than $300 million at the time of
investment. It does not take into account sales charges.
(3) The Fund began operations on 6/25/93. Index comparisons begin
on 6/30/93.
- --------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Institutional Class or Administrative Class shares of the
of the Fund:
Fund
Shareholder Fees (fees paid directly from your investment) None
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Share Class Fees (12b-1) Fees Expenses(/1/) Expenses
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional 1.25% None 0.25% 1.50%
---------------------------------------------------------------------
Administrative 1.25 0.25% 0.25 1.75
---------------------------------------------------------------------
</TABLE>
(1) Other Expenses reflects a 0.25% Administrative Fee paid by
the class.
Examples. The Examples below are intended to help you compare the
cost of investing in Institutional Class or Administrative Class
shares of the Fund with the costs of investing in other mutual
funds. The Examples assume that you invest $10,000 in the noted
class of shares for the time periods indicated, and then redeem
all your shares at the end of those periods. The Examples also
assume that your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the Fund's
operating expenses remain the same. Although your actual costs may
be higher or lower, the Examples show what your costs would be
based on these assumptions.
<TABLE>
<CAPTION>
Share Class Year 1 Year 3 Year 5 Year 10
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional $153 $474 $818 $1,791
---------------------------------------------------------------------
Administrative 178 551 949 2,062
---------------------------------------------------------------------
</TABLE>
Prospectus 30
<PAGE>
PIMCO Equity Income Fund
Ticker Symbols: PEIIX (Inst. Class)
PINAX (Admin. Class)
- --------------------------------------------------------------------------------
Principal Investment Objective Fund Focus Approximate
Investments Seeks current Income producing Capitalization Range
and income as a common stocks with More than $2 billion
Strategies primary potential for capital
objective, and appreciation
long-term growth
of capital as a
secondary
objective
Dividend Frequency
Approximate Number of Quarterly
Holdings
40-50
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in income-producing (or
dividend-paying) common stocks of companies with market
capitalizations of more than $2 billion at the time of investment.
The Fund's initial selection universe consists of the 1,000
largest publicly traded companies (in terms of market
capitalization) in the U.S. The portfolio managers classify the
universe by industry. They then identify the most undervalued
stocks in each industry based mainly on relative P/E ratios,
calculated both with respect to trailing operating earnings and
forward earnings estimates. From this group of stocks, the Fund
buys approximately 25 stocks with the highest dividend yields. The
portfolio managers then screen the most undervalued companies in
each industry by dividend yield to identify the highest yielding
stocks in each industry. From this group, the Fund buys
approximately 25 additional stocks with the lowest P/E ratios.
In selecting stocks, the portfolio managers consider quantitative
factors such as price momentum (based on changes in stock price
relative to changes in overall market prices), earnings momentum
(based on analysts' earnings per share estimates and revisions to
those estimates), relative dividend yields, valuation relative to
the overall market and trading liquidity. The portfolio managers
may replace a stock when a stock within the same industry group
has a considerably higher dividend yield or lower valuation than
the Fund's current holding.
Under normal circumstances, the Fund intends to be fully invested
in common stocks (aside from certain cash management practices).
The Fund may temporarily hold up to 10% of its assets in cash and
cash equivalents for defensive purposes in response to unfavorable
market and other conditions. This would be inconsistent with the
Fund's investment objective and principal strategies.
- --------------------------------------------------------------------------------
Principal Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
. Market Risk . Value Securities Risk . Management Risk
. Issuer Risk . Credit Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
- --------------------------------------------------------------------------------
Performance The top of the next page shows summary performance information for
Information the Fund in a bar chart and an Average Annual Total Returns table.
The information provides some indication of the risks of investing
in the Fund by showing changes in its performance from year to
year and by showing how the Fund's average annual returns compare
with the returns of a broad-based securities market index and an
index of similar funds. The bar chart and the information to its
right show performance of the Fund's Institutional Class shares.
For periods prior to the inception of Administrative Class shares
(11/30/94), performance information shown in the Average Annual
Total Returns table for that class is based on the performance of
the Fund's Institutional Class shares. The prior Institutional
Class performance has been adjusted to reflect the actual
distribution and/or service (12b-1 fees) and other expenses paid
by Administrative Class shares. Past performance is no guarantee
of future results.
31 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Equity Income Fund (continued)
Calendar Year Total Returns -- Institutional Class
[CHART APPEARS HERE] More Recent Return
Information
------------------------------
1992 14.75% 1/1/99-9/30/9 0.80%
1993 8.47%
1994 -1.61% Highest and Lowest Quarter
1995 33.47% Returns (for periods shown
1996 21.48% in the bar chart)
1997 31.38% ------------------------------
1998 8.37% Highest (4th Qtr. '98) 13.98%
------------------------------
Lowest (3rd Qtr. '98) -10.93%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/98)
<TABLE>
<CAPTION>
Fund Inception
1 Year 5 Years (3/8/91)(/3/)
---------------------------------------------------------------------
<S> <C> <C> <C>
Institutional Class 8.37% 17.83% 16.51%
---------------------------------------------------------------------
Administrative Class 8.12% 17.54% 16.22%
---------------------------------------------------------------------
S&P 500 Index(/1/) 28.58% 24.06% 19.58%
---------------------------------------------------------------------
Lipper Equity Income Fund Average(/2/) 11.90% 16.50% 15.59%
---------------------------------------------------------------------
</TABLE>
(1) The S&P 500 Index is an unmanaged index of large
capitalization common stocks. It is not possible to invest
directly in the index.
(2) The Lipper Equity Income Fund Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. that seek relatively higher growth of income
through investing 60% or more of their portfolios in equities.
It does not take into account sales charges.
(3) The Fund began operations on 3/8/91. Index comparisons begin
on 2/28/91.
- --------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Institutional Class or Administrative Class shares of the
of the Fund:
Fund
Shareholder Fees (fees paid directly from your investment)None
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Share Class Fees (12b-1) Fees Expenses(/1/) Expenses
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional 0.45% None 0.25% 0.70%
---------------------------------------------------------------------
Administrative 0.45 0.25% 0.25 0.95
---------------------------------------------------------------------
</TABLE>
(1) Other Expenses reflects a 0.25% Administrative Fee paid by
the class.
Examples. The Examples below are intended to help you compare the
cost of investing in Institutional Class or Administrative Class
shares of the Fund with the costs of investing in other mutual
funds. The Examples assume that you invest $10,000 in the noted
class of shares for the time periods indicated, and then redeem
all your shares at the end of those periods. The Examples also
assume that your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the Fund's
operating expenses remain the same. Although your actual costs may
be higher or lower, the Examples show what your costs would be
based on these assumptions.
<TABLE>
<CAPTION> Share Class
Year 1 Year 3 Year 5 Year 10
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional $72 $224 $390 $ 871
---------------------------------------------------------------------
Administrative 97 303 525 1,166
---------------------------------------------------------------------
</TABLE>
Prospectus 32
<PAGE>
PIMCO Value Fund
Ticker Symbols: PDLIX (Inst. Class)
PVLAX (Admin. Class)
- --------------------------------------------------------------------------------
Principal Investment Objective Fund Focus Approximate
Investments Seeks long-term Undervalued Capitalization Range
and growth of larger More than $2 billion
Strategies capital and capitalization
income common stocks
Dividend Frequency
Approximate Number Quarterly
of Holdings
40
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in common stocks of companies
with market capitalizations of more than $2 billion at the time of
investment and below average P/E ratios relative to the market and
their respective industry groups. To achieve income, the Fund
invests a portion of its assets in income-producing (or dividend-
paying) common stocks.
The Fund's initial selection universe consists of the 1,000
largest publicly traded companies (in terms of market
capitalization) in the U.S. The portfolio managers classify the
universe by industry. They then identify the most undervalued
stocks in each industry based mainly on relative P/E ratios,
calculated both with respect to trailing operating earnings and
forward earnings estimates. After narrowing this universe to
approximately 150 candidates, the portfolio managers select
approximately 40 stocks for the Fund, each representing a
different industry group. The portfolio managers select stocks
based on a quantitative analysis of factors including price
momentum (based on changes in stock price relative to changes in
overall market prices), earnings momentum (based on analysts'
earnings per share estimates and revisions to those estimates),
relative dividend yields, valuation relative to the overall market
and trading liquidity. The Fund's portfolio is generally
rebalanced quarterly. The portfolio managers may also replace a
stock when a stock within the same industry group has a
considerably lower valuation than the Fund's current holding.
Under normal circumstances, the Fund intends to be fully invested
in common stocks (aside from certain cash management practices).
The Fund may temporarily hold up to 10% of its assets in cash and
cash equivalents for defensive purposes in response to unfavorable
market and other conditions. This would be inconsistent with the
Fund's investment objective and principal strategies.
- --------------------------------------------------------------------------------
Principal Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
. Market Risk . Value Securities Risk . Management Risk
. Issuer Risk . Credit Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
- --------------------------------------------------------------------------------
Performance The top of the next page shows summary performance information for
Information the Fund in a bar chart and an Average Annual Total Returns table.
The information provides some indication of the risks of investing
in the Fund by showing changes in its performance from year to
year and by showing how the Fund's average annual returns compare
with the returns of a broad-based securities market index and an
index of similar funds. The bar chart and the information to its
right show performance of the Fund's Institutional Class shares.
For periods prior to the inception of Administrative Class shares
(8/21/97), performance information shown in the chart and Average
Annual Total Returns table for that class is based on the
performance of the Fund's Institutional Class shares. The prior
Institutional Class performance has been adjusted to reflect the
actual distribution and/or service (12b-1 fees) and other expenses
paid by Administrative Class shares. Past performance is no
guarantee of future results.
33 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Value Fund (continued)
Calendar Year Total Returns -- Institutional Class
[BAR CHART APPEARS HERE] More Recent Return
Information
------------------------------
1992 13.15% 1/1/99-9/30/9 5.18%
1993 16.41%
1994 -4.07% Highest and Lowest Quarter
1995 38.91% Returns (for periods shown
1996 20.34% in the bar chart)
1997 26.21% ------------------------------
1998 10.17% Highest (4th Qtr. '98) 17.19%
------------------------------
Lowest (3rd Qtr. '98) -13.23%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/98)
<TABLE>
<CAPTION>
Fund Inception
1 Year 5 Years (12/30/91)(/3/)
--------------------------------------------------------------------------
<S> <C> <C> <C>
Institutional Class 10.17% 17.39% 16.74%
--------------------------------------------------------------------------
Administrative Class 9.77% 17.10% 16.45%
-----------------------------------------------------------------------
S&P 500 Index(/1/) 28.58% 24.06% 19.51%
--------------------------------------------------------------------------
Lipper Growth and Income Fund Average(/2/) 15.80% 18.42% 15.94%
--------------------------------------------------------------------------
</TABLE>
(1) The S&P 500 Index is an unmanaged index of large
capitalization common stocks. It is not possible to invest
directly in the index.
(2) The Lipper Growth and Income Fund Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. that combine a growth-of-earnings orientation
and an income requirement for level and/or rising dividends. It
does not take into account sales charges.
(3) The Fund began operations on 12/30/91. Index comparisons begin
on 12/31/91.
- --------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Institutional Class or Administrative Class shares of the
of the Fund:
Fund
Shareholder Fees (fees paid directly from your investment)None
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Share Class Fees (12b-1) Fees Expenses(/1/) Expenses
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional 0.45% None 0.25% 0.70%
---------------------------------------------------------------------
Administrative 0.45 0.25% 0.25 0.95
---------------------------------------------------------------------
</TABLE>
(1) Other Expenses reflects a 0.25% Administrative Fee paid by
the class.
Examples. The Examples below are intended to help you compare the
cost of investing in Institutional Class or Administrative Class
shares of the Fund with the costs of investing in other mutual
funds. The Examples assume that you invest $10,000 in the noted
class of shares for the time periods indicated, and then redeem
all your shares at the end of those periods. The Examples also
assume that your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the Fund's
operating expenses remain the same. Although your actual costs may
be higher or lower, the Examples show what your costs would be
based on these assumptions.
<TABLE>
<CAPTION> Share Class
Year 1 Year 3 Year 5 Year 10
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional $72 $224 $390 $ 871
---------------------------------------------------------------------
Administrative 97 303 525 1,166
---------------------------------------------------------------------
</TABLE>
Prospectus 34
<PAGE>
PIMCO Value 25 Fund
Ticker Symbols: N/A (Inst. Class)
N/A (Admin. Class)
- --------------------------------------------------------------------------------
Principal Investment Objective Fund Focus Approximate
Investments Seeks long-term Undervalued Capitalization Range
and growth of medium Between $1 billion and
Strategies capital and capitalization $5 billion
income common stocks
Dividend Frequency
Approximate Number At least annually
of Holdings
25
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in common stocks of companies
with market capitalizations of between $1 billion and $5 billion
at the time of investment and below average P/E ratios relative to
their respective industry groups. The Fund normally invests in
approximately 25 common stocks. To achieve income, the Fund
invests a portion of its assets in income-producing (or dividend-
paying) common stocks.
The Fund's initial selection universe consists of approximately
600 stocks of companies within the Fund's capitalization range.
The portfolio managers classify the universe by industry. They
then identify the most undervalued stocks in each industry based
mainly on relative P/E ratios, calculated both with respect to
trailing operating earnings and forward earnings estimates. The
portfolio managers then select approximately 25 stocks, each
representing a different industry group. Each stock has close to
equal weighting in the portfolio. The portfolio managers select
stocks based on a quantitative analysis of factors including price
momentum (based on changes in stock price relative to changes in
overall market prices), earnings momentum (based on analysts'
earnings per share estimates and revisions to those estimates),
relative dividend yields and trading liquidity. The Fund's
portfolio is generally rebalanced quarterly. The portfolio
managers may also replace a stock when a stock within the same
industry group has a considerably lower valuation than the Fund's
current holding.
Under normal circumstances, the Fund intends to be fully
invested in common stocks (aside from certain cash management
practices). The Fund may temporarily hold up to 10% of its assets
in cash and cash equivalents for defensive purposes in response to
unfavorable market and other conditions. This would be
inconsistent with the Fund's investment objective and principal
strategies.
- --------------------------------------------------------------------------------
Principal Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
. Market Risk . Smaller Company Risk . Credit Risk
. Issuer Risk . Liquidity Risk . Management
. Value Securities Risk . Concentration Risk Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
- --------------------------------------------------------------------------------
Performance The Fund commenced operations in July 1998 and does not yet have a
Information full calendar year of performance. Thus, no bar chart or Average
Annual Total Returns table is included for the Fund.
35 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Value 25 Fund (continued)
- --------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Institutional Class or Administrative Class shares of the
of the Fund:
Fund
Shareholder Fees (fees paid directly from your investment)None
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets):
<TABLE>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Share Class Fees (12b-1) Fees Expenses(/1/) Expenses
------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional 0.50% None 0.25% 0.75%
------------------------------------------------------------------------
Administrative 0.50 0.25% 0.25 1.00
------------------------------------------------------------------------
</TABLE>
(1) Other Expenses reflects a 0.25% Administrative Fee paid by
the class.
Examples. The Examples below are intended to help you compare the
cost of investing in Institutional Class or Administrative Class
shares of the Fund with the costs of investing in other mutual
funds. The Examples assume that you invest $10,000 in the noted
class of shares for the time periods indicated, and then redeem
all your shares at the end of those periods. The Examples also
assume that your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the Fund's
operating expenses remain the same. Although your actual costs may
be higher or lower, the Examples show what your costs would be
based on these assumptions.
<TABLE>
<CAPTION>
Share Class Year 1 Year 3 Year 5 Year 10
------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional $ 77 $240 $417 $ 930
------------------------------------------------------------------------
Administrative 102 318 552 1,225
------------------------------------------------------------------------
</TABLE>
Prospectus 36
<PAGE>
PIMCO Small-Cap Value Fund
Ticker Symbols: PSVIX (Inst. Class)
PVADX (Admin. Class)
- --------------------------------------------------------------------------------
Principal Investment Objective Fund Focus Approximate
Investments Seeks long-term Undervalued Capitalization Range
and growth of smaller Between $100 million
Strategies capital and capitalization and $1.5 billion
income common stocks
Dividend Frequency
Approximate Number At least annually
of Holdings
100
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in common stocks of companies
with market capitalizations of between $100 million and $1.5
billion at the time of investment and below average P/E ratios
relative to the market and their respective industry groups. To
achieve income, the Fund invests a portion of its assets in
income-producing (or dividend-paying) common stocks.
The Fund's initial selection universe consists of approximately
4,500 stocks of companies within the Fund's capitalization range.
The portfolio managers screen this universe to identify
approximately 500 undervalued stocks representing approximately
160 industry groups. This screening process is based on a number
of valuation factors, including P/E ratios (calculated both with
respect to trailing operating earnings and forward earnings
estimates) and price-to-sales, price-to-book value, and price-to-
cash flow ratios. These factors are considered both on a relative
basis (compared to other stocks in the same industry group) and on
an absolute basis (compared to the overall market).
From this narrowed universe, the portfolio managers select
approximately 100 stocks for the Fund, each of which has close to
equal weighting in the portfolio. They select stocks based on a
quantitative analysis of factors including price momentum (based
on changes in stock price relative to changes in overall market
prices), earnings momentum (based on analysts' earnings per share
estimates and revisions to those estimates), relative dividend
yields and trading liquidity. The portfolio is also structured to
have a maximum weighting of no more than 10% in any one industry.
The portfolio managers may replace a stock if its market
capitalization becomes excessive, if its valuation exceeds the
average valuation of stocks represented in the S&P 500 Index, or
when a stock within the same industry group has a considerably
lower valuation than the Fund's current holding.
Under normal circumstances, the Fund intends to be fully
invested in common stocks (aside from certain cash management
practices). The Fund may temporarily hold up to 10% of its assets
in cash and cash equivalents for defensive purposes in response to
unfavorable market and other conditions. This would be
inconsistent with the Fund's investment objective and principal
strategies.
- --------------------------------------------------------------------------------
Principal Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
. Market Risk . Smaller Company Risk . Credit Risk
. Issuer Risk . Liquidity Risk . Management Risk
. Value Securities Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
- --------------------------------------------------------------------------------
Performance The top of the next page shows summary performance information for
Information the Fund in a bar chart and an Average Annual Total Returns table.
The information provides some indication of the risks of investing
in the Fund by showing changes in its performance from year to
year and by showing how the Fund's average annual returns compare
with the returns of a broad-based securities market index and an
index of similar funds. The bar chart and the information to its
right show performance of the Fund's Institutional Class shares.
For periods prior to the inception of Administrative Class shares
(11/1/95), performance information shown in the Average Annual
Total Returns table for that class is based on the performance of
the Fund's Institutional Class shares. The prior Institutional
Class performance has been adjusted to reflect the actual
distribution and/or service (12b-1 fees) and other expenses paid
by Administrative Class shares. Past performance is no guarantee
of future results.
37 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Small-Cap Value Fund (continued)
Calendar Year Total Returns -- Institutional Class
[CHART APPEARS HERE] More Recent Return
Information
------------------------------
1992 18.27% 1/1/99-9/30/9 -4.69%
1993 13.39%
1994 -4.07% Highest and Lowest Quarter
1995 24.98% Returns (for periods shown
1996 27.22% in the bar chart)
1997 34.47% ------------------------------
1998 -9.16% Highest (3rd Qtr. '97) 15.91%
------------------------------
Lowest (3rd Qtr. '98) -18.61%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/98)
<TABLE>
<CAPTION>
Fund Inception
1 Year 5 Years (10/1/91)(/3/)
----------------------------------------------------------------------
<S> <C> <C> <C>
Institutional Class -9.16% 13.62% 14.78%
----------------------------------------------------------------------
Administrative Class -9.37% 13.33% 14.49%
----------------------------------------------------------------------
Russell 2000 Index(/1/) -2.55% 11.86% 14.13%
----------------------------------------------------------------------
Lipper Small-Cap Fund Average(/2/) -0.23% 13.12% 14.69%
----------------------------------------------------------------------
</TABLE>
(1) The Russell 2000 Index is a capitalization weighted broad
based index of 2,000 small capitalization U.S. stocks. It is
not possible to invest directly in the index.
(2) The Lipper Small-Cap Fund Average is a total return performance
average of funds tracked by Lipper Analytical Services, Inc.
that invest primarily in companies with market capitalizations
of less than $1 billion at the time of investment. It does not
take into account sales charges.
(3) The Fund began operations on 10/1/91. Index comparisons begin
on 9/30/91.
- --------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Institutional Class or Administrative Class shares of the
of the Fund:
Fund
Shareholder Fees (fees paid directly from your investment)
None
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Share Class Fees (12b-1) Fees Expenses(/1/) Expenses
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional 0.60% None 0.25% 0.85%
---------------------------------------------------------------------
Administrative 0.60 0.25% 0.25 1.10
---------------------------------------------------------------------
</TABLE>
(1) Other Expenses reflects a 0.25% Administrative Fee paid by
the class.
Examples. The Examples below are intended to help you compare the
cost of investing in Institutional Class or Administrative Class
shares of the Fund with the costs of investing in other mutual
funds. The Examples assume that you invest $10,000 in the noted
class of shares for the time periods indicated, and then redeem
all your shares at the end of those periods. The Examples also
assume that your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the Fund's
operating expenses remain the same. Although your actual costs may
be higher or lower, the Examples show what your costs would be
based on these assumptions.
<TABLE>
<CAPTION>
Share Class Year 1 Year 3 Year 5 Year 10
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional $ 87 $271 $471 $1,049
---------------------------------------------------------------------
Administrative 112 350 606 1,340
---------------------------------------------------------------------
</TABLE>
Prospectus 38
<PAGE>
PIMCO Enhanced Equity Fund
<TABLE>
<CAPTION>
Ticker Symbols: PEEIX (Inst. Class)
PEQAX (Admin. Class)
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Principal Investment Objective Fund Focus Approximate Capitalization Range
Investments and Seeks to provide a total return A portion of the common stocks More than $5 billion
Strategies which equals or exceeds the total represented in the S&P 500
return performance of an index Index
(currently the S&P 500 Index) that Dividend Frequency
represents the performance of a Approximate Number of Holdings At least annually
reasonably broad spectrum of 100-200
common stocks that are publicly
traded in the U.S.
</TABLE>
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in common stocks represented
in the S&P 500 Index.
In making investment decisions for the Fund, the portfolio
managers first rank the stocks in the S&P 500 Index using a
quantitative model that analyses each stock's exposure to both
growth factors (including company revenues and cash flows,
reported and estimated earnings and earnings estimates revisions)
and value factors (including relative stock price and price-to-
earnings ratios). The rankings give more weight to stocks with
rising earnings expectations where the stock price reflects
reasonable valuation relative to other stocks in the same industry
sector.
Using these rankings, the portfolio managers construct a sector-
neutral portfolio of between 100 to 200 stocks designed to have
above-average total return potential relative to the S&P 500
Index. The portfolio managers also use a computer optimization
model to provide risk-controlled exposure to the S&P 500 Index,
such that the portfolio ordinarily has no greater volatility than
the index and provides diversification across the industry sectors
represented in the index. The portfolio managers attempt to
maintain this balance through frequent and modest restructuring of
the portfolio. A stock is sold when it drops significantly in the
portfolio managers' rankings or when a replacement is necessary to
maintain the Fund's balance of risk relative to the S&P 500 Index.
Notwithstanding these strategies, there is no assurance that the
Fund's investment performance will equal or exceed that of the S&P
500 Index.
The Fund may invest in stocks of foreign issuers if included in
the S&P 500. The Fund may change the index upon which it bases its
performance without shareholder approval, although it does not
expect to make such a change under ordinary circumstances.
The Fund intends to be fully invested in common stock (aside from
certain cash management practices) and will not make defensive
investments in response to unfavorable market and other
conditions.
- --------------------------------------------------------------------------------
Principal Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
.Market Risk .Growth Securities Risk .Leveraging Risk
.Issuer Risk .Foreign Investment Risk .Credit Risk
.Value Securities .Currency Risk .Management Risk
Risk.
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
- --------------------------------------------------------------------------------
Performance The top of the next page shows summary performance information for
Information the Fund in a bar chart and an Average Annual Total Returns table.
The information provides some indication of the risks of investing
in the Fund by showing changes in its performance from year to
year and by showing how the Fund's average annual returns compare
with the returns of a broad-based securities market index and an
index of similar funds. The bar chart and the information to its
right show performance of the Fund's Institutional Class shares.
For periods prior to the inception of Administrative Class shares
(8/21/97), performance information shown in the Average Annual
Total Returns table for that class is based on the performance of
the Fund's Institutional Class shares. The prior Institutional
Class performance has been adjusted to reflect the actual
distribution and/or service (12b-1 fees) and other expenses paid
by Administrative Class shares. Past performance is no guarantee
of future results.
39 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Enhanced Equity Fund (continued)
Calendar Year Total Returns -- Institutional Class
[CHART APPEARS HERE] More Recent Return
Information
------------------------------
1992 6.60% 1/1/99-9/30/9 3.34%
1993 3.71%
1994 -0.49% Highest and Lowest Quarter
1995 34.42% Returns (for periods shown
1996 21.15% in the bar chart)
1997 30.85% ------------------------------
1998 26.51% Highest (4th Qtr. '98) 22.48%
------------------------------
Lowest (3rd Qtr. '98) -13.13%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/98)
<TABLE>
<CAPTION>
Fund Inception
1 Year 5 Years (2/11/91)(/3/)
----------------------------------------------------------------------
<S> <C> <C> <C>
Institutional Class 26.51% 21.82% 17.39%
----------------------------------------------------------------------
Administrative Class 26.14% 21.50% 17.09%
----------------------------------------------------------------------
S&P 500 Index(/1/) 28.58% 24.06% 20.42%
----------------------------------------------------------------------
Lipper Growth and Income Fund
Average(/2/) 15.80% 18.42% 16.93%
----------------------------------------------------------------------
</TABLE>
(1) The S&P 500 Index is an unmanaged index of large
capitalization common stocks. It is not possible to invest
directly in the index.
(2) The Lipper Growth and Income Fund Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. that combine a growth-of-earnings orientation
and an income requirement for level and/or rising dividends. It
does not take into account sales charges.
(3) The Fund began operations on 2/11/91. Index comparisons begin
on 1/31/91.
- --------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Institutional Class or Administrative Class shares of the
of the Fund:
Fund
Shareholder Fees (fees paid directly from your investment)None
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Share Class Fees (12b-1) Fees Expenses(/1/) Expenses
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional 0.45% None 0.25% 0.70%
---------------------------------------------------------------------
Administrative 0.45 0.25% 0.25 0.95
---------------------------------------------------------------------
</TABLE>
(1) Other Expenses reflects a 0.25% Administrative Fee paid by
the class.
Examples. The Examples below are intended to help you compare the
cost of investing in Institutional Class or Administrative Class
shares of the Fund with the costs of investing in other mutual
funds. The Examples assume that you invest $10,000 in the noted
class of shares for the time periods indicated, and then redeem
all your shares at the end of those periods. The Examples also
assume that your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the Fund's
operating expenses remain the same. Although your actual costs may
be higher or lower, the Examples show what your costs would be
based on these assumptions.
<TABLE>
<CAPTION>
Share Class Year 1 Year 3 Year 5 Year 10
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional $72 $224 $390 $ 871
---------------------------------------------------------------------
Administrative 97 303 525 1,166
---------------------------------------------------------------------
</TABLE>
Prospectus 40
<PAGE>
PIMCO Tax-Efficient Equity Fund
<TABLE>
<CAPTION>
Ticker Symbols: N/A (Inst. Class)
PEQAX (Admin. Class)
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Principal Investment Objective Fund Focus Approximate Capitalization Range
Investments and Seeks maximum after-tax growth A portion of the common stocks More than $5 billion
Strategies of capital represented in the S&P 500
Index
Dividend Frequency
Approximate Number of Holdings At least annually
More than 200
</TABLE>
The Fund attempts to provide a total return which exceeds the
return of the S&P 500 Index by investing in a broadly diversified
portfolio of at least 200 common stocks. The Fund also attempts to
achieve superior after-tax returns for its shareholders by using a
variety of tax-efficient management strategies.
The Fund seeks to achieve its investment objective by normally
investing at least 95% of its assets in stocks represented in the
S&P 500 Index. The Fund's portfolio is designed to have certain
characteristics that are similar to those of the index, including
such measures as dividend yield, P/E ratio, relative volatility,
economic sector exposure, return on equity and market price-to-
book value ratio. The Fund's return is intended to correlate
highly with the return of the S&P 500 Index, but the portfolio
managers attempt to produce a higher total return than the index
by selecting a portion of the stocks represented in the index
using the quantitative techniques described below. The portfolio
managers also use these techniques to make sell decisions.
Notwithstanding these strategies, there is no assurance that the
Fund's investment performance will equal or exceed that of the S&P
500 Index.
The Fund intends to be fully invested in common stock (aside from
certain cash management practices) and will not make defensive
investments in response to unfavorable market and other
conditions.
Quantitative Techniques. The portfolio managers use a proprietary
quantitative model that ranks companies based on long-term (5-10
years) price appreciation potential. They analyze factors such as
growth of sustainable earnings and dividend behavior. Stocks in
the top 50% of the model's ranking are considered for purchase by
the Fund. The Fund sells stocks selected from the bottom 20% of
the model's ranking based on cost, current market value and
anticipated benefit of replacement. The portfolio managers' sell
discipline also focuses on reducing realized capital gains as
indicated below.
Tax-Efficient Strategies. The portfolio managers utilize a range
of active tax management strategies designed to minimize the
Fund's taxable distributions, including low portfolio turnover and
favoring investments in low-dividend, growth-oriented companies.
The portfolio managers also identify specific shares of stock to
be sold that have the lowest tax cost. When prudent, stocks are
also sold to realize capital losses in order to offset realized
capital gains. In limited circumstances, the Fund may also
distribute appreciated securities to shareholders to meet
redemption requests so as to avoid realizing capital gains.
Despite the use of these tax-efficient strategies, the Fund may
realize gains and shareholders will incur tax liability from time
to time.
- --------------------------------------------------------------------------------
Principal Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
.Market Risk .Growth Securities Risk .Credit Risk
.Issuer Risk .Leveraging Risk .Management Risk
.Value Securities
Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
- --------------------------------------------------------------------------------
Performance
Information
The Fund commenced operations in September 1998 and does not yet
have a full calendar year of performance. Thus, no bar chart or
Average Annual Total Returns table is included for the Fund.
41 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Tax-Efficient Equity Fund (continued)
- --------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Institutional Class or Administrative Class shares of the
of the Fund:
Fund
Shareholder Fees (fees paid directly from your investment)None
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Share Class Fees (12b-1) Fees Expenses(/1/) Expenses
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional 0.45% None 0.25% 0.70%
---------------------------------------------------------------------
Administrative 0.45 0.25% 0.25 0.95
---------------------------------------------------------------------
(1) Other Expenses reflects a 0.25% Administrative Fee paid by the
class.
</TABLE>
Examples. The Examples below are intended to help you compare the
cost of investing in Institutional Class or Administrative Class
shares of the Fund with the costs of investing in other mutual
funds. The Examples assume that you invest $10,000 in the noted
class of shares for the time periods indicated, and then redeem
all your shares at the end of those periods. The Examples also
assume that your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the Fund's
operating expenses remain the same. Although your actual costs may
be higher or lower, the Examples show what your costs would be
based on these assumptions.
<TABLE>
<CAPTION>
Share Class Year 1 Year 3 Year 5 Year 10
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional $72 $224 $390 $ 871
---------------------------------------------------------------------
Administrative 97 303 525 1,166
---------------------------------------------------------------------
</TABLE>
Prospectus 42
<PAGE>
PIMCO Structured Emerging Markets Fund
<TABLE>
<CAPTION>
Ticker Symbols: PSTIX (Inst. Class)
N/A (Admin. Class)
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Principal Investment Objective Fund Focus Approximate Capitalization Range
Investments and Seeks long-term growth of capital Common stocks of emerging More than $5 billion
Strategies market
Dividend Frequency
Approximate Number of Holdings All capitalizations
More than 300
</TABLE>
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in common stocks of companies
located in, or whose business relates to, emerging markets. The
Fund is normally exposed to roughly 20 emerging market countries
and invests in more than 300 stocks. The Fund invests most of its
assets in foreign securities which trade primarily in currencies
other than the U.S. dollar and may also invest directly in foreign
currencies.
The International Finance Corporation Investable Composite Index
is the primary source for identifying emerging market countries for
the Fund. The portfolio managers may identify other emerging market
countries on the basis of market capitalization and liquidity, as
well their inclusion (or consideration for inclusion) as emerging
market countries in other broad-based market indexes.
The portfolio managers follow a disciplined and systematic
investment process that emphasizes diversification and fairly
consistent allocation among countries, industries and issuers. They
select countries based on factors such as level of economic
development (with emphasis on GNP per capita and local economic
diversification) and the maturity of equity markets in the country
(with emphasis on freedom of investment flows and development of
legal, regulatory, banking and settlement systems). They assign
equal weight to most countries represented in the portfolio unless
the size of a country's equity market is prohibitive. Countries
with smaller equity markets (i.e., less than $5 billion of market
capitalization) are assigned one-half the weight of countries with
larger equity markets. The portfolio managers divide all issuers in
each eligible country into the following five broad economic sector
groups: financial, industrial, consumer, utilities and natural
resources. The Fund attempts to maintain exposure across all five
sectors in each country. The portfolio managers purchase and sell
individual stocks based on such factors as liquidity, industry
representation, performance relative to industry and long-term
profitability. A stock may also be sold when the portfolio managers
believe its relative weighting in the portfolio has become
excessive.
The Fund intends to invest substantially all of its assets in
common stocks and other equity and equity-linked securities (aside
from certain cash management practices) and will not make defensive
investments in response to unfavorable market and other conditions.
The Fund may use derivatives.
- --------------------------------------------------------------------------------
Principal Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
<TABLE>
<CAPTION>
<S> <C> <C>
.Foreign Investment Risk .Value Securities Risk .Concentration Risk
.Emerging Markets Risk .Growth Securities Risk .Leveraging Risk
.Currency Risk .Smaller Company Risk .Credit Risk
.Market Risk .Liquidity Risk .Management Risk
.Issuer Risk .Derivatives Risk
</TABLE>
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
- --------------------------------------------------------------------------------
Performance The Fund commenced operations in June 1998 and does not yet have
Information a full calendar year of performance. Thus, no bar chart or Average
Annual Total Returns table is included for the Fund.
43 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Structured Emerging Markets Fund (continued)
- --------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Institutional Class or Administrative Class shares of the
of the Fund:
Fund
Shareholder Fees (fees paid directly from your investment)None
Fund Reimbursement Fee (as a percentage of offering or exchange
price or amount redeemed)1.00%*
* Unless a waiver applies, you will be charged a "Fund
Reimbursement Fee" when you purchase, sell (redeem) or exchange
Institutional Class or Administrative Class shares of the Fund.
The fee will be equal to 1.00% of the net asset value of the
shares purchased, redeemed or exchanged. Fund Reimbursement
Fees are paid to and retained by the Fund and are not sales
charges (loads). See "Purchases, Redemptions and Exchanges--
Fund Reimbursement Fees."
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets):
<TABLE>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Share Class Fees (12b-1) Fees Expenses(/1/) Expenses
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional 0.45% None 0.50% 0.95%
---------------------------------------------------------------------
Administrative 0.45 0.25% 0.50 1.20
---------------------------------------------------------------------
(1) Other Expenses reflects a 0.50% Administrative Fee paid by the
class.
</TABLE>
Examples. The Examples below are intended to help you compare the
cost of investing in Institutional Class or Administrative Class
shares of the Fund with the costs of investing in other mutual
funds. The Examples assume that you invest $10,000 in the noted
class of shares for the time periods indicated. The Examples also
assume that your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the Fund's
operating expenses remain the same. Although your actual costs may
be higher or lower, the Examples show what your costs would be
based on these assumptions.
Assuming you redeem your shares at the end of each period.*
<TABLE>
<CAPTION>
Share Class Year 1 Year 3 Year 5 Year 10
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional $299 $511 $741 $1,402
---------------------------------------------------------------------
Administrative 324 588 872 1,684
---------------------------------------------------------------------
</TABLE>
Assuming you do not redeem your shares.*
<TABLE>
<CAPTION>
Share Class Year 1 Year 3 Year 5 Year 10
------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional $196 $400 $620 $1,255
------------------------------------------------------------------
Administrative 221 477 753 1,540
------------------------------------------------------------------
</TABLE>
* The Examples assume the payment of a 1.00% Fund Reimbursement
Fee both at the time of purchase and at the time of redemption
even though such fees may be waived for certain investors. See
"Purchases, Redemptions and Exchanges--Fund Reimbursement Fees."
Prospectus 44
<PAGE>
PIMCO Tax-Efficient Structured Emerging Markets Fund
<TABLE>
<CAPTION>
Ticker Symbols: PEFIX (Inst. Class)
N/A (Admin. Class)
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Principal Investment Objective Fund Focus Approximate Capitalization Range
Investments and Seeks long-term growth of capital. Common stocks of emerging All capitalizationsn
Strategies The Fund also seeks to achieve market issuers
superior after-tax returns for its Dividend Frequency
shareholders by using tax-efficient Approximate Number of Holdings At least annually
management strategies. More than 300
</TABLE>
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in common stocks of companies
located in, or whose business relates to, emerging markets. The
Fund is normally exposed to roughly 20 emerging market countries
and invests in more than 300 stocks. The Fund invests most of its
assets in foreign securities which trade primarily in currencies
other than the U.S. dollar and may also invest directly in foreign
currencies.
The International Finance Corporation Investable Composite Index
is the primary source for identifying emerging market countries for
the Fund. The portfolio managers may identify other emerging market
countries on the basis of market capitalization and liquidity, as
well their inclusion (or consideration for inclusion) as emerging
market countries in other broad-based market indexes.
The portfolio managers follow a disciplined and systematic
investment process that emphasizes diversification and fairly
consistent allocation among countries, industries and issuers. They
select countries based on factors such as level of economic
development (with emphasis on GNP per capita and local economic
diversification) and the maturity of equity markets in the country
(with emphasis on freedom of investment flows and development of
legal, regulatory, banking and settlement systems). They assign
equal weight to most countries represented in the portfolio unless
the size of a country's equity market is prohibitive. Countries
with smaller equity markets (i.e., less than $5 billion of market
capitalization) are assigned one-half the weight of countries with
larger equity markets. The portfolio managers divide all issuers in
each eligible country into the following five broad economic sector
groups: financial, industrial, consumer, utilities and natural
resources. The Fund attempts to maintain exposure across all five
sectors in each country. The portfolio managers purchase and sell
individual stocks based on such factors as liquidity, industry
representation, performance relative to industry and long-term
profitability. A stock may also be sold when the portfolio managers
believe its relative weighting in the portfolio has become
excessive.
The Fund intends to invest substantially all of its assets in
common stocks and other equity and equity-linked securities (aside
from certain cash management practices) and will not make
defensive investments in response to unfavorable market and other
conditions. The Fund may use derivatives.
Tax-Efficient Strategies. The portfolio managers utilize a range
of active tax management strategies designed to minimize the Fund's
taxable distributions, including low portfolio turnover and
favoring investments in low-dividend, growth-oriented companies.
The portfolio managers also identify specific shares of stock to be
sold that have the lowest tax cost. When prudent, stocks are also
sold to realize capital losses in order to offset realized capital
gains. In limited circumstances, the Fund may also distribute
appreciated securities to shareholders to meet redemption requests
so as to avoid realizing capital gains. Despite the use of these
tax-efficient strategies, the Fund may realize gains and
shareholders will incur tax liability from time to time.
- --------------------------------------------------------------------------------
Principal Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
<TABLE>
<S> <C> <C>
.Foreign Investment Risk .Value Securities Risk .Concentration Risk
.Emerging Markets Risk .Growth Securities Risk .Leveraging Risk
.Currency Risk .Smaller Company Risk .Credit Risk
.Market Risk .Liquidity Risk .Management Risk
.Issuer Risk .Derivatives Risk
</TABLE>
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
- --------------------------------------------------------------------------------
Performance The Fund commenced operations in June 1998 and does not yet have
Information a full calendar year of performance. Thus, no bar chart or Average
Annual Total Returns table is included for the Fund.
45 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Tax-Efficient Structured Emerging Markets Fund (continued)
- --------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Institutional Class or Administrative Class shares of the
of the Fund:
Fund
Shareholder Fees (fees paid directly from your investment)None
Fund Reimbursement Fee (as a percentage of offering or exchange
price or amount redeemed)1.00%*
* Unless a waiver applies, you will be charged a "Fund
Reimbursement Fee" when you purchase, sell (redeem) or exchange
Institutional Class or Administrative Class shares of the Fund.
The fee will be equal to 1.00% of the net asset value of the
shares purchased, redeemed or exchanged. Fund Reimbursement Fees
are paid to and retained by the Fund and are not sales charges
(loads). See "Purchases, Redemptions and Exchanges--Fund
Reimbursement Fees."
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets):
<TABLE>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Share Class Fees (12b-1) Fees Expenses(/1/) Expenses
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional 0.45% None 0.50% 0.95%
---------------------------------------------------------------------
Administrative 0.45 0.25% 0.50 1.20
---------------------------------------------------------------------
(1) Other Expenses reflects a 0.50% Administrative Fee paid by the
class.
Examples. The Examples below are intended to help you compare the
cost of investing in Institutional Class or Administrative Class
shares of the Fund with the costs of investing in other mutual
funds. The Examples assume that you invest $10,000 in the noted
class of shares for the time periods indicated. The Examples also
assume that your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the Fund's
operating expenses remain the same. Although your actual costs may
be higher or lower, the Examples show what your costs would be
based on these assumptions.
Assuming you redeem your shares at the end of each period.*
Share Class Year 1 Year 3 Year 5 Year 10
---------------------------------------------------------------------
Institutional $299 $511 $741 $1,402
---------------------------------------------------------------------
Administrative 324 588 872 1,684
---------------------------------------------------------------------
Assuming you do not redeem your shares.*
Share Class Year 1 Year 3 Year 5 Year 10
---------------------------------------------------------------------
Institutional $196 $400 $620 $1,255
---------------------------------------------------------------------
Administrative 221 477 753 1,540
---------------------------------------------------------------------
</TABLE>
* The Examples assume the payment of a 1.00% Fund Reimbursement
Fee both at the time of purchase and at the time of redemption
even though such fees may be waived for certain investors. See
"Purchases, Redemptions and Exchanges--Fund Reimbursement Fees."
Prospectus 46
<PAGE>
PIMCO International Fund
Ticker Symbols: N/A (Inst. Class)
N/A (Admin. Class)
- --------------------------------------------------------------------------------
Principal Investment Fund Focus Approximate
Investments Objective Common stocks of Capitalization Range
and Seeks capital foreign More than $500
Strategies appreciation (non-U.S.) million
through issuers
investment in an Dividend Frequency
international Approximate Number At least annually
portfolio; income of Holdings
is an incidental 200-250
consideration
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in an international portfolio
of common stocks, which may or may not pay dividends. The Fund
normally invests in securities traded principally in developed
foreign securities markets, but may also invest up to 30% of its
assets in developing or "emerging" markets. The Fund has no
prescribed limits on geographic asset distribution and may invest
in any foreign securities market in the world. The Fund may also
invest in securities of foreign issuers traded on U.S. securities
markets, but will normally not invest in U.S. issuers. The Fund
invests most of its assets in foreign securities which trade in
currencies other than the U.S. dollar and may invest directly in
foreign currencies.
The portfolio manager uses a "top down" investment approach. He
first determines regional and country weightings for the Fund by
considering such factors as the condition and growth potential of
the various economies and securities markets, currency and
taxation considerations and other financial, social, national and
political factors. The Sub-Adviser's country specialists then
select individual stocks to fill out the desired country
weightings. In selecting stocks, the specialists analyze a broad
range of company fundamentals, such as price-to-earnings, price-
to-book value and price-to-cash flow ratios (value factors),
earnings, dividend and profit growth (growth factors) and balance
sheet strength and return on assets (quality factors). The
portfolio manager sells stocks in order to adjust or rebalance the
Fund's regional and country weightings or to replace companies
with weakening fundamentals.
The Fund may utilize foreign currency exchange contracts and
derivative instruments (such as stock index futures contracts)
primarily for risk management or hedging purposes. The Fund may
also invest in equity securities other than common stocks (such as
preferred stocks and convertible securities) and may invest up to
10% of its assets in other investment companies. In response to
unfavorable market and other conditions, the Fund may make
temporary investments of some or all of its assets in foreign and
domestic fixed income securities and in equity securities of U.S.
issuers. This would be inconsistent with the Fund's investment
objective and principal strategies.
- --------------------------------------------------------------------------------
Principal Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
.Foreign Investment Risk .Value Securities Risk .Concentration Risk
.Emerging Markets Risk .Growth Securities Risk .Leveraging Risk
.Currency Risk .Smaller Companies Risk .Credit Risk
.Market Risk .Liquidity Risk .Management Risk
.Issuer Risk .Derivatives Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
</TABLE>
- --------------------------------------------------------------------------------
Performance The top of the next page shows summary performance information for
Information the Fund in a bar chart and an Average Annual Total Returns table.
The information provides some indication of the risks of investing
in the Fund by showing changes in its performance from year to
year and by showing how the Fund's average annual returns compare
with the returns of a broad-based securities market index and an
index of similar funds. The bar chart, the information to its
right and the Average Annual Total Returns table show performance
of the Fund's Class C shares, which are offered in a different
prospectus. This is because the Fund has not offered Institutional
Class or Administrative Class shares for a full calendar year.
Although Class C, Institutional Class and Administrative Class
shares would have similar annual returns (because all the Fund's
shares represent interests in the same portfolio of securities),
Class C performance would be lower than Institutional Class or
Administrative Class performance because of the higher sales
charges and expenses paid by Class C shares. The returns in the
bar chart and the information to its right do not reflect the
impact of sales charges (loads). If they did, the returns would be
lower than those shown. Unlike the bar chart, performance figures
for Class C shares in the Average Annual Total Returns table
reflect the impact of sales charges. For periods prior to the
inception of Institutional Class and Administrative Class shares
(9/30/98), the Average Annual Total Returns table also shows
estimated historical performance for those classes based on the
performance of the Fund's Class C shares. The Class C performance
has been adjusted to reflect that there are no sales charges and
lower distribution and/or service (12b-1) fees (if any),
administrative fees and other expenses paid by Institutional Class
and Administrative Class shares. The Fund had different sub-
advisers during the periods prior to November 15, 1994, and would
not necessarily have achieved the performance results shown on the
next page under its current investment management arrangements.
Past performance is no guarantee of future results.
47 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO International Fund (continued)
Calendar Year Total Returns -- Class C
[CHART APPEARS HERE] More Recent Return
Information
--------------------------------
1989 28.51% 1/1/99-9/30/99 5.34%
1990 -15.50%
1991 19.92%
1992 -5.84% Highest and Lowest Quarter Returns
1993 33.47%
1994 -8.16% (for periods shown in the bar
1995 5.79% chart)
1996 5.76% --------------------------------
1997 1.85% Highest (4/th/ Qtr. '98) 16.44%
1998 8.27% --------------------------------
Lowest (3/rd/ Qtr. '90) -22.16%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/98)
<TABLE>
<CAPTION>
Fund Inception
1 Year 5 Years 10 Years (8/25/86)(/3/)
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class C 7.30% 2.53% 6.37% 6.41%
---------------------------------------------------------------------
Institutional Class 9.68% 3.74% 7.61% 7.65%
---------------------------------------------------------------------
Administrative Class 9.10% 3.43% 7.31% 7.36%
---------------------------------------------------------------------
MSCI EAFE Index(/1/) 20.33% 9.50% 5.85% 9.09%
---------------------------------------------------------------------
Lipper International Fund
Average(/2/) 12.99% 7.81% 9.15% 9.77%
---------------------------------------------------------------------
</TABLE>
(1) The Morgan Stanley Capital International EAFE (Europe,
Australasia, Far East) ("MSCI EAFE") Index is a widely
recognized, unmanaged index of issuers in countries of Europe,
Australia and Asia. It is not possible to invest directly in the
index.
(2) The Lipper International Fund Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. that invest their assets in securities whose
primary trading markets are outside of the United States. It
does not take into account sales charges.
(3) The Fund began operations on 8/25/86. Index comparisons begin
on 8/31/86.
- --------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Institutional Class or Administrative Class shares of the
of the Fund:
Fund
Shareholder Fees (fees paid directly from your investment) None
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Share Class Fees (12b-1) Fees Expenses(/1/) Expenses
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional 0.55% None 0.50% 1.05%
---------------------------------------------------------------------
Administrative 0.55 0.25% 0.50 1.30
---------------------------------------------------------------------
</TABLE>
(1) Other Expenses reflects a 0.50% Administrative Fee paid by the
class.
Examples. The Examples below are intended to help you compare the
cost of investing in Institutional Class or Administrative Class
shares of the Fund with the costs of investing in other mutual
funds. The Examples assume that you invest $10,000 in the noted
class of shares for the time periods indicated, and then redeem
all your shares at the end of those periods. The Examples also
assume that your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the Fund's
operating expenses remain the same. Although your actual costs may
be higher or lower, the Examples show what your costs would be
based on these assumptions.
<TABLE>
<CAPTION>
Share Class Year 1 Year 3 Year 5 Year 10
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional $107 $334 $579 $1,283
---------------------------------------------------------------------
Administrative 132 412 713 1,568
---------------------------------------------------------------------
</TABLE>
Prospectus 48
<PAGE>
Summary of Principal Risks
The value of your investment in a Fund changes with the values of
that Fund's investments. Many factors can affect those values. The
factors that are most likely to have a material effect on a
particular Fund's portfolio as a whole are called "principal
risks." The principal risks of each Fund are identified in the
Fund Summaries and are summarized in this section. Each Fund may
be subject to additional principal risks and risks other than
those described below because the types of investments made by
each Fund can change over time. Securities and investment
techniques mentioned in this summary and described in greater
detail under "Characteristics and Risks of Securities and
Investment Techniques" appear in bold type. That section and
"Investment Objectives and Policies" in the Statement of
Additional Information also include more information about the
Funds, their investments and the related risks. There is no
guarantee that a Fund will be able to achieve its investment
objective.
Market The market price of securities owned by a Fund may go up or down,
Risk sometimes rapidly or unpredictably. Each of the Funds normally
invests most of its assets in common stocks and/or other equity
securities. A principal risk of investing in each Fund is that the
equity securities in its portfolio will decline in value due to
factors affecting equity securities markets generally or
particular industries represented in those markets. The values of
equity securities may decline due to general market conditions
which are not specifically related to a particular company, such
as real or perceived adverse economic conditions, changes in the
general outlook for corporate earnings, changes in interest or
currency rates or adverse investor sentiment generally. They may
also decline due to factors which affect a particular industry or
industries, such as labor shortages or increased production costs
and competitive conditions within an industry. Equity securities
generally have greater price volatility than fixed income
securities.
Issuer The value of a security may also decline for a number of reasons
Risk which directly relate to the issuer, such as management
performance, financial leverage and reduced demand for the
issuer's goods or services.
Value Each Fund may invest in companies that may not be expected to
Securities experience significant earnings growth, but whose securities its
Risk portfolio manager believes are selling at a price lower than their
true value. The Renaissance, Core Equity, Mid-Cap Equity, Mega-
Cap, Capital Appreciation, Mid-Cap Growth, Small-Cap Growth,
Micro-Cap Growth, Equity Income, Value, Value 25 and Small-Cap
Value Funds place particular emphasis on value securities.
Companies that issue value securities may have experienced adverse
business developments or may be subject to special risks that have
caused their securities to be out of favor. If a portfolio
manager's assessment of a company's prospects is wrong, or if the
market does not recognize the value of the company, the price of
its securities may decline or may not approach the value that the
portfolio manager anticipates.
Growth Each Fund may invest in equity securities of companies that its
Securities portfolio manager believes will experience relatively rapid
Risk earnings growth. The Growth, Core Equity, Target, Mid-Cap Equity,
Opportunity, Innovation, International Growth, Mega-Cap, Capital
Appreciation, Mid-Cap Growth, Small-Cap Growth and Micro-Cap
Growth Funds place particular emphasis on growth securities.
Growth securities typically trade at higher multiples of current
earnings than other securities. Therefore, the values of growth
securities may be more sensitive to changes in current or expected
earnings than the values of other securities.
Smaller The general risks associated with equity securities and liquidity
Company risk are particularly pronounced for securities of companies with
Risk smaller market capitalizations. These companies may have limited
product lines, markets or financial resources or they may depend
on a few key employees. Securities of smaller companies may trade
less frequently and in lesser volume than more widely held
securities and their values may fluctuate more sharply than other
securities. They may also trade in the over-the-counter market or
on a regional exchange, or may
49 PIMCO Funds: Multi-Manager Series
<PAGE>
otherwise have limited liquidity. The Micro-Cap Growth Fund, in
particular, and the Opportunity, Small-Cap Growth and Small-Cap
Value Funds generally have substantial exposure to this risk. The
Target, Mid-Cap Equity, Mid-Cap Growth and Value 25 Funds also
have significant exposure to this risk because they invest
substantial assets in companies with medium-sized market
capitalizations, which are smaller and generally less-seasoned
than the largest companies.
Liquidity All of the Funds are subject to liquidity risk. Liquidity risk
Risk exists when particular investments are difficult to purchase or
sell, possibly preventing a Fund from selling such illiquid
securities at an advantageous time or price. Funds with principal
investment strategies that involve securities of companies with
smaller market capitalizations, foreign securities, derivatives or
securities with substantial market and/or credit risk tend to have
the greatest exposure to liquidity risk.
Derivatives All Funds except the Mega-Cap, Capital Appreciation, Mid-Cap
Risk Growth, Small-Cap Growth, Micro-Cap Growth, Equity Income, Value,
Value 25 and Small-Cap Value Funds may use derivatives, which are
financial contracts whose value depends on, or is derived from,
the value of an underlying asset, reference rate or index. The
various derivative instruments that the Funds may use are
referenced under "Characteristics and Risks of Securities and
Investment Techniques--Derivatives" in this Prospectus and
described in more detail under "Investment Objectives and
Policies" in the Statement of Additional Information. The Funds
may sometimes use derivatives as part of a strategy designed to
reduce exposure to other risks, such as interest rate or currency
risk. The Funds may also use derivatives for leverage, which
increases opportunities for gain but also involves greater risk of
loss due to leveraging risk. A Fund's use of derivative
instruments involves risks different from, or possibly greater
than, the risks associated with investing directly in securities
and other traditional investments. Derivatives are subject to a
number of risks described elsewhere in this section, such as
liquidity risk, market risk, credit risk and management risk. They
also involve the risk of mispricing or improper valuation and the
risk that changes in the value of the derivative may not correlate
perfectly with the underlying asset, rate or index. In addition, a
Fund's use of derivatives may increase or accelerate the amount of
taxes payable by shareholders. A Fund investing in a derivative
instrument could lose more than the principal amount invested.
Also, suitable derivative transactions may not be available in all
circumstances and there can be no assurance that a Fund will
engage in these transactions to reduce exposure to other risks
when that would be beneficial.
Foreign A Fund that invests in foreign securities, and particularly the
(non- International Growth, Structured Emerging Markets, Tax-Efficient
U.S.) Structured Emerging Markets and International Funds, may
Investment experience more rapid and extreme changes in value than Funds that
Risk invest exclusively in securities of U.S. issuers or securities
that trade exclusively in U.S. markets. The securities markets of
many foreign countries are relatively small, with a limited number
of companies representing a small number of industries.
Additionally, issuers of foreign securities are usually not
subject to the same degree of regulation as U.S. issuers.
Reporting, accounting and auditing standards of foreign countries
differ, in some cases significantly, from U.S. standards. Also,
nationalization, expropriation or confiscatory taxation, currency
blockage, political changes or diplomatic developments could
adversely affect a Fund's investments in a foreign country. In the
event of nationalization, expropriation or other confiscation, a
Fund could lose its entire investment in foreign securities. To
the extent that a Fund, such as the International Growth,
Structured Emerging Markets, Tax-Efficient Structured Emerging
Markets or International Funds, invests a significant portion of
its assets in a concentrated geographic area like Eastern Europe,
South Africa or Asia, the Fund will generally have more exposure
to regional economic risks associated with foreign investments.
Adverse conditions in certain regions (such as Southeast Asia) can
also adversely affect securities of other countries whose
economies appear to be unrelated. In addition, special U.S. tax
considerations may apply to a Fund's investment in foreign
securities.
Prospectus 50
<PAGE>
Emerging Foreign investment risk may be particularly high to the extent
Markets that a Fund invests in emerging market securities of issuers
Risk based inn countries with developing economies. These securities
may present market, credit, currency, liquidity, legal, political
and other risks different from, or greater than, the risks of
investing in developed foreign countries. The Structured Emerging
Markets and Tax-Efficient Structured Emerging Markets Funds
normally invest most of their assets in emerging market
securities and are particularly sensitive to these risks. The
International Fund may also invest a significant portion of its
assets in emerging market securities.
Currency Funds that invest directly in foreign currencies or in securities
Risk that trade in, and receive revenues in, foreign currencies are
subject to the risk that those currencies will decline in value
relative to the U.S. Dollar, or, in the case of hedging
positions, that the U.S. Dollar will decline in value relative to
the currency being hedged. The International Growth, Structured
Emerging Markets, Tax-Efficient Structured Emerging Markets and
International Funds are particularly sensitive to currency risk.
Currency rates in foreign countries may fluctuate significantly
over short periods of time for a number of reasons, including
changes in interest rates, intervention (or the failure to
intervene) by U.S. or foreign governments, central banks or
supranational entities such as the International Monetary Fund,
or by the imposition of currency controls or other political
developments in the U.S. or abroad.
Concentration Concentration of investments in a small number of issuers,
Risk industries or foreign currencies increases risk. Funds such as
the Value 25 Fund that invest in a relatively small number of
issuers are more susceptible to risks associated with a single
economic, political or regulatory occurrence than a more
diversified Fund might be. Some of those issuers also may present
substantial credit or other risks. The International Growth,
Structured Emerging Markets, Tax-Efficient Structured Emerging
Markets and International Funds may be subject to this risk to
the extent that they concentrate their assets in securities
denominated in a particular foreign currency or in a concentrated
geographic area outside the U.S. Similarly, the Innovation Fund
is vulnerable to events affecting companies which use innovative
technologies to gain a strategic, competitive advantage in their
industry and companies that provide and service those
technologies because it concentrates its investments in those
companies.
Leveraging Certain Funds may engage in transactions or purchase instruments
Risk that give rise to forms of leverage. Such transactions and
instruments may include, among others, the use of reverse
repurchase agreements and other borrowings, the investment of
collateral from loans of portfolio securities, or the use of
when-issued, delayed-delivery or forward commitment transactions.
The use of derivatives may also involve leverage. Leverage,
including borrowing, will cause the value of a Fund's shares to
be more volatile than if the Fund did not use leverage. This is
because leverage tends to exaggerate the effect of any increase
or decrease in the value of a Fund's portfolio securities. The
use of leverage may also cause a Fund to liquidate portfolio
positions when it would not be advantageous to do so in order to
satisfy its obligations or to meet segregation requirements.
Interest To the extent that Funds purchase fixed income securities for
Rate Risk investment or defensive purposes, they will be subject to
interest rate risk, a market risk relating to investments in
fixed income securities such as bonds and notes. As interest
rates rise, the value of fixed income securities in a Fund's
portfolio are likely to decrease.
Credit All of the Funds are subject to credit risk. This is the risk
Risk that the issuer or the guarantor of a fixed income security, or
the counterparty to a derivatives contract, repurchase agreement
or a loan of portfolio securities, is unable or unwilling to make
timely principal and/or interest payments, or to otherwise honor
its obligations. Securities are subject to varying degrees of
credit risk, which are often reflected in their credit ratings.
Management Each Fund is subject to management risk because it is an actively
Risk managed investment portfolio. PIMCO Advisors, the Sub-Advisers
and each individual portfolio manager will apply investment
techniques and risk analyses in making investment decisions for
the Funds, but there can be no guarantee that these will produce
the desired results.
51 PIMCO Funds: Multi-Manager Series
<PAGE>
Management of the Funds
Investment PIMCO Advisors serves as the investment adviser and the
Adviser administrator (serving in its capacity as administrator, the
and "Administrator") for the Funds. Subject to the supervision of the
Administrator Board of Trustees, PIMCO Advisors is responsible for managing,
either directly or through others selected by it, the investment
activities of the Funds and the Funds' business affairs and other
administrative matters.
PIMCO Advisors is located at 800 Newport Center Drive, Newport
Beach, California 92660. Organized in 1987, PIMCO Advisors
provides investment management and advisory services to private
accounts of institutional and individual clients and to mutual
funds. As of September 30, 1999, PIMCO Advisors and its
subsidiary partnerships had more than $256 billion in assets
under management.
PIMCO Advisors has retained investment management firms ("Sub-
Advisers") to manage each Fund's investments, except that the
PIMCO Equity Advisors division of PIMCO Advisors manages the
investments of the Renaissance, Growth, Core Equity, Target, Mid-
Cap Equity, Opportunity, Innovation and International Growth
Funds (PIMCO Equity Advisors is also referred to as a "Sub-
Adviser" in this capacity). See "Sub-Advisers" below.
PIMCO Advisors has retained its affiliate, Pacific Investment
Management Company, to provide various administrative and other
services required by the Funds in its capacity as sub-
administrator. PIMCO Advisors and the sub-administrator may
retain other affiliates to provide certain of these services.
Advisory Each Fund pays PIMCO Advisors fees in return for providing or
Fees arranging for the provision of investment advisory services. In
the case of Funds for which PIMCO Advisors has retained a
separate Sub-Adviser, PIMCO Advisors (and not the Fund) pays a
portion of the advisory fees it receives to the Sub-Adviser in
return for its services.
For the fiscal year ended June 30, 1999, the Funds paid monthly
advisory fees to PIMCO Advisors at the following annual rates
(stated as a percentage of the average daily net assets of each
Fund taken separately):
<TABLE>
<CAPTION>
Fund Advisory Fees
-----------------------------------------------------------------
<S> <C>
Capital Appreciation, Mid-Cap Growth, Equity Income,
Value and Enhanced Equity Funds 0.45%
Growth Fund 0.50%
Target and International Funds 0.55%
Core Equity Fund 0.57%
Renaissance and Small-Cap Value Funds 0.60%
Mid-Cap Equity Fund 0.63%
Opportunity and Innovation Funds 0.65%
International Growth Fund 0.85%
Small-Cap Growth Fund 1.00%
Micro-Cap Growth Fund 1.25%
</TABLE>
The Mega-Cap, Value 25, Tax-Efficient Equity, Structured
Emerging Markets and Tax-Efficient Structured Emerging Markets
Funds were not operational during the entire fiscal year ended
June 30, 1999. The annual investment advisory fee rates payable
by these Funds are as follows (stated as a percentage of the
average daily net assets of each Fund taken separately): Value
25--0.50%; Mega-Cap, Tax-Efficient Equity, Structured Emerging
Markets and Tax-Efficient Structured Emerging Markets--0.45%.
Administrative Each Fund pays for the administrative services it requires
Fees under a fee structure which is essentially fixed. Institutional
and Administrative Class shareholders of each Fund pay an
administrative fee to PIMCO Advisors, computed as a percentage of
the Fund's assets attributable in the aggregate to those classes
of shares. PIMCO Advisors, in turn, provides or procures
administrative services for Institutional and Administrative
Class shareholders and also bears the costs of various third-
party services required by the Funds, including
Prospectus 52
<PAGE>
audit, custodial, portfolio accounting, legal, transfer agency and
printing costs. The result of this fee structure is an expense
level for Institutional and Administrative Class shareholders of
each Fund that, with limited exceptions, is precise and
predictable under ordinary circumstances.
For the fiscal year ended June 30, 1999, Institutional and
Administrative Class shareholders of the Funds paid PIMCO Advisors
monthly administrative fees at the following annual rates (stated
as a percentage of the average daily net assets attributable in
the aggregate to the Fund's Institutional and Administrative Class
shares):
<TABLE>
<CAPTION>
Fund Administrative Fees
--------------------------------------------------------------
<S> <C>
International Growth and International Funds 0.50%
All Other Funds* 0.25%
</TABLE>
* The Mega-Cap, Value 25, Tax-Efficient Equity, Structured
Emerging Markets and Tax-Efficient Structured Emerging Markets
Funds were not operational during the entire fiscal year ended
June 30, 1999. Institutional and Administrative Class
shareholders of these Funds pay administrative fees at the
following annual rates (each stated as a percentage of the
average daily net assets attributable in the aggregate to the
Fund's Institutional and Administrative Class shares): Mega-Cap,
Value 25 and Tax-Efficient Equity--0.25%; Structured Emerging
Markets and Tax-Efficient Structured Emerging Markets--0.50%.
Sub- Each Sub-Adviser has full investment discretion and makes all
Advisers determinations with respect to the investment of a Fund's assets.
The following provides summary information about each Sub-Adviser,
including the Fund(s) it manages and its investment specialty.
<TABLE>
<CAPTION>
Sub-Adviser* Funds Investment Specialty
----------------------------------------------------------------------------
<S> <C> <C>
PIMCO Equity Advisors Renaissance, Growth, Core Disciplined approach to
division of PIMCO Equity, Target, Mid-Cap identifying quality growth
Advisors ("PIMCO Equity Equity, Opportunity, and/or undervalued
Advisors") Innovation and companies
1345 Avenue of the International Growth
Americas, 50th Floor
New York, NY 10105
Cadence Capital Mega-Cap, Capital A blend of growth
Management ("Cadence") Appreciation, Mid-Cap companies whose stock is
Exchange Place, 53 State Growth, Small-Cap Growth reasonably valued by the
Street and Micro-Cap Growth market
Boston, MA 02109
NFJ Investment Group Equity Income, Value, Value stocks that the Sub-
("NFJ") Value 25 and Small-Cap Adviser believes are
2121 San Jacinto, Suite Value undervalued and/or offer
1840 above-average dividend
Dallas, TX 75201 yields
Parametric Portfolio Enhanced Equity, Tax- Stocks, using
Associates Efficient Equity, quantitatively-driven
("Parametric") Structured Emerging fundamental analysis and
7310 Columbia Center, Markets and Tax-Efficient economic methods, with a
701 Fifth Avenue Structured Emerging specialty in tax-efficient
Seattle, WA 98104 Markets products
Blairlogie Capital International International stocks using
Management Scottish standards of
("Blairlogie") prudent investment
4th Floor, 125 Princes management with modern
Street quantitative analytical
Edinburgh EH2 4AD, tools
Scotland
</TABLE>
-------
* PIMCO Equity Advisors is a division of PIMCO Advisors. With the
exception of Blairlogie, each of the other Sub-Advisers is an
affiliated sub-partnership of PIMCO Advisors.
53 PIMCO Funds: Multi-Manager Series
<PAGE>
The following provides additional information about each Sub-
Adviser and the individual Portfolio Manager(s) who have or share
primary responsibility for managing the Funds' investments.
PIMCO A division of PIMCO Advisors, PIMCO Equity Advisors provides
Equity equity-related advisory services to mutual funds and institutional
Advisors accounts. See "Investment Adviser and Administrator" above for
additional information about PIMCO Advisors.
The following individuals at PIMCO Equity Advisors have or share
primary responsibility for the noted Funds. A different sub-
advisory firm served as Sub-Adviser for each of the Growth,
Target, Opportunity and Innovation Funds prior to March 6, 1999,
for the Renaissance Fund prior to May 7, 1999, and for the Core-
Equity, Mid-Cap Equity and International Growth Funds prior to
July 1, 1999.
<TABLE>
<CAPTION>
Portfolio
Fund Manager(s) Since Recent Professional Experience
------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Renaissance John K. Schneider 5/99 Senior Portfolio Manager of PIMCO
Equity Advisors. Prior to joining
PIMCO Advisors, he was a partner and
Portfolio Manager of Schneider
Capital Management from 1996 to
1999, where he managed equity
accounts for various institutional
clients. Prior to that he was a
member of the Equity Policy
Committee and Director of Research
at Newbold's Asset Management from
1991 to 1996.
Growth Kenneth W. Corba 3/99 Managing Director and Chief
Investment Officer of PIMCO Equity
Advisors and a Member of the
Management Board of PIMCO Advisors.
Prior to joining PIMCO Advisors, he
was with Eagle Asset Management from
1995 to 1998, serving in various
capacities including as Chief
Investment Officer and Portfolio
Manager. He was with Stein Roe and
Farnham Inc. from 1984 to 1995,
serving in various capacities
including as Director of the Capital
Management Group, Senior Vice
President and Portfolio Manager.
Core Equity Messrs. Corba and 7/99 See above.
Schneider
Target Mr. Corba 3/99 See above.
Jeff Parker 3/99 Assistant Portfolio Manager and
Research Analyst for PIMCO Equity
Advisors. Prior to joining PIMCO
Equity Advisors, he managed equity
accounts as an Assistant Portfolio
Manager at Eagle Asset Management
from 1996 to 1998. He was a Senior
Consultant with Andersen Consulting,
specializing in health care and
technology, from 1991 to 1994.
Mid-Cap Equity Messrs. Corba, 7/99 See above.
Schneider and
Parker
Opportunity Michael F. Gaffney 3/99 Managing Director of PIMCO Equity
Advisors, where he manages the
Opportunity Fund and other small-cap
products. Prior to joining PIMCO
Advisors, he was with Alliance
Capital Management L.P. from 1993 to
1999, serving in various capacities
including as Senior Vice President
and Portfolio Manager.
Innovation Dennis P. McKechnie 10/98 Portfolio Manager of PIMCO Equity
Advisors. Prior to joining PIMCO
Advisors, he was with Columbus
Circle Investors from 1991 to 1999,
where he managed equity accounts and
served in various capacities
including as Portfolio Manager for
the Innovation Fund.
International Growth David Stein 7/99 Senior Portfolio Manager of PIMCO
Equity Advisors. He also serves as
Managing Director of Parametric. He
has been with Parametric since 1996
where he leads the investment,
research and product development
activities. Previously, he served in
Investment Research at GTE
Corporation from 1995 to 1996, in
Equity Research at Vanguard Group
from 1994 to 1995 and in Investment
Research at IBM Corporation from
1977 to 1994.
Cliff Quisenberry 7/99 Portfolio Manager of PIMCO Equity
Advisors. He also serves as Vice
President and Global Portfolio
Manager of Parametric. He joined
Parametric in 1998 where he heads
international investments in both
developed and emerging markets.
Previously, he served as Vice
President and Portfolio Manager at
Cutler & Co. from 1990 to 1994 and
as a Securities Analyst and
Portfolio Manager at Fred Alger
Management from 1987 to 1998.
</TABLE>
Prospectus 54
<PAGE>
Cadence An affiliated sub-partnership of PIMCO Advisors, Cadence provides
advisory services to mutual funds and institutional accounts.
Cadence Capital Management Corporation, the predecessor investment
adviser to Cadence, commenced operations in 1988. Accounts managed
by Cadence had combined assets as of September 30, 1999 of
approximately $6.5 billion.
The following individuals at Cadence share primary responsibility
for each of the noted Funds.
<TABLE>
<CAPTION>
Portfolio
Fund Manager(s) Since Recent Professional Experience
------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Mega-Cap David B. Breed 9/99* Managing Director, Chief Executive
Officer, Chief Investment Officer
and founding partner of Cadence.
Member of the Management Board of
PIMCO Advisors. He is a research
generalist and has lead the team of
portfolio managers and analysts
since 1988. Mr. Breed has managed
separate equity accounts for many
institutional clients and has led
the team that manages the PIMCO
Funds sub-advised by Cadence since
those Funds' inception dates.
William B. Bannick 9/99* Managing Director and Executive Vice
President at Cadence. Mr. Bannick is
a research generalist and Senior
Portfolio Manager for the Cadence
team. He has managed separately
managed equity accounts for various
Cadence institutional clients and
has been a member of the team that
manages the PIMCO Funds sub-advised
by Cadence since joining Cadence in
1992.
Katherine A. Burdon 9/99* Managing Director and Senior
Portfolio Manager at Cadence. Ms.
Burdon is a research generalist and
has managed separately managed
equity accounts for various Cadence
institutional clients and has been a
member of the team that manages the
PIMCO Funds sub-advised by Cadence
since joining Cadence in 1993.
Peter B. McManus 9/99* Director, Account Management at
Cadence. He has been a member of the
investment team at Cadence and
handles client relationships of
separately managed accounts, and has
been a member of the team that
manages the PIMCO Funds sub-advised
by Cadence since joining Cadence in
1994. Previously, he served as a
Vice President of Bank of Boston
from 1991 to 1994.
Capital Appreciation Mr. Breed 3/91* See above.
Mr. Bannick 10/92 See above.
Ms. Burdon 1/93 See above.
Mr. McManus 10/94 See above.
Mid-Cap Growth Mr. Breed 8/91* See above.
Messrs. Bannick and Same as See above.
McManus and Capital
Ms. Burdon Appreciation
Fund
Snall-Cap Growth Mr. Breed 1/91* See above.
Messrs. Bannick and Same as See above.
McManus and Capital
Ms. Burdon Appreciation
Fund
Micro-Cap Growth Messrs. Breed and 6/93* See above.
Bannick and Ms.
Burdon
Mr. McManus 10/94 See above.
</TABLE>
-------
* Since inception of the Fund
55 PIMCO Funds: Multi-Manager Series
<PAGE>
NFJ An affiliated sub-partnership of PIMCO Advisors, NFJ provides
advisory services to mutual funds and institutional accounts. NFJ
Investment Group, Inc., the predecessor investment adviser to NFJ,
commenced operations in 1989. Accounts managed by NFJ had combined
assets as of September 30, 1999 of approximately $2.2 billion.
The following individuals at NFJ share primary responsibility for
the noted Funds.
<TABLE>
<CAPTION>
Portfolio
Fund Manager(s) Since Recent Professional Experience
-------------------------------------------------------------------------------------
<S> <C> <C> <C>
Equity Income Chris Najork 3/91* Managing Director and founding
partner of NFJ. He has 30 years'
experience encompassing equity
research and portfolio management.
Prior to the formation of NFJ in
1989, he was a senior vice
president, senior portfolio manager
and analyst at NationsBank, which he
joined in 1974.
Benjamin J. Fischer 3/91* Managing Director and founding
partner of NFJ. He has 32 years'
experience in portfolio management,
investment analysis and research.
Prior to the formation of NFJ in
1989, he was chief investment
officer (institutional and fixed
income), senior vice president and
senior portfolio manager at
NationsBank, which he joined in
1971. Prior to joining NationsBank,
Mr. Fischer was a securities analyst
at Chase Manhattan Bank and Clark,
Dodge.
Value Messrs. Najork and 12/91* See above.
Fischer
Paul A. Magnuson 7/95 Principal at NFJ. He is a Portfolio
Manager and Senior Research Analyst
with 14 years' experience in equity
analysis and portfolio management.
Prior to joining NFJ in 1992, he was
an assistant vice president at
NationsBank, which he joined in
1985. Within the Trust Investment
Qualitative Services Division of
NationsBank, he was responsible for
equity analytics and structured fund
management.
Value 25 Messrs. Najork and 7/98* See above.
Fischer
E. Clifton Hoover, 7/98* Principal at NFJ. He is a Portfolio
Jr. Manager with 13 years' experience in
financial analysis and portfolio
management. Prior to joining NFJ in
1997, he was associated with Credit
Lyonnais from 1991 to 1997, where he
served as a vice president and was
responsible for the financial
analysis and portfolio management of
a diversified portfolio. He began
his career as a financial analyst
with NationsBank in 1985.
Small-Cap Value Messrs. Najork and 10/91* See above.
Fischer
Mr. Magnuson 7/95 See above.
</TABLE>
-------
*Since inception of the Fund
Parametric An affiliated sub-partnership of PIMCO Advisors, Parametric
provides advisory services to mutual funds and institutional
accounts. Parametric Portfolio Associates, Inc., the predecessor
investment adviser to Parametric, commenced operations in 1987.
Accounts managed by Parametric had combined assets as of September
30, 1999 of approximately $3.9 billion.
Prospectus 56
<PAGE>
The following individuals share primary responsibility for each of
the noted Funds.
<TABLE>
<CAPTION>
Portfolio
Fund Manager(s) Since Recent Professional Experience
----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Enhanced Equity David Stein 7/96* Managing Director of Parametric. He
also serves as a Senior Portfolio
Manager of PIMCO Equity Advisors. He
has been with Parametric since 1996
where he leads the investment,
research and product development
activities. Previously, he served in
Investment Research at GTE
Corporation from 1995 to 1996, in
Equity Research at Vanguard Group
from 1994 to 1995 and in Investment
Research at IBM Corporation from
1977 to 1994.
Tom Seto 10/98* Vice President and Portfolio Manager
of Parametric. Since joining
Parametric in 1998, he has been
responsible for management of
Parametric's active U.S. equity
strategies and has managed
structured equity portfolios.
Previously, he was with Barclays
Global Investors from 1991 to 1998,
serving in various capacities
including as head of U.S. Equity
Index Investments and Portfolio
Manager.
Tax-Efficient Equity Messrs. Stein and 9/98* See above.
Seto
Structured Emerging Messrs. Stein and 6/98* See above.
Markets Seto
Cliff Quisenberry 6/98* Vice President and Global Portfolio
Manager of Parametric. He also
serves as Portfolio Manager of PIMCO
Equity Advisors. He joined
Parametric in 1998 where he heads
international investments in both
developed and emerging markets.
Previously, he served as Vice
President and Portfolio Manager at
Cutler & Co. from 1990 to 1994 and
as a Securities Analyst and
Portfolio Manager at Fred Alger
Management from 1987 to 1998.
Tax-Efficient Structured Messrs. Stein, Seto 6/98* See above.
Emerging Markets and Quisenberry
</TABLE>
-------
*Since inception of the Fund
Blairlogie Blairlogie provides advisory services to mutual funds and
institutional accounts. Blairlogie Capital Management Ltd., the
predecessor investment adviser the Blairlogie, commenced
operations in 1992. Accounts managed by Blairlogie had combined
assets as of September 30, 1999 of approximately $903 million.
Blairlogie is an indirect majority-owned subsidiary of the
Alleghany Corporation, and is not an affiliate of PIMCO Advisors.
Blairlogie was formerly an affiliated sub-partnership of PIMCO
Advisors. On April 30, 1999, PIMCO Advisors sold all of its
ownership interest in Blairlogie to subsidiaries of the Alleghany
Corporation. PIMCO Advisors retained Blairlogie as the Sub-Adviser
of the International Fund both prior and subsequent to this
transaction.
The following individual at Blairlogie has primary responsibility
for the International Fund.
<TABLE>
<CAPTION>
Fund Portfolio Manager Since Recent Professional Experience
--------------------------------------------------------------------------
<S> <C> <C> <C>
International James Smith 11/94 Chief Investment Officer of Blairlogie
since 1992, responsible for setting
investment policy, asset allocation,
managing the investment team and stock
selection in Latin America.
</TABLE>
Distributor The Trust's Distributor is PIMCO Funds Distributors LLC, a wholly
owned subsidiary of PIMCO Advisors. The Distributor, located at
2187 Atlantic Street, Stamford, Connecticut 06902, is a broker-
dealer registered with the Securities and Exchange Commission.
57 PIMCO Funds: Multi-Manager Series
<PAGE>
Investment Options --
Institutional Class and Administrative Class Shares
The Trust offers investors Institutional Class and Administrative
Class shares of the Funds in this Prospectus.
The Trust does not charge any sales charges (loads) or other fees
in connection with purchases, sales (redemptions) or exchanges of
Institutional Class or Administrative Class shares, except that a
1.00% Fund Reimbursement Fee may apply to transactions involving
shares of the Structured Emerging Markets and Tax-Efficient
Structured Emerging Markets Funds. See "Purchases, Redemptions and
Exchanges--Fund Reimbursement Fees" below.
Administrative Class shares are generally subject to a higher
level of operating expenses than Institutional Class shares due to
the additional service and/or distribution fees paid by
Administrative Class shares as described below. Therefore,
Institutional Class shares will generally pay higher dividends and
have a more favorable investment return than Administrative Class
shares.
. Service and Distribution (12b-1) Fees--Administrative Class
Shares. The Trust has adopted an Administrative Services Plan for
the Administrative Class shares of each Fund. It has also adopted
a Distribution Plan for the Administrative Class shares of each
Fund except for the Capital Appreciation and Small-Cap Growth
Funds. Each Plan has been adopted in accordance with the
requirements of Rule 12b-1 under the Investment Company Act of
1940 and is administered in accordance with that rule. However,
shareholders do not have the voting rights set forth in Rule 12b-1
with respect to the Administrative Services Plan.
Each Plan allows the Funds to use its Administrative Class assets
to reimburse financial intermediaries that provide services
relating to Administrative Class shares. The Distribution Plan
permits reimbursement for expenses in connection with the
distribution and marketing of Administrative Class shares and/or
the provision of shareholder services to Administrative Class
shareholders. The Administrative Services Plan permits
reimbursement for services in connection with the administration
of plans or programs that use Administrative Class shares of the
Funds as their funding medium and for related expenses.
In combination, the Plans permit a Fund to make total
reimbursements at an annual rate of up to 0.25% of the Fund's
average daily net assets attributable to its Administrative Class
shares. The same entity may not receive both distribution and
administrative services fees with respect to the same
Administrative Class assets, but may receive fees under each Plan
with respect to separate assets. Because these fees are paid out
of a Fund's Administrative Class assets on an ongoing basis, over
time they will increase the cost of an investment in
Administrative Class shares and may cost an investor more than
other types of sales charges.
. Arrangements with Service Agents. Institutional Class and
Administrative Class shares of the Funds may be offered through
certain brokers and financial intermediaries ("service agents")
that have established a shareholder servicing relationship with
the Trust on behalf of their customers. The Trust pays no
compensation to such entities other than service and/or
distribution fees paid with respect to Administrative Class
shares. Service agents may impose additional or different
conditions than the Trust on purchases, redemptions or exchanges
of Fund shares by their customers. Service agents may also
independently establish and charge their customers transaction
fees, account fees and other amounts in connection with purchases,
sales and redemptions of Fund shares in addition to any fees
charged by the Trust. These additional fees may vary over time and
would increase the cost of the customer's investment and lower
investment returns. Each service agent is responsible for
transmitting to its customers a schedule of any such fees and
information regarding any additional or different conditions
regarding purchases, redemptions and exchanges. Shareholders who
are customers of service agents should consult their service
agents for information regarding these fees and conditions.
Prospectus 58
<PAGE>
Purchases, Redemptions and Exchanges
Purchasing Investors may purchase Institutional Class and Administrative
Shares Class shares of the Funds at the relevant net asset value ("NAV")
of that class without a sales charge or other fee, except that a
1.00% Fund Reimbursement Fee may apply to transactions involving
shares of the Structured Emerging Markets and Tax-Efficient
Structured Emerging Markets Funds. See "Fund Reimbursement Fees"
below.
Institutional Class shares are offered primarily for direct
investment by investors such as pension and profit sharing plans,
employee benefit trusts, endowments, foundations, corporations and
high net worth individuals. Institutional Class shares may also be
offered through certain financial intermediaries that charge their
customers transaction or other fees with respect to their
customers' investments in the Funds.
Administrative Class shares are offered primarily through
employee benefit plan alliances, broker-dealers and other
intermediaries, and each Fund pays service and/or distribution
fees to these entities for services they provide to Administrative
Class shareholders.
Pension and profit-sharing plans, employee benefit trusts and
employee benefit plan alliances and "wrap account" programs
established with broker-dealers or financial intermediaries may
purchase shares of either class only if the plan or program for
which the shares are being acquired will maintain an omnibus or
pooled account for each Fund and will not require a Fund to pay
any type of administrative payment per participant account to any
third party.
. Investment Minimums. The minimum initial investment for shares
of either class is $5 million, except that the minimum initial
investment for a registered investment adviser purchasing
Institutional Class shares for its clients through omnibus
accounts is $250,000 per Fund. The minimum initial investment may
be waived for Institutional or Administrative Class shares offered
to clients of PIMCO Equity Advisors, Cadence, NFJ, Pacific
Investment Management, Parametric, and their affiliates, and to
the benefit plans of PIMCO Advisors and its affiliates. In
addition, the minimum initial investment does not apply to
Institutional Class shares offered through fee-based programs
sponsored and maintained by a registered broker-dealer and
approved by the Distributor in which each investor pays an asset
based fee at an annual rate of at least 0.50% of the assets in the
account to a financial intermediary for investment advisory and/or
administrative services.
The Trust and the Distributor may waive the minimum initial
investment for other categories of investors at their discretion.
The investment minimums discussed in this section and the
limitations set forth in "Investment Limitations" below do not
apply to participants in PIMCO Advisors Portfolio Strategies, a
managed product sponsored by PIMCO Advisors.
. Timing of Purchase Orders and Share Price Calculations. A
purchase order received by the Trust's transfer agent, National
Financial Data Services (the "Transfer Agent") prior to the close
of regular trading (normally 4:00 p.m., Eastern time) on the New
York Stock Exchange, on a day the Trust is open for business,
together with payment made in one of the ways described below,
will be effected at that day's net asset value ("NAV"). An order
received after the close of regular trading on the New York Stock
Exchange will be effected at the NAV determined on the next
business day. However, orders received by certain retirement plans
and other financial intermediaries on a business day prior to the
close of regular trading on the New York Stock Exchange and
communicated to the Transfer Agent prior to 9:00 a.m., Eastern
time, on the following business day will be effected at the NAV
determined on the prior business day. The Trust is "open for
business" on each day the New York Stock Exchange is open for
trading, which excludes the following holidays: New Year's Day,
Martin Luther King, Jr. Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day. Purchase orders will be accepted only on days on
which the Trust is open for business.
59 PIMCO Funds: Multi-Manager Series
<PAGE>
. Initial Investment. Investors may open an account by
completing and signing a Client Registration Application and
mailing it to PIMCO Funds at 840 Newport Center Drive, Suite 300,
Newport Beach, California 92660. A Client Registration Application
may be obtained by calling 1-800-927-4648.
Except as described below, an investor may purchase Institutional
Class and Administrative Class shares only by wiring federal funds
to the Transfer Agent, National Financial Data Services, 330 West
9th Street, 4th Floor, Kansas City, Missouri 64105. Before wiring
federal funds, the investor must telephone the Trust at 1-800-927-
4648 to receive instructions for wire transfer and must provide
the following information: name of authorized person, shareholder
name, shareholder account number, name of Fund and share class,
amount being wired, and wiring bank name.
An investor may purchase shares without first wiring federal
funds if the proceeds of the investment are derived from an
advisory account the investor maintains with PIMCO Advisors or one
of its affiliates, from surrender or other payment from an
annuity, insurance, or other contract held by Pacific Life
Insurance Company, or from an investment by broker-dealers,
institutional clients or other financial intermediaries which have
established a shareholder servicing relationship with the Trust on
behalf of their customers.
. Additional Investments. An investor may purchase additional
Institutional Class and Administrative Class shares of the Funds
at any time by calling the Trust and wiring federal funds to the
Transfer Agent as outlined above.
. Other Purchase Information. Purchases of a Fund's
Institutional Class and Administrative Class shares will be made
in full and fractional shares. In the interest of economy and
convenience, certificates for shares will not be issued.
The Trust and the Distributor each reserves the right, in its
sole discretion, to suspend the offering of shares of the Funds or
to reject any purchase order, in whole or in part, when, in the
judgment of management, such suspension or rejection is in the
best interests of the Trust.
An investor should invest in the Funds for long-term investment
purposes only. The Trust and PIMCO Advisors each reserves the
right to restrict purchases of Fund shares (including exchanges)
when a pattern of frequent purchases and sales made in response to
short-term fluctuations in share price appears evident. Notice of
any such restrictions, if any, will vary according to the
particular circumstances.
Institutional Class and Administrative Class shares of the Trust
are not qualified or registered for sale in all states. Investors
should inquire as to whether shares of a particular Fund are
available for offer and sale in the investor's state of residence.
Shares of the Trust may not be offered or sold in any state unless
registered or qualified in that jurisdiction or unless an
exemption from registration or qualification is available.
Subject to the approval of the Trust, an investor may purchase
shares of a Fund with liquid securities that are eligible for
purchase by the Fund (consistent with the Fund's investment
policies and restrictions) and that have a value that is readily
ascertainable in accordance with the Trust's valuation policies.
These transactions will be effected only if PIMCO Advisors or a
Sub-Adviser intends to retain the security in the Fund as an
investment. Assets purchased by a Fund in such a transaction will
be valued in generally the same manner as they would be valued for
purposes of pricing the Fund's shares, if such assets were
included in the Fund's assets at the time of purchase. The Trust
reserves the right to amend or terminate this practice at any
time.
. Investment Limitations. Shares of the Micro-Cap Growth Fund
are normally not available for purchase by new investors, although
purchase orders may be accepted in certain circumstances. Existing
shareholders may continue to invest in this Fund. This restriction
may be changed or eliminated at any time at the discretion of the
Trust's Board of Trustees.
Prospectus 60
<PAGE>
. Retirement Plans. Shares of the Funds are available for
purchase by retirement and savings plans, including Keogh plans,
401(k) plans, 403(b) custodial accounts, and Individual Retirement
Accounts. The administrator of a plan or employee benefits office
can provide participants or employees with detailed information on
how to participate in the plan and how to elect a Fund as an
investment option. Participants in a retirement or savings plan
may be permitted to elect different investment options, alter the
amounts contributed to the plan, or change how contributions are
allocated among investment options in accordance with the plan's
specific provisions. The plan administrator or employee benefits
office should be consulted for details. For questions about
participant accounts, participants should contact their employee
benefits office, the plan administrator, or the organization that
provides recordkeeping services for the plan. Investors who
purchase shares through retirement plans should be aware that plan
administrators may aggregate purchase and redemption orders for
participants in the plan. Therefore, there may be a delay between
the time the investor places an order with the plan administrator
and the time the order is forwarded to the Transfer Agent for
execution.
. Fund Reimbursement Fees. Investors in Institutional Class and
Administrative Class shares of the Structured Emerging Markets and
Tax-Efficient Structured Emerging Markets Funds are subject to a
"Fund Reimbursement Fee," both at the time of purchase and at the
time of redemption, equal to 1.00% of the net asset value of the
shares purchased or redeemed. Fund Reimbursement Fees are not paid
separately, but are deducted automatically from the amount
invested or the amount to be received in connection with a
redemption. Fund Reimbursement Fees are paid to and retained by
the Funds to defray certain costs described below and are not paid
to or retained by PIMCO Advisors, the Fund's Sub-Adviser, or the
Distributor. Fund Reimbursement Fees are not sales loads or
contingent deferred sales charges. Reinvestment of dividends and
capital gains distributions paid to shareholders by the Funds are
not subject to Fund Reimbursement Fees, but redemptions and
exchanges of shares acquired by these reinvestments are subject to
Fund Reimbursement Fees unless a waiver applies.
The purpose of the Fund Reimbursement Fees is to defray the costs
associated with investing the proceeds of the sale of the Fund's
shares (in the case of purchases) or the costs associated with the
sale of portfolio securities to satisfy redemption requests (in
the case of redemptions), thereby insulating existing shareholders
from such costs. The amount of a Fund Reimbursement Fee represents
the Sub-Adviser's estimate of the costs reasonably anticipated to
be incurred by the Funds in connection with the purchase or sale
of portfolio securities, including international stocks,
associated with an investor's purchase or redemption. These costs
include brokerage costs, market impact costs (i.e., the increase
in market prices which may result when a Fund purchases or sells
thinly traded stocks) and the effect of "bid/asked" spreads in
international markets. Transaction costs incurred when purchasing
or selling stocks of companies in foreign countries, and
particularly emerging market countries, may be significantly
higher than those in more developed countries. This is due, in
part, to less competition among brokers, underutilization of
technology on the part of foreign exchanges and brokers, the lack
of less expensive investment options (such as derivative
instruments) and lower levels of liquidity in foreign and
underdeveloped markets.
Waiver of Fund Reimbursement Fees. Former participants in the
Parametric Portfolio Associates Emerging Markets Trust will not be
subject to Fund Reimbursement Fees with respect to any shares of
the Structured Emerging Markets and Tax-Efficient Structured
Emerging Markets Funds they acquired through June 30, 1998, and
will not be subject to Fund Reimbursement Fees upon the subsequent
redemption (including any redemption in connection with an
exchange) of any shares acquired by any such participant through
June 30, 1998. Such participants will be subject to such Fund
Reimbursement Fees to the same extent as any other shareholder on
any shares of either Fund acquired (whether by reinvestment of
dividends or capital gain distributions or otherwise) after June
30, 1998.
61 PIMCO Funds: Multi-Manager Series
<PAGE>
Redeeming . Redemptions by Mail. An investor may redeem (sell)
Shares Institutional Class and Administrative Class shares by submitting
a written request to PIMCO Funds at 840 Newport Center Drive,
Suite 300, Newport Beach, California 92660. The redemption request
should state the Fund from which the shares are to be redeemed,
the class of shares, the number or dollar amount of the shares to
be redeemed and the account number. The request must be signed
exactly as the names of the registered owners appear on the
Trust's account records, and the request must be signed by the
minimum number of persons designated on the Client Registration
Application that are required to effect a redemption.
. Redemptions by Telephone or Other Wire Communication. An
investor that elects this option on the Client Registration
Application (or subsequently in writing) may request redemptions
of shares by calling the Trust at 1-800-927-4648, by sending a
facsimile to 1-949-725-6830, or by other means of wire
communication. Investors should state the Fund and class from
which the shares are to be redeemed, the number or dollar amount
of the shares to be redeemed and the account number. Redemption
requests of an amount of $10 million or more may be initiated by
telephone, but must be confirmed in writing by an authorized party
prior to processing.
In electing a telephone redemption, the investor authorizes
Pacific Investment Management Company and the Transfer Agent to
act on telephone instructions from any person representing himself
to be the investor, and reasonably believed by Pacific Investment
Management Company or the Transfer Agent to be genuine. Neither
the Trust nor the Transfer Agent may be liable for any loss, cost
or expense for acting on instructions (whether in writing or by
telephone) believed by the party receiving such instructions to be
genuine and in accordance with the procedures described in this
Prospectus. Shareholders should realize that by electing the
telephone or wire redemption option, they may be giving up a
measure of security that they might have if they were to redeem
their shares in writing. Furthermore, interruptions in telephone
service may mean that a shareholder will be unable to effect a
redemption by telephone when desired. The Transfer Agent also
provides written confirmation of transactions initiated by
telephone as a procedure designed to confirm that telephone
instructions are genuine (written confirmation is also provided
for redemption requests received in writing). All telephone
transactions are recorded, and Pacific Investment Management
Company or the Transfer Agent may request certain information in
order to verify that the person giving instructions is authorized
to do so. The Trust or Transfer Agent may be liable for any losses
due to unauthorized or fraudulent telephone transactions if it
fails to employ reasonable procedures to confirm that instructions
communicated by telephone are genuine. All redemptions, whether
initiated by letter or telephone, will be processed in a timely
manner, and proceeds will be forwarded by wire in accordance with
the redemption policies of the Trust detailed below. See "Other
Redemption Information."
Shareholders may decline telephone exchange or redemption
privileges after an account is opened by instructing the Transfer
Agent in writing at least seven business days prior to the date
the instruction is to be effective. Shareholders may experience
delays in exercising telephone redemption privileges during
periods of abnormal market activity. During periods of volatile
economic or market conditions, shareholders may wish to consider
transmitting redemption orders by telegram, facsimile or overnight
courier.
Defined contribution plan participants may request redemptions by
contacting the employee benefits office, the plan administrator or
the organization that provides recordkeeping services for the
plan.
. Other Redemption Information. Redemption requests for Fund
shares are effected at the NAV per share next determined after
receipt of a redemption request by the Trust or its designee. The
request must properly identify all relevant information, such as
account number, redemption amount (in dollars or shares) and the
Fund name, and must be executed or initialed by the appropriate
signatories. A redemption request received by the Trust or its
designee prior to the close of regular trading on the New York
Stock Exchange (normally 4:00 p.m., Eastern time), on a day the
Trust is open for business, is effective on that day. A redemption
request received after that time becomes effective on the next
business day.
Prospectus 62
<PAGE>
Unless eligible for a waiver, shareholders of the Structured
Emerging Markets and Tax-Efficient Structured Emerging Markets
Funds who redeem their shares will pay a Fund Reimbursement Fee
equal to 1.00% of the NAV of the shares redeemed. See "Fund
Reimbursement Fees" above.
Redemption proceeds will ordinarily be wired to the investor's
bank within three business days after the redemption request, but
may take up to seven business days. Redemption proceeds will be
sent by wire only to the bank name designated on the Client
Registration Application. The Trust may suspend the right of
redemption or postpone the payment date at times when the New York
Stock Exchange is closed, or during certain other periods as
permitted under the federal securities laws.
For shareholder protection, a request to change information
contained in an account registration (for example, a request to
change the bank designated to receive wire redemption proceeds)
must be received in writing, signed by the minimum number of
persons designated on the Client Registration Application that are
required to effect a redemption, and accompanied by a signature
guarantee from any eligible guarantor institution, as determined
in accordance with the Trust's procedures. Shareholders should
inquire as to whether a particular institution is an eligible
guarantor institution. A signature guarantee cannot be provided by
a notary public. In addition, corporations, trusts, and other
institutional organizations are required to furnish evidence of
the authority of the persons designated on the Client Registration
Application to effect transactions for the organization.
Due to the relatively high cost of maintaining small accounts,
the Trust reserves the right to redeem Institutional Class and
Administrative Class shares in any account for their then-current
value (which will be promptly paid to the investor) if at any
time, due to redemption by the investor, the shares in the account
do not have a value of at least $100,000. A shareholder will
receive advance notice of a mandatory redemption and will be given
at least 30 days to bring the value of its account up to at least
$100,000. This mandatory redemption policy does not apply to
participants in PIMCO Advisors Portfolio Strategies, a managed
product sponsored by PIMCO Advisors.
The Trust agrees to redeem shares of each Fund solely in cash up
to the lesser of $250,000 or 1% of the Fund's net assets during
any 90-day period for any one shareholder. In consideration of the
best interests of the remaining shareholders, the Trust reserves
the right to pay any redemption proceeds exceeding this amount in
whole or in part by a distribution in kind of securities held by a
Fund in lieu of cash. Except for Funds with a tax-efficient
management strategy, it is highly unlikely that shares would ever
be redeemed in kind. When shares are redeemed in kind, the
redeeming shareholder should expect to incur transaction costs
upon the disposition of the securities received in the
distribution.
Exchange An investor may exchange Institutional Class or Administrative
Privilege Class shares of a Fund for shares of the same class of any other
Fund or other series of the Trust that offers that class based on
the respective NAVs of the shares involved. An exchange may be
made by following the redemption procedure described above under
"Redemptions by Mail" or, if the investor has elected the
telephone redemption option, by calling the Trust at 1-800-927-
4648. An investor may also exchange shares of a Fund for shares of
the same class of a series of PIMCO Funds: Pacific Investment
Management Series, an affiliated mutual fund family composed
primarily of fixed income portfolios managed by Pacific Investment
Management Company. Shareholders interested in such an exchange
may request a prospectus for these other series by contacting
PIMCO Funds: Pacific Investment Management Series at the same
address and telephone number as the Trust.
Unless eligible for a waiver, shareholders who exchange their
Institutional Class or Administrative Class shares of a Fund for
the same class of shares of the Structured Emerging Markets or
Tax-Efficient Structured Emerging Markets Fund will be subject to
a Fund Reimbursement Fee of 1.00% of the NAV of the shares of
these Funds acquired in connection with the exchange. Also,
shareholders who exchange shares of the
63 PIMCO Funds: Multi-Manager Series
<PAGE>
Structured Emerging Markets Fund or Tax-Efficient Structured
Emerging Markets Fund for shares of any other Fund will be subject
to a Fund Reimbursement Fee of 1.00% of the NAV of the shares of
these Funds redeemed in connection with the exchange. See "Fund
Reimbursement Fees" above.
An investor may exchange shares only with respect to Funds or
other eligible series that are registered in the investor's state
of residence or where an exemption from registration is available.
In addition, an exchange is generally a taxable event which will
generate capital gains or losses, and special rules may apply in
computing tax basis when determining gain or loss. See "Tax
Consequences" in this Prospectus and "Taxation" in the Statement
of Additional Information.
The Trust reserves the right to refuse exchange purchases if, in
the judgment of PIMCO Advisors, the purchase would adversely
affect a Fund and its shareholders. In particular, a pattern of
exchanges characteristic of "market-timing" strategies may be
deemed by PIMCO Advisors to be detrimental to the Trust or a
particular Fund. Currently, the Trust limits the number of "round
trip" exchanges investors may make. An investor makes a "round
trip" exchange when the investor purchases shares of a particular
Fund, subsequently exchanges those shares for shares of a
different PIMCO Fund, and then exchanges back into the originally
purchased Fund. The Trust has the right to refuse any exchange for
any investor who completes (by making the exchange back into the
shares of the originally purchased Fund) more than six round trip
exchanges in any twelve-month period. The Trust reserves the right
to impose additional restrictions on exchanges at any time,
although it will attempt to give shareholders 30 days' prior
notice whenever it is reasonably able to do so.
How Fund Shares Are Priced
The net asset value ("NAV") of a Fund's Institutional and
Administrative Class shares is determined by dividing the total
value of a Fund's portfolio investments and other assets
attributable to that class, less any liabilities, by the total
number of shares outstanding of that class.
For purposes of calculating the NAV, portfolio securities and
other assets for which market quotes are available are stated at
market value. Market value is generally determined on the basis of
last reported sales prices, or if no sales are reported, based on
quotes obtained from a quotation reporting system, established
market makers, or pricing services. Certain securities or
investments for which daily market quotes are not readily
available may be valued, pursuant to guidelines established by the
Board of Trustees, with reference to other securities or indices.
Short-term investments having a maturity of 60 days or less are
generally valued at amortized cost. Exchange traded options,
futures and options on futures are valued at the settlement price
determined by the exchange. Other securities for which market
quotes are not readily available are valued at fair value as
determined in good faith by the Board of Trustees or persons
acting at their direction.
Investments initially valued in currencies other than the U.S.
dollar are converted to U.S. dollars using exchange rates obtained
from pricing services. As a result, the NAV of a Fund's shares may
be affected by changes in the value of currencies in relation to
the U.S. dollar. The value of securities traded in markets outside
the United States or denominated in currencies other than the U.S.
dollar may be affected significantly on a day that the New York
Stock Exchange is closed and an investor is not able to purchase,
redeem or exchange shares. In particular, calculation of the NAV
of the International Growth, Structured Emerging Markets, Tax-
Efficient Structured Emerging Markets and International Funds may
not take place contemporaneously with the determination of the
prices of foreign securities used in NAV calculations.
Fund shares are valued at the close of regular trading (normally
4:00 p.m., Eastern time) (the "NYSE Close") on each day that the
New York Stock Exchange is open. For purposes of calculating the
NAV, the Funds normally use pricing data for domestic equity
securities received shortly after the NYSE Close and do not
normally take into account trading, clearances or settlements that
take place after the NYSE Close.
Prospectus 64
<PAGE>
Domestic fixed income and foreign securities are normally priced
using data reflecting the earlier closing of the principal markets
for those securities. Information that becomes known to the Funds
or their agents after the NAV has been calculated on a particular
day will not generally be used to retroactively adjust the price
of a security or the NAV determined earlier that day.
In unusual circumstances, instead of valuing securities in the
usual manner, the Funds may value securities at fair value or
estimate their value as determined in good faith by the Board of
Trustees, generally based upon recommendations provided by PIMCO
Advisors and/or the relevant Sub-Adviser. Fair valuation may also
be used by the Board of Trustees if extraordinary events occur
after the close of the relevant market but prior to the NYSE
Close.
Under certain circumstances, the per share NAV of the
Administrative Class shares of the Funds may be lower than the per
share NAV of the Institutional Class shares as a result of the
daily expense accruals of the service and/or distribution fees
paid by Administrative Class shares. Generally, for Funds that pay
income dividends, those dividends are expected to differ over time
by approximately the amount of the expense accrual differential
between the two classes.
Fund Distributions
Each Fund distributes substantially all of its net investment
income to shareholders in the form of dividends. A shareholder
begins earning dividends on Fund shares the day after the Trust
receives the shareholder's purchase payment. Dividends paid by
each Fund with respect to each class of shares are calculated in
the same manner and at the same time, but dividends on
Administrative Class shares are expected to be lower than
dividends on Institutional Class shares as a result of the service
and/or distribution fees applicable to Administrative Class
shares. The following shows when each Fund intends to declare and
distribute income dividends to shareholders of record.
<TABLE>
<CAPTION>
Fund At Least Annually Quarterly
---------------------------------------------------------------
<S> <C> <C>
Renaissance, Equity Income and .
Value Funds
---------------------------------------------------------------
All other Funds .
---------------------------------------------------------------
</TABLE>
In addition, each Fund distributes any net capital gains it earns
from the sale of portfolio securities to shareholders no less
frequently than annually. Net short-term capital gains may be paid
more frequently.
A Fund's dividend and capital gain distributions with respect to
a particular class of shares will automatically be reinvested in
additional shares of the same class of the Fund at NAV unless the
shareholder elects to have the distributions paid in cash. A
shareholder may elect to have distributions paid in cash by
calling the Trust at 1-800-927-4648.
Shareholders do not pay any sales charges or other fees
(including Fund Reimbursement Fees) on shares received through the
reinvestment of Fund distributions. However, shareholders of the
Structured Emerging Markets and Tax-Efficient Structured Emerging
Markets Funds who receive additional shares through the
reinvestment of distributions will pay a Fund Reimbursement Fee if
they subsequently redeem or exchange those shares. See "Purchases,
Redemptions and Exchanges--Fund Reimbursement Fees."
For further information on distribution options, please contact
the Trust at 1-800-927-4648.
65 PIMCO Funds: Multi-Manager Series
<PAGE>
Tax Consequences
. Taxes on Fund Distributions. A shareholder subject to U.S.
federal income tax will be subject to tax on Fund distributions
whether they are paid in cash or reinvested in additional shares
of the Funds. For federal income tax purposes, Fund distributions
will be taxable to the shareholder as either ordinary income or
capital gains.
Fund dividends (i.e., distributions of investment income) are
taxable to shareholders as ordinary income. Federal taxes on Fund
distributions of gains are determined by how long the Fund owned the
investments that generated the gains, rather than how long the
shareholder owned the shares. Distributions of gains from
investments that a Fund owned for more than 12 months will generally
be taxable to shareholders as capital gains. Distributions of gains
from investments that the Fund owned for 12 months or less will
generally be taxable as ordinary income.
Fund distributions are taxable to shareholders even if they are
paid from income or gains earned by a Fund prior to the
shareholder's investment and thus were included in the price paid
for the shares. For example, a shareholder who purchases shares on
or just before the record date of a Fund distribution will pay
full price for the shares and may receive a portion of his or her
investment back as a taxable distribution.
. Taxes on Redemptions or Exchanges of Shares. Any gain
resulting from the sale of Fund shares will generally be subject
to federal income tax. When a shareholder exchanges shares of a
Fund for shares of another series, the transaction generally will
be treated as a sale of the Fund shares for these purposes, and
any gain on those shares will generally be subject to federal
income tax.
. A Note on the Tax-Efficient Equity and Tax-Efficient
Structured Emerging Markets Funds. The Tax-Efficient Equity and
Tax-Efficient Structured Emerging Markets Funds utilize a number
of tax-efficient management techniques designed to minimize
taxable distributions. For instance, the Funds generally seek to
minimize realized gains and, when realizing gains, attempt to
realize gains that will be taxed as capital gains (i.e., on
investments owned for more than 12 months). Although the Funds
attempt to minimize taxable distributions, they may be expected to
earn and distribute taxable income and realize and distribute
capital gains from time to time.
. A Note on Foreign Investments. A Fund's investment in foreign
securities may be subject to foreign withholding taxes. In that
case, the Fund's yield on those securities would be decreased. In
addition, a Fund's investments in foreign securities or foreign
currencies may increase or accelerate the Fund's recognition of
ordinary income and may affect the timing or amount of the Fund's
distributions. Shareholders of the International Growth,
Structured Emerging Markets, Tax-Efficient Structured Emerging
Markets and International Funds may be entitled to claim a credit
or deduction with respect to foreign taxes.
This section relates only to federal income tax; the consequences
under other tax laws may differ. Shareholders should consult their
tax advisors as to the possible application of foreign, state and
local income tax laws to Fund dividends and capital distributions.
Please see the Statement of Additional Information for additional
information regarding the tax aspects of investing in the Funds.
Characteristics and Risks of Securities and Investment Techniques
This section provides additional information about some of the
principal investments and related risks of the Funds identified
under "Summary Information" above. It also describes
characteristics and risks of additional securities and investment
techniques that are not necessarily principal investments or
strategies but may be
Prospectus 66
<PAGE>
used by the Funds from time to time. Most of these
securities and investment techniques are discretionary,
which means that the portfolio managers can decide whether
to use them or not. This Prospectus does not attempt to
disclose all of the various types of securities and
investment techniques that may be used by the Funds. As with
any mutual fund, investors in the Funds must rely on the
professional investment judgment and skill of PIMCO
Advisors, the Sub-Advisers and the individual portfolio
managers. Please see "Investment Objectives and Policies" in
the Statement of Additional Information for more detailed
information about the securities and investment techniques
described in this section and about other strategies and
techniques that may be used by the Funds.
Fixed Income Fixed income securities are obligations of the issuer to
Securities and make payments of principal and/or interest on future dates,
Defensive and include corporate and government bonds, notes,
Strategies certificates of deposit, commercial paper, convertible
securities and mortgage-backed and other asset-backed
securities.
Aside from the cash management practices described below,
the International Growth, Mega-Cap, Capital Appreciation,
Mid-Cap Growth, Small-Cap Growth, Micro-Cap Growth, Enhanced
Equity and Tax-Efficient Equity Funds intend to be as fully
invested in common stocks as practicable at all times. The
Structured Emerging Markets and Tax-Efficient Structured
Emerging Markets Funds normally invest substantially all of
their assets in common stocks and other equity and equity-
linked securities, but may invest up to 5% of their assets
in fixed income securities of emerging market issuers. For
cash management purposes, each of these Funds may maintain a
portion of its assets (normally not more than 10%) in U.S.
Government securities, high quality fixed income securities,
money market obligations and cash to pay certain Fund
expenses and to meet redemption requests. None of the Funds
listed in this paragraph will make defensive investments in
response to unfavorable market and other conditions and
therefore may be particularly vulnerable to general declines
in stock prices and/or other categories of securities in
which they invest.
Under normal circumstances, the Equity Income, Value,
Value 25 and Small-Cap Value Funds intend to be fully
invested in common stocks (aside from cash management
practices), except that each of these Funds may temporarily
hold up to 10% of its assets in cash and cash equivalents
for defensive purposes in response to unfavorable market and
other conditions. The Renaissance, Growth, Core Equity,
Target, Mid-Cap Equity, Opportunity, Innovation and
International Funds will each invest primarily in common
stocks, and may also invest in other kinds of equity
securities, including preferred stocks and securities
(including fixed income securities and warrants) convertible
into or exercisable for common stocks. Each of these Funds
may invest a portion of its assets in fixed income
securities. These Funds may temporarily hold up to 100% of
their assets in short-term U.S. Government securities and
other money market instruments for defensive purposes in
response to unfavorable market and other conditions. The
International Fund may also hold up to 100% of its assets in
other domestic fixed income, foreign fixed income and equity
securities principally traded in the U.S., including
obligations issued or guaranteed by a foreign government or
its agencies, authorities or instrumentalities, corporate
bonds and American Depository Receipts, for temporary
defensive purposes. The temporary defensive strategies
described in this paragraph would be inconsistent with the
investment objective and principal investment strategies of
each of the noted Funds and may adversely affect the Fund's
ability to achieve its investment objective.
Companies With Each of the Funds may invest in securities of companies with
Smaller Market market capitalizations that are small compared to other
Capitalizations publicly traded companies. The Micro-Cap Growth Fund, in
particular, and the Opportunity, Small-Cap Growth and Small-
Cap Value Funds generally invest primarily in smaller
companies and are especially sensitive to the risks
described below. The Target, Mid-Cap Growth, Mid-Cap Equity
and Value 25 Funds also have significant exposure to these
risks because they invest primarily in companies with
medium-sized market capitalizations, which are smaller than
the largest companies.
67 PIMCO Funds: Multi-Manager Series
<PAGE>
Companies which are smaller and less well-known or seasoned than
larger, more widely held companies may offer greater opportunities
for capital appreciation, but may also involve risks different
from, or greater than, risks normally associated with larger
companies. Larger companies generally have greater financial
resources, more extensive research and development, manufacturing,
marketing and service capabilities, and more stability and greater
depth of management and technical personnel than smaller
companies. Smaller companies may have limited product lines,
markets or financial resources or may depend on a small,
inexperienced management group. Securities of smaller companies
may trade less frequently and in lesser volume than more widely
held securities and their values may fluctuate more abruptly or
erratically than securities of larger companies. They may also
trade in the over-the-counter market or on a regional exchange, or
may otherwise have limited liquidity. These securities may
therefore be more vulnerable to adverse market developments than
securities of larger companies. Also, there may be less publicly
available information about smaller companies or less market
interest in their securities as compared to larger companies, and
it may take longer for the prices of the securities to reflect the
full value of a company's earnings potential or assets.
Because securities of smaller companies may have limited
liquidity, a Fund may have difficulty establishing or closing out
its positions in smaller companies at prevailing market prices. As
a result of owning large positions in this type of security, a
Fund is subject to the additional risk of possibly having to sell
portfolio securities at disadvantageous times and prices if
redemptions require the Fund to liquidate its securities
positions. For these reasons, it may be prudent for a Fund with a
relatively large asset size to limit the number of relatively
small positions it holds in securities having limited liquidity in
order to minimize its exposure to such risks, to minimize
transaction costs, and to maximize the benefits of research. As a
consequence, as a Fund's asset size increases, the Fund may reduce
its exposure to illiquid smaller capitalization securities, which
could adversely affect performance.
Foreign The International Growth, Structured Emerging Markets, Tax-
Securities Efficient Structured Emerging Markets and International Funds
normally invest principally in securities of foreign issuers,
securities traded principally in securities markets outside the
United States and/or securities denominated in foreign currencies
(together, "foreign securities"). The Renaissance, Growth, Core
Equity, Target, Mid-Cap Equity, Opportunity and Innovation Funds
may invest up to 15% of their respective assets in foreign
securities. The Enhanced Equity Fund may invest in common stocks
of foreign issuers if included in the S&P 500 Index.
All of the Funds may invest in American Depository Receipts
("ADRs"). In addition, the Renaissance, Growth, Core Equity,
Target, Mid-Cap Equity, Opportunity, Innovation, International
Growth, Structured Emerging Markets, Tax-Efficient Structured
Emerging Markets and International Funds may invest in European
Depository Receipts (EDRs) and Global Depository Receipts (GDRs).
ADRs are dollar-denominated receipts issued generally by domestic
banks and representing the deposit with the bank of a security of
a foreign issuer, and are publicly traded on exchanges or over-
the-counter in the United States. EDRs are receipts similar to
ADRs and are issued and traded in Europe. GDRs may be offered
privately in the United States and also traded in public or
private markets in other countries.
Investing in foreign securities involves special risks and
considerations not typically associated with investing in U.S.
securities and shareholders should consider carefully the
substantial risks involved for Funds that invest in these
securities. These risks include: differences in accounting,
auditing and financial reporting standards; generally higher
commission rates on foreign portfolio transactions; the
possibility of nationalization, expropriation or confiscatory
taxation; adverse changes in investment or exchange control
regulations; and political instability. Individual foreign
economies may differ favorably or unfavorably from the U.S.
economy in such respects as growth of gross domestic product, rate
of inflation, capital reinvestment, resources, self-sufficiency
and balance of payments position. The securities markets, values
of securities, yields and risks associated with foreign securities
markets may change independently of each other. Also, foreign
securities and
Prospectus 68
<PAGE>
dividends and interest payable on those securities may be subject
to foreign taxes, including taxes withheld from payments on those
securities. Foreign securities often trade with less frequency and
volume than domestic securities and therefore may exhibit greater
price volatility. Investments in foreign securities may also
involve higher custodial costs than domestic investments and
additional transaction costs with respect to foreign currency
conversions. Changes in foreign exchange rates also will affect
the value of securities denominated or quoted in foreign
currencies.
Emerging Each of the Funds that may invest in foreign securities may invest
Market in securities of issuers based in or that trade principally in
Securities countries with developing (or "emerging market") economies. The
Structured Emerging Markets and Tax-Efficient Structured Emerging
Markets Funds normally invest most of their assets in emerging
market securities. The International Fund may also invest a
significant portion of its assets in emerging market securities.
Investing in emerging market securities imposes risks different
from, or greater than, risks of investing in domestic securities
or in foreign, developed countries. These risks include: smaller
market capitalization of securities markets, which may suffer
periods of relative illiquidity; significant price volatility;
restrictions on foreign investment; and possible repatriation of
investment income and capital. In addition, foreign investors may
be required to register the proceeds of sales, and future economic
or political crises could lead to price controls, forced mergers,
expropriation or confiscatory taxation, seizure, nationalization
or the creation of government monopolies. The currencies of
emerging market countries may experience significant declines
against the U.S. dollar, and devaluation may occur subsequent to
investments in these currencies by a Fund. Inflation and rapid
fluctuations in inflation rates have had, and may continue to
have, negative effects on the economies and securities markets of
certain emerging market countries.
Additional risks of emerging market securities may include:
greater social, economic and political uncertainty and
instability; more substantial governmental involvement in the
economy; less governmental supervision and regulation;
unavailability of currency hedging techniques; companies that are
newly organized and small; differences in auditing and financial
reporting standards, which may result in unavailability of
material information about issuers; and less developed legal
systems. In addition, emerging securities markets may have
different clearance and settlement procedures, which may be unable
to keep pace with the volume of securities transactions or
otherwise make it difficult to engage in such transactions.
Settlement problems may cause a Fund to miss attractive investment
opportunities, hold a portion of its assets in cash pending
investment, or be delayed in disposing of a portfolio security.
Such a delay could result in possible liability to a purchaser of
the security.
Special Risks of Investing in Russian and Other Eastern European
Securities. Each of the Structured Emerging Markets, Tax-Efficient
Structured Emerging Markets and International Funds may invest a
portion of its assets in securities of issuers located in Russia
and in other Eastern European countries. While investments in
securities of such issuers are subject generally to the same risks
associated with investments in other emerging market countries
described above, the political, legal and operational risks of
investing in Russian and other Eastern European issuers, and of
having assets custodied within these countries, may be
particularly acute. A risk of particular note with respect to
direct investment in Russian securities is the way in which
ownership of shares of companies is normally recorded. When a Fund
invests in a Russian issuer, it will normally receive a "share
extract," but that extract is not legally determinative of
ownership. The official record of ownership of a company's share
is maintained by the company's share registrar. Such share
registrars are completely under the control of the issuer, and
investors are provided with few legal rights against such
registrars.
Foreign A Fund that invests directly in foreign currencies or in
Currencies securities that trade in, and receive revenues in, foreign
currencies will be subject to currency risk. The International
Growth, Structured Emerging Markets, Tax-Efficient Structured
Emerging Markets and International Funds are particularly
sensitive to this risk.
69 PIMCO Funds: Multi-Manager Series
<PAGE>
Foreign currency exchange rates may fluctuate significantly over
short periods of time. They generally are determined by supply and
demand and the relative merits of investments in different
countries, actual or perceived changes in interest rates and other
complex factors. Currency exchange rates also can be affected
unpredictably by intervention (or the failure to intervene) by
U.S. or foreign governments or central banks, or by currency
controls or political developments. For example, significant
uncertainty surrounds the recent introduction of the euro (a
common currency unit for the European Union) in January 1999 and
the effect it may have on the value of securities denominated in
local European currencies. These and other currencies in which the
Funds' assets are denominated may be devalued against the U.S.
dollar, resulting in a loss to the Funds.
Foreign Currency Transactions. The Renaissance, Growth, Core
Equity, Target, Mid-Cap Equity, Opportunity, Innovation,
International Growth, Structured Emerging Markets, Tax-Efficient
Structured Emerging Markets and International Funds may enter into
forward foreign currency exchange contracts to reduce the risks of
adverse changes in foreign exchange rates. In addition, the
International Growth, Structured Emerging Markets, Tax-Efficient
Structured Emerging Markets and International Funds may buy and
sell foreign currency futures contracts and options on foreign
currencies and foreign currency futures. A forward foreign
currency exchange contract, which involves an obligation to
purchase or sell a specific currency at a future date at a price
set at the time of the contract, reduces a Fund's exposure to
changes in the value of the currency it will deliver and increases
its exposure to changes in the value of the currency it will
receive for the duration of the contract. The effect on the value
of a Fund is similar to selling securities denominated in one
currency and purchasing securities denominated in another
currency. Contracts to sell foreign currency would limit any
potential gain which might be realized by a Fund if the value of
the hedged currency increases. A Fund may enter into these
contracts to hedge against foreign exchange risk arising from the
Fund's investment or anticipated investment in securities
denominated in foreign currencies. Suitable hedging transactions
may not be available in all circumstances and there can be no
assurance that a Fund will engage in such transactions at any
given time or from time to time. Also, such transactions may not
be successful and may eliminate any chance for a Fund to benefit
from favorable fluctuations in relevant foreign currencies.
The International Growth, Structured Emerging Markets, Tax-
Efficient Structured Emerging Markets and International Funds 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 currency to another. To the extent
that it does so, a Fund will be subject to the additional risk
that the relative value of currencies will be different than
anticipated by the Fund's portfolio manager. The International
Growth, Structured Emerging Markets, Tax-Efficient Structured
Emerging Markets and International Funds may use one currency (or
a basket of currencies) to hedge against adverse changes in the
value of another currency (or a basket of currencies) when
exchange rates between the two currencies are positively
correlated. The Fund will segregate assets determined to be liquid
by PIMCO Advisors or a Sub-Adviser in accordance with procedures
established by the Board of Trustees to cover its obligations
under forward foreign currency exchange contracts entered into for
non-hedging purposes.
Convertible Each Fund may invest in convertible securities. Convertible
Securities securities are generally preferred stocks and other securities,
including fixed income securities and warrants, that are
convertible into or exercisable for common stock at either a
stated price or a stated rate. The price of a convertible security
will normally vary in some proportion to changes in the price of
the underlying common stock because of this conversion or exercise
feature. However, the value of a convertible security may not
increase or decrease as rapidly as the underlying common stock. A
convertible security will normally also provide income and is
subject to interest rate risk. While convertible securities
generally offer lower interest or dividend yields than non-
convertible fixed income securities of similar quality, their
value tends to increase as the market value of the underlying
stock increases and to decrease when the value of the underlying
stock decreases. Also, a Fund may be forced to convert a security
before it would otherwise choose, which may have an adverse effect
on the Fund's ability to achieve its investment objective.
Prospectus 70
<PAGE>
Credit The Funds may invest in securities based on their credit ratings
Ratings assigned by rating agencies such as Moody's Investors Service,
and Inc. ("Moody's") and Standard & Poor's Ratings Services ("S&P").
Unrated Moody's, S&P and other rating agencies are private services that
Securities provide ratings of the credit quality of fixed income securities,
including convertible securities. The Appendix to the Statement of
Additional Information describes the various ratings assigned to
fixed income securities by Moody's and S&P. Ratings assigned by a
rating agency are not absolute standards of credit quality and do
not evaluate market risk. Rating agencies may fail to make timely
changes in credit ratings and an issuer's current financial
condition may be better or worse than a rating indicates. A Fund
will not necessarily sell a security when its rating is reduced
below its rating at the time of purchase. PIMCO Advisors and the
Sub-Advisers do not rely solely on credit ratings, and develop
their own analysis of issuer credit quality.
A Fund may purchase unrated securities (which are not rated by a
rating agency) if its portfolio manager determines that the
security is of comparable quality to a rated security that the
Fund may purchase. Unrated securities may be less liquid than
comparable rated securities and involve the risk that the
portfolio manager may not accurately evaluate the security's
comparative credit rating.
Derivatives Each Fund (except the Mega-Cap, Capital Appreciation, Mid-Cap
Growth, Small-Cap Growth, Micro-Cap Growth, Equity Income, Value,
Value 25 and Small-Cap Value Funds) may, but is not required to,
use a number of derivative instruments for risk management
purposes or as part of its investment strategies. Generally,
derivatives are financial contracts whose value depends upon, or
is derived from, the value of an underlying asset, reference rate
or index, and may relate to stocks, bonds, interest rates,
currencies or currency exchange rates, commodities, and related
indexes. A portfolio manager may decide not to employ any of these
strategies and there is no assurance that any derivatives strategy
used by a Fund will succeed.
Examples of derivative instruments include options contracts,
futures contracts, options on futures contracts and swap
agreements. The Renaissance, Growth, Core Equity, Target, Mid-Cap
Equity, Opportunity, Innovation, International Growth, Tax-
Efficient Equity, Structured Emerging Markets, Tax-Efficient
Structured Emerging Markets and International Funds may purchase
and sell (write) call and put options on securities, securities
indexes and foreign currencies. Each of these Funds may purchase
and sell futures contracts and options thereon with respect to
securities, securities indexes and foreign currencies. The
Enhanced Equity Fund may purchase and write options on securities
indexes and enter into securities index futures contracts and
options on securities index futures contracts. The International
Growth, Tax-Efficient Equity, Structured Emerging Markets and Tax-
Efficient Structured Emerging Markets may enter into swap
agreements with respect to securities indexes. A description of
these and other derivative instruments that the Funds may use are
described under "Investment Objectives and Policies" in the
Statement of Additional Information.
A Fund's use of derivative instruments involves risks different
from, or greater than, the risks associated with investing
directly in securities and other more traditional investments. A
description of various risks associated with particular derivative
instruments is included in "Investment Objectives and Policies" in
the Statement of Additional Information. The following provides a
more general discussion of important risk factors relating to all
derivative instruments that may be used by the Funds.
Management Risk Derivative products are highly specialized
instruments that require investment techniques and risk analyses
different from those associated with stocks and bonds. The use of
a derivative requires an understanding not only of the underlying
instrument but also of the derivative itself, without the benefit
of observing the performance of the derivative under all possible
market conditions.
Credit Risk The use of a derivative instrument involves the risk
that a loss may be sustained as a result of the failure of another
party to the contract (usually referred to as a "counterparty") to
make required payments or otherwise comply with the contract's
terms.
71 PIMCO Funds: Multi-Manager Series
<PAGE>
Liquidity Risk Liquidity risk exists when a particular derivative
instrument is difficult to purchase or sell. If a derivative
transaction is particularly large or if the relevant market is
illiquid (as is the case with many privately negotiated
derivatives), it may not be possible to initiate a transaction or
liquidate a position at an advantageous time or price.
Leveraging Risk Because many derivatives have a leverage
component, adverse changes in the value or level of the underlying
asset, reference rate or index can result in a loss substantially
greater than the amount invested in the derivative itself. Certain
derivatives have the potential for unlimited loss, regardless of
the size of the initial investment. When a Fund uses derivatives
for leverage, investments in that Fund will tend to be more
volatile, resulting in larger gains or losses in response to
market changes. To limit leverage risk, each Fund will segregate
assets determined to be liquid by PIMCO Advisors or a Sub-Adviser
in accordance with procedures established by the Board of Trustees
(or, as permitted by applicable regulation, enter into certain
offsetting positions) to cover its obligations under derivative
instruments.
Lack of Availability Because the markets for certain derivative
instruments (including markets located in foreign countries) are
relatively new and still developing, suitable derivatives
transactions may not be available in all circumstances for risk
management or other purposes. There is no assurance that a Fund
will engage in derivatives transactions at any time or from time
to time. A Fund's ability to use derivatives may also be limited
by certain regulatory and tax considerations.
Market and Other Risks Like most other investments, derivative
instruments are subject to the risk that the market value of the
instrument will change in a way detrimental to a Fund's interest.
If a portfolio manager incorrectly forecasts the values of
securities, currencies or interest rates or other economic factors
in using derivatives for a Fund, the Fund might have been in a
better position if it had not entered into the transaction at all.
While some strategies involving derivative instruments can reduce
the risk of loss, they can also reduce the opportunity for gain or
even result in losses by offsetting favorable price movements in
other Fund investments. A Fund may also have to buy or sell a
security at a disadvantageous time or price because the Fund is
legally required to maintain offsetting positions or asset
coverage in connection with certain derivatives transactions.
Other risks in using derivatives include the risk of mispricing
or improper valuation of derivatives and the inability of
derivatives to correlate perfectly with underlying assets, rates
and indexes. Many derivatives, in particular privately negotiated
derivatives, are complex and often valued subjectively. Improper
valuations can result in increased cash payment requirements to
counterparties or a loss of value to a Fund. Also, the value of
derivatives may not correlate perfectly, or at all, with the value
of the assets, reference rates or indexes they are designed to
closely track. In addition, a Fund's use of derivatives may cause
the Fund to realize higher amounts of short-term capital gains
(taxed at ordinary income tax rates when distributed to
shareholders who are individuals) than if the Fund had not used
such instruments.
Equity- Each of the Structured Emerging Markets and Tax-Efficient
Linked Structured Emerging Markets Funds may invest up to 15% of its net
Securities assets in equity-linked securities. The International Fund may
invest up to 5% of its assets in equity-linked securities. Equity-
linked securities are privately issued securities whose investment
results are designed to correspond generally to the performance of
a specified stock index or "basket" of stocks, or sometimes a
single stock. To the extent that a Fund invests in equity-linked
securities whose return corresponds to the performance of a
foreign securities index or one or more of foreign stocks,
investing in equity-linked securities will involve risks similar
to the risks of investing in foreign equity securities. See
"Foreign Securities" above. In addition, an investing Fund bears
the risk that the issuer of an equity-linked security may default
on its obligations under the security. Equity-linked securities
may be considered illiquid and thus subject to the Funds'
restrictions on investments in illiquid securities.
Prospectus 72
<PAGE>
Loans of For the purpose of achieving income, each Fund may lend its
Portfolio portfolio securities to brokers, dealers, and other financial
Securities institutions provided a number of conditions are satisfied,
including that the loan is fully collateralized. Please see
"Investment Objectives and Policies" in the Statement of
Additional Information for details. When a Fund lends portfolio
securities, its investment performance will continue to reflect
changes in the value of the securities loaned, and the Fund will
also receive a fee or interest on the collateral. Securities
lending involves the risk of loss of rights in the collateral or
delay in recovery of the collateral if the borrower fails to
return the security loaned or becomes insolvent. A Fund may pay
lending fees to the party arranging the loan.
Short Each Fund may make short sales as part of its overall portfolio
Sales management strategies or to offset a potential decline in the
value of a security. A short sale involves the sale of a security
that is borrowed from a broker or other institution to complete
the sale. A Fund may only enter into short selling transactions if
the security sold short is held in the Fund's portfolio or if the
Fund has the right to acquire the security without the payment of
further consideration. For these purposes, a Fund may also hold or
have the right to acquire securities which, without the payment of
any further consideration, are convertible into or exchangeable
for the securities sold short. Short sales expose a Fund to the
risk that it will be required to acquire, convert or exchange
securities to replace the borrowed securities (also known as
"covering" the short position) at a time when the securities sold
short have appreciated in value, thus resulting in a loss to the
Fund.
When- Each Fund may purchase securities which it is eligible to purchase
Issued, on a when-issued basis, may purchase and sell such securities for
Delayed delayed delivery and may make contracts to purchase such
Delivery securities for a fixed price at a future date beyond normal
and settlement time (forward commitments). When-issued transactions,
Forward delayed delivery purchases and forward commitments involve a risk
Commitment of loss if the value of the securities declines prior to the
Transactionssettlement date. This risk is in addition to the risk that the
Fund's other assets will decline in the value. Therefore, these
transactions may result in a form of leverage and increase a
Fund's overall investment exposure. Typically, no income accrues
on securities a Fund has committed to purchase prior to the time
delivery of the securities is made, although a Fund may earn
income on securities it has segregated to cover these positions.
Repurchase Each Fund may enter into repurchase agreements, in which the Fund
Agreements purchases a security from a bank or broker-dealer that agrees to
repurchase the security at the Fund's cost plus interest within a
specified time. If the party agreeing to repurchase should
default, the Fund will seek to sell the securities which it holds.
This could involve procedural costs or delays in addition to a
loss on the securities if their value should fall below their
repurchase price. Those Funds whose investment objectives do not
include the earning of income will invest in repurchase agreements
only as a cash management technique with respect to that portion
of its portfolio maintained in cash. Repurchase agreements
maturing in more than seven days are considered illiquid
securities.
Reverse Each Fund may enter into reverse repurchase agreements, subject to
Repurchase the Fund's limitations on borrowings. A reverse repurchase
Agreements agreement involves the sale of a security by a Fund and its
and Other agreement to repurchase the instrument at a specified time and
Borrowings price, and may be considered a form of borrowing for some
purposes. A Fund will segregate assets determined to be liquid by
PIMCO Advisors or a Sub-Adviser in accordance with procedures
established by the Board of Trustees to cover its obligations
under reverse repurchase agreements. A Fund also may borrow money
for investment purposes subject to any policies of the Fund
currently described in this Prospectus or in the Statement of
Additional Information. Reverse repurchase agreements and other
forms of borrowings may create leveraging risk for a Fund.
Portfolio With the exception of the Tax-Efficient Equity and Tax-Efficient
Turnover Structured Emerging Markets Funds, the length of time a Fund has
held a particular security is not generally a consideration in
investment decisions.
73 PIMCO Funds: Multi-Manager Series
<PAGE>
A change in the securities held by a Fund is known as "portfolio
turnover." Each Fund may engage in active and frequent trading of
portfolio securities to achieve its investment objective and
principal investment strategies, particularly during periods of
volatile market movements, although the Tax-Efficient Equity and
Tax-Efficient Structured Emerging Markets Funds will generally
attempt to limit portfolio turnover as part of their tax-efficient
management strategies. High portfolio turnover (e.g., over 100%)
involves correspondingly greater expenses to a Fund, including
brokerage commissions or dealer mark-ups and other transaction
costs on the sale of securities and reinvestments in other
securities. Such sales may also result in realization of taxable
capital gains, including short-term capital gains (which are taxed
at ordinary income tax rates when distributed to shareholders who
are individuals). The trading costs and tax effects associated
with portfolio turnover may adversely affect a Fund's performance.
Illiquid Each Fund may invest in securities that are illiquid so long as
Securities not more than 15% of the value of the Fund's net assets (taken at
market value at the time of investment) would be invested in such
securities. Certain illiquid securities may require pricing at
fair value as determined in good faith under the supervision of
the Board of Trustees. A portfolio manager may be subject to
significant delays in disposing of illiquid securities held by the
Fund, and transactions in illiquid securities may entail
registration expenses and other transaction costs that are higher
than those for transactions in liquid securities. The term
"illiquid securities" for this purpose means securities that
cannot be disposed of within seven days in the ordinary course of
business at approximately the amount at which a Fund has valued
the securities. Please see "Investment Objectives and Policies" in
the Statement of Additional Information for a listing of various
securities that are generally considered to be illiquid for these
purposes. Restricted securities, i.e., securities subject to legal
or contractual restrictions on resale, may be illiquid. However,
some restricted securities (such as securities issued pursuant to
Rule 144A under the Securities Act of 1933 and certain commercial
paper) may be treated as liquid, although they may be less liquid
than registered securities traded on established secondary
markets.
Investment The International Growth and International Funds may invest up to
in Other 10% of their assets in securities of other investment companies,
Investment such as closed-end management investment companies, or in pooled
Companies accounts or other investment vehicles which invest in foreign
markets. Each of the other Funds may invest up to 5% of its assets
in other investment companies. As a shareholder of an investment
company, a Fund may indirectly bear service and other fees which
are in addition to the fees the Fund pays its service providers.
Year 2000 Many of the services provided to the Funds depend on the smooth
Readiness functioning of computer systems. Many systems in use today cannot
Disclosure distinguish between the year 1900 and the year 2000. Should any of
the service systems fail to process information properly, this
could have an adverse impact on the Funds' operations and services
provided to shareholders. PIMCO Advisors and its subsidiaries have
surveyed the Funds' material service providers and believe that,
on the basis of the information supplied, the service providers
used by the Funds on January 1, 2000 will not be materially
adversely affected by the so-called "year 2000 problem." However,
there can be no assurance that the problem will be corrected in
all respects and that the Funds' operations and services provided
to shareholders will not be adversely affected, nor can there be
any assurance that the year 2000 problem will not have an adverse
effect on the entities whose securities are held by the Funds or
on domestic or global equity markets or economies, generally.
Accordingly, PIMCO Advisors and the Sub-Advisers reserve the right
to vary, during the fourth quarter of 1999 and/or the first
quarter of 2000, the investments of any Fund to maintain
sufficient liquidity to satisfy actual or anticipated redemption
activity.
Changes The investment objective of each of the Renaissance, Growth,
in Target, Opportunity, Innovation, International Growth, Value 25,
Investment Tax-Efficient Equity, Tax-Efficient Structured Emerging Markets
Objectives and International Funds described in this Prospectus may be
and echanged by the Board of Trustees without shareholder approval. The
Policies tinvestment objective of each other Fund is fundamental and may not
be changed without shareholder approval. Unless otherwise stated,
all other investment policies of the Funds may be changed by the
Board of
Prospectus 74
<PAGE>
Trustees without shareholder approval. If there is a change in a
Fund's investment objective or policies, including a change
approved by shareholder vote, shareholders should consider whether
the Fund remains an appropriate investment in light of their then
current financial position and needs.
Percentage Unless otherwise stated, all percentage limitations on Fund
Investment investments listed in this Prospectus will apply at the time of
Limitations investment. A Fund would not violate these limitations unless an
excess or deficiency occurs or exists immediately after and as a
result of an investment.
Other The Funds may invest in other types of securities and use a
Investments variety of investment techniques and strategies which are not
and described in this Prospectus. These securities and techniques may
Techniques subject the Funds to additional risks. Please see the Statement of
Additional Information for additional information about the
securities and investment techniques described in this Prospectus
and about additional securities and techniques that may be used by
the Funds.
75 PIMCO Funds: Multi-Manager Series
<PAGE>
(This page left blank intentionally)
Prospectus 76
<PAGE>
Financial Highlights
The financial highlights table is intended to help a shareholder
understand the financial performance of Institutional and
Administrative Class shares of each Fund for the past 5 years or,
if the class is less than 5 years old, since the class of shares
was first offered. Certain information reflects financial results
for a single Fund share. The total returns in the table represent
the rate that an investor would have earned or lost on an
investment in a particular class of shares of a Fund, assuming
reinvestment of all dividends and distributions. This information
has been audited by PricewaterhouseCoopers LLP, whose report,
along with each Fund's financial statements, are included in the
Trust's annual report to shareholders. The annual report is
incorporated by reference in the Statement of Additional
Information and is available free of charge upon request from the
Distributor.
The Mega-Cap Fund did not offer Institutional or Administrative
Class shares during the periods shown.
<TABLE>
<CAPTION>
Net Asset Net Realized/ Total Dividends Dividends in Distributions
Year or Value Net Unrealized Income from from Net Excess of Net from Net
Period Beginning Investment Gain (Loss) on Investment Investment Investment Realized
Ended of Period Income (Loss) Investments Operations Income Income Capital Gains
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Renaissance Fund (i)
Institutional Class
06/30/99 $19.07 $ 0.06 (a) $ 1.43 (a) $ 1.49 $ 0.00 $ 0.00 $(2.33)
12/30/97-06/30/98 16.73 0.05 2.29 2.34 0.00 0.00 0.00
Administrative Class
08/31/98-06/30/99 15.37 0.02 (a) 5.12 (a) 5.14 0.00 0.00 (2.33)
Growth Fund (i)
Institutional Class
03/31/99-06/30/99 $31.27 $(0.01)(a) $(0.02)(a) $(0.03) $ 0.00 $ 0.00 $ 0.00
Administrative Class
03/31/99-06/30/99 31.27 (0.04)(a) 0.00(a) (0.04) 0.00 0.00 0.00
Core Equity Fund (i)
Institutional Class
06/30/99 $20.39 $(0.04)(a) $ 5.24 (a) $ 5.20 $ 0.00 $ 0.00 $(0.73)
06/30/98 15.55 0.03 (a) 6.11 (a) 6.14 0.00 0.00 (1.30)
06/30/97 13.55 0.03 (a) 2.78 (a) 2.81 (0.02) 0.00 (0.79)
11/01/95-06/30/96 12.72 0.51 0.65 1.16 (0.04) (0.01) (0.28)
12/28/94-10/31/95 10.00 0.07 2.71 2.78 (0.06) 0.00 0.00
Administrative Class
06/30/99 20.32 (0.03)(a) 5.11 (a) 5.08 0.00 0.00 (0.73)
06/30/98 15.53 (0.01)(a) 6.10 (a) 6.09 0.00 0.00 (1.30)
06/30/97 13.56 0.00 (a) 2.77 (a) 2.77 (0.01) 0.00 (0.79)
11/01/95-06/30/96 12.73 0.49 0.65 1.14 (0.02) (0.01) (0.28)
05/31/95-10/31/95 11.45 0.02 1.28 1.30 (0.02) 0.00 0.00
Target Fund (i)
Institutional Class
03/31/99-06/30/99 $16.34 $(0.02)(a) $ 1.42(a) $ 1.40 $ 0.00 $ 0.00 $ 0.00
Administrative Class
03/31/99-06/30/99 16.34 (0.03)(a) 1.42(a) 1.39 0.00 0.00 0.00
Mid-Cap Equity Fund (i)
Institutional Class
06/30/99 $13.53 $(0.03)(a) $ 2.99 (a) $ 2.96 $ 0.00 $ 0.00 $(0.65)
06/30/98 14.04 (0.03)(a) 3.61 (a) 3.58 0.00 0.00 (4.09)
06/30/97 14.66 (0.06)(a) 1.31 (a) 1.25 0.00 0.00 (1.87)
11/01/95-06/30/96 12.92 0.49 1.62 2.11 0.00 0.00 (0.37)
12/28/94-10/31/95 10.00 0.02 2.92 2.94 (0.02) 0.00 0.00
Administrative Class
07/01/98-05/27/99(b) 13.50 (0.05)(a) 1.71 (a) 1.66 0.00 0.00 (0.65)
08/21/97-06/30/98 15.27 (0.05)(a) 2.37 (a) 2.32 0.00 0.00 (4.09)
Opportunity Fund (i)
Institutional Class
03/31/99-06/30/99 $21.40 $(0.03)(a) $ 2.89 (a) $ 2.86 $ 0.00 $ 0.00 $ 0.00
Administrative Class
03/31/99-06/30/99 21.40 (0.05)(a) 2.91 (a) 2.86 0.00 0.00 0.00
Innovation Fund (i)
Institutional Class
03/05/99-06/30/99 $32.73 $(0.05)(a) $ 4.82 (a) $ 4.77 $ 0.00 $ 0.00 $ 0.00
International Growth
Fund (i)
Institutional Class
06/30/99 $13.55 $(0.02)(a) $ 3.56 (a) $ 3.54 $(0.02) $ 0.00 $(1.03)
12/31/97-06/30/98 10.00 0.00 (a) 3.55 (a) 3.55 0.00 0.00 0.00
</TABLE>
- -------
* Annualized
(a) Per share amounts based on average number of shares outstanding during the
period.
(b) All Administrative Class shares of the Mid-Cap Equity Fund were redeemed
on May 27, 1999.
(i) The information provided for the Renaissance, Growth, Core Equity, Target,
Mid-Cap Equity, Opportunity, Innovation and International Growth Funds
reflects results of operations under the Funds' former Sub-Adviser through
May 7, March 6, June 30, March 6, June 30, March 6, March 6 and June 30,
respectively; the Funds would not necessarily have achieved the
performance results shown above under their current investment management
arrangements.
77 PIMCO Funds: Multi-Manager Series
<PAGE>
<TABLE>
<CAPTION>
Fund Ratio of Net
Distributions Reimbursement Ratio of Investment
in Excess of Tax Basis Fee Added To Net Asset Net Assets Expenses to Income (Loss)
Net Realized Return of Total Paid-In- Value End End of Average Net to Average Portfolio
Capital Gains Capital Distributions Capital of Period Total Return Period (000s) Assets Net Assets Turnover Rate
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$0.00 $0.00 $ (2.33) $ 0.00 $18.23 10.24% $ 136 0.86% 0.38% 221%
0.00 0.00 0.00 0.00 19.07 13.99 851 0.86* 0.55* 192
0.00 0.00 (2.33) 0.00 18.18 36.41 427 1.09* 0.13* 221
$0.00 $0.00 $ 0.00 $ 0.00 $31.24 (0.10)% $ 948 0.74%* (0.19)%* 131%
0.00 0.00 0.00 0.00 31.23 (0.13) 6,164 0.97* (0.53)* 131
$0.00 $0.00 $ (0.73) $ 0.00 $24.86 26.34% $ 1,184 1.01% (0.20)% 95%
0.00 0.00 (1.30) 0.00 20.39 41.83 1,915 0.83 0.20 120
0.00 0.00 (0.81) 0.00 15.55 21.59 6,444 0.87 0.23 139
0.00 0.00 (0.33) 0.00 13.55 9.41 10,452 0.82* 0.53* 73
0.00 0.00 (0.06) 0.00 12.72 27.86 7,791 0.82* 0.79* 123
0.00 0.00 (0.73) 0.00 24.67 25.84 15 1.08 (0.17) 95
0.00 0.00 (1.30) 0.00 20.32 41.54 128,666 1.08 (0.07) 120
0.00 0.00 (0.80) 0.00 15.53 21.20 29,332 1.13 (0.03) 139
0.00 0.00 (0.31) 0.00 13.56 9.23 33,575 1.07* 0.28 * 73
0.00 0.00 (0.02) 0.00 12.73 11.34 24,645 1.06* 0.34 * 58
$0.00 $0.00 $ 0.00 $ 0.00 $17.74 8.57% $ 1,298 0.79%* (0.39)%* 229%
0.00 0.00 0.00 0.00 17.73 8.51 5,513 1.02* (0.61)* 229
$0.00 $0.00 $ (0.65) $ 0.00 $15.84 23.18% $ 7,399 0.89% (0.22)% 273%
0.00 0.00 (4.09) 0.00 13.53 30.40 8,488 0.89 (0.25) 268
0.00 0.00 (1.87) 0.00 14.04 9.61 7,591 1.15 (0.43) 202
0.00 0.00 (0.37) 0.00 14.66 16.72 8,378 0.88* (0.32)* 97
0.00 0.00 (0.02) 0.00 12.92 29.34 8,357 0.88* 0.24* 132
0.00 0.00 (0.65) 0.00 14.51 13.12 0 1.14* (0.45)* 273
0.00 0.00 (4.09) 0.00 13.50 19.65 2,371 1.13* (0.49)* 268
$0.00 $0.00 $ 0.00 $ 0.00 $24.26 13.36% $ 417 0.88%* (0.54)%* 175%
0.00 0.00 0.00 0.00 24.26 13.36 2,010 1.12* (0.82)* 175
$0.00 $0.00 $ 0.00 $ 0.00 $37.50 14.57% $ 444 0.88%* (0.15)%* 119%
$0.00 $0.00 $ (1.05) $ 0.00 $16.04 28.62% $ 8,408 1.39% (0.15)% 269%
0.00 0.00 0.00 0.00 13.55 35.50 6,822 1.36* 0.08* 60
</TABLE>
Prospectus 78
<PAGE>
Financial Highlights (continued)
<TABLE>
<CAPTION>
Net Asset Net Realized/ Total Dividends Dividends in Distributions
Year or Value Net Unrealized Income from from Net Excess of Net from Net
Period Beginning Investment Gain (Loss) on Investment Investment Investment Realized
Ended of Period Income (Loss) Investments Operations Income Income Capital Gains
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Capital Appreciation
Fund
Institutional Class
06/30/99 $26.13 $ 0.16 (a) $ 2.35 (a) $ 2.51 $ (0.15) $0.00 $ (1.65)
06/30/98 21.19 0.15 (a) 6.59 (a) 6.74 (0.12) 0.00 (1.68)
06/30/97 18.10 0.24 5.08 5.32 (0.10) 0.00 (2.13)
11/01/95-06/30/96 16.94 0.35 1.99 2.34 (0.15) 0.00 (1.03)
10/31/95 13.34 0.18 3.60 3.78 (0.18) 0.00 0.00
10/31/94 13.50 0.14 (0.12) 0.02 (0.14) 0.00 (0.04)
Administrative Class
06/30/99 25.99 0.09 (a) 2.34 (a) 2.43 (0.13) 0.00 (1.65)
06/30/98 21.16 0.10 (a) 6.55 (a) 6.65 (0.14) 0.00 (1.68)
07/31/96-06/30/97 17.19 0.16 6.03 6.19 (0.09) 0.00 (2.13)
Mid-Cap Growth Fund
Institutional Class
06/30/99 $24.09 $ 0.12 (a) $ (0.11)(a) $ 0.01 $ (0.02) $0.00 $ (1.07)
06/30/98 20.28 0.11 (a) 5.11 (a) 5.22 (0.07) (0.01) (1.33)
06/30/97 19.44 (0.07) 5.25 5.18 (0.05) 0.00 (4.29)
11/01/95-06/30/96 18.16 0.32 1.53 1.85 (0.14) 0.00 (0.43)
10/31/95 13.97 0.07 4.19 4.26 (0.07) 0.00 0.00
10/31/94 13.97 0.06 0.01 0.07 (0.06) 0.00 (0.01)
Administrative Class
06/30/99 23.96 0.06 (a) (0.06)(a) 0.00 (0.01) 0.00 (1.07)
06/30/98 20.24 0.05 (a) 5.08 (a) 5.13 (0.07) (0.01) (1.33)
06/30/97 19.44 (0.13) 5.25 5.12 (0.03) 0.00 (4.29)
11/01/95-06/30/96 18.17 0.28 1.53 1.81 (0.11) 0.00 (0.43)
11/30/94-10/31/95 13.31 0.03 4.85 4.88 (0.02) 0.00 0.00
Small-Cap Growth Fund
Institutional Class
06/30/99 $14.01 $(0.01)(a) $ (2.12)(a) $(2.13) $ 0.00 $0.00 $ 0.00
06/30/98 13.40 (0.03)(a) 2.52 (a) 2.49 0.00 0.00 (1.88)
06/30/97 20.83 (0.01)(a) 3.17 (a) 3.16 0.00 0.00 (10.59)
11/01/95-06/30/96 21.02 2.02 (0.61) 1.41 0.00 0.00 (1.60)
10/31/95 19.38 (0.05) 3.12 3.07 0.00 0.00 (1.43)
10/31/94 19.15 (0.02) 0.89 0.87 0.00 0.00 (0.64)
Administrative Class
06/30/99 13.97 (0.04)(a) (2.12)(a) (2.16) 0.00 0.00 0.00
06/30/98 13.41 (0.07)(a) 2.51 (a) 2.44 0.00 0.00 (1.88)
06/30/97 20.82 (0.06)(a) 3.24 (a) 3.18 0.00 0.00 (10.59)
11/01/95-06/30/96 21.01 2.02 (a) (0.61)(a) 1.41 0.00 0.00 (1.60)
09/27/95-10/31/95 21.90 (0.02) (0.87) (0.89) 0.00 0.00 0.00
Micro-Cap Growth Fund
Institutional Class
06/30/99 $23.66 $(0.14)(a) $(2.89 )(a) $(3.03) $ 0.00 $0.00 $ 0.00
06/30/98 19.85 (0.11)(a) 6.54 (a) 6.43 0.00 0.00 (2.62)
06/30/97 18.47 0.00 3.41 3.41 0.00 0.00 (2.03)
11/01/95-06/30/96 15.38 0.00 3.43 3.43 0.00 0.00 (0.34)
10/31/95 11.87 (0.04) 3.55 3.51 0.00 0.00 0.00
10/31/94 11.06 (0.03) 0.84 0.81 0.00 0.00 0.00
Administrative Class
06/30/99 23.52 (0.19)(a) (2.88)(a) (3.07) 0.00 0.00 0.00
06/30/98 19.78 (0.17)(a) 6.53 (a) 6.36 0.00 0.00 (2.62)
06/30/97 18.46 (0.06) 3.41 3.35 0.00 0.00 (2.03)
04/01/96-06/30/96 16.73 0.03 1.70 1.73 0.00 0.00 0.00
Equity Income Fund
Institutional Class
06/30/99 $16.09 $ 0.44 (a) $ 1.28 (a) $ 1.72 $ (0.43) $0.00 $ (1.76)
06/30/98 15.41 0.44 (a) 2.75 (a) 3.19 (0.42) 0.00 (2.09)
06/30/97 14.36 0.40 3.17 3.57 (0.55) 0.00 (1.97)
11/01/95-06/30/96 13.09 0.78 1.31 2.09 (0.34) 0.00 (0.48)
10/31/95 11.75 0.46 1.67 2.13 (0.46) 0.00 (0.33)
10/31/94 11.95 0.42 (0.16) 0.26 (0.42) 0.00 (0.04)
Administrative Class
06/30/99 16.08 0.41 (a) 1.28 (a) 1.69 (0.40) 0.00 (1.76)
06/30/98 15.40 0.40 (a) 2.75 (a) 3.15 (0.38) 0.00 (2.09)
06/30/97 14.35 0.27 3.26 3.53 (0.51) 0.00 (1.97)
11/01/95-06/30/96 13.13 0.75 1.31 2.06 (0.36) 0.00 (0.48)
11/30/94-10/31/95 11.12 0.39 2.35 2.74 (0.40) 0.00 (0.33)
</TABLE>
- -------
* Annualized
(a) Per share amounts based on average number of shares outstanding during the
period.
79 PIMCO Funds: Multi-Manager Series
<PAGE>
<TABLE>
<CAPTION>
Fund Ratio of Net
Distributions Reimbursement Ratio of Investment
in Excess of Tax Basis Fee Added to Net Asset Net Assets Expenses to Income (Loss)
Net Realized Return of Total Paid-In- Value End End of Average Net to Average Portfolio
Capital Gains Capital Distributions Capital of Period Total Return Period (000s) Assets Net Assets Turnover Rate
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0.00 $0.00 $ (1.80) $0.00 $26.84 10.57 % $645,967 0.71% 0.64 % 120%
0.00 0.00 (1.80) 0.00 26.13 32.97 805,856 0.71 0.64 75
0.00 0.00 (2.23) 0.00 21.19 31.52 536,187 0.71 1.02 87
0.00 0.00 (1.18) 0.00 18.10 14.65 348,728 0.70* 1.33* 73
0.00 0.00 (0.18) 0.00 16.94 28.47 236,220 0.70 1.22 83
0.00 0.00 (0.18) 0.00 13.34 0.15 165,441 0.70 1.17 77
0.00 0.00 (1.78) 0.00 26.64 10.30 229,831 0.95 0.38 120
0.00 0.00 (1.82) 0.00 25.99 32.55 132,384 0.96 0.39 75
0.00 0.00 (2.22) 0.00 21.16 38.26 3,115 0.96* 0.66* 87
$ 0.00 $0.00 $ (1.09) $0.00 $23.01 0.33 % $581,544 0.70% 0.54 % 85%
0.00 0.00 (1.41) 0.00 24.09 26.16 437,985 0.71 0.46 66
0.00 0.00 (4.34) 0.00 20.28 30.58 291,374 0.71 0.53 82
0.00 0.00 (0.57) 0.00 19.44 10.37 231,011 0.70* 1.11* 79
0.00 0.00 (0.07) 0.00 18.16 30.54 189,320 0.70 0.43 78
0.00 0.00 (0.07) 0.00 13.97 0.58 121,791 0.70 0.45 61
0.00 0.00 (1.08) 0.00 22.88 0.31 104,337 0.95 0.30 85
0.00 0.00 (1.41) 0.00 23.96 25.75 73,614 0.95 0.22 66
0.00 0.00 (4.32) 0.00 20.24 30.23 2,066 0.96 0.28 82
0.00 0.00 (0.54) 0.00 19.44 10.17 1,071 0.95* 0.89* 79
0.00 0.00 (0.02) 0.00 18.17 36.64 892 0.94* 0.23* 72
$(0.47) $0.00 $ (0.47) $0.00 $11.41 (14.99)% $ 66,393 1.25% (0.09)% 94%
0.00 0.00 (1.88) 0.00 14.01 19.33 47,641 1.26 (0.20) 77
0.00 0.00 (10.59) 0.00 13.40 22.82 33,390 1.32 (0.05) 129
0.00 0.00 (1.60) 0.00 20.83 7.22 32,954 1.25* (0.20)* 59
0.00 0.00 (1.43) 0.00 21.02 17.39 73,977 1.25 (0.27) 86
0.00 0.00 (0.64) 0.00 19.38 4.62 50,425 1.25 (0.33) 66
(0.47) 0.00 (0.47) 0.00 11.34 (15.26) 2,229 1.50 (0.33) 94
0.00 0.00 (1.88) 0.00 13.97 18.90 981 1.49 (0.51) 77
0.00 0.00 (10.59) 0.00 13.41 23.12 1 1.54 (0.36) 129
0.00 0.00 (1.60) 0.00 20.82 7.18 112 1.50* (0.41)* 59
0.00 0.00 0.00 0.00 21.01 (5.34) 544 1.60* (0.82)* 9
$(0.63) $0.00 $ (0.63) $0.00 $20.00 (12.66)% $234,439 1.50% (0.71)% 73%
0.00 0.00 (2.62) 0.00 23.66 33.95 257,842 1.51 (0.50) 72
0.00 0.00 (2.03) 0.00 19.85 20.05 164,139 1.52 (0.49) 84
0.00 0.00 (0.34) 0.00 18.47 22.64 83,973 1.50* (0.45)* 54
0.00 0.00 0.00 0.00 15.38 29.54 69,775 1.50 (0.37) 87
0.00 0.00 0.00 0.00 11.87 7.31 32,605 1.50 (0.25) 59
(0.63) 0.00 (0.63) 0.00 19.82 (12.91) 3,000 1.75 (0.97) 73
0.00 0.00 (2.62) 0.00 23.52 33.70 4,779 1.76 (0.74) 72
0.00 0.00 (2.03) 0.00 19.78 19.72 2,116 1.77 (0.74) 84
0.00 0.00 0.00 0.00 18.46 10.34 566 1.73* (0.74)* 54
$ 0.00 $0.00 $ (2.19) $0.00 $15.62 12.56 % $123,012 0.71% 3.00% 76%
0.00 0.00 (2.51) 0.00 16.09 21.84 138,650 0.71 2.71 45
0.00 0.00 (2.52) 0.00 15.41 27.67 121,138 0.72 3.03 45
0.00 0.00 (0.82) 0.00 14.36 16.35 116,714 0.70* 3.41 * 52
0.00 0.00 (0.79) 0.00 13.09 19.36 118,015 0.70 3.83 46
0.00 0.00 (0.46) 0.00 11.75 2.25 92,365 0.70 3.77 36
0.00 0.00 (2.16) 0.00 15.61 12.31 13,797 0.96 2.80 76
0.00 0.00 (2.47) 0.00 16.08 21.58 11,699 0.96 2.45 45
0.00 0.00 (2.48) 0.00 15.40 27.40 8,145 0.97 2.79 45
0.00 0.00 (0.84) 0.00 14.35 16.08 6,097 0.95* 3.19 * 52
0.00 0.00 (0.73) 0.00 13.13 25.69 140 0.95* 3.43 * 43
</TABLE>
Prospectus 80
<PAGE>
Financial Highlights (continued)
<TABLE>
<CAPTION>
Net Asset Net Realized/ Total Dividends Dividends in Distributions
Year or Value Net Unrealized Income from from Net Excess of Net from Net
Period Beginning Investment Gain (Loss) on Investment Investment Investment Realized
Ended of Period Income (Loss) Investments Operations Income Income Capital Gains
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Value Fund
Institutional Class
06/30/99 $15.66 $0.28 (a) $ 1.36 (a) $ 1.64 $(0.28) $0.00 $(1.72)
06/30/98 14.81 0.25 (a) 2.47 (a) 2.72 (0.24) 0.00 (1.63)
06/30/97 12.46 1.05 2.11 3.16 (0.31) 0.00 (0.50)
11/01/95-06/30/96 12.53 0.25 1.62 1.87 (0.17) 0.00 (1.77)
10/31/95 11.55 0.30 2.18 2.48 (0.30) 0.00 (1.20)
10/31/94 11.92 0.30 (0.28) 0.02 (0.29) 0.00 (0.10)
Administrative Class
06/30/99 15.65 0.26 (a) 1.32 (a) 1.58 (0.25) 0.00 (1.72)
08/21/97-06/30/98 15.66 0.19 (a) 1.65 (a) 1.84 (0.22) 0.00 (1.63)
Value 25 Fund
Institutional Class
07/10/98-06/30/99 $10.00 $0.15 (a) $(1.10)(a) $(0.95) $(0.06) $0.00 $ 0.00
Small-Cap Value Fund
Institutional Class
06/30/99 $17.68 $0.32 (a) $(1.29)(a) $(0.97) $(0.21) $0.00 $ 0.00
06/30/98 15.78 0.29 (a) 2.50 (a) 2.79 (0.13) 0.00 (0.76)
06/30/97 14.20 0.46 3.63 4.09 (0.13) 0.00 (2.38)
11/01/95-06/30/96 13.10 0.56 1.49 2.05 (0.21) 0.00 (0.74)
10/31/95 12.07 0.28 1.92 2.20 (0.28) 0.00 (0.89)
10/31/94 12.81 0.29 (0.65) (0.36) (0.29) 0.00 (0.09)
Administrative Class
06/30/99 17.63 0.29 (a) (1.30)(a) (1.01) (0.20) 0.00 0.00
06/30/98 15.76 0.25 (a) 2.49 (a) 2.74 (0.11) 0.00 (0.76)
06/30/97 14.20 0.38 3.68 4.06 (0.12) 0.00 (2.38)
11/01/95-06/30/96 13.16 0.54 1.43 1.97 (0.19) 0.00 (0.74)
Enhanced Equity Fund
Institutional Class
06/30/99 $12.64 $0.08 (a) $ 1.91 (a) $ 1.99 $(0.06) $0.00 $(1.61)
06/30/98 16.46 0.11 (a) 3.91 (a) 4.02 (0.11) 0.00 (7.73)
06/30/97 15.91 1.18 3.10 4.28 (0.10) 0.00 (3.63)
11/01/95-06/30/96 14.44 0.34 1.67 2.01 (0.16) 0.00 (0.38)
10/31/95 11.99 0.25 2.62 2.87 (0.25) 0.00 (0.17)
10/31/94 12.08 0.25 (0.04) 0.21 (0.25) 0.00 (0.05)
Administrative Class
06/30/99 12.59 0.05 (a) 1.90 (a) 1.95 (0.06) 0.00 (1.61)
08/21/97-06/30/98 17.53 0.05 (a) 2.85 (a) 2.90 (0.11) 0.00 (7.73)
Tax-Efficient Equity
Fund
Administrative Class
09/30/98-06/30/99 $ 8.65 $0.03 (a) $ 2.93 (a) $ 2.96 $ 0.00 $0.00 $ 0.00
Structured Emerging
Markets Fund
Institutional Class
09/30/98-06/30/99 $10.00 $0.15 (a) $ 2.57 (a) $ 2.72 $(0.07) $0.00 $(0.28)
Tax-Efficient Structured
Emerging Markets Fund
Institutional Class
09/30/98-06/30/99 $10.00 $0.16 (a) $ 3.10 (a) $ 3.26 $(0.06) $0.00 $ 0.00
International Fund
Institutional Class
09/30/98-12/31/98 $10.47 $0.14 (a) $ 2.16 (a) $ 2.30 $ 0.00 $0.00 $(1.15)
Administrative Class
09/30/98-12/31/98 10.47 0.09 (a) 2.15 (a) 2.24 0.00 0.00 (1.15)
</TABLE>
- -------
* Annualized
(a) Per share amounts based on average number of shares outstanding during the
period.
81 PIMCO Funds: Multi-Manager Series
<PAGE>
<TABLE>
<CAPTION>
Fund Ratio of Net
Distributions Reimbursement Ratio of Investment
in Excess of Tax Basis Fee Added to Net Asset Net Assets Expenses to Income (Loss)
Net Realized Return of Total Paid-In- Value End End of Average Net to Average Portfolio
Capital Gains Capital Distributions Capital of Period Total Return Period (000s) Assets Net Assets Turnover Rate
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0.00 $0.00 $(2.00) $ 0.00 $15.30 12.30 % $69,181 0.71% 1.99% 101%
0.00 0.00 (1.87) 0.00 15.66 19.35 83,219 0.71 1.59 77
0.00 0.00 (0.81) 0.00 14.81 26.38 74,613 0.73 2.02 71
0.00 0.00 (1.94) 0.00 12.46 16.24 52,727 0.70* 2.40* 29
0.00 0.00 (1.50) 0.00 12.53 24.98 14,443 0.70 2.50 71
0.00 0.00 (0.39) 0.00 11.55 0.15 15,442 0.70 2.34 44
0.00 0.00 (1.97) 0.00 15.26 11.91 23,164 0.95 1.81 101
0.00 0.00 (1.85) 0.00 15.65 12.71 10,349 0.96* 1.40* 77
$ 0.00 $0.00 $(0.06) $ 0.00 $ 8.99 (9.48)% $ 229 0.85%* 1.89%* 182%
$(0.45) $0.00 $(0.66) $ 0.00 $16.05 (5.11)% $59,132 0.85% 2.12% 60%
0.00 0.00 (0.89) 0.00 17.68 17.77 47,432 0.85 1.65 41
0.00 0.00 (2.51) 0.00 15.78 31.99 34,639 0.90 1.92 48
0.00 0.00 (0.95) 0.00 14.20 16.35 29,017 0.85* 2.12* 35
0.00 0.00 (1.17) 0.00 13.10 19.88 35,093 0.85 2.25 50
0.00 0.00 (0.38) 0.00 12.07 (2.89) 31,236 0.85 2.23 48
(0.45) 0.00 (0.65) 0.00 15.97 (5.40) 21,002 1.10 1.92 60
0.00 0.00 (0.87) 0.00 17.63 17.41 10,751 1.10 1.39 41
0.00 0.00 (2.50) 0.00 15.76 31.70 5,916 1.16 1.68 48
0.00 0.00 (0.93) 0.00 14.20 15.64 4,433 1.10* 1.86* 35
$ 0.00 $0.00 $(1.67) $ 0.00 $12.96 17.95 % $42,619 0.71% 0.66% 34%
0.00 0.00 (7.84) 0.00 12.64 32.33 36,584 0.71 0.63 65
0.00 0.00 (3.73) 0.00 16.46 31.45 44,838 0.74 1.31 91
0.00 0.00 (0.54) 0.00 15.91 14.21 83,425 0.70* 1.58* 53
0.00 0.00 (0.42) 0.00 14.44 24.46 73,999 0.70 1.91 21
0.00 0.00 (0.30) 0.00 11.99 1.83 65,915 0.70 2.20 44
0.00 0.00 (1.67) 0.00 12.87 17.63 24,015 0.96 0.41 34
0.00 0.00 (7.84) 0.00 12.59 23.85 10,409 0.95* 0.47* 65
$ 0.00 $0.00 $ 0.00 $ 0.00 $11.61 34.28 % $ 3,391 0.92%* 0.31%* 13%
$ 0.00 $0.00 $(0.35) $ 0.05 $12.42 29.21 % $46,577 0.95% 1.56% 30%
$ 0.00 $0.00 $(0.06) $ 0.05 $13.25 33.39 % $72,509 0.95% 1.57% 28%
$ 0.00 $0.00 $(1.15) $ 0.00 $11.62 23.07 % $ 3,627 1.09%* 1.70%* 55%
0.00 0.00 (1.15) 0.00 11.56 22.47 15,797 1.34* 1.06* 55
</TABLE>
Prospectus 82
<PAGE>
-------------------------------------------------------------------
PIMCO INVESTMENT ADVISER AND ADMINISTRATOR
Funds:
Multi- PIMCO Advisors L.P., 800 Newport Center Drive, Newport Beach, CA
Manager 92660
Series -------------------------------------------------------------------
CUSTODIAN
Investors Fiduciary Trust Company, 801 Pennsylvania, Kansas City,
MO 64105
-------------------------------------------------------------------
TRANSFER AGENT
National Financial Data Services, 330 W. 9th Street, 4th Floor,
Kansas City, MO 64105
-------------------------------------------------------------------
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP, 1055 Broadway, Kansas City, MO 64105
-------------------------------------------------------------------
LEGAL COUNSEL
Ropes & Gray, One International Place, Boston, MA 02110
-------------------------------------------------------------------
<PAGE>
The Trust's Statement of Additional Information ("SAI") and annual and semi-
annual reports to shareholders include additional information about the Funds.
The SAI and the financial statements included in the Funds' most recent annual
report to shareholders are incorporated by reference into this Prospectus, which
means they are part of this Prospectus for legal purposes. The Funds' annual
report discusses the market conditions and investment strategies that
significantly affected each Fund's performance during its last fiscal year.
You may get free copies of any of these materials, request other information
about a Fund, or make shareholder inquiries by calling the Trust at 1-800-927-
4648 or PIMCO Infolink Audio Response Network at 1-800-987-4626, or by writing
to:
PIMCO Funds:
Multi-Manager Series
840 Newport Center Drive
Suite 300
NewPort Beach, CA 92660
You may review and copy information about the Trust, including its SAI, at the
Securities and Exchange Commission's public reference room in Washington, D.C.
You may call the Commission at 1-800-SEC-0330 for information about the
operation of the public reference room. You may also access reports and other
information about the Trust on the Commission's Web site at www.sec.gov. You may
get copies of this information, with payment of a duplication fee, by writing
the Public Reference Section of the Commission, Washington, D.C. 20549-6009. You
may need to refer to the Trust's file number under the Investment Company Act,
which is 811-6161.
PIMCO
FUNDS
PIMCO Funds
Multi-Manager Series
840 Newport Center Drive
Suite 300
Newport Beach, CA 92660
File No. 811-6161
<PAGE>
Rule 497(c)
33-36528
811-6161
PIMCO Funds Prospectus
PIMCO This Prospectus describes three actively managed mutual fund
Funds: Portfolios offered by PIMCO Funds: Multi-Manager Series.
Multi-
Manager
Series
Asset Allocation Series -- 90/10 Portfolio
Asset Allocation Series -- 60/40 Portfolio
November Asset Allocation Series -- 30/70 Portfolio
1, 1999
Each Portfolio invests in a diversified portfolio of other PIMCO
Funds. This Prospectus explains what you should know about the
Portfolios before you invest. Please read it carefully.
Share
Classes
A, B
and C
The Securities and Exchange Commission has not approved or
disapproved these securities or determined if this Prospectus is
truthful or complete. Any representation to the contrary is a
criminal offense.
1 PIMCO Funds: Multi-Manager Series
<PAGE>
Table of Contents
<TABLE>
<S> <C>
Summary Information................................................ 3
Portfolio Summaries
90/10 Portfolio.................................................. 5
60/40 Portfolio.................................................. 7
30/70 Portfolio.................................................. 9
Summary of Principal Risks......................................... 11
Investment Objectives and Principal Investment Strategies.......... 17
Underlying Funds................................................... 20
Other Risk Information............................................. 23
Management of the Portfolios....................................... 24
Investment Options - Class A, B and C Shares ...................... 26
How Portfolio Shares Are Priced.................................... 29
How to Buy and Sell Shares......................................... 29
Portfolio Distributions............................................ 33
Tax Consequences................................................... 34
Financial Highlights............................................... 35
</TABLE>
Prospectus 2
<PAGE>
Summary Information
The Portfolios are intended for investors who prefer to have their
asset allocation decisions made by professional money managers.
Each Portfolio has a distinct investment objective which it seeks
to achieve by investing within specified equity and fixed income
targets and ranges among certain Funds in the PIMCO Funds family.
The Portfolios invest only in Funds in the PIMCO Funds family. The
PIMCO Funds in which the Portfolios invest are called Underlying
Funds or Funds in this Prospectus.
Some of the Underlying Funds invest primarily in equity
securities and are called Underlying Stock Funds. Other Underlying
Funds invest primarily in fixed income securities, including money
market instruments, and are called Underlying Bond Funds. The
Portfolios are named according to their equity/fixed income
allocation targets. For instance, the 90/10 Portfolio will
normally invest approximately 90% of its assets in Underlying
Stock Funds and 10% of its assets in Underlying Bond Funds.
The table below lists the investment objectives and compares the
asset allocation strategies of the Portfolios. Other important
characteristics are described in the individual Portfolio
Summaries beginning on page 5, and are discussed in greater detail
under "Investment Objectives and Principal Investment Strategies."
A "Summary of Principal Risks" begins on page 11.
<TABLE>
<CAPTION>
PIMCO Funds
Asset Allocation Series Investment Objective Allocation Strategy
----------------------------------------------------------------------
<C> <C> <S>
90/10 Portfolio Long-term capital Under normal conditions,
appreciation approximately 90% (range
of 80%-100%) of the
Portfolio's assets will
be allocated among
Underlying Stock Funds
and 10% (range of 0%-
20%) among Underlying
Bond Funds
----------------------------------------------------------------------
60/40 Portfolio Long-term capital Under normal conditions,
appreciation and approximately 60% (range
current income of 50%-70%) of the
Portfolio's assets will
be allocated among
Underlying Stock Funds
and 40% (range of 30%-
50%) among Underlying
Bond Funds
----------------------------------------------------------------------
30/70 Portfolio Current income, with Under normal conditions,
long-term approximately 30% (range
capital appreciation as of 25%-35%) of the
a Portfolio's assets will
secondary objective be allocated among
Underlying Stock Funds
and 70% (range of 65%-
75%) among Underlying
Bond Funds
</TABLE>
Risk/Return You should choose among the Portfolios based on personal
Comparison investment objectives, investment time horizon, tolerance for risk
and personal financial circumstances. Generally speaking,
historical data suggests that the longer the time horizon, the
greater the likelihood that the total return of a portfolio that
invests primarily in equity securities will be higher than the
total return of a portfolio that invests primarily in fixed income
securities. However, an equity portfolio is generally subject to
higher levels of overall risk and price volatility than a fixed
income portfolio and is considered to be a more aggressive
investment. Based on these assumptions, the following chart gives
some indication of the comparative risk/return potential of the
Portfolios according to their equity/fixed income allocation
targets and ranges. Note that these assumptions may not be correct
in future market conditions and the chart may not accurately
predict the actual comparative risk/return of the Portfolios under
all market conditions.
90/10 Portfolio might be suitable if you have a relatively
long time horizon, seek long-term capital appreciation
potential and have a fairly high tolerance for risk and
volatility.
60/40 Portfolio might be suitable if you have a medium-
range time horizon, seek a balance of long-term capital
appreciation potential and income and have medium tolerance
for risk and volatility.
30/70 Portfolio might be suitable if you have a shorter
time horizon, seek a higher level of income combined with
some potential for long-term capital appreciation and have
a lower tolerance for risk and volatility.
It is possible to lose money on investments in the Portfolios.
While each Portfolio provides a relatively high level of
diversification in comparison to most mutual funds, a single
Portfolio may not be suitable as a complete investment program. An
investment in a Portfolio is not a deposit of a bank and is not
guaranteed or insured by the Federal Deposit Insurance Corporation
or any other government agency.
3 PIMCO Funds: Multi-Manager Series
<PAGE>
Summary Information (continued)
Asset PIMCO Advisors L.P. serves as the investment adviser to the
Allocation Portfolios. PIMCO Advisors' Asset Allocation Committee determines
Strategies how each Portfolio allocates and reallocates its assets among the
Underlying Funds according to the Portfolio's equity/fixed income
allocation targets and ranges. The Committee attempts to diversify
each Portfolio's assets broadly among the major asset classes and
sub-classes represented by the Underlying Funds.
The major equity asset classes and sub-classes held by the
Underlying Stock Funds include those categorized by investment
style/category (growth, blend, value, enhanced index, sector-
related), region (U.S. equities, international developed markets,
international emerging markets), and market capitalization (large-
cap, mid-cap and small-cap). The major fixed income asset classes
and sub-classes held by the Underlying Bond Funds include those
categorized by sector/investment specialty (government securities,
mortgage-related securities, corporate bonds and inflation-indexed
bonds), region (U.S. fixed income, developed foreign fixed income,
emerging markets fixed income), credit quality (investment
grade/money market, medium grade, high yield), and duration (long-
term, intermediate-term and short-term).
Please see "Underlying Funds" in this Prospectus for a
description of the Underlying Funds as categorized by their
investment styles and main investments.
The Portfolios may invest in any or all of the Underlying Funds,
but will not normally invest in every Underlying Fund at any
particular time. Each Portfolio may invest in shares of the same
Underlying Funds; however, the percentage of each Portfolio's
assets so invested will vary depending on the Portfolio's
investment objective. The Asset Allocation Committee does not
allocate a Portfolio's assets according to a predetermined blend
of particular Underlying Funds. Instead, the Committee meets
regularly to determine the mix of Underlying Funds appropriate for
each Portfolio by allocating among the asset classes and sub-
classes held by the Underlying Funds. When making these decisions,
the Committee considers various quantitative and qualitative data
relating to the U.S. and foreign economies and securities markets.
This data includes projected growth trends in the U.S. and foreign
economies, forecasts for interest rates and the relationship
between short- and long-term interest rates (yield curve), current
and projected trends in inflation, relative valuation levels in
the equity and fixed income markets and various segments within
those markets, the outlook and projected growth of various
industrial sectors, information relating to business cycles,
borrowing trends and the cost of capital, political trends, data
relating to trade balances and labor information. The Committee
may also consider proprietary research provided by the investment
advisers and sub-advisers of the Underlying Funds.
The Committee then selects representative Underlying Funds for
each Portfolio to fill out the asset class and sub-class
weightings it has identified according to the Portfolio's
equity/fixed income targets and ranges. The Committee has the
flexibility to reallocate each Portfolio's assets in varying
percentages among any or all of the Underlying Funds based on the
Committee's ongoing analyses of the equity and fixed income
markets, although these tactical shifts are not expected to be
large or frequent in nature.
"Fund of The term "fund of funds" is used to describe mutual funds, such as
Funds" the Portfolios, that pursue their investment objectives by
Structure investing in other mutual funds. Your cost of investing in a
and Portfolio will generally be higher than the cost of investing in a
Expenses mutual fund that invests directly in individual stocks and bonds.
By investing in a Portfolio, you will indirectly bear fees and
expenses charged by the Underlying Funds in which the Portfolio
invests in addition to the Portfolio's direct fees and expenses.
In addition, the use of a fund of funds structure could affect the
timing, amount and character of distributions to you and therefore
may increase the amount of taxes payable by you.
Portfolio The following Portfolio Summaries identify each Portfolio's
Descriptionsinvestment objective, principal investments and strategies,
and Fees principal risks and fees and expenses. A more detailed "Summary of
Principal Risks" describing principal risks of investing in the
Portfolios begins after the Portfolio Summaries. Because the
Portfolios have not been in operation for a full calendar year, no
performance information (e.g., a bar chart or average annual total
returns table) is included for the Portfolios. A fuller discussion
of the Portfolios' investment strategies and related information
is included under "Investment Objectives and Principal Investment
Strategies" in this Prospectus.
Prospectus 4
<PAGE>
90/10 Portfolio
- --------------------------------------------------------------------------------
Principal Investment <TABLE>
Investments Objective <CAPTION>
and Allocation
Strategies Strategy Target Range
<S> <C> <C>
Underlying Stock
Funds 90% 80%-100%
Underlying Bond
Funds 10% 0%-20%
</TABLE>
Seeks long-term
capital
appreciation
Dividend
Frequency
At least
annually
The Portfolio seeks to achieve its investment objective by
normally investing approximately 90% (within a range of 80%-100%)
of its assets in Underlying Stock Funds and approximately 10%
(within a range of 0%-20%) of its assets in Underlying Bond Funds.
The Portfolio invests all of its assets in shares of the
Underlying Funds and does not invest directly in stocks or bonds
of other issuers.
Please see "Asset Allocation Strategies" on page 3 for a summary
of how the Asset Allocation Committee allocates and reallocates
the Portfolio's assets among particular Underlying Funds.
The Portfolio may concentrate investments in a particular
Underlying Fund by investing more than 25% of its assets in that
Fund.
Based on the Portfolio's equity/fixed income allocation
strategy, it might be suitable for an investor with a relatively
long time horizon who seeks long-term capital appreciation
potential and has a fairly high tolerance for risk and volatility.
- --------------------------------------------------------------------------------
Principal Allocation Risk The Portfolio's investment performance depends
Risks upon how its assets are allocated and reallocated among particular
Underlying Funds. A principal risk of investing in the Portfolio
is that the Asset Allocation Committee's allocation techniques and
decisions will not produce the desired results, and the Portfolio
may not achieve its investment objective.
Underlying Fund Risks The value of your investment in the
Portfolio is directly related to the investment performance of the
Underlying Funds in which it invests. Therefore, the principal
risks of investing in the Portfolio are closely related to the
principal risks associated with the Underlying Funds and their
investments. Because the Portfolio's allocation among the
Underlying Funds will vary, your investment may be subject to any
and all of these risks at different times and to different
degrees.
Among the principal risks of the Underlying Funds, which could
adversely affect the net asset value, yield and total return of
the Portfolio, are:
.Market Risk .Derivatives Risk .Interest Rate Risk
.Issuer Risk .Foreign Investment Risk
.Credit Risk
.Value Securities Risk.Emerging Markets Risk
.High Yield Risk
.Growth Securities Risk
.Currency Risk .Mortgage Risk
.Smaller Company Risk .Concentration Risk .Management Risk
.Liquidity Risk .Leveraging Risk
Please see "Summary of Principal Risks" following the Portfolio
Summaries for a description of these and other risks associated
with the Underlying Funds and an investment in the Portfolio.
- --------------------------------------------------------------------------------
Performance The Portfolio commenced operations in September 1998 and does not
Information yet have a full calendar year of performance to be shown in the
Prospectus. Therefore, no bar chart or average annual total
returns table is provided for the Portfolio.
5 PIMCO Funds: Multi-Manager Series
<PAGE>
90/10 Portfolio (continued)
- --------------------------------------------------------------------------------
These tables describe the fees and expenses you may pay if you buy
and hold Class A, B or C shares of the Portfolio:
Fees and Shareholder Fees (fees paid directly from your investment)
Expenses
of the
Portfolio
<TABLE>
<S> <C> <C>
Maximum Sales Charge (Load) Imposed Maximum Contingent Deferred Sales Charge (Load)
on Purchases (as a percentage of offering price) (as a percentage of original purchase price)
------------------------------------------------------------------------------------------------------
Class A 5.50% 1%(/1/)
------------------------------------------------------------------------------------------------------
Class B None 5%(/2/)
------------------------------------------------------------------------------------------------------
Class C None 1%(/3/)
------------------------------------------------------------------------------------------------------
</TABLE>
(1) Imposed only in certain circumstances where Class A shares are
purchased without a front-end sales charge at the time of
purchase.
(2) The maximum CDSC is imposed on shares redeemed in the first
year. For shares held longer than one year, the CDSC declines
according to the schedule set forth under "Investment
Options--Class A, B and C Shares--Contingent Deferred Sales
Charges (CDSCs)--Class B Shares."
(3) The CDSC on Class C shares is imposed only on shares redeemed
in the first year.
Annual Portfolio Operating Expenses (expenses that are deducted
from Portfolio assets)
<TABLE>
<S> <C> <C> <C> <C> <C>
Other Expenses
---------------------------------
Distribution Total Annual
Advisory and/or Service Administrative Underlying Portfolio Operating
Share Class Fees (12b-1) Fees(/1/) Fees(/2/) Fund Expenses(/3/) Expenses
------------------------------------------------------------------------------------------
Class A None 0.25% 0.40% 0.76% 1.41%
------------------------------------------------------------------------------------------
Class B None 1.00 0.40 0.76 2.16
------------------------------------------------------------------------------------------
Class C None 1.00 0.40 0.76 2.16
------------------------------------------------------------------------------------------
</TABLE>
(1) Due to the 12b-1 distribution fee imposed on Class B and Class
C shares, a Class B or Class C shareholders may, depending
upon the length of time the shares are held, pay more than the
economic equivalent of the maximum front-end sales charges
permitted by relevant rules of the National Association of
Securities Dealers, Inc.
(2) The Administrative Fees are subject to a reduction of 0.05% on
average net assets attributable in the aggregate to the
Portfolio's Class A, B and C shares in excess of $2.5 billion.
(3) Based on estimated expenses for the current fiscal year.
Underlying Fund Expenses for the Portfolio are estimated based
upon a recent allocation of the Portfolio's assets among
Underlying Funds and upon the total annual operating expenses
of Institutional Class shares of these Underlying Funds. For a
listing of the expenses associated with each Underlying Fund,
please see "Management of the Portfolios--Underlying Fund
Expenses." Total Annual Portfolio Operating Expenses and the
Examples set forth below are based on estimates of the
Underlying Fund Expenses the Portfolio will incur. Actual
Underlying Fund Expenses for the Portfolio are expected to
vary with changes in the allocation of the Portfolio's assets,
and may be higher or lower than those shown above.
Examples. The Examples are intended to help you compare the cost
of investing in Class A, B or C shares of the Portfolio with the
costs of investing in other mutual funds. The Examples assume that
you invest $10,000 in the noted class of shares for the time
periods indicated, your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the
Portfolio's operating expenses remain the same. Although your
actual costs may be higher or lower, the Examples show what your
costs would be based on these assumptions.
<TABLE>
<CAPTION>
Example: Assuming you do not
Example: Assuming you redeem your shares at the end of each period redeem your shares
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Share Class Year 1 Year 3 Year 5 Year 10 Year 1 Year 3 Year 5 Year 10
-----------------------------------------------------------------------------------------------------------
Class A $686 $972 $1,279 $2,148 $686 $972 $1,279 $2,148
-----------------------------------------------------------------------------------------------------------
Class B 719 976 1,359 2,207 219 676 1,159 2,207
-----------------------------------------------------------------------------------------------------------
Class C 319 676 1,159 2,493 219 676 1,159 2,493
-----------------------------------------------------------------------------------------------------------
</TABLE>
Prospectus 6
<PAGE>
60/40 Portfolio
- --------------------------------------------------------------------------------
Principal Investment
Investments Objective
and
Strategies
<TABLE>
<CAPTION> Seeks long-term
capital Allocation
appreciation and Strategy Target Range
current income <S> <C> <C>
Underlying Stock
Funds 60% 50%-70%
Underlying Bond
Funds 40% 30%-50%
</TABLE>
Dividend
Frequency
Quarterly
The Portfolio seeks to achieve its investment objective by
normally investing approximately 60% (within a range of 50%-70%)
of its assets in Underlying Stock Funds and approximately 40%
(within a range of 30%-50%) of its assets in Underlying Bond
Funds. The Portfolio invests all of its assets in shares of the
Underlying Funds and does not invest directly in stocks or bonds
of other issuers.
Please see "Asset Allocation Strategies" on page 3 for a summary
of how the Asset Allocation Committee allocates and reallocates
the Portfolio's assets among particular Underlying Funds.
The Portfolio may concentrate investments in a particular
Underlying Fund by investing more than 25% of its assets in that
Fund.
Based on the Portfolio's equity/fixed income allocation
strategy, it might be suitable for an investor with a medium-range
time horizon who seeks a balance of long-term capital appreciation
potential and income and has a medium tolerance for risk and
volatility.
- --------------------------------------------------------------------------------
Principal Allocation Risk The Portfolio's investment performance depends
Risks upon how its assets are allocated and reallocated among particular
Underlying Funds. A principal risk of investing in the Portfolio
is that the Asset Allocation Committee's allocation techniques and
decisions will not produce the desired results, and the Portfolio
may not achieve its investment objective.
Underlying Fund Risks The value of your investment in the
Portfolio is directly related to the investment performance of the
Underlying Funds in which it invests. Therefore, the principal
risks of investing in the Portfolio are closely related to the
principal risks associated with the Underlying Funds and their
investments. Because the Portfolio's allocation among the
Underlying Funds will vary, your investment may be subject to any
and all of these risks at different times and to different
degrees.
Among the principal risks of the Underlying Funds, which could
adversely affect the net asset value, yield and total return of
the Portfolio, are:
.Market Risk .Credit Risk .Emerging Markets Risk
.Issuer Risk .High Yield Risk .Currency Risk
.Value Securities Risk.Mortgage Risk .Concentration Risk
.Growth Securities Risk
.Liquidity Risk .Leveraging Risk
.Smaller Company Risk .Derivatives Risk .Management Risk
.Interest Rate Risk .Foreign Investment Risk
Please see "Summary of Principal Risks" following the Portfolio
Summaries for a description of these and other risks associated
with the Underlying Funds and an investment in the Portfolio.
- --------------------------------------------------------------------------------
Performance The Portfolio commenced operations in September 1998 and does not
Information yet have a full calendar year of performance to be shown in the
Prospectus. Therefore, no bar chart or average annual total
returns table is provided for the Portfolio.
7 PIMCO Funds: Multi-Manager Series
<PAGE>
60/40 Portfolio (continued)
- --------------------------------------------------------------------------------
These tables describe the fees and expenses you may pay if you buy
and hold Class A, B or C shares of the Portfolio:
Fees and Shareholder Fees (fees paid directly from your investment)
Expenses
of the
Portfolio
<TABLE>
<S> <C> <C>
Maximum Sales Charge (Load) Imposed Maximum Contingent Deferred Sales Charge (Load)
on Purchases (as a percentage of offering price) (as a percentage of original purchase price)
------------------------------------------------------------------------------------------------------
Class A 5.50% 1%(/1/)
------------------------------------------------------------------------------------------------------
Class B None 5%(/2/)
------------------------------------------------------------------------------------------------------
Class C None 1%(/3/)
------------------------------------------------------------------------------------------------------
</TABLE>
(1) Imposed only in certain circumstances where Class A shares are
purchased without a front-end sales charge at the time of
purchase.
(2) The maximum CDSC is imposed on shares redeemed in the first
year. For shares held longer than one year, the CDSC declines
according to the schedule set forth under "Investment
Options--Class A, B and C Shares--Contingent Deferred Sales
Charges (CDSCs)--Class B Shares."
(3) The CDSC on Class C shares is imposed only on shares redeemed
in the first year.
Annual Portfolio Operating Expenses (expenses that are deducted
from Portfolio assets)
<TABLE>
<S> <C> <C> <C> <C> <C>
Other Expenses
---------------------------------
Distribution Total Annual
Advisory and/or Service Administrative Underlying Portfolio Operating
Share Class Fees (12b-1) Fees(/1/) Fees(/2/) Fund Expenses(/3/) Expenses
------------------------------------------------------------------------------------------
Class A None 0.25% 0.40% 0.65% 1.30%
------------------------------------------------------------------------------------------
Class B None 1.00 0.40 0.65 2.05
------------------------------------------------------------------------------------------
Class C None 1.00 0.40 0.65 2.05
------------------------------------------------------------------------------------------
</TABLE>
(1) Due to the 12b-1 distribution fee imposed on Class B and Class
C shares, a Class B or Class C shareholders may, depending
upon the length of time the shares are held, pay more than the
economic equivalent of the maximum front-end sales charges
permitted by relevant rules of the National Association of
Securities Dealers, Inc.
(2) The Administrative Fees are subject to a reduction of 0.05% on
average net assets attributable in the aggregate to the
Portfolio's Class A, B and C shares in excess of $2.5 billion.
(3) Based on estimated expenses for the current fiscal year.
Underlying Fund Expenses for the Portfolio are estimated based
upon a recent allocation of the Portfolio's assets among
Underlying Funds and upon the total annual operating expenses
of Institutional Class shares of these Underlying Funds. For a
listing of the expenses associated with each Underlying Fund,
please see "Management of the Portfolios--Underlying Fund
Expenses." Total Annual Portfolio Operating Expenses and the
Examples set forth below are based on estimates of the
Underlying Fund Expenses the Portfolio will incur. Actual
Underlying Fund Expenses for the Portfolio are expected to
vary with changes in the allocation of the Portfolio's assets,
and may be higher or lower than those shown above.
Examples. The Examples are intended to help you compare the cost
of investing in Class A, B or C shares of the Portfolio with the
costs of investing in other mutual funds. The Examples assume that
you invest $10,000 in the noted class of shares for the time
periods indicated, your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the
Portfolio's operating expenses remain the same. Although your
actual costs may be higher or lower, the Examples show what your
costs would be based on these assumptions.
<TABLE>
<CAPTION>
Example: Assuming you do not
Example: Assuming you redeem your shares at the end of each period redeem your shares
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Share Class Year 1 Year 3 Year 5 Year 10 Year 1 Year 3 Year 5 Year 10
-----------------------------------------------------------------------------------------------------------
Class A $675 $939 $1,224 $2,032 $675 $939 $1,224 $2,032
-----------------------------------------------------------------------------------------------------------
Class B 708 943 1,303 2,091 208 643 1,103 2,091
-----------------------------------------------------------------------------------------------------------
Class C 308 643 1,103 2,379 208 643 1,103 2,379
-----------------------------------------------------------------------------------------------------------
</TABLE>
Prospectus 8
<PAGE>
30/70 Portfolio
- --------------------------------------------------------------------------------
Principal Investment <TABLE>
Investments Objective <CAPTION>
and Seeks current Allocation
Strategies income, with Strategy Target Range
long-term <S> <C> <C>
capital Underlying Stock
appreciation as Funds 30% 25%-35%
a secondary Underlying Bond
objective Funds 70% 65%-75%
</TABLE>
Dividend
Frequency
Monthly
The Portfolio seeks to achieve its investment objective by
normally investing approximately 30% (within a range of 25%-35%)
of its assets in Underlying Stock Funds and approximately 70%
(within a range of 65%-75%) of its assets in Underlying Bond
Funds. The Portfolio invests all of its assets in shares of the
Underlying Funds and does not invest directly in stocks or bonds
of other issuers.
Please see "Asset Allocation Strategies" on page 3 for a summary
of how the Asset Allocation Committee allocates and reallocates
the Portfolio's assets among particular Underlying Funds.
The Portfolio may concentrate investments in a particular
Underlying Fund by investing more than 25% of its assets in that
Fund.
Based on the Portfolio's equity/fixed income allocation
strategy, it might be suitable for an investor with a shorter time
horizon who seeks a higher level of income combined with some
potential for long-term capital appreciation and has a lower
tolerance for risk and volatility.
- --------------------------------------------------------------------------------
Principal Allocation Risk The Portfolio's investment performance depends
Risks upon how its assets are allocated and reallocated among particular
Underlying Funds. A principal risk of investing in the Portfolio
is that the Asset Allocation Committee's allocation techniques and
decisions will not produce the desired results, and the Portfolio
may not achieve its investment objective.
Underlying Fund Risks The value of your investment in the
Portfolio is directly related to the investment performance of the
Underlying Funds in which it invests. Therefore, the principal
risks of investing in the Portfolio are closely related to the
principal risks associated with the Underlying Funds and their
investments. Because the Portfolio's allocation among the
Underlying Funds will vary, your investment may be subject to any
and all of these risks at different times and to different
degrees.
Among the principal risks of the Underlying Funds, which could
adversely affect the net asset value, yield and total return of
the Portfolio, are:
.Interest Rate Risk.Value Securities Risk .Emerging Markets Risk
.Credit Risk .Growth Securities Risk.Currency Risk
Please see "Summary of Principal Risks" following the Portfolio
Summaries for a description of these and other risks associated
with the Underlying Funds and an investment in the Portfolio.
.High Yield Risk .Smaller Company Risk .Concentration Risk
.Mortgage Risk .Liquidity Risk .Leveraging Risk
.Market Risk .Derivatives Risk .Management Risk
.Issuer Risk .Foreign Investment Risk
- --------------------------------------------------------------------------------
Performance The Portfolio commenced operations in September 1998 and does not
Information yet have a full calendar year of performance to be shown in the
Prospectus. Therefore, no bar chart or average annual total
returns table is provided for the Portfolio.
9 PIMCO Funds: Multi-Manager Series
<PAGE>
30/70 Portfolio (continued)
- --------------------------------------------------------------------------------
These tables describe the fees and expenses you may pay if you buy
and hold Class A, B or C shares of the Portfolio:
Fees and Shareholder Fees (fees paid directly from your investment)
Expenses
of the
Portfolio
<TABLE>
<S> <C> <C>
Maximum Sales Charge (Load) Imposed Maximum Contingent Deferred Sales Charge (Load)
on Purchases (as a percentage of offering price) (as a percentage of original purchase price)
------------------------------------------------------------------------------------------------------
Class A 4.50% 1%(/1/)
------------------------------------------------------------------------------------------------------
Class B None 5%(/2/)
------------------------------------------------------------------------------------------------------
Class C None 1%(/3/)
------------------------------------------------------------------------------------------------------
</TABLE>
(1) Imposed only in certain circumstances where Class A shares are
purchased without a front-end sales charge at the time of
purchase.
(2) The maximum CDSC is imposed on shares redeemed in the first
year. For shares held longer than one year, the CDSC declines
according to the schedule set forth under "Investment
Options--Class A, B and C Shares--Contingent Deferred Sales
Charges (CDSCs)--Class B Shares."
(3) The CDSC on Class C shares is imposed only on shares redeemed
in the first year.
Annual Portfolio Operating Expenses (expenses that are deducted
from Portfolio assets)
<TABLE>
<S> <C> <C> <C> <C> <C>
Other Expenses
---------------------------------
Distribution Total Annual
Advisory and/or Service Administrative Underlying Portfolio Operating
Share Class Fees (12b-1) Fees(/1/) Fees(/2/) Fund Expenses(/3/) Expenses
------------------------------------------------------------------------------------------
Class A None 0.25% 0.40% 0.55% 1.20%
------------------------------------------------------------------------------------------
Class B None 1.00 0.40 0.55 1.95
------------------------------------------------------------------------------------------
Class C None 1.00 0.40 0.55 1.95
------------------------------------------------------------------------------------------
</TABLE>
(1) Due to the 12b-1 distribution fee imposed on Class B and Class
C shares, a Class B or Class C shareholders may, depending
upon the length of time the shares are held, pay more than the
economic equivalent of the maximum front-end sales charges
permitted by relevant rules of the National Association of
Securities Dealers, Inc.
(2) The Administrative Fees are subject to a reduction of 0.05% on
average net assets attributable in the aggregate to the
Portfolio's Class A, B, and C shares in excess of $2.5 billion.
(3) Based on estimated expenses for the current fiscal year.
Underlying Fund Expenses for the Portfolio are estimated based
upon a recent allocation of the Portfolio's assets among
Underlying Funds and upon the total annual operating expenses
of Institutional Class shares of these Underlying Funds. For a
listing of the expenses associated with each Underlying Fund,
please see "Management of the Portfolios--Underlying Fund
Expenses." Total Annual Portfolio Operating Expenses and the
Examples set forth below are based on estimates of the
Underlying Fund Expenses the Portfolio will incur. Actual
Underlying Fund Expenses for the Portfolio are expected to
vary with changes in the allocation of the Portfolio's assets,
and may be higher or lower than those shown above.
Examples. The Examples are intended to help you compare the cost
of investing in Class A, B or C shares of the Portfolio with the
costs of investing in other mutual funds. The Examples assume that
you invest $10,000 in the noted class of shares for the time
periods indicated, your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the
Portfolio's operating expenses remain the same. Although your
actual costs may be higher or lower, the Examples show what your
costs would be based on these assumptions.
<TABLE>
<CAPTION>
Example: Assuming you do not
Example: Assuming you redeem your shares at the end of each period redeem your shares
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Share Class Year 1 Year 3 Year 5 Year 10 Year 1 Year 3 Year 5 Year 10
-----------------------------------------------------------------------------------------------------------
Class A $567 $814 $1,080 $1,839 $567 $814 $1,080 $1,839
-----------------------------------------------------------------------------------------------------------
Class B 698 912 1,252 1,984 198 612 1,052 1,984
-----------------------------------------------------------------------------------------------------------
Class C 298 612 1,052 2,275 198 612 1,052 2,275
-----------------------------------------------------------------------------------------------------------
</TABLE>
Prospectus 10
<PAGE>
Summary of Principal Risks
The value of your investment in a Portfolio changes with the
values of that Portfolio's investments in the Underlying Funds.
Many factors can affect those values. The factors that are most
likely to have a material effect on a particular Portfolio's
investments as a whole are called "principal risks." The principal
risks of each Portfolio are identified in the Portfolio Summaries
beginning on page 5 and are summarized in this section. There is
no guarantee that a Portfolio will be able to achieve its
investment objective.
Allocation Risk
Each Portfolio's investment performance depends upon how its
assets are allocated and reallocated among particular Underlying
Funds according to the Portfolio's equity/fixed income allocation
targets and ranges. A principal risk of investing in each
Portfolio is that PIMCO Advisors' Asset Allocation Committee will
make less than optimal or poor asset allocation decisions. The
Committee attempts to identify asset classes and sub-classes
represented by the Underlying Funds that will provide consistent,
quality performance for the Portfolios, but there is no guarantee
that the Committee's allocation techniques will produce the
desired results. It is possible that the Committee will focus on
Underlying Funds that perform poorly or underperform other
available Funds under various market conditions. You could lose
money on your investment in a Portfolio as a result of these
allocation decisions.
Underlying Fund Risks
Because each Portfolio invests all of its assets in Underlying
Funds, the risks associated with investing in the Portfolios are
closely related to the risks associated with the securities and
other investments held by the Underlying Funds. The ability of a
Portfolio to achieve its investment objective will depend upon the
ability of the Underlying Funds to achieve their objectives. There
can be no assurance that the investment objective of any
Underlying Fund will be achieved.
Each Portfolio's net asset value will fluctuate in response to
changes in the net asset values of the Underlying Funds in which
it invests. The extent to which the investment performance and
risks associated with a particular Portfolio correlate to those of
a particular Underlying Fund will depend upon the extent to which
the Portfolio's assets are allocated from time to time for
investment in the Underlying Fund, which will vary. A Portfolio's
investment in a particular Underlying Fund may and in some cases
is expected to exceed 25% of its assets. To the extent that a
Portfolio invests a significant portion of its assets in an
Underlying Fund, it will be particularly sensitive to the risks
associated with that Fund.
The following summarizes principal risks associated with
investments in the Underlying Funds and, indirectly, with your
investment in a Portfolio. Each Underlying Fund may be subject to
additional principal risks other than those described below
because the types of investments made by an Underlying Fund can
change over time. The summary is not intended to be exhaustive.
For a more complete description of these risks and the securities
and investment techniques used by the Underlying Funds, please
refer to the Statement of Additional Information and the
Underlying Fund prospectuses, which are incorporated herein by
reference and are available free of charge by telephoning the
Distributor at 1-800-426-0107.
Market The market price of securities owned by an Underlying Fund may go
Risk up or down, sometimes rapidly or unpredictably. Securities may
decline in value due to factors affecting securities markets
generally or particular industries represented in the securities
markets. The value of a security may decline due to general market
conditions which are not specifically related to a particular
company, such as real or perceived adverse economic conditions,
changes in the general outlook for corporate earnings, changes in
interest or currency rates, or adverse investor sentiment
generally. They may also decline due to factors which affect a
particular industry or industries, such as labor shortages or
increased production costs and competitive conditions within an
industry. Equity securities generally have greater price
volatility than fixed income securities and the Underlying Stock
Funds are particularly sensitive to these market risks.
Issuer
Risk
The value of a security may also decline for a number of reasons
which directly relate to the issuer, such as management
performance, financial leverage and reduced demand for the
issuer's goods or services.
11 PIMCO Funds: Multi-Manager Series
<PAGE>
Value Each Underlying Stock Fund may invest in companies that may not be
Securities expected to experience significant earnings growth, but whose
Risk securities the Fund's portfolio manager believes are selling at a
price lower than their true value. PIMCO Equity Income,
Renaissance, Value, Value 25, Small-Cap Value, Capital
Appreciation, Mid-Cap Growth, Small-Cap Growth and Micro-Cap
Growth Funds place particular emphasis on value securities.
Companies that issue value securities may have experienced adverse
business developments or may be subject to special risks that have
caused their securities to be out of favor. If a portfolio
manager's assessment of a company's prospects is wrong, or if the
market does not recognize the value of the company, the price of
its securities may decline or may not approach the value that the
portfolio manager anticipates.
Growth Each Underlying Stock Fund may invest in equity securities of
Securities companies that its portfolio manager believes will experience
Risk relatively rapid earnings growth. PIMCO Growth, Target,
Opportunity, Capital Appreciation, Mid-Cap Growth, Small-Cap
Growth, Micro-Cap Growth, International Growth and Innovation
Funds place particular emphasis on growth securities. Growth
securities typically trade at higher multiples of current earnings
than other securities. Therefore, the values of growth securities
may be more sensitive to changes in current or expected earnings
than the values of other securities.
Smaller The general risks associated with equity securities and liquidity
Company risk are particularly pronounced for securities of companies with
Risk market capitalizations that are small compared to other publicly
traded companies. These companies may have limited product lines,
markets or financial resources or they may depend on a few key
employees. Securities of smaller companies may trade less
frequently and in lesser volume than more widely held securities
and their values may fluctuate more sharply than other securities.
They may also trade in the over-the-counter market or on a
regional exchange, or may otherwise have limited liquidity. PIMCO
Opportunity, Small-Cap Growth, Micro-Cap Growth and Small-Cap
Value Funds generally have substantial exposure to this risk.
PIMCO Target, Mid-Cap Growth and Value 25 Funds also have
significant exposure to this risk because they invest substantial
assets in companies with medium-sized market capitalizations,
which are smaller and generally less-seasoned than the largest
companies. Smaller company risk also applies to fixed income
securities issued by smaller companies and may affect certain
investments of the Underlying Bond Funds.
Liquidity Many of the Underlying Funds are subject to liquidity risk.
Risk Liquidity risk exists when particular investments are difficult to
purchase or sell, possibly preventing a Fund from selling out of
these illiquid securities at an advantageous time or price.
Underlying Funds with principal investment strategies that involve
securities of companies with smaller market capitalizations,
foreign securities, derivatives or securities with substantial
market and/or credit risk tend to have the greatest exposure to
liquidity risk.
Derivatives
Risk Many of the Underlying Funds may, but are not required to, use a
number of derivative instruments for risk management purposes or
as part of their investment strategies. Generally, derivatives are
financial contracts whose value depends upon, or is derived from,
the value of an underlying asset, reference rate or index, and may
relate to stocks, bonds, interest rates, currencies or currency
exchange rates, commodities, and related indexes. Examples of
derivative instruments include options contracts, futures
contracts, options on futures contracts and swap agreements. An
Underlying Fund's use of derivative instruments involves risks
different from, or possibly greater than, the risks associated
with investing directly in securities and other traditional
investments. Also, an Underlying Fund's portfolio manager may
decide not to employ any of these strategies and there is no
assurance that any derivatives strategy used by a Fund will
succeed.
A description of the various derivative instruments in which the
Underlying Funds may invest and the risks associated with each
instrument is included in the Underlying Fund prospectuses and in
the Statement of Additional Information. The following provides a
more general discussion of important risk factors relating to all
derivative instruments that may be used by the Underlying Funds.
Management Risk Derivative products are highly specialized
instruments that require investment techniques and risk analyses
different from those associated with stocks and bonds. The use of
a derivative requires an understanding not only of the underlying
instrument but also of the derivative itself, without the benefit
of observing the performance of the derivative under all possible
market conditions.
Credit Risk The use of a derivative instrument involves the risk
that a loss may be sustained as a result of the failure of another
party to the contract (usually referred to as a "counterparty") to
make required payments or otherwise comply with the contract's
terms.
Prospectus 12
<PAGE>
Liquidity Risk Liquidity risk exists when a particular
derivative instrument is difficult to purchase or sell. If a
derivative transaction is particularly large or if the relevant
market is illiquid (as is the case with many privately negotiated
derivatives), it may not be possible to initiate a transaction or
liquidate a position at an advantageous time or price.
Leveraging Risk Because many derivatives have a leverage
component, adverse changes in the value or level of the underlying
asset, reference rate or index can result in a loss substantially
greater than the amount invested in the derivative itself. Certain
derivatives have the potential for unlimited loss, regardless of
the size of the initial investment. When an Underlying Fund uses
derivatives for leverage, investments in that Fund will tend to be
more volatile, resulting in larger gains or losses in response to
market changes. To limit leveraging risk, the Underlying Funds
observe asset segregation requirements to cover their obligations
under derivative instruments.
Lack of Availability Because the markets for certain derivative
instruments (including markets located in foreign countries) are
relatively new and still developing, suitable derivatives
transactions may not be available in all circumstances for risk
management or other purposes. There is no assurance that an
Underlying Fund will engage in derivatives transactions at any
time or from time to time. A Fund's ability to use derivatives may
also be limited by certain regulatory considerations.
Market and Other Risks Like most other investments, derivative
instruments are subject to the general risk that the market value
of the instrument will change in a way detrimental to an
Underlying Fund's interest. If a portfolio manager incorrectly
forecasts the values of securities, currencies or interest rates
or other economic factors in using derivatives for an Underlying
Fund, the Fund might have been in a better position if it had not
entered into the transaction at all. While some strategies
involving derivative instruments can reduce the risk of loss, they
can also reduce the opportunity for gain or even result in losses
by offsetting favorable price movements in other investments of an
Underlying Fund. An Underlying Fund may also have to buy or sell a
security at a disadvantageous time or price because the Fund is
legally required to maintain offsetting positions or asset
coverage in connection with certain derivatives transactions.
Other risks in using derivatives include the risk of mispricing
or improper valuation of derivatives and the inability of
derivatives to correlate perfectly with underlying assets, rates
and indexes. Many derivatives, in particular privately negotiated
derivatives, are complex and often valued subjectively. Improper
valuations can result in increased cash payment requirements to
counterparties or a loss of value to an Underlying Fund. Also, the
value of derivatives may not correlate perfectly, or at all, with
the value of the assets, reference rates or indexes they are
designed to closely track. In addition, an Underlying Fund's use
of derivatives may also cause the Fund to realize higher amounts
of short-term capital gains (taxed at ordinary income tax rates
when distributed to shareholders who are individuals) than if the
Fund had not used such instruments.
Foreign Many Underlying Funds (in particular, PIMCO International,
Investment International Growth, Structured Emerging Markets, Tax-Efficient
Risk Structured Emerging Markets, Global Bond, Foreign Bond and
Emerging Markets Bond Funds) invest in securities of foreign
issuers, securities traded principally in securities markets
outside the United States and/or securities denominated in foreign
currencies (together, "foreign securities"). These Funds may
experience more rapid and extreme changes in value than Funds that
invest exclusively in securities of U.S. issuers or securities
that trade exclusively in U.S. markets.
The securities markets of many foreign countries are relatively
small, with a limited number of companies representing a small
number of industries. Foreign securities often trade with less
frequency and volume than domestic securities and therefore may
exhibit greater price volatility. Additionally, issuers of foreign
securities are usually not subject to the same degree of
regulation as U.S. issuers. Reporting, accounting and auditing
standards of foreign countries differ, in some cases
significantly, from U.S. standards. Also, nationalization,
expropriation or confiscatory taxation, currency blockage,
political changes or diplomatic developments could adversely
affect an Underlying Fund's investments in a foreign country. In
the event of nationalization, expropriation or other confiscation,
a Fund could lose its entire investment in foreign securities. To
the extent that an Underlying Fund invests a significant portion
of its assets in a concentrated geographic area like Eastern
Europe, South Africa or Asia, the Fund will generally have more
exposure to regional economic risks associated with foreign
investments. Adverse conditions in certain regions (such as
Southeast Asia) can also adversely affect securities of other
countries whose economies appear to be unrelated. In addition,
special U.S. tax considerations may apply to an Underlying Fund's
investment in foreign securities.
13 PIMCO Funds: Multi-Manager Series
<PAGE>
Certain Underlying Bond Funds may invest in sovereign debt
issued by governments, their agencies or instrumentalities, or
other government-related entities. Holders of sovereign debt may
be requested to participate in the rescheduling of such debt and
to extend further loans to governmental entities. In addition,
there is no bankruptcy proceeding by which defaulted sovereign
debt may be collected.
Emerging Certain Underlying Funds (in particular, PIMCO Structured Emerging
Markets Markets, Tax-Efficient Structured Emerging Markets and Emerging
Risk Markets Bond Funds) may invest in the securities of issuers based
in countries with developing or "emerging market" economies. These
securities may present market, credit, currency, liquidity, legal,
political and other risks different from, or greater than, the
risks of investing in developed foreign countries.
Currency Many Underlying Funds may invest directly in foreign currencies or
Risk in securities that trade in, or receive revenues in, foreign
currencies. To the extent that they do so, these Funds are subject
to the risk that those currencies will decline in value relative
to the U.S. dollar, or, in the case of hedging positions, that the
U.S. Dollar will decline in value relative to the currency being
hedged. PIMCO Global Bond, Foreign Bond, Emerging Markets Bond,
International, International Growth, Structured Emerging Markets
and Tax-Efficient Structured Emerging Markets Funds are
particularly sensitive to currency risk. Currency rates in foreign
countries may fluctuate significantly over short periods of time
for a number of reasons, including changes in interest rates,
intervention (or the failure to intervene) by U.S. or foreign
governments, central banks or supranational entities such as the
International Monetary Fund, or by the imposition of currency
controls or other political developments in the U.S. or abroad.
For example, significant uncertainty surrounds the recent
introduction of the euro (a common currency unit for the European
Union) in January 1999 and its effect on the value of securities
denominated in local European currencies. These and other
currencies in which Underlying Fund assets are denominated may be
devalued against the U.S. dollar, resulting in a loss to such
Funds.
Concentration
Risk
Concentration of investments in a small number of issuers,
industries or foreign currencies increases risk. PIMCO Global
Bond, Foreign Bond and Emerging Markets Bond Funds are "non-
diversified," which means that they may invest a greater
percentage of their assets in the securities of a single issuer
than diversified mutual funds. Other Underlying Funds, such as
PIMCO Value 25 Fund, normally invest in a relatively small number
of issuers. In addition, many Underlying Bond Funds may invest a
substantial portion of their assets in the bonds of similar
projects or from issuers in the same state. To the extent that
they concentrate investments, the Underlying Funds are more
susceptible to risks associated with a single economic, political
or regulatory occurrence than a more diversified portfolio might
be. Some of those investments also may present substantial credit
or other risks. PIMCO International, International Growth,
Structured Emerging Markets, Tax-Efficient Structured Emerging
Markets, Global Bond, Foreign Bond and Emerging Markets Bond Funds
may be subject to this risk to the extent they concentrate their
assets in securities denominated in a particular foreign currency
or in a concentrated geographic area outside the U.S. Similarly,
PIMCO Innovation Fund is vulnerable to events affecting companies
which use innovative technologies to gain a strategic, competitive
advantage in their industry and companies that provide and service
those technologies because it normally concentrates its
investments in those companies.
Although each Portfolio normally invests in a number of different
Underlying Funds, to the extent that a Portfolio concentrates a
significant portion of its assets in a single Underlying Fund, it
will be particularly sensitive to the risks associated with that
Fund and any investments in which that Fund concentrates.
Leveraging Certain Underlying Funds may engage in transactions or purchase
Risk instruments that give rise to forms of leverage. Such transactions
and instruments may include, among others, the use of reverse
repurchase agreements and other borrowings, the investment of
collateral from loans of portfolio securities, or the use of when-
issued, delayed-delivery or forward commitment transactions. An
Underlying Fund's use of derivatives may also involve leverage.
Leverage, including borrowing, will cause the value of an
Underlying Fund's shares to be more volatile that if the Fund did
not use leverage. This is because leverage tends to exaggerate the
effect of any increase or decrease in the value of a Fund's
portfolio securities. The use of leverage may also cause an
Underlying Fund to liquidate portfolio positions when it may not
be advantageous to do so in order to satisfy its obligations or to
meet segregation requirements.
Prospectus 14
<PAGE>
Interest All of the Underlying Funds that invest in fixed income
Rate Risk securities, and particularly the Underlying Bond Funds, are
subject to interest rate risk. Changes in the market values of
fixed income securities are largely a function of changes in the
current level of interest rates. The value of an Underlying Fund's
investments in fixed income securities will typically change as
the level of interest rates fluctuate. During periods of declining
interest rates, the value of fixed income securities generally
rise. Conversely, during periods of rising interest rates, the
value of fixed income securities generally decline.
"Duration" is one measure of the expected life of a fixed income
security that is used to determine the sensitivity of a security's
price to changes in interest rates. Securities with longer
durations tend to be more sensitive to changes in interest rates,
usually making them more volatile than securities with shorter
durations. Accordingly, Underlying Bond Funds with longer average
portfolio durations (e.g., PIMCO Long-Term U.S. Government Fund)
will be more sensitive to changes in interest rates than Funds
with shorter average portfolio durations (e.g., PIMCO Money
Market, Short-Term and Low Duration Funds). Also, some portfolios
(e.g., those with mortgage-backed and other prepayable securities)
have changing durations and may have increasing durations
precisely when that is least advantageous (i.e., when interest
rates are rising).
Many Underlying Funds, including most of the Underlying Bond
Funds, may invest in securities that are particularly sensitive to
fluctuations in prevailing interest rates and have relatively high
levels of interest rate risk. These include various mortgage-
related securities (for instance, the interest-only or "IO" class
of a stripped mortgage-backed security) and "zero coupon"
securities (fixed income securities, including certain U.S.
Government securities, that do not make periodic interest payments
and are purchased at a discount from their value at maturity).
Credit All of the Underlying Funds are subject to credit risk. This is
Risk the risk that the issuer or the guarantor of a fixed income
security, or the counterparty to a derivatives contract,
repurchase agreement or a loan of portfolio securities, will be
unable or unwilling to make timely principal and/or interest
payments, or to otherwise honor its obligations. Securities are
subject to varying degrees of credit risk, which are often
reflecting in credit ratings provided by rating agencies such as
Moody's Investors Service, Inc. ("Moody's") and Standard & Poor's
Ratings Services ("S&P").
The Underlying Funds that invest in fixed income securities
(particularly the Underlying Bond Funds) are subject to varying
degrees of risk that the issuers of the securities will have their
credit ratings downgraded or will default, potentially reducing
the Underlying Fund's share price and income level. Nearly all
fixed income securities are subject to some credit risk, whether
the issuers of the securities are corporations, states and local
governments or foreign governments. Even certain U.S. Government
securities are subject to credit risk.
High High yield securities (commonly known as "junk bonds") are fixed
Yield income securities rated lower than Baa by Moody's or BBB by S&P,
Risk or unrated securities determined to be of comparable quality.
Underlying Bond Funds which invest in high yield securities (in
particular, PIMCO High Yield and Emerging Markets Bond Funds) may
be subject to greater volatility and higher levels of credit,
liquidity and other risks than Funds that invest exclusively in
higher quality fixed income securities (e.g., PIMCO Money Market
and Long-Term U.S. Government Funds). High yield securities are
considered predominately speculative with respect to the issuer's
continuing ability to make principal and interest payments (credit
risk). High yield securities may also be more susceptible to real
or perceived adverse economic and competitive industry conditions
than higher quality fixed income securities. An economic downturn
or period of rising interest rates could adversely affect the
market for high yield securities and reduce an Underlying Bond
Fund's ability to sell its high yield securities (liquidity risk).
Mortgage Most of the Underlying Bond Funds may invest in mortgage-related
Risk securities. Rising interest rates tend to extend the duration of
mortgage-related securities, making them more sensitive to changes
in interest rates. As a result, in a period of rising interest
rates, an Underlying Fund that holds mortgage-related securities
may exhibit additional volatility. This is sometimes referred to
as extension risk. In addition, mortgage-related securities may
involve special risks relating to unanticipated rates of
prepayment on the mortgages underlying the securities. This is
sometimes referred to as prepayment risk. Declining interest rates
may tend to increase prepayments, and these prepayments would have
to be reinvested at the then-prevailing lower interest rates.
Therefore, an Underlying Fund that holds mortgage-related
securities may have less potential for capital appreciation during
periods of declining interest rates than Funds that invest in
other types of fixed income securities of similar maturities.
15 PIMCO Funds: Multi-Manager Series
<PAGE>
Management Each Underlying Fund is subject to management risk because it is
Risk an actively managed investment portfolio. PIMCO Advisors, Pacific
Investment Management Company, and the sub-advisers and individual
portfolio managers of the Underlying Funds will apply investment
techniques and risk analyses in making investment decisions for
the Funds, but there can be no guarantee that they will produce
the desired results.
A Note on Each Portfolio may invest in PIMCO StocksPLUS Fund. While the
PIMCO investment objective of that Fund is to achieve a total return
StocksPLUS which exceeds the total return performance of the S&P 500 Index,
Fund it does so by investing substantially all of its assets in a
combination of equity-based (S&P 500 Index) derivative
instruments, backed by a portfolio of fixed income securities.
Consequently, the risks of investing in the Fund include
derivatives risk and the risks generally associated with the
Underlying Bond Funds. To the extent that the Fund invests in S&P
500 Index derivatives backed by a portfolio of fixed income
securities, under certain conditions, generally in a market where
the value of both S&P 500 Index derivatives and fixed income
securities are declining, the Fund may experience greater losses
than would be the case if it were to invest directly in a
portfolio of S&P 500 Index stocks.
Prospectus 16
<PAGE>
Investment Objectives and Principal Investment Strategies
The investment objective and principal investment strategies of
each Portfolio are described below. There can be no assurance that
the investment objective of any Portfolio will be achieved.
Because the market value of each Portfolio's investments will
change, the net asset value per share of each Portfolio will also
vary.
The Portfolios are intended for investors who prefer to have
their asset allocation decisions made by professional money
managers. Each Portfolio seeks to achieve its investment objective
by investing within specified equity and fixed income ranges among
the Underlying Funds. Each Underlying Fund is a series of the
Trust or PIMCO Funds: Pacific Investment Management Series and is
managed by PIMCO Advisors and/or its affiliates.
Portfolio 90/10 Portfolio seeks long-term capital appreciation. Under normal
Descriptionsconditions, approximately 90% of the Portfolio's assets will be
allocated among Underlying Stock Funds and 10% among Underlying
Bond Funds.
60/40 Portfolio seeks long-term capital appreciation and current
income. Under normal conditions, approximately 60% of the
Portfolio's assets will be allocated among Underlying Stock Funds
and 40% among Underlying Bond Funds.
30/70 Portfolio seeks current income. Long-term capital
appreciation is a secondary objective. Under normal conditions,
approximately 30% of the Portfolio's assets will be allocated
among Underlying Stock Funds and 70% among Underlying Bond Funds.
PIMCO Advisors serves as the investment adviser to the
Portfolios. PIMCO Advisors' Asset Allocation Committee determines
how each Portfolio allocates and reallocates its assets among the
Underlying Funds according to the Portfolio's equity/fixed income
allocation targets and ranges. Please see "Asset Allocation
Strategies" in the Summary Information section above for a
description of the allocation strategies and techniques used by
the Committee. The table below illustrates the equity and fixed
income allocation targets and typical ranges for each Portfolio
under normal market conditions.
Equity and Fixed Income Targets and Ranges
(as a percentage of each Portfolio's total investments)
<TABLE>
<CAPTION>
Typical
PIMCO Funds Target Allocation
Asset Allocation Series Allocation Range
--------------------------------------------------------
<S> <C> <C>
90/10 Portfolio
Equity--Underlying Stock Funds 90% 80% - 100%
Fixed Income--Underlying Bond Funds* 10% 0% - 20%
--------------------------------------------------------
60/40 Portfolio
Equity--Underlying Stock Funds 60% 50% - 70%
Fixed Income--Underlying Bond Funds* 40% 30% - 50%
--------------------------------------------------------
30/70 Portfolio
Equity--Underlying Stock Funds 30% 25% - 35%
Fixed Income--Underlying Bond Funds* 70% 65% - 75%
</TABLE>
* The Fixed Income portion may include a money market component
through investments in PIMCO Money Market Fund.
17 PIMCO Funds: Multi-Manager Series
<PAGE>
Each Portfolio invests all of its assets in Underlying Funds and
may invest in any or all of the Funds. However, it is expected
that a Portfolio will invest in only some of the Underlying Funds
at any particular time. A Portfolio's investment in a particular
Underlying Fund may exceed 25% of the Portfolio's total assets. To
the extent that a Portfolio invests a significant portion of its
assets in an Underlying Fund, it will be particularly sensitive to
the risks associated with that Fund. The particular Underlying
Funds in which each Portfolio may invest, the equity and fixed
income allocation targets and ranges specified above, and the
percentage of each Portfolio's assets invested from time to time
in any Underlying Fund or combination of Funds may be changed from
time to time without the approval of the Portfolio's shareholders.
Each Portfolio is also subject to certain investment restrictions
that are described under "Investment Restrictions" in the
Statement of Additional Information.
Equity The equity portion of each Portfolio will be allocated among a
Portion number of Underlying Stock Funds which represent a broad range of
of the equity-based asset classes and sub-classes and a variety of
Portfolios investment objectives and strategies. By allocating assets among
these Funds, the equity portions of the Portfolios can be
diversified in multiple ways, including the following:
By Investment Style/Category
.Growth
.Blend (Broad Market)
.Value
.Enhanced Index
.Sector-Related
By Region
.U.S. Equities
.International Developed Markets Equities
.International Emerging Markets Equities
By Size
.Large-Cap
.Mid-Cap
.Small-Cap
For a description of the Underlying Stock Funds and their
investment objectives and strategies, please see "Underlying
Funds."
Fixed The fixed income portion of each Portfolio will be allocated among
Income a number of Underlying Bond Funds which represent a broad range of
Portion fixed income-based asset classes and sub-classes and a variety of
of the investment objectives and strategies. By allocating assets among
Portfolios these Funds, the fixed income portions of the Portfolios can be
diversified in multiple ways, including the following:
By Sector/Investment Specialty
.Governments
.Mortgages
.Corporate
.Inflation-Indexed
By Region
.U.S. Fixed Income
.Developed Foreign Fixed Income
.Emerging Markets Fixed Income
By Credit Quality
.Investment Grade/Money Market
.Medium Grade
.High Yield
By Duration
.Long-Term
.Intermediate-Term
.Short-Term
Prospectus 18
<PAGE>
For a description of the Underlying Bond Funds and their
investment objectives and strategies, please see "Underlying
Funds."
Temporary In response to unfavorable market and other conditions, each
Defensive Portfolio may invest up to 100% of its assets in PIMCO Money
Strategies Market Fund (and may deviate from its asset allocation range) for
temporary defensive purposes. A Portfolio may also borrow money
for temporary or emergency purposes. These temporary strategies
would be inconsistent with the Portfolio's investment objective
and principal investment strategies and may adversely affect the
Portfolio's ability to achieve its investment objective.
Portfolio A change in the securities held by a Portfolio is known as
Turnover "portfolio turnover." Because PIMCO Advisors does not expect to
reallocate the Portfolios' assets among the Underlying Funds on a
frequent basis, the portfolio turnover rates for the Portfolios
are expected to be modest (i.e., less than 25%) in comparison to
most mutual funds. However, the Portfolios' indirectly bear the
expenses associated with portfolio turnover of the Underlying
Funds, a number of which have fairly high portfolio turnover rates
(i.e., in excess of 100%). High portfolio turnover involves
correspondingly greater expenses to an Underlying Fund, including
brokerage commissions or dealer mark-ups and other transaction
costs on the sale of securities and reinvestments in other
securities. Shareholders in the Portfolios may also bear expenses
directly or indirectly through sales of securities held by the
Portfolios and the Underlying Funds which result in realization of
taxable capital gains. To the extent such gains relate to
securities held for twelve months or less, such gains will be
short-term capital gains taxed at ordinary income tax rates when
distributed to shareholders who are individuals. The trading costs
and tax effects associated with portfolio turnover may adversely
affect a Portfolio's performance and the return to shareholders.
Changes The investment objective, equity/fixed income allocation targets
in and ranges, and, unless otherwise noted, other investment policies
Investment of each Portfolio described in this Prospectus may be changed by
Objectives the Board of Trustees without shareholder approval. If there is a
and change in a Portfolio's investment objective, allocation target or
Policies range, or other investment policies, shareholders should consider
whether the Portfolio remains an appropriate investment in light
of their then current financial positions and needs.
19 PIMCO Funds: Multi-Manager Series
<PAGE>
Underlying Funds
Each Portfolio invests all of its assets in Underlying Funds.
Accordingly, each Portfolio's investment performance depends upon
a favorable allocation among the Underlying Funds as well as the
ability of the Underlying Funds to achieve their objectives. There
can be no assurance that the investment objective of any
Underlying Fund will be achieved. Shares of the Underlying Funds
are not offered in this Prospectus.
Advisory PIMCO Advisors serves as investment adviser for each of the
ArrangementsUnderlying Stock Funds, except that its affiliate, Pacific
for the Investment Management Company, is the sole investment adviser to
Underlying PIMCO StocksPLUS Fund. The PIMCO Equity Advisors division of PIMCO
Funds Advisors manages the investments of several of the Underlying
Stock Funds. PIMCO Advisors retains sub-advisory firms to manage
the portfolios of other Underlying Stock Funds. These firms
include Cadence Capital Management, NFJ Investment Group and
Parametric Portfolio Associates, each of which is an affiliate of
PIMCO Advisors, and Blairlogie Capital Management, which is not an
affiliate. Pacific Investment Management Company is the sole
investment adviser to each of the Underlying Bond Funds. For a
complete description of the advisory and sub-advisory arrangements
for the Underlying Funds, please see the Statement of Additional
Information and the Underlying Fund prospectuses, which are
incorporated herein by reference and are available free of charge
by telephoning the Distributor at 1-800-426-0107.
Underlying The following provides a concise description of the investment
Stock objective, main investments and other information about each
Funds Underlying Stock Fund. For a complete description of these Funds,
please see the Underlying Fund prospectuses, which are
incorporated herein by reference and are available free of charge
by telephoning the Distributor at 1-800-426-0107.
<TABLE>
<CAPTION>
Approximate Approximate
PIMCO Investment Main Number of Capitalization
Fund Objective Investments Holdings Range
----------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <S> <C> <C>
Growth Stock Growth Long-term growth of Common stocks of 35-40 At least $5 billion
Funds capital; companies with market
income is an capitalizations of at
incidental least $5 billion
consideration
--------------------------------------------------------------------------------------------------------
Target Capital appreciation; Common stocks of 40-60 Between $1 billion
no companies with market and $10 billion
consideration is capitalizations of
given to income between $1 billion and
$10 billion
--------------------------------------------------------------------------------------------------------
Opportunity Capital appreciation; Common stocks of 60-100 Between $100 million
no companies with market and $2 billion
consideration is capitalizations of
given to income between $100 million and
$2 billion
----------------------------------------------------------------------------------------------------------------------
Blend Stock Capital Appreciation Growth of capital Common stocks of 60-100 At least $1 billion
Funds companies with market
capitalizations of at
least $1 billion that
have improving
fundamentals and whose
stock is reasonably
valued by the market
--------------------------------------------------------------------------------------------------------
Mid-Cap Growth Growth of capital Common stocks of 60-100 More than $500 million
companies with market (excluding the
capitalizations of more largest 200
than $500 million companies)
(excluding the largest
200 companies) that have
improving fundamentals
and whose stock is
reasonably valued by the
market
--------------------------------------------------------------------------------------------------------
Small-Cap Growth Growth of capital Common stocks of 60-100 More than $100 million
companies with market (excluding the largest
capitalizations of more 1,000 companies)
than $100 million
(excluding the largest
1,000 companies) that
have improving
fundamentals and whose
stock is reasonably
valued by the market
--------------------------------------------------------------------------------------------------------
Micro-Cap Growth Long-term growth of Common stocks of 60-100 Less than
capital companies with market $250 million
capitalizations of less
than $250 million that
have improving
fundamentals and whose
stock is reasonably
valued by the market
</TABLE>
Prospectus 20
<PAGE>
<TABLE>
<CAPTION>
Approximate Approximate
PIMCO Investment Main Number of Capitalization
Fund Objective Investments Holdings Range
---------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <S> <C> <C>
Value Stock Equity Income Current income as a Income-producing common 40-50 More than $2 billion
Funds primary objective; stocks of companies
long-term growth of with market
capital as a capitalizations of more
secondary objective than $2 billion
-----------------------------------------------------------------------------------------------------------
Renaissance Long-term growth of Common stocks having 50-80 All capitalizations
capital below-average
and income valuations where the
company's business
fundamentals are
expected to improve
-----------------------------------------------------------------------------------------------------------
Value Long-term growth of Common stocks of 40 More than $2 billion
capital companies with market
and income capitalizations of more
than $2 billion that
are undervalued
relative to the market
and their industry
groups
-----------------------------------------------------------------------------------------------------------
Value 25 Long-term growth of Approximately 25 common 25 Between $1 billion
capital stocks of companies and $5 billion
and income with market
capitalizations of
between $1 billion and
$5 billion and below-
average price to
earnings ratios
relative to their
industry groups
-----------------------------------------------------------------------------------------------------------
Small-Cap Value Long-term growth of Common stocks of 100 Between $100 million
capital companies with market and $1.5 billion
and income capitalizations of
between $100 million
and $1.5 billion and
below-average price to
earnings ratios
relative to the market
and their industry
groups
---------------------------------------------------------------------------------------------------------------------------
Enhanced Index Tax-Efficient Equity Maximum after-tax A broadly diversified More than More than $5 billion
Stock Funds growth of capital portfolio of at least 200
200 common stocks of
companies represented
in the S&P 500 Index
with market
capitalizations of more
than $5 billion
-----------------------------------------------------------------------------------------------------------
Enhanced Equity A total return which Common stocks 100-200 At least $5 billion
equals or exceeds the represented in the S&P
total return 500 Index with market
performance of an capitalizations of more
index (currently the than $5 billion
S&P 500 Index) that
represents the
performance of a
reasonably broad
spectrum of common
stocks that are
publicly traded in
the U.S.
-----------------------------------------------------------------------------------------------------------
StocksPLUS Total return that S&P 500 stock index N/A N/A
exceeds that derivatives backed by a
of the S&P 500 Index portfolio of short-term
fixed income securities
---------------------------------------------------------------------------------------------------------------------------
International International Capital appreciation Common stocks of 200-250 More than $500 million
Stock Funds through investment in foreign (non-U.S.)
an international issuers (developed and
portfolio; income is emerging markets)
an incidental with market
consideration capitalizations of more
than $500 million
-----------------------------------------------------------------------------------------------------------
International Growth Long-term capital An international 50-100 At least $2 billion
appreciation portfolio of
common stocks
-----------------------------------------------------------------------------------------------------------
Structured Emerging Long-term growth of Common stocks of More than All
Markets capital companies located in, 300 capitalizations
or whose business
relates to, emerging
markets
-----------------------------------------------------------------------------------------------------------
Tax-Efficient Structured Long-term growth of Common stocks of More than All
Emerging Markets capital. The Fund companies located in, 300 capitalizations
also seeks to achieve or whose business
superior after-tax relates to, emerging
returns for its markets
shareholders by using
a variety of tax-
efficient management
strategies
---------------------------------------------------------------------------------------------------------------------------
Sector-Related Innovation Capital appreciation; Common stocks of 40 More than $200 million
Stock Funds no technology-related
consideration is companies with market
given to income capitalizations of more
than $200 million
</TABLE>
21 PIMCO Funds: Multi-Manager Series
<PAGE>
Underlying The investment objective of each Underlying Bond Fund (except as
Bond provided below) is to seek to realize maximum total return,
Funds consistent with preservation of capital and prudent investment
management. The "total return" sought by most of the Underlying
Bond Funds will consist of income earned on the Fund's
investments, plus capital appreciation, if any, which generally
arises from decreases in interest rates or improving credit
fundamentals for a particular sector or security. The investment
objective of PIMCO Real Return Bond Fund is to seek to realize
maximum real return, consistent with preservation of real capital
and prudent investment management. "Real return" is a measure of
the change in purchasing power of money invested in a particular
investment after adjusting for inflation. The investment objective
of each of PIMCO Money Market Fund and PIMCO Short-Term Fund is to
seek to obtain maximum current income, consistent with
preservation of capital and daily liquidity. PIMCO Money Market
Fund also attempts to maintain a stable net asset value of $1.00
per share, although there can be no assurance that it will be
successful in doing so.
The following provides a concise description of the main
investments of and other information relating to each Underlying
Bond Fund. For a complete description of these Funds, please see
the Underlying Fund prospectus for PIMCO Funds: Pacific Investment
Management Series, which is incorporated herein by reference and
is available free of charge by telephoning the Distributor at
1-800-426-0107.
<TABLE>
<CAPTION>
Non-U.S. Dollar
Denominated
PIMCO Fund Main Investments Duration Credit Quality(/1/) Securities(/2/)
--------------------------------------------------------------------------------------------------------
<C> <C> <S> <C> <C> <C>
Short Money Market Money market instruments ^90 days Min 95% Aaa or Prime 1; 0%
Duration Bond dollar-weighted ^5% Aa or Prime 2
Funds average maturity
------------------------------------------------------------------------------------------
Short-Term Money market instruments 0-1 yr B to Aaa; max 10% 0-5%
and below Baa
short maturity fixed
income
securities
------------------------------------------------------------------------------------------
Low Duration Short maturity fixed 1-3 yrs B to Aaa; max 10% 0-20%
income below Baa
securities
--------------------------------------------------------------------------------------------------------
Intermediate Moderate Duration Short and intermediate 2-5 yrs B to Aaa; max 10% 0-20%
Duration maturity below Baa
Bond Funds fixed income securities
------------------------------------------------------------------------------------------
Total Return Intermediate maturity 3-6 yrs B to Aaa; max 10% 0-20%
fixed income securities below Baa
------------------------------------------------------------------------------------------
Total Return II Intermediate maturity 3-6 yrs Baa to Aaa 0%
fixed
income securities with
quality
and foreign issuer
restrictions
--------------------------------------------------------------------------------------------------------
Long Duration Long-Term U.S. Long-term maturity fixed ^8 yrs A to Aaa 0%
Bond Funds Government income
securities
--------------------------------------------------------------------------------------------------------
International Global Bond U.S. and foreign 3-7 yrs B to Aaa; max 10% 25-75%
Bond Funds intermediate below Baa
maturity fixed income
securities
------------------------------------------------------------------------------------------
Foreign Bond Intermediate maturity 3-7 yrs B to Aaa; max 10% ^85%
hedged below Baa
foreign fixed income
securities
------------------------------------------------------------------------------------------
Emerging Markets Emerging market fixed 0-8 yrs B to Aaa ^80%
Bond income
securities
--------------------------------------------------------------------------------------------------------
High Yield High Yield Higher yielding fixed 2-6 yrs B to Aaa; min 65% 0%
Bond Funds income below Baa
securities
--------------------------------------------------------------------------------------------------------
Inflation Real Return Bond Inflation-indexed fixed N/A B to Aaa; max 10% 0-35%
Indexed Bond income below Baa
Funds securities
</TABLE>
1. As rated by Moody's Investors Service, Inc., or equivalently
rated by Standard & Poor's Rating Services, or if unrated, deter-
mined by Pacific Investment Management Company to be of compara-
ble quality.
2. Percentage limitations relate to non-U.S. dollar-denominated
securities for all Underlying Bond Funds except PIMCO Global
Bond, Foreign Bond and Emerging Markets Bond Funds. Percentage
limitations for these three Funds relate to securities of non-
U.S. issuers, denominated in any currency. Each Underlying Bond
Fund (except PIMCO Total Return II and Long-Term U.S. Government
Funds) may invest beyond these limits in U.S. dollar-denominated
securities of non-U.S. issuers.
Each Underlying Bond Fund invests at least 65% of its assets in
the following types of securities, which, unless provided above,
may be issued by domestic or foreign entities and denominated in
U.S. dollars or foreign currencies: securities issued or
guaranteed by the U.S. Government, its agencies or
instrumentalities ("U.S. Government securities"); corporate debt
securities, including convertible securities and corporate
commercial paper; mortgage-backed and other asset-backed
securities; inflation-indexed bonds issued by both governments and
corporations; structured notes, including hybrid or "indexed"
securities, catastrophe bonds and loan participations; delayed
funding loans and revolving
Prospectus 22
<PAGE>
credit facilities; bank certificates of deposit, fixed time
deposits and bankers' acceptances; repurchase agreements and
reverse repurchase agreements; debt securities issued by states or
local governments and their agencies, authorities and other
instrumentalities; obligations of foreign governments or their
subdivisions, agencies and instrumentalities; and obligations of
international agencies or supranational entities.
Other In addition to purchasing the securities listed above under "Main
Investment Investments," some or all of the Underlying Funds may to varying
Practices extents: lend portfolio securities; enter into repurchase
of the agreements and reverse repurchase agreements; purchase and sell
Underlying securities on a when-issued or delayed delivery basis; enter into
Funds forward commitments to purchase securities; purchase and write
call and put options on securities and securities indexes; enter
into futures contracts, options on futures contracts and swap
agreements; invest in foreign securities; and buy or sell foreign
currencies and enter into forward foreign currency contracts.
These and the other types of securities and investment techniques
used by the Underlying Funds all have attendant risks. The
Portfolios are indirectly subject to some or all of these risks to
varying degrees because they invest all of their assets in the
Underlying Funds. For further information concerning the
investment practices of and risks associated with the Underlying
Funds, please see "Investment Objectives and Policies" in the
Statement of Additional Information and the Underlying Fund
prospectuses, which are incorporated herein by reference and are
available free of charge by telephoning the Distributor at 1-800-
426-0107.
Additional
Underlying Funds
In addition to the Funds listed above, a Portfolio may invest in
additional Underlying Funds, including those that may become
available for investment in the future, at the discretion of PIMCO
Advisors and without shareholder approval.
Other Risk Information
Potential PIMCO Advisors has broad discretion to allocate and reallocate the
Conflicts Portfolios' assets among the Underlying Funds consistent with the
of Portfolios' investment objectives and policies and asset
Interest allocation targets and ranges. Although PIMCO Advisors does not
charge an investment advisory fee for its asset allocation
services, PIMCO Advisors and its affiliates indirectly receive
fees (including investment advisory and administrative fees) from
the Underlying Funds in which the Portfolios invest. In this
regard, PIMCO Advisors has a financial incentive to invest a
Portfolio's assets in Underlying Funds with higher fees than other
Funds, even if it believes that alternate investments would better
serve the Portfolio's investment program. PIMCO Advisors is
legally obligated to disregard that incentive in making asset
allocation decisions for the Portfolios. The Trustees and officers
of the Trust may also have conflicting interests in fulfilling
their fiduciary duties to both the Portfolios and the Underlying
Funds of the Trust.
Year 2000 Many of the services provided to the Portfolios and the Underlying
Readiness Funds depend on the smooth functioning of computer systems. Many
Disclosure systems in use today cannot distinguish between the year 1900 and
the year 2000. Should any of the service systems fail to process
information properly, this could have an adverse impact on the
operations of the Portfolios and/or the Underlying Funds and
services provided to shareholders. PIMCO Advisors, its
subsidiaries and Pacific Investment Management Company have
surveyed the Portfolios' and the Underlying Funds' material
service providers and believe that, on the basis of the
information supplied, the service providers used by the Portfolios
and the Underlying Funds on January 1, 2000 will not be materially
adversely affected by the so-called "year 2000 problem." However,
there can be no assurance that the problem will be corrected in
all respects and that the operations of the Portfolios and the
Underlying Funds and services provided to shareholders will not be
adversely affected, nor can there be any assurance that the year
2000 problem will not have an adverse effect on the entities whose
securities are held by the Underlying Funds or on domestic or
global equity or fixed income markets or economies, generally.
Accordingly, PIMCO Advisors, Pacific Investment Management Company
and the sub-advisers to the Underlying Funds reserve the right to
vary, during the fourth quarter of 1999 and/or the first quarter
of 2000, the investments of any Portfolio or Underlying Fund to
maintain sufficient liquidity to satisfy actual or anticipated
redemption activity.
23 PIMCO Funds: Multi-Manager Series
<PAGE>
Management of the Portfolios
Investment
Adviser
and
Administrator
PIMCO Advisors serves as the investment adviser and the
administrator (serving in its capacity as administrator, the
"Administrator") for the Portfolios. Subject to the supervision of
the Board of Trustees, PIMCO Advisors is responsible for managing,
either directly or through others selected by it, the investment
activities of the Portfolios and the Portfolios' business affairs
and other administrative matters.
PIMCO Advisors is located at 800 Newport Center Drive, Newport
Beach, California 92660. Organized in 1987, PIMCO Advisors
provides investment management and advisory services to private
accounts of institutional and individual clients and to mutual
funds. As of September 30, 1999, PIMCO Advisors and its subsidiary
partnerships had more than $256 billion in assets under
management.
PIMCO Advisors has retained its affiliate, Pacific Investment
Management Company, to provide various administrative and other
services required by the Portfolios in its capacity as sub-
administrator. PIMCO Advisors and the sub-administrator may retain
other affiliates to provide certain of these services.
Asset PIMCO Advisors' Asset Allocation Committee is responsible for
Allocation determining how the Portfolios' assets are allocated and
Committee reallocated from time to time among the Underlying Funds. The
following provides information about the individuals who comprise
the Asset Allocation Committee and are primarily responsible for
making asset allocation and other investment decisions for the
Portfolios.
<TABLE>
<CAPTION>
Asset Allocation
Committee Member Since* Recent Professional Experience
---------------------------------------------------------------------------------------------
<C> <C> <S>
William D. Cvengros 1998 Chief Executive Officer, President and a Member of the Management
Board of PIMCO Advisors and Chairman of the Board of Trustees and a
Trustee of the Trust. Previously, he was President of the Trust and
a Director and the Vice Chairman and Chief Investment Officer of
Pacific Life Insurance Company from January 1990 to November 1994.
Timothy R. Clark 1998 Vice President of PIMCO Advisors and a Senior Vice President of
PIMCO Funds Distributors LLC. Previously, he was President of
Katonah Capital Management, Inc. from July 1995 to December 1996
and served in various capacities at Zweig Advisors Inc. from
September 1989 to July 1995.
Robert S. Venable 1998 Vice President of PIMCO Advisors. Previously, he was a Vice
President and portfolio manager at Pacific Investment Management
Company from August 1992 to August 1996.
David Young 1998 Vice President and an Account Manager at Pacific Investment
Management Company. He has served in various capacities with
Pacific Investment Management Company and its affiliates since
January 1994. Previously, he was a Vice President and portfolio
manager at Analytic Investment Management, Inc. from September 1988
to January 1994.
</TABLE>
* Each individual has served on the Committee since the inception
of each Portfolio in September 1998.
Advisory The Portfolios do not pay any fees to PIMCO Advisors under the
Fees Trust's investment advisory agreement in return for the advisory
and asset allocation services provided by PIMCO Advisors. The
Portfolios do, however, indirectly pay their proportionate share
of the advisory fees paid to PIMCO Advisors and Pacific Investment
Management Company by the Underlying Funds in which the Portfolios
invest. See "Underlying Fund Expenses" below.
Administrative
Fees
Each Portfolio pays for the administrative services it requires
under a fee structure which is essentially fixed. Class A, Class B
and Class C shareholders of each Portfolio pay an administrative
fee to PIMCO Advisors, computed as a percentage of the Portfolio's
assets attributable in the aggregate to those classes of shares.
PIMCO Advisors, in turn, provides or procures administrative
services for Class A, Class B and Class C shareholders and also
bears the costs of various third-party services required by the
Portfolios, including audit, custodial, portfolio accounting,
legal, transfer agency and printing costs.
The Portfolios were not operational for the entire fiscal year
ended June 30, 1999. Each Portfolio pays monthly administrative
fees to PIMCO Advisors at an annual rate of 0.40% based on the
average daily net assets attributable in the aggregate to the
Portfolio's Class A, Class B and Class C shares up to $2.5
billion, and 0.35% based on such average daily net assets in
excess of $2.5 billion. The Portfolios also indirectly pay their
proportionate share of the administrative fees charged by PIMCO
Advisors and Pacific Investment Management Company to the
Underlying Funds in which the Portfolios invest. See "Underlying
Fund Expenses" below.
Prospectus 24
<PAGE>
Underlying The expenses associated with investing in a "fund of funds," such
Fund as the Portfolios, are generally higher than those for mutual
Expenses funds that do not invest primarily in other mutual funds. This is
because shareholders in a "fund of funds" indirectly pay a portion
of the fees and expenses charged at the underlying fund level.
The Portfolios are structured in the following ways to lessen
the impact of expenses incurred at the Underlying Fund level:
. The Portfolios do not pay any fees for asset allocation or
advisory services under the Trust's investment advisory
agreement.
. The Underlying Funds invest in Institutional Class shares of the
Underlying Funds, which are not subject to any sales charges or
12b-1 fees.
The following table summarizes the annual expenses borne by
Institutional Class shareholders of the Underlying Funds (based on
estimates for the current fiscal year). Because the Portfolios
invest in Institutional Class shares of the Underlying Funds,
shareholders of each Portfolio indirectly bear a proportionate
share of these expenses, depending upon how the Portfolio's assets
are allocated from time to time among the Underlying Funds. See
"Fees and Expenses of the Portfolio" in each Portfolio Summary
above.
<TABLE>
<CAPTION>
Annual Underlying Fund Expenses
(Based on the average daily net assets
attributable
to a Fund's Institutional Class shares):
Advisory Admini- Total Fund
Underlying Fund Fees strative Fees Operating Expenses
----------------------------------------------------------------
<S> <C> <C> <C>
PIMCO Growth 0.50% 0.25% 0.75%
----------------------------------------------------------------
PIMCO Target 0.55 0.25 0.80
----------------------------------------------------------------
PIMCO Opportunity 0.65 0.25 0.90
----------------------------------------------------------------
PIMCO Capital
Appreciation 0.45 0.25 0.70
----------------------------------------------------------------
PIMCO Mid-Cap Growth 0.45 0.25 0.70
----------------------------------------------------------------
PIMCO Small-Cap Growth 1.00 0.25 1.25
----------------------------------------------------------------
PIMCO Micro-Cap Growth 1.25 0.25 1.50
----------------------------------------------------------------
PIMCO Equity Income 0.45 0.25 0.70
----------------------------------------------------------------
PIMCO Renaissance 0.60 0.25 0.85
----------------------------------------------------------------
PIMCO Value 0.45 0.25 0.70
----------------------------------------------------------------
PIMCO Value 25 0.50 0.25 0.75
----------------------------------------------------------------
PIMCO Small-Cap Value 0.60 0.25 0.85
----------------------------------------------------------------
PIMCO Tax-Efficient
Equity 0.45 0.25 0.70
----------------------------------------------------------------
PIMCO Enhanced Equity 0.45 0.25 0.70
----------------------------------------------------------------
PIMCO StocksPLUS 0.40 0.25 0.65
----------------------------------------------------------------
PIMCO International 0.55 0.50 1.05
----------------------------------------------------------------
PIMCO International
Growth 0.85 0.50 1.35
----------------------------------------------------------------
PIMCO Structured Emerging
Markets 0.45 0.50 0.95
----------------------------------------------------------------
PIMCO Tax-Efficient
Structured Emerging
Markets 0.45 0.50 0.95
----------------------------------------------------------------
PIMCO Innovation 0.65 0.25 0.90
----------------------------------------------------------------
PIMCO Money Market 0.15 0.20 0.35
----------------------------------------------------------------
PIMCO Short-Term 0.25 0.20 0.45
----------------------------------------------------------------
PIMCO Low Duration 0.25 0.18 0.43
----------------------------------------------------------------
PIMCO Moderate Duration 0.25 0.20 0.45
----------------------------------------------------------------
PIMCO Total Return 0.25 0.18 0.43
----------------------------------------------------------------
PIMCO Total Return II 0.25 0.25 0.50
----------------------------------------------------------------
PIMCO Long-Term U.S.
Government 0.25 0.25 0.50
----------------------------------------------------------------
PIMCO Global Bond 0.25 0.30 0.55
----------------------------------------------------------------
PIMCO Foreign Bond 0.25 0.25 0.50
----------------------------------------------------------------
PIMCO Emerging Markets
Bond 0.45 0.40 0.85
----------------------------------------------------------------
PIMCO High Yield 0.25 0.25 0.50
----------------------------------------------------------------
PIMCO Real Return Bond 0.25 0.27 0.52
</TABLE>
25 PIMCO Funds: Multi-Manager Series
<PAGE>
Distributor The Trust's Distributor is PIMCO Funds Distributors LLC, a wholly
owned subsidiary of PIMCO Advisors. The Distributor, located at
2187 Atlantic Street, Stanford, CT 06902, is a broker-dealer
registered with the Securities and Exchange Commission.
Investment Options -- Class A, B and C Shares
The Trust offers investors Class A, Class B and Class C shares of
each Portfolio in this Prospectus. Each class of shares is subject
to different types and levels of sales charges than the other
classes and bears a different level of expenses.
The class of shares that is best for you depends upon a number of
factors, including the amount and the intended length of your
investment. The following summarizes key information about each
class to help you make your investment decision, including the
various expenses associated with each class. More extensive
information about the Trust's multi-class arrangements is included
in the PIMCO Funds Shareholders' Guide for Class A, B and C Shares
(the "Guide"), which is included as part of the Statement of
Additional Information and can be obtained free of charge from the
Distributor. See "How to Buy and Sell Shares--PIMCO Funds
Shareholders' Guide" below.
Class A . You pay an initial sales charge of up to 5.50% when you buy
Shares Class A shares. The sales charge is deducted from your
investment so that not all of your purchase payment is
invested.
. You may be eligible for a reduction or a complete waiver of
the initial sales charge under a number of circumstances. For
example, you normally pay no sales charge if you purchase
$1,000,000 or more of Class A shares. Please see the Guide for
details.
. Class A shares are subject to lower 12b-1 fees than Class B or
Class C shares. Therefore, Class A shareholders generally pay
lower annual expenses and receive higher dividends than Class
B or Class C shareholders.
. You normally pay no contingent deferred sales charge ("CDSC")
when you redeem Class A shares, although you may pay a 1% CDSC
if you purchase $1,000,000 or more of Class A shares (and
therefore pay no initial sales charge) and then redeem the
shares during the first 18 months after your initial purchase.
The Class A CDSC is waived for certain categories of investors
and does not apply if you are otherwise eligible to purchase
Class A shares without a sales charge. Please see the Guide
for details.
Class B . You do not pay an initial sales charge when you buy Class B
Shares shares. The full amount of your purchase payment is invested
initially.
. You normally pay a CDSC of up to 5% if you redeem Class B
shares during the first six years after your initial purchase.
The amount of the CDSC declines the longer you hold your Class
B shares. You pay no CDSC if you redeem during the seventh year
and thereafter. The Class B CDSC is waived for certain
categories of investors. Please see the Guide for details.
. Class B shares are subject to higher 12b-1 fees than Class A
shares for the first seven years they are held. During this
time, Class B shareholders normally pay higher annual expenses
and receive lower dividends than Class A shareholders.
. Class B shares automatically convert into Class A shares after
they have been held for seven years. After the conversion takes
place, the shares are subject to the lower 12b-1 fees paid by
Class A shares.
Class C . You do not pay an initial sales charge when you buy Class C
Shares shares. The full amount of your purchase payment is invested
initially.
. You normally pay a CDSC of 1% if you redeem Class C shares
during the first year after your initial purchase. The Class C
CDSC is waived for certain categories of investors. Please see
the Guide for details.
. Class C shares are subject to higher 12b-1 fees than Class A
shares. Therefore, Class C shareholders normally pay higher
annual expenses and receive lower dividends than Class A
shareholders.
. Class C shares do not convert into any other class of shares.
Because Class B shares convert into Class A shares after seven
years, Class C shares will normally be subject to higher
expenses and will pay lower dividends than Class B shares if
the shares are held for more than seven years.
Prospectus 26
<PAGE>
The following provides additional information about the sales
charges and other expenses associated with Class A, Class B and
Class C shares.
- --------------------------------------------------------------------------------
Initial Unless you are eligible for a waiver, the public offering price
Sales you pay when you buy Class A shares of the Portfolios is the net
Charges-- asset value ("NAV") of the shares plus an initial sales charge.
Class A The initial sales charge varies depending upon the size of your
Shares purchase, as set forth below. No sales charge is imposed where
Class A shares are issued to you pursuant to the automatic
reinvestment of income dividends or capital gains distributions.
90/10 Portfolio and 60/40 Portfolio
<TABLE>
<S> <C> <C>
Initial Sales Charge Initial Sales Charge
Amount of as % of Net as % of Public
Purchase Amount Invested Offering Price
---------------------------------------------------------------------
$0-$49,999 5.82% 5.50%
---------------------------------------------------------------------
$50,000-$99,999 4.71% 4.50%
---------------------------------------------------------------------
$100,000-$249,999 3.63% 3.50%
---------------------------------------------------------------------
$250,000-$499,999 2.56% 2.50%
---------------------------------------------------------------------
$500,000-$999,999 2.04% 2.00%
---------------------------------------------------------------------
$1,000,000 + 0.00%* 0.00%*
---------------------------------------------------------------------
</TABLE>
30/70 Portfolio
<TABLE>
<S> <C> <C>
Initial Sales Charge Initial Sales Charge
Amount of as % of Net as % of Public
Purchase Amount Invested Offering Price
---------------------------------------------------------------------
$0-$49,999 4.71% 4.50%
---------------------------------------------------------------------
$50,000-$99,999 4.17% 4.00%
---------------------------------------------------------------------
$100,000-$249,999 3.63% 3.50%
---------------------------------------------------------------------
$250,000-$499,999 2.56% 2.50%
---------------------------------------------------------------------
$500,000-$999,999 2.04% 2.00%
---------------------------------------------------------------------
$1,000,000 + 0.00%* 0.00%*
---------------------------------------------------------------------
</TABLE>
*As shown, investors that purchase $1,000,000 or more of any
Portfolio's Class A shares will not pay any initial sales charge
on the purchase. However, purchasers of $1,000,000 or more of
Class A shares may be subject to a CDSC of 1% if the shares are
redeemed during the first 18 months after their purchase. See
"CDSCs on Class A Shares" below.
- --------------------------------------------------------------------------------
Contingent Unless you are eligible for a waiver, if you sell (redeem) your
Deferred Class B or Class C shares within the time periods specified below,
Sales you will pay a CDSC according to the following schedules.
Charges
(CDSCs)
- -- Class
B and
Class C
Shares
Class B <TABLE>
Shares
<S> <C> <C>
Years Since Purchase Percentage Contingent
Payment was Made Deferred Sales Charge
-----------------------------------------------------------------------------
First 5
-----------------------------------------------------------------------------
Second 4
-----------------------------------------------------------------------------
Third 3
-----------------------------------------------------------------------------
Fourth 3
-----------------------------------------------------------------------------
Fifth 2
-----------------------------------------------------------------------------
Sixth 1
-----------------------------------------------------------------------------
Seventh 0*
-----------------------------------------------------------------------------
*After the seventh year, Class B shares convert into Class A
shares.
Class C
Shares
Years Since Purchase Percentage Contingent
Payment was Made Deferred Sales Charge
-----------------------------------------------------------------------------
First 1
-----------------------------------------------------------------------------
Thereafter 0
-----------------------------------------------------------------------------
</TABLE>
27 PIMCO Funds: Multi-Manager Series
<PAGE>
- --------------------------------------------------------------------------------
CDSCs on Unless a waiver applies, investors who purchase $1,000,000 or more
Class A of Class A shares (and, thus, pay no initial sales charge) will be
Shares subject to a 1% CDSC if the shares are redeemed within 18 months
of their purchase. The Class A CDSC does not apply if you are
otherwise eligible to purchase Class A shares without an initial
sales charge or if you are eligible for a waiver of the CDSC. See
"Reductions and Waivers of Initial Sales Charges and CDSCs" below.
- --------------------------------------------------------------------------------
How CDSCs A CDSC is imposed on redemptions of Class B and Class C shares
are (and where applicable, Class A shares) on the amount of the
Calculated redemption which causes the current value of your account for the
particular class of shares of a Portfolio to fall below the total
dollar amount of your purchase payments subject to the CDSC.
However, no CDSC is imposed if the shares redeemed have been
acquired through the reinvestment of dividends or capital gains
distributions or if the amount redeemed is derived from increases
in the value of your account above the amount of the purchase
payments subject to the CDSC. CDSCs are deducted from the proceeds
of your redemption, not from amounts remaining in your account. In
determining whether a CDSC is payable, it is assumed that the
purchase payment from which the redemption is made is the earliest
purchase payment for the particular class of shares in your
account (from which a redemption or exchange has not already been
effected).
For instance, the following example illustrates the operation of
the Class B CDSC:
. Assume that an individual opens an account and makes a
purchase payment of $10,000 for Class B shares of a Portfolio
and that six months later the value of the investor's account
for that Portfolio has grown through investment performance
and reinvestment of distributions to $11,000. The investor
then may redeem up to $1,000 from that Portfolio ($11,000
minus $10,000) without incurring a CDSC. If the investor
should redeem $3,000, a CDSC would be imposed on $2,000 of
the redemption (the amount by which the investor's account
for the Portfolio was reduced below the amount of the
purchase payment). At the rate of 5%, the Class B CDSC would
be $100.
In determining whether an amount is available for redemption
without incurring a CDSC, the purchase payments made for all
shares of a particular class of a Portfolio in the shareholder's
account are aggregated, and the current value of all such shares
is aggregated.
- --------------------------------------------------------------------------------
Reductions The initial sales charges on Class A shares and the CDSCs on Class
and A, Class B and Class C shares may be reduced or waived under
Waivers certain purchase arrangements and for certain categories of
of investors. Please see the Guide for details. The Guide is
Initial available free of charge from the Distributor. See "How to Buy and
Sales Sell Shares--PIMCO Funds Shareholders' Guide" below.
Charges
and CDSCs
- --------------------------------------------------------------------------------
DistributionThe Portfolios pay fees to the Distributor on an ongoing basis as
and compensation for the services the Distributor renders and the
Servicing expenses it bears in connection with the sale and distribution of
(12b-1) Portfolio shares ("distribution fees") and/or in connection with
Plans personal services rendered to Portfolio shareholders and the
maintenance of shareholder accounts ("servicing fees"). These
payments are made pursuant to Distribution and Servicing Plans
("12b-1 Plans") adopted by each Portfolio pursuant to Rule 12b-1
under the Investment Company Act of 1940.
There is a separate 12b-1 Plan for each class of shares offered
in this Prospectus. Class A shares pay only servicing fees. Class
B and Class C shares pay both distribution and servicing fees. The
following lists the maximum annual rates at which the distribution
and/or servicing fees may be paid under each 12b-1 Plan
(calculated as a percentage of each Portfolio's average daily net
assets attributable to the particular class of shares):
<TABLE>
<S> <C> <C>
Servicing Distribution
All Portfolios Fee Fee
--------------------------------------------------------------------------------
Class A 0.25% None
--------------------------------------------------------------------------------
Class B 0.25% 0.75%
--------------------------------------------------------------------------------
Class C 0.25% 0.75%
--------------------------------------------------------------------------------
</TABLE>
Because 12b-1 fees are paid out of a Portfolio's assets on an
ongoing basis, over time these fees will increase the cost of your
investment and may cost you more than sales charges which are
deducted at the time of investment. Therefore, although Class B
and Class C shares do not pay initial sales charges, the
distribution fees payable on Class B and Class C shares may, over
time, cost you more than the initial sales charge imposed on Class
A shares. Also, because Class B shares convert into Class A shares
after they have been held for seven years and are not subject to
distribution fees after the conversion, an investment in Class C
shares may cost you more over time than an investment in Class B
shares.
Prospectus 28
<PAGE>
How Portfolio Shares Are Priced
The net asset value ("NAV") of a Portfolio's Class A, Class B and
Class C shares is determined by dividing the total value of a
Portfolio's portfolio investments and other assets attributable to
that class, less any liabilities, by the total number of shares
outstanding of that class.
The assets of each Portfolio consist of shares of the Underlying
Funds, which are valued at their respective NAVs at the time of
valuation of the Portfolios' shares. For purposes of calculating
the NAV of Underlying Fund shares, portfolio securities and other
assets of the Funds for which market quotes are available are
stated at market value. Market value is generally determined on
the basis of last reported sales prices, or if no sales are
reported, based on quotes obtained from a quotation reporting
system, established market makers, or pricing services. Certain
securities or investments for which daily market quotes are not
readily available may be valued, pursuant to guidelines
established by the Board of Trustees of the Underlying Fund, with
reference to other securities or indices. Short-term investments
having a maturity of 60 days or less are generally valued at
amortized cost. Exchange traded options, futures and options on
futures are valued at the settlement price determined by the
exchange. Other securities for which market quotes are not readily
available are valued at fair value as determined in good faith by
the Fund's Board of Trustees or persons acting at the Board's
direction.
Underlying Fund investments initially valued in currencies other
than the U.S. dollar are converted to U.S. dollars using exchange
rates obtained from pricing services. As a result, the NAV of an
Underlying Fund's shares may be affected by changes in the value
of currencies in relation to the U.S. dollar. The value of
securities traded in markets outside the United States or
denominated in currencies other than the U.S. dollar may be
affected significantly on a day that the New York Stock Exchange
is closed. As a result, to the extent that a Portfolio invests in
Underlying Funds that hold foreign securities, the NAV of the
Portfolio's shares may change at times when you can not purchase,
redeem or exchange shares.
Portfolio and Underlying Fund shares are valued at the close of
regular trading (normally 4:00 p.m., Eastern time) (the "NYSE
Close") on each day that the New York Stock Exchange is open. For
purposes of calculating the NAV, the Underlying Funds normally use
pricing data for domestic equity securities received shortly after
the NYSE Close and do not normally take into account trading,
clearances or settlements that take place after the NYSE Close.
Domestic fixed income and foreign securities are normally priced
using data reflecting the earlier closing of the principal markets
for those securities. Information that becomes known to the
Underlying Funds or their agents after the NAV has been calculated
on a particular day will not generally be used to retroactively
adjust the price of a security or the NAV determined earlier that
day.
In unusual circumstances, instead of valuing securities in the
usual manner, the Underlying Funds may value securities at fair
value or estimate their value as determined in good faith by the
Fund's Board of Trustees, generally based upon recommendations
provided by the Fund's investment adviser and/or sub-adviser. Fair
valuation may also be used by the Underlying Fund's Board of
Trustees if extraordinary events occur after the close of the
relevant market but prior to the NYSE Close.
How to Buy and Sell Shares
The following section provides basic information about how to buy,
sell (redeem) and exchange shares of the Portfolios.
PIMCO
Funds
Shareholders'
Guide
More detailed information about the Trust's purchase, sale and
exchange arrangements for Portfolio shares is provided in the
PIMCO Funds Shareholders' Guide, which is included in the
Statement of Additional Information and can be obtained free of
charge from the Distributor by written request or by calling 1-
800-426-0107. The Guide provides technical information about the
basic arrangements described below and also describes special
purchase, sale and exchange features and programs offered by the
Trust, including:
. Automated telephone and wire transfer procedures
. Automatic purchase, exchange and withdrawal programs
. Programs that establish a link from your Portfolio account to
your bank account
. Special arrangements for tax-qualified retirement plans
. Investment programs which allow you to reduce or eliminate the
initial sales charges on Class A shares
. Categories of investors that are eligible for waivers or
reductions of initial sales charges and CDSCs
29 PIMCO Funds: Multi-Manager Series
<PAGE>
Calculation When you buy shares of the Portfolios, you pay a price equal to
of Share the NAV of the shares, plus any applicable sales charge. When you
Price and sell (redeem) shares, you receive an amount equal to the NAV of
Redemption the shares, minus any applicable CDSC. NAVs are determined at the
Payments close of regular trading (normally, 4:00 p.m., Eastern time) on
the New York Stock Exchange on each day the New York Stock
Exchange is open. See "How Portfolio Shares Are Priced" above for
details. Generally, purchase and redemption orders for Portfolio
shares are processed at the NAV next calculated after your order
is received by the Distributor. There are certain exceptions where
an order is received by a broker or dealer prior to the close of
regular trading on the New York Stock Exchange and then
transmitted to the Distributor after the NAV has been calculated
for that day (in which case the order may be processed at that
day's NAV). Please see the Guide for details.
The Trust does not calculate NAVs or process orders on days when
the New York Stock Exchange is closed. If your purchase or
redemption order is received by the Distributor on a day when the
New York Stock Exchange is closed, it will be processed on the
next succeeding day when the New York Stock Exchange is open (at
the succeeding day's NAV).
Buying You can buy Class A, Class B or Class C shares of the Portfolios
Shares in the following ways:
. Through your broker, dealer or other financial intermediary.
Your broker, dealer or other intermediary may establish higher
minimum investment requirements than the Trust and may also
independently charge you transaction fees and additional amounts
(which may vary) in return for its services, which will reduce
your return. Shares you purchase through your broker, dealer or
other intermediary will normally be held in your account with that
firm.
. Directly from the Trust. To make direct investments, you must
open an account with the Distributor and send payment for your
shares either by mail or through a variety of other purchase
options and plans offered by the Trust.
If you wish to invest directly by mail, please send a check
payable to PIMCO Funds Distributors LLC, along with a completed
application form to:
PIMCO Funds Distributors LLC
P.O. Box 9688
Providence, RI 02940-0926
The Trust accepts all purchases by mail subject to collection of
checks at full value and conversion into federal funds. You may
make subsequent purchases by mailing a check to the address above
with a letter describing the investment or with the additional
investment portion of a confirmation statement. Checks for
subsequent purchases should be payable to PIMCO Funds Distributors
LLC and should clearly indicate your account number. Please call
the Distributor at 1-800-426-0107 if you have any questions
regarding purchases by mail.
The Guide describes a number of additional ways you can make
direct investments, including through the PIMCO Funds Auto-Invest
and PIMCO Funds Fund Link programs. You can obtain a Guide free of
charge from the Distributor by written request or by calling 1-
800-426-0107. See "PIMCO Funds Shareholders' Guide" above.
The Distributor, in its sole discretion, may accept or reject any
order for purchase of Portfolio shares. No share certificates will
be issued unless specifically requested in writing.
Investment The following investment minimums apply for purchases of Class A,
Minimums Class B and Class C shares:
<TABLE>
<CAPTION>
Initial Investment Subsequent Investments
------------------ ----------------------
<S> <C>
$2,500 per Portfolio $100 per Portfolio
</TABLE>
Lower minimums may apply for certain categories of investors,
including certain tax-qualified retirement plans, and for special
investment programs and plans offered by the Trust, such as the
PIMCO Funds Auto-Invest and PIMCO Funds Fund Link programs. Please
see the Guide for details.
Small
Account
Fee
Because of the disproportionately high costs of servicing accounts
with low balances, if you have a direct account with the
Distributor, you will be charged a fee at the annual rate of $16
if your account balance for any Portfolio falls below a minimum
level of $2,500. However, you will not be charged this fee if the
aggregate value of all of your PIMCO Funds accounts is at least
$50,000. Any applicable small account fee will be deducted
automatically from your below-minimum Portfolio account in
Prospectus 30
<PAGE>
quarterly installments and paid to the Administrator. Each
Portfolio account will normally be valued, and any deduction
taken, during the last five business days of each calendar
quarter. Lower minimum balance requirements and waivers of the
small account fee apply for certain categories of investors.
Please see the Guide for details.
Minimum Due to the relatively high cost to the Portfolios of maintaining
Account small accounts, you are asked to maintain an account balance in
Size each Portfolio in which you invest of at least the minimum
investment necessary to open the particular type of account. If
your balance for any Portfolio remains below the minimum for three
months or longer, the Administrator has the right (except in the
case of employer-sponsored retirement accounts) to redeem your
remaining shares and close that Portfolio account after giving you
60 days to increase your balance. Your Portfolio account will not
be liquidated if the reduction in size is due solely to a decline
in market value of your Portfolio shares or if the aggregate value
of all your PIMCO Funds accounts exceeds $50,000.
Exchanging You may exchange your Class A, Class B or Class C shares of any
Shares Portfolio for the same Class of shares of any other Portfolio or
of another series of the Trust or PIMCO Funds: Pacific Investment
Management Series. Shares are exchanged on the basis of their
respective NAVs next calculated after your exchange order is
received by the Distributor. Currently, the Trust does not charge
any exchange fees or charges. Exchanges are subject to the $2,500
minimum initial purchase requirements for each Portfolio, except
with respect to tax-qualified programs and exchanges effected
through the PIMCO Funds Auto-Exchange plan. In addition, an
exchange is generally a taxable event which will generate capital
gains or losses, and special rules may apply in computing tax
basis when determining gain or loss. If you maintain your account
with the Distributor, you may exchange shares by completing a
written exchange request and sending it to PIMCO Funds
Distributors LLC, P.O. Box 9688, Providence, RI 02940-0926. You
can get an exchange form by calling the Distributor at 1-800-426-
0107.
The Trust reserves the right to refuse exchange purchases if, in
the judgment of PIMCO Advisors, the purchase would adversely
affect a Portfolio and its shareholders. In particular, a pattern
of exchanges characteristic of "market-timing" strategies may be
deemed by PIMCO Advisors to be detrimental to the Trust or a
particular Portfolio. Currently, the Trust limits the number of
"round trip" exchanges an investor may make. An investor makes a
"round trip" exchange when the investor purchases shares of a
particular Portfolio, subsequently exchanges those shares for
shares of a different PIMCO Fund and then exchanges back into the
originally purchased Portfolio. The Trust has the right to refuse
any exchange for any investor who completes (by making the
exchange back into the shares of the originally purchased
Portfolio) more than six round trip exchanges in any twelve-month
period. Although the Trust has no current intention of terminating
or modifying the exchange privilege other than as set forth in the
preceeding sentence, it reserves the right to do so at any time.
Except as otherwise permitted by the Securities and Exchange
Commission, the Trust will give you 60 days' advance notice if it
exercises its right to terminate or materially modify the exchange
privilege with respect to Class A, B and C shares.
The Guide provides more detailed information about the exchange
privilege, including the procedures you must follow and additional
exchange options. You can obtain a Guide free of charge from the
Distributor by written request or by calling 1-800-426-0107. See
"PIMCO Funds Shareholders' Guide" above.
Selling You can sell (redeem) Class A, Class B or Class C shares of the
Shares Portfolios in the following ways:
. Through your broker, dealer or other financial intermediary.
Your broker, dealer or other intermediary may independently charge
you transaction fees and additional amounts (which may vary) in
return for its services, which will reduce your return.
. Directly from the Trust by Written Request. To redeem shares
directly from the Trust by written request (whether or not the
shares are represented by certificates), you must send the
following items to the Trust's Transfer Agent, First Data Investor
Services Group, Inc., P.O. Box 9688, Providence, RI 02940-0926:
(1) a written request for redemption signed by all registered
owners exactly as the account is registered on the Transfer
Agent's records, including fiduciary titles, if any, and
specifying the account number and the dollar amount or number of
shares to be redeemed;
(2) for certain redemptions described below, a guarantee of all
signatures on the written request or on the share certificate or
accompanying stock power, if required, as described under
"Signature Guarantee" below;
31 PIMCO Funds: Multi-Manager Series
<PAGE>
(3) any share certificates issued for any of the shares to be
redeemed (see "Certificated Shares" below); and
(4) any additional documents which may be required by the
Transfer Agent for redemption by corporations, partnerships or
other organizations, executors, administrators, trustees,
custodians or guardians, or if the redemption is requested by
anyone other than the shareholder(s) of record. Transfers of
shares are subject to the same requirements.
A signature guarantee is not required for redemptions requested
by and payable to all shareholders of record for the account, and
to be sent to the address of record for that account. To avoid
delay in redemption or transfer, if you have any questions about
these requirements you should contact the Transfer Agent in
writing or call 1-800-426-0107 before submitting a request.
Written redemption or transfer requests will not be honored until
all required documents in the proper form have been received by
the Transfer Agent. You can not redeem your shares by written
request to the Trust if they are held in broker "street name"
accounts--you must redeem through your broker.
If the proceeds of your redemption (i) are to be paid to a person
other than the record owner, (ii) are to be sent to an address
other than the address of the account on the Transfer Agent's
records, and/or (iii) are to be paid to a corporation,
partnership, trust or fiduciary, the signature(s) on the
redemption request and on the certificates, if any, or stock power
must be guaranteed as described under "Signature Guarantee" below.
The Distributor may, however, waive the signature guarantee
requirement for redemptions up to $2,500 by a trustee of a
qualified retirement plan, the administrator for which has an
agreement with the Distributor.
The Guide describes a number of additional ways you can redeem
your shares, including:
. Telephone requests to the Transfer Agent
. PIMCO Funds Automated Telephone System (ATS)
. Expedited wire transfers
. Automatic Withdrawal Plan
. PIMCO Funds Fund Link
Unless you specifically elect otherwise, your initial account
application permits you to redeem shares by telephone subject to
certain requirements. To be eligible for ATS, expedited wire
transfer, Automatic Withdrawal Plan, and Fund Link privileges, you
must specifically elect the particular option on your account
application and satisfy certain other requirements. The Guide
describes each of these options and provides additional
information about selling shares. You can obtain a Guide free of
charge from the Distributor by written request or by calling 1-
800-426-0107.
Other than an applicable CDSC, you will not pay any special fees
or charges to the Trust or the Distributor when you sell your
shares. However, if you sell your shares through your broker,
dealer or other financial intermediary, that firm may charge you a
commission or other fee for processing your redemption request.
Redemptions of Portfolio shares may be suspended when trading on
the New York Stock Exchange is restricted or during an emergency
which makes it impracticable for the Portfolios to dispose of
their securities or to determine fairly the value of their net
assets, or during any other period as permitted by the Securities
and Exchange Commission for the protection of investors.
Timing of Redemption proceeds will normally be mailed to the redeeming
Redemption shareholder within seven calendar days or, in the case of wire
Payments transfer or Fund Link redemptions, sent to the designated bank
account within one business day. Fund Link redemptions may be
received by the bank on the second or third business day. In cases
where shares have recently been purchased by personal check,
redemption proceeds may be withheld until the check has been
collected, which may take up to 15 days. To avoid such
withholding, investors should purchase shares by certified or bank
check or by wire transfer. Under unusual circumstances, the Trust
may delay your redemption payments for more than seven days, as
permitted by law.
Redemptions
In Kind
The Trust has agreed to redeem shares of each Portfolio solely in
cash up to the lesser of $250,000 or 1% of the Portfolio's net
assets during any 90-day period for any one shareholder. In
consideration of the best interests of the remaining shareholders,
the Trust may pay any redemption proceeds exceeding this amount in
whole or in part by a distribution in kind of securities held by a
Portfolio in lieu of cash. If your shares are redeemed in kind,
you may incur transaction costs upon the disposition of the
securities received in the distribution.
Prospectus 32
<PAGE>
CertificatedIf you are redeeming shares for which certificates have been
Shares issued, the certificates must be mailed to or deposited with the
Trust, duly endorsed or accompanied by a duly endorsed stock power
or by a written request for redemption. Signatures must be
guaranteed as described under "Signature Guarantee" below. The
Trust may request further documentation from institutions or
fiduciary accounts, such as corporations, custodians (e.g., under
the Uniform Gifts to Minors Act), executors, administrators,
trustees or guardians. Your redemption request and stock power
must be signed exactly as the account is registered, including
indication of any special capacity of the registered owner.
Signature When a signature guarantee is called for, you should have
Guarantee "Signature Guaranteed" stamped under your signature and guaranteed
by any of the following entities: U.S. banks, foreign banks having
a U.S. correspondent bank, credit unions, savings associations,
U.S. registered dealers and brokers, municipal securities dealers
and brokers, government securities dealers and brokers, national
securities exchanges, registered securities associations and
clearing agencies (each an "Eligible Guarantor Institution"). The
Distributor reserves the right to reject any signature guarantee
pursuant to its written signature guarantee standards or
procedures, which may be revised in the future to permit it to
reject signature guarantees from Eligible Guarantor Institutions
that do not, based on credit guidelines, satisfy such written
standards or procedures. The Trust may change the signature
guarantee requirements from time to time upon notice to
shareholders, which may be given by means of a new or supplemented
Prospectus.
Portfolio Distributions
Each Portfolio distributes substantially all of its net investment
income to shareholders in the form of dividends. You begin earning
dividends on Portfolio shares the day after the Trust receives
your purchase payment. Dividends paid by each Portfolio with
respect to each class of shares are calculated in the same manner
and at the same time, but dividends on Class B and Class C shares
are expected to be lower than dividends on Class A shares as a
result of the distribution fees applicable to Class B and Class C
shares. The following shows when each Portfolio intends to declare
and distribute income dividends to shareholders of record.
<TABLE>
<CAPTION>
Portfolio At Least Annually Quarterly Monthly
---------------------------------------------------------------------------
<S> <C> <C> <C>
90/10 Portfolio .
---------------------------------------------------------------------------
60/40 Portfolio .
---------------------------------------------------------------------------
30/70 Portfolio .
---------------------------------------------------------------------------
</TABLE>
In addition, each Portfolio distributes any net capital gains it
earns from the sale of portfolio securities to shareholders no
less frequently than annually. Net short-term capital gains may be
paid more frequently.
You can choose from the following distribution options:
. Reinvest all distributions in additional shares of the same
class of your Portfolio at NAV. This will be done unless you
elect another option.
. Invest all distributions in shares of the same class of any
other Portfolio or another series of the Trust or PIMCO Funds:
Pacific Investment Management Series which offers that class at
NAV. You must have an account existing in the Portfolio or
series selected for investment with the identical registered
name. You must elect this option on your account application or
by a telephone request to the Transfer Agent at 1-800-426-0107.
. Receive all distributions in cash (either paid directly to you
or credited to your account with your broker or other financial
intermediary). You must elect this option on your account
application or by a telephone request to the Transfer Agent at
1-800-426-0107.
You do not pay any sales charges on shares you receive through
the reinvestment of Portfolio distributions.
If you elect to receive Portfolio distributions in cash and the
postal or other delivery service is unable to deliver checks to
your address of record, the Trust's Transfer Agent will hold the
returned checks for your benefit in a non-interest bearing
account.
For further information on distribution options, please contact
your broker or call the Distributor at 1-800-426-0107.
33 PIMCO Funds: Multi-Manager Series
<PAGE>
Tax Consequences
. Taxes on Portfolio distributions. If you are subject to U.S.
federal income tax, you will be subject to tax on Portfolio
distributions whether you received them in cash or reinvested them
in additional shares. For federal income tax purposes, Portfolio
distributions will be taxable to you as either ordinary income or
capital gains.
Portfolio dividends (i.e., distributions of investment income)
are taxable to you as ordinary income. Federal taxes on Portfolio
distributions of gains are determined by how long the Portfolio
owned the investments that generated the gains, rather than how
long you have owned your shares. Distributions of gains from
investments that a Portfolio owned for more than 12 months will
generally be taxable to you as capital gains. Distributions of
gains from investments that the Portfolio owned for 12 months or
less will generally be taxable to you as ordinary income.
Portfolio distributions are taxable to you even if they are paid
from income or gains earned by a Portfolio prior to your
investment and thus were included in the price you paid for your
shares. For example, if you purchase shares on or just before the
record date of a Portfolio distribution, you will pay full price
for the shares and may receive a portion of your investment back
as a taxable distribution.
The Portfolios' use of a fund of funds structure could affect the
amount, timing and character of distributions to shareholders. See
"Taxation--Distributions" in the Statement of Additional
Information.
. Taxes when you sell (redeem) or exchange your shares. Any gain
resulting from the sale of Portfolio shares will generally be
subject to federal income tax. When you exchange shares of a
Portfolio for shares of another Portfolio or series of the Trust,
the transaction will be treated as a sale of the first Portfolio's
shares for these purposes, and any gain on those shares will
generally be subject to federal income tax.
This section relates only to federal income tax consequences of
investing in the Portfolios; the consequences under other tax laws
may differ. You should consult your tax advisor as to the possible
application of foreign, state and local income tax laws to
Portfolio dividends and capital distributions. Please see the
Statement of Additional Information for additional information
regarding the tax aspects of investing in the Portfolios.
Prospectus 34
<PAGE>
Financial Highlights
The financial highlights table is intended to help you understand
the financial performance of Class A, Class B and Class C shares
of each Portfolio since the class of shares was first offered.
Certain information reflects financial results for a single
Portfolio share. The total returns in the table represent the rate
that an investor would have earned or lost on an investment in a
particular class of shares of a Portfolio, assuming reinvestment
of all dividends and distributions. This information has been
audited by PricewaterhouseCoopers LLP, whose report, along with
each Portfolio's financial statements, are included in the Trust's
annual report to shareholders. The annual report is incorporated
by reference in the Statement of Additional Information and is
available free of charge upon request from the Distributor.
<TABLE>
<CAPTION>
Year or Net Realized/ Dividends Dividends in
Period Net Asset Value Net Unrealized Total Income From Net Excess of Net
Ended Beginning Investment Gain (Loss) on From Investment Investment Investment
of Period Income (Loss) Investments Operations Income Income
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
90/10 Portfolio
Class A
09/30/98-06/30/99 $10.00 $0.16(a) $2.19(a) $2.35 $(0.15) $(0.03)
Class B
09/30/98-06/30/99 10.00 0.16(a) 2.13(a) 2.29 (0.15) (0.03)
Class C
09/30/98-06/30/99 10.00 0.07(a) 2.22(a) 2.29 (0.15) (0.03)
60/40 Portfolio
Class A
09/30/98-06/30/99 $10.00 $0.31(a) $1.23(a) $1.54 $(0.27) $0.00
Class B
09/30/98-06/30/99 10.00 0.16(a) 1.31(a) 1.47 (0.22) 0.00
Class C
09/30/98-06/30/99 10.00 0.18(a) 1.29(a) 1.47 (0.23) 0.00
30/70 Portfolio
Class A
09/30/98-06/30/99 $10.00 $0.58(a) $0.11(a) $0.69 $(0.36) $0.00
Class B
09/30/98-06/30/99 10.00 0.32(a) 0.31(a) 0.63 (0.31) 0.00
Class C
09/30/98-06/30/99 10.00 0.26(a) 0.36(a) 0.62 (0.32) 0.00
</TABLE>
- -------
* Annualized
(a) Per share amounts based upon average number of shares outstanding during
the period.
35 PIMCO Funds: Multi-Manager Series
<PAGE>
<TABLE>
<CAPTION>
Ratio of Net
Ratio of Investment
Net Asset Expenses to Income (Loss) to
Total Value End of Net Assets End Average Net Average Net Portfolio
Ditributionss Period Total Return of Period (000s) Assets Assets Turnover Rate
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$(0.18) $12.17 23.69% $ 647 0.65%* 1.91%* 48%
(0.18) 12.11 23.03 1,920 1.40* 1.87* 48
(0.18) 12.11 23.03 7,969 1.40* 0.77* 48
$(0.27) $11.27 15.50% $2,196 0.65%* 3.76%* 39%
(0.22) 11.25 14.83 3,653 1.40* 1.92* 39
(0.23) 11.24 14.82 9,826 1.40* 2.14* 39
$(0.36) $10.33 6.91% $ 407 0.65%* 7.54%* 37%
(0.31) 10.32 6.29 1,738 1.40* 4.09* 37
(0.32) 10.30 6.27 4,969 1.40* 3.39* 37
</TABLE>
Prospectus 36
<PAGE>
PIMCO Funds Asset Allocation Series
Actively managed Portfolios of select PIMCO Funds
The Trust's Statement of Additional Information ("SAI") and annual
and semi-annual reports to shareholders include additional
information about the Portfolios. In addition, the current Trust
prospectus and the prospectus of PIMCO Funds: Pacific Investment
Management Series relating to Institutional Class shares of the
Underlying Funds contain additional information about the
Underlying Funds. The SAI, the financial statements included in
the Portfolios' most recent annual report to shareholders, and the
Underlying Fund prospectuses are incorporated by reference into
this Prospectus, which means they are part of this Prospectus for
legal purposes. The Portfolios' annual report discusses the market
conditions and investment strategies that significantly affected
each Portfolio's performance during its last fiscal year.
The SAI includes the PIMCO Funds Shareholders' Guide for Class A,
B and C Shares, a separate booklet which contains more detailed
information about Portfolio purchase, redemption and exchange
options and procedures and other information about the Portfolios.
You can get a free copy of the Guide together with or separately
from the rest of the SAI.
You may get free copies of any of these materials, request other
information about a Portfolio or the Underlying Funds, or make
shareholder inquiries by calling 1-800-426-0107, or by writing to:
PIMCO Funds Distributors LLC
2187 Atlantic Street
Stamford, Connecticut 06902
You may review and copy information about the Trust, the
Portfolios and the Underlying Funds, including the SAI and the
Underlying Fund prospectuses, at the Securities and Exchange
Commission's public reference room in Washington, D.C. You may
call the Commission at 1-800-SEC-0330 for information about the
operation of the public reference room. You may also access
reports and other information about the Trust on the Commission's
Web site at www.sec.gov. You may get copies of this information,
with payment of a duplication fee, by writing the Public Reference
Section of the Commission, Washington, D.C. 20549-6009. You may
need to refer to the Trust's file number under the Investment
Company Act, which is 811-6161.
You can also visit our Web site at www.pimcofunds.com for
additional information about the Portfolios and the Underlying
Funds.
[LOGO OF PIMCO FUNDS APPEARS HERE]
File No. 811-6161
<PAGE>
----------------------------------------------------------------------
PIMCO INVESTMENT ADVISER AND ADMINISTRATOR
Funds PIMCO Advisors L.P., 800 Newport Center Drive, Newport Beach, CA
92660
Asset
Allocation
----------------------------------------------------------------------
Series DISTRIBUTOR
PIMCO Funds Distributors LLC, 2187 Atlantic Street, Stamford, CT
06902
----------------------------------------------------------------------
CUSTODIAN
Investors Fiduciary Trust Company, 801 Pennsylvania, Kansas City, MO
64105
----------------------------------------------------------------------
SHAREHOLDER SERVICING AGENT AND TRANSFER AGENT
First Data Investor Services Group, Inc., P.O. Box 9688, Providence,
RI 02940
----------------------------------------------------------------------
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP, 1055 Broadway, Kansas City, MO 64105
----------------------------------------------------------------------
LEGAL COUNSEL
Ropes & Gray, One International Place, Boston, MA 02110
----------------------------------------------------------------------
For further information about the PIMCO Funds, call 1-800-426-0107 or
visit our Web site at www.pimcofunds.com.
<PAGE>
Rule 497(c)
33-36528
811-6161
PIMCO Funds Prospectus
This Prospectus describes three actively managed mutual fund
PIMCO Portfolios offered by PIMCO Funds: Multi-Manager Series (the
Funds: "Trust").
Multi-
Manager
Series
Asset Allocation Series -- 90/10 Portfolio
Asset Allocation Series -- 60/40 Portfolio
November Asset Allocation Series -- 30/70 Portfolio
1, 1999
Each Portfolio invests in a diversified portfolio of other PIMCO
Funds. This Prospectus explains what you should know about the
Portfolios before you invest. Please read it carefully.
Share
Classes
Institutional and
Administrative
The Securities and Exchange Commission has not approved or
disapproved these securities or determined if this Prospectus is
truthful or complete. Any representation to the contrary is a
criminal offense.
1 PIMCO Funds: Multi-Manager Series
<PAGE>
Table of Contents
<TABLE>
<S> <C>
Summary Information.............................................. 3
Portfolio Summaries
90/10 Portfolio................................................ 5
60/40 Portfolio................................................ 7
30/70 Portfolio................................................ 9
Summary of Principal Risks....................................... 11
Investment Objectives and Principal Investment Strategies........ 17
Underlying Funds................................................. 20
Other Risk Information........................................... 23
Management of the Portfolios..................................... 23
Investment Options - Institutional Class and Administrative Class
Shares ......................................................... 26
Purchases, Redemptions and Exchanges............................. 27
How Portfolio Shares Are Priced.................................. 30
Portfolio Distributions.......................................... 31
Tax Consequences................................................. 31
Financial Highlights............................................. 33
</TABLE>
Prospectus 2
<PAGE>
Summary Information
The Portfolios are intended for investors who prefer to have their
asset allocation decisions made by professional money managers.
Each Portfolio has a distinct investment objective which it seeks
to achieve by investing within specified equity and fixed income
targets and ranges among certain Funds in the PIMCO Funds family.
The Portfolios invest only in Funds in the PIMCO Funds family. The
PIMCO Funds in which the Portfolios invest are called Underlying
Funds or Funds in this Prospectus.
Some of the Underlying Funds invest primarily in equity
securities and are called Underlying Stock Funds. Other Underlying
Funds invest primarily in fixed income securities, including money
market instruments, and are called Underlying Bond Funds. The
Portfolios are named according to their equity/fixed income
allocation targets. For instance, the 90/10 Portfolio will
normally invest approximately 90% of its assets in Underlying
Stock Funds and 10% of its assets in Underlying Bond Funds.
The table below lists the investment objectives and compares the
asset allocation strategies of the Portfolios. Other important
characteristics are described in the individual Portfolio
Summaries beginning on page 5, and are discussed in greater detail
under "Investment Objectives and Principal Investment Strategies."
A "Summary of Principal Risks" begins on page 11.
<TABLE>
<CAPTION>
PIMCO Funds
Asset Allocation Series Investment Objective Allocation Strategy
----------------------------------------------------------------------
<C> <C> <S>
90/10 Portfolio Long-term capital Under normal conditions,
appreciation approximately 90% (range
of 80%-100%) of the
Portfolio's assets will
be allocated among
Underlying Stock Funds
and 10% (range of 0%-
20%) among Underlying
Bond Funds
----------------------------------------------------------------------
60/40 Portfolio Long-term capital Under normal conditions,
appreciation and approximately 60% (range
current income of 50%-70%) of the
Portfolio's assets will
be allocated among
Underlying Stock Funds
and 40% (range of 30%-
50%) among Underlying
Bond Funds
----------------------------------------------------------------------
30/70 Portfolio Current income, with Under normal conditions,
long-term approximately 30% (range
capital appreciation as of 25%-35%) of the
a Portfolio's assets will
secondary objective be allocated among
Underlying Stock Funds
and 70% (range of 65%-
75%) among Underlying
Bond Funds
</TABLE>
Risk/Return An investor should choose among the Portfolios based on personal
Comparison investment objectives, investment time horizon, tolerance for risk
and personal financial circumstances. Generally speaking,
historical data suggests that the longer the time horizon, the
greater the likelihood that the total return of a portfolio that
invests primarily in equity securities will be higher than the
total return of a portfolio that invests primarily in fixed income
securities. However, an equity portfolio is generally subject to
higher levels of overall risk and price volatility than a fixed
income portfolio and is considered to be a more aggressive
investment. Based on these assumptions, the following chart gives
some indication of the comparative risk/return potential of the
Portfolios according to their equity/fixed income allocation
targets and ranges. Note that these assumptions may not be correct
in future market conditions and the chart may not accurately
predict the actual comparative risk/return of the Portfolios under
all market conditions.
90/10 Portfolio might be suitable for investors that have a
relatively long time horizon, seek long-term capital
appreciation potential and have a fairly high tolerance for
risk and volatility.
60/40 Portfolio might be suitable for investors that have a
medium-range time horizon, seek a balance of long-term
capital appreciation potential and income and have medium
tolerance for risk and volatility.
30/70 Portfolio might be suitable for investors that have a
shorter time horizon, seek a higher level of income
combined with some potential for long-term capital
appreciation and have a lower tolerance for risk and
volatility.
It is possible to lose money on investments in the Portfolios.
While each Portfolio provides a relatively high level of
diversification in comparison to most mutual funds, a single
Portfolio may not be suitable as a complete investment program. An
investment in a Portfolio is not a deposit of a bank and is not
guaranteed or insured by the Federal Deposit Insurance Corporation
or any other government agency.
3 PIMCO Funds: Multi-Manager Series
<PAGE>
Summary Information (continued)
Asset PIMCO Advisors L.P. serves as the investment adviser to the
Allocation Portfolios. PIMCO Advisors' Asset Allocation Committee determines
Strategies how each Portfolio allocates and reallocates its assets among the
Underlying Funds according to the Portfolio's equity/fixed income
allocation targets and ranges. The Committee attempts to diversify
each Portfolio's assets broadly among the major asset classes and
sub-classes represented by the Underlying Funds.
The major equity asset classes and sub-classes held by the
Underlying Stock Funds include those categorized by investment
style/category (growth, blend, value, enhanced index, sector-
related), region (U.S. equities, international developed markets,
international emerging markets), and market capitalization (large-
cap, mid-cap and small-cap). The major fixed income asset classes
and sub-classes held by the Underlying Bond Funds include those
categorized by sector/investment specialty (government securities,
mortgage-related securities, corporate bonds and inflation-indexed
bonds), region (U.S. fixed income, developed foreign fixed income,
emerging markets fixed income), credit quality (investment
grade/money market, medium grade, high yield), and duration (long-
term, intermediate-term and short-term).
Please see "Underlying Funds" in this Prospectus for a
description of the Underlying Funds as categorized by their
investment styles and main investments.
The Portfolios may invest in any or all of the Underlying Funds,
but will not normally invest in every Underlying Fund at any
particular time. Each Portfolio may invest in shares of the same
Underlying Funds; however, the percentage of each Portfolio's
assets so invested will vary depending on the Portfolio's
investment objective. The Asset Allocation Committee does not
allocate a Portfolio's assets according to a predetermined blend
of particular Underlying Funds. Instead, the Committee meets
regularly to determine the mix of Underlying Funds appropriate for
each Portfolio by allocating among the asset classes and sub-
classes held by the Underlying Funds. When making these decisions,
the Committee considers various quantitative and qualitative data
relating to the U.S. and foreign economies and securities markets.
This data includes projected growth trends in the U.S. and foreign
economies, forecasts for interest rates and the relationship
between short- and long-term interest rates (yield curve), current
and projected trends in inflation, relative valuation levels in
the equity and fixed income markets and various segments within
those markets, the outlook and projected growth of various
industrial sectors, information relating to business cycles,
borrowing trends and the cost of capital, political trends, data
relating to trade balances and labor information. The Committee
may also consider proprietary research provided by the investment
advisers and sub-advisers of the Underlying Funds.
The Committee then selects representative Underlying Funds for
each Portfolio to fill out the asset class and sub-class
weightings it has identified according to the Portfolio's
equity/fixed income targets and ranges. The Committee has the
flexibility to reallocate each Portfolio's assets in varying
percentages among any or all of the Underlying Funds based on the
Committee's ongoing analyses of the equity and fixed income
markets, although these tactical shifts are not expected to be
large or frequent in nature.
"Fund of The term "fund of funds" is used to describe mutual funds, such as
Funds" the Portfolios, that pursue their investment objectives by
Structure investing in other mutual funds. The cost of investing in a
and Portfolio will generally be higher than the cost of investing in a
Expenses mutual fund that invests directly in individual stocks and bonds.
By investing in a Portfolio, an investor will indirectly bear fees
and expenses charged by the Underlying Funds in which the
Portfolio invests in addition to the Portfolio's direct fees and
expenses. In addition, the use of a fund of funds structure could
affect the timing, amount and character of distibutions to
shareholders and therefore may increase the amount of taxes
payable by shareholders.
Portfolio
Descriptions
and Fees
The following Portfolio Summaries identify each Portfolio's
investment objective, principal investments and strategies,
principal risks and fees and expenses. A more detailed "Summary of
Principal Risks" describing principal risks of investing in the
Portfolios begins after the Portfolio Summaries. Because the
Portfolios have not been in operation for a full calendar year, no
performance information (e.g., a bar chart or average annual total
returns table) is included for the Portfolios. A fuller discussion
of the Portfolios' investment strategies and related information
is included under "Investment Objectives and Principal Investment
Strategies" in this Prospectus.
Prospectus 4
<PAGE>
90/10 Portfolio
<TABLE>
<CAPTION>
Allocation
Strategy Target Range
<S> <C> <C>
Underlying Stock
Funds 90% 80%-100%
Underlying Bond
Funds 10% 0%-20%
</TABLE>
- --------------------------------------------------------------------------------
Principal Investment
Investments Objective
and Seeks long-term
Strategies capital
appreciation
Dividend
Frequency
At least
annually
The Portfolio seeks to achieve its investment objective by
normally investing approximately 90% (within a range of 80%--100%)
of its assets in Underlying Stock Funds and approximately 10%
(within a range of0%--20%) of its assets in Underlying Bond Funds.
The Portfolio invests all of its assets in shares of the
Underlying Funds and does not invest directly in stocks or bonds
of other issuers.
Please see "Asset Allocation Strategies" on page 3 for a summary
of how the Asset Allocation Committee allocates and reallocates
the Portfolio's assets among particular Underlying Funds.
The Portfolio may concentrate investments in a particular
Underlying Fund by investing more than 25% of its assets in that
Fund.
Based on the Portfolio's equity/fixed income allocation
strategy, it might be suitable for an investor with a relatively
long time horizon who seeks long-term capital appreciation
potential and has a fairly high tolerance for risk and volatility.
- --------------------------------------------------------------------------------
Principal Allocation Risk The Portfolio's investment performance depends
Risks upon how its assets are allocated and reallocated among particular
Underlying Funds. A principal risk of investing in the Portfolio
is that the Asset Allocation Committee's allocation techniques and
decisions will not produce the desired results, and the Portfolio
may not achieve its investment objective.
Underlying Fund Risks The value of your investment in the
Portfolio is directly related to the investment performance of the
Underlying Funds in which it invests. Therefore, the principal
risks of investing in the Portfolio are closely related to the
principal risks associated with the Underlying Funds and their
investments. Because the Portfolio's allocation among the
Underlying Funds will vary, an investment may be subject to any
and all of these risks at different times and to different
degrees.
Among the principal risks of the Underlying Funds, which could
adversely affect the net asset value, yield and total return of
the Portfolio, are:
.Market Risk .Derivatives Risk .Interest Rate Risk
.Issuer Risk .Foreign Investment Risk
.Credit Risk
.Value Securities Risk.Emerging Markets Risk
.High Yield Risk
.Growth Securities Risk
.Currency Risk .Mortgage Risk
.Smaller Company Risk .Concentration Risk .Management Risk
.Liquidity Risk .Leveraging Risk
Please see "Summary of Principal Risks" following the Portfolio
Summaries for a description of these and other risks associated
with the Underlying Funds and an investment in the Portfolio.
- --------------------------------------------------------------------------------
Performance
Information The Portfolio commenced operations in September 1998 and does not
yet have a full calendar year of performance to be shown in the
Prospectus. Therefore, no bar chart or average annual total
returns table is provided for the Portfolio.
5 PIMCO Funds: Multi-Manager Series
<PAGE>
90/10 Portfolio (continued)
- --------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Institutional Class or Administrative Class shares of the
of the Portfolio:
Portfolio
Shareholder Fees (fees paid directly from your investment)
None
Annual Portfolio Operating Expenses (expenses that are deducted
from Portfolio assets)
<TABLE>
<S> <C> <C> <C> <C> <C>
Other Expenses
---------------------------------
Distribution Total Annual
Advisory and/or Service Administrative Underlying Portfolio Operating
Share Class Fees (12b-1) Fees Fees(/1/) Fund Expenses(/2/) Expenses(/1/)
------------------------------------------------------------------------------------------
Institutional None None 0.15% 0.76% 0.91%
------------------------------------------------------------------------------------------
Administrative None 0.25% 0.15 0.76 1.16
------------------------------------------------------------------------------------------
</TABLE>
(1) The Administrative Fees for the Portfolio do not reflect a
voluntary fee waiver of 0.05% currently in effect. While the
fee waiver is in effect, actual Administrative Fees will be
0.10%, and Total Annual Portfolio Operating Expenses are
estimated to be as follows: Institutional Class - 0.86%;
Administrative Class - 1.11%.
(2) Based on estimated expenses for the current fiscal year.
Underlying Fund Expenses for the Portfolio are estimated based
upon a recent allocation of the Portfolio's assets among
Underlying Funds and upon the total annual operating expenses
of Institutional Class shares of these Underlying Funds. For a
listing of the expenses associated with each Underlying Fund,
please see "Management of the Portfolios--Underlying Fund
Expenses." Total Annual Portfolio Operating Expenses and the
Examples set forth below are based on estimates of the
Underlying Fund Expenses the Portfolio will incur. Actual
Underlying Fund Expenses for the Portfolio are expected to
vary with changes in the allocation of the Portfolio's assets,
and may be higher or lower than those shown above.
Examples. The Examples are intended to help you compare the cost
of investing in Institutional Class or Administrative Class shares
of the Portfolio with the costs of investing in other mutual
funds. The Examples assume that you invest $10,000 in the noted
class of shares for the time periods indicated, and then redeem
all your shares at the end of those periods. The Examples also
assume that your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the
Portfolio's operating expenses remain the same. Although your
actual costs may be higher or lower, the Examples show what your
costs would be based on these assumptions.
<TABLE>
<S> <C> <C> <C> <C>
Share Class Year 1 Year 3 Year 5 Year 10
-----------------------------------------------------------------------------------
Institutional $ 93 $290 $504 $1,120
-----------------------------------------------------------------------------------
Administrative 118 368 638 1,409
-----------------------------------------------------------------------------------
</TABLE>
Taking into account the Administrative Fees waiver described in
footnote (1) above, the Examples for Years 1, 3, 5 and 10,
respectively, are as follows: Institutional Class -- $88, $274,
$477 and $1,061; Administrative Class -- $113, $353, $612 and
$1,352.
Prospectus 6
<PAGE>
60/40 Portfolio
<TABLE>
<CAPTION>
Allocation
Strategy Target Range
<S> <C> <C>
Underlying Stock
Funds 60% 50%-70%
Underlying Bond
Funds 40% 30%-50%
</TABLE>
- --------------------------------------------------------------------------------
Principal Investment
Investments Objective
and Seeks long-term
Strategies capital
appreciation and
current income
Dividend
Frequency
Quarterly
The Portfolio seeks to achieve its investment objective by
normally investing approximately 60% (within a range of 50%--70%)
of its assets in Underlying Stock Funds and approximately 40%
(within a range of 30%--50%) of its assets in Underlying Bond
Funds. The Portfolio invests all of its assets in shares of the
Underlying Funds and does not invest directly in stocks or bonds
of other issuers.
Please see "Asset Allocation Strategies" on page 3 for a summary
of how the Asset Allocation Committee allocates and reallocates
the Portfolio's assets among particular Underlying Funds.
The Portfolio may concentrate investments in a particular
Underlying Fund by investing more than 25% of its assets in that
Fund.
Based on the Portfolio's equity/fixed income allocation
strategy, it might be suitable for an investor with a medium-range
time horizon who seeks a balance of long-term capital appreciation
potential and income and has a medium tolerance for risk and
volatility.
- --------------------------------------------------------------------------------
Principal Allocation Risk The Portfolio's investment performance depends
Risks upon how its assets are allocated and reallocated among particular
Underlying Funds. A principal risk of investing in the Portfolio
is that the Asset Allocation Committee's allocation techniques and
decisions will not produce the desired results, and the Portfolio
may not achieve its investment objective.
Underlying Fund Risks The value of your investment in the
Portfolio is directly related to the investment performance of the
Underlying Funds in which it invests. Therefore, the principal
risks of investing in the Portfolio are closely related to the
principal risks associated with the Underlying Funds and their
investments. Because the Portfolio's allocation among the
Underlying Funds will vary, an investment may be subject to any
and all of these risks at different times and to different
degrees.
Among the principal risks of the Underlying Funds, which could
adversely affect the net asset value, yield and total return of
the Portfolio, are:
.Market Risk .Credit Risk .Emerging Markets Risk
.Issuer Risk .High Yield Risk .Currency Risk
.Value Securities Risk.Mortgage Risk .Concentration Risk
.Growth Securities Risk
.Liquidity Risk .Leveraging Risk
.Smaller Company Risk .Derivatives Risk .Management Risk
.Interest Rate Risk .Foreign Investment Risk
Please see "Summary of Principal Risks" following the Portfolio
Summaries for a description of these and other risks associated
with the Underlying Funds and an investment in the Portfolio.
- --------------------------------------------------------------------------------
Performance
Information The Portfolio commenced operations in September 1998 and does not
yet have a full calendar year of performance to be shown in the
Prospectus. Therefore, no bar chart or average annual total
returns table is provided for the Portfolio.
7 PIMCO Funds: Multi-Manager Series
<PAGE>
60/40 Portfolio (continued)
- --------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Institutional Class or Administrative Class shares of the
of the Portfolio:
Portfolio
Shareholder Fees (fees paid directly from your investment)
None
Annual Portfolio Operating Expenses (expenses that are deducted
from Portfolio assets)
<TABLE>
<S> <C> <C> <C> <C> <C>
Other Expenses
---------------------------------
Distribution Total Annual
Advisory and/or Service Administrative Underlying Portfolio Operating
Share Class Fees (12b-1) Fees Fees(/1/) Fund Expenses(/2/) Expenses(/1/)
------------------------------------------------------------------------------------------
Institutional None None 0.15% 0.65% 0.80%
------------------------------------------------------------------------------------------
Administrative None 0.25% 0.15 0.65 1.05
------------------------------------------------------------------------------------------
</TABLE>
(1) The Administrative Fees for the Portfolio do not reflect a
voluntary fee waiver of 0.05% currently in effect. While the
fee waiver is in effect, actual Administrative Fees will be
0.10%, and Total Annual Portfolio Operating Expenses are
estimated to be as follows: Institutional Class - 0.75%;
Administrative Class - 1.00%.
(2) Based on estimated expenses for the current fiscal year.
Underlying Fund Expenses for the Portfolio are estimated based
upon a recent allocation of the Portfolio's assets among
Underlying Funds and upon the total annual operating expenses
of Institutional Class shares of these Underlying Funds. For a
listing of the expenses associated with each Underlying Fund,
please see "Management of the Portfolios--Underlying Fund
Expenses." Total Annual Portfolio Operating Expenses and the
Examples set forth below are based on estimates of the
Underlying Fund Expenses the Portfolio will incur. Actual
Underlying Fund Expenses for the Portfolio are expected to
vary with changes in the allocation of the Portfolio's assets,
and may be higher or lower than those shown above.
Examples. The Examples are intended to help you compare the cost
of investing in Institutional Class or Administrative Class shares
of the Portfolio with the costs of investing in other mutual
funds. The Examples assume that you invest $10,000 in the noted
class of shares for the time periods indicated, and then redeem
all your shares at the end of those periods. The Examples also
assume that your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the
Portfolio's operating expenses remain the same. Although your
actual costs may be higher or lower, the Examples show what your
costs would be based on these assumptions.
<TABLE>
<S> <C> <C> <C> <C>
Share Class Year 1 Year 3 Year 5 Year 10
-----------------------------------------------------------------------------------
Institutional $ 82 $255 $444 $ 990
-----------------------------------------------------------------------------------
Administrative 107 334 579 1,283
-----------------------------------------------------------------------------------
</TABLE>
Taking into account the Administrative Fees waiver described in
footnote (1) above, the Examples for Years 1, 3, 5 and 10,
respectively, are as follows: Institutional Class -- $77, $240,
$417 and $930; Administrative Class -- $102, $318, $552 and
$1,225.
Prospectus 8
<PAGE>
30/70 Portfolio
- --------------------------------------------------------------------------------
Principal Investment <TABLE>
Investments Objective <CAPTION>
and Allocation
Strategies Strategy Target Range
<S> <C> <C>
Underlying Stock
Funds 30% 25%-35%
Underlying Bond
Funds 70% 65%-75%
</TABLE>
Seeks current
income, with
long-term
capital
appreciation as
a secondary
objective
Dividend
Frequency
Monthly
The Portfolio seeks to achieve its investment objective by
normally investing approximately 30% (within a range of 25%--35%)
of its assets in Underlying Stock Funds and approximately 70%
(within a range of 65%--75%) of its assets in Underlying Bond
Funds. The Portfolio invests all of its assets in shares of the
Underlying Funds and does not invest directly in stocks or bonds
of other issuers.
Please see "Asset Allocation Strategies" on page 3 for a summary
of how the Asset Allocation Committee allocates and reallocates
the Portfolio's assets among particular Underlying Funds.
The Portfolio may concentrate investments in a particular
Underlying Fund by investing more than 25% of its assets in that
Fund.
Based on the Portfolio's equity/fixed income allocation
strategy, it might be suitable for an investor with a shorter time
horizon who seeks a higher level of income combined with some
potential for long-term capital appreciation and has a lower
tolerance for risk and volatility.
- --------------------------------------------------------------------------------
Principal Allocation Risk The Portfolio's investment performance depends
Risks upon how its assets are allocated and reallocated among particular
Underlying Funds. A principal risk of investing in the Portfolio
is that the Asset Allocation Committee's allocation techniques and
decisions will not produce the desired results, and the Portfolio
may not achieve its investment objective.
Underlying Fund Risks The value of your investment in the
Portfolio is directly related to the investment performance of the
Underlying Funds in which it invests. Therefore, the principal
risks of investing in the Portfolio are closely related to the
principal risks associated with the Underlying Funds and their
investments. Because the Portfolio's allocation among the
Underlying Funds will vary, an investment may be subject to any
and all of these risks at different times and to different
degrees.
Among the principal risks of the Underlying Funds, which could
adversely affect the net asset value, yield and total return of
the Portfolio, are:
.Interest Rate Risk.Value Securities Risk .Emerging Markets Risk
.Credit Risk .Growth Securities Risk.Currency Risk
Please see "Summary of Principal Risks" following the Portfolio
Summaries for a description of these and other risks associated
with the Underlying Funds and an investment in the Portfolio.
.High Yield Risk .Smaller Company Risk .Concentration Risk
.Mortgage Risk .Liquidity Risk .Leveraging Risk
.Market Risk .Derivatives Risk .Management Risk
.Issuer Risk .Foreign Investment Risk
- --------------------------------------------------------------------------------
Performance
Information The Portfolio commenced operations in September 1998 and does not
yet have a full calendar year of performance to be shown in the
Prospectus. Therefore, no bar chart or average annual total
returns table is provided for the Portfolio.
9 PIMCO Funds: Multi-Manager Series
<PAGE>
30/70 Portfolio (continued)
- --------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Institutional Class or Administrative Class shares of the
of the Portfolio:
Portfolio
Shareholder Fees (fees paid directly from your investment)
None
Annual Portfolio Operating Expenses (expenses that are deducted
from Portfolio assets)
<TABLE>
<S> <C> <C> <C> <C> <C>
Other Expenses
---------------------------------
Distribution Total Annual
Advisory and/or Service Administrative Underlying Portfolio Operating
Share Class Fees (12b-1) Fees Fees(/1/) Fund Expenses(/2/) Expenses(/1/)
------------------------------------------------------------------------------------------
Institutional None None 0.15% 0.55% 0.70%
------------------------------------------------------------------------------------------
Administrative None 0.25% 0.15 0.55 0.95
------------------------------------------------------------------------------------------
</TABLE>
(1) The Administrative Fees for the Portfolio do not reflect a
voluntary fee waiver of 0.05% currently in effect. While the
fee waiver is in effect, actual Administrative Fees will be
0.10%, and Total Annual Portfolio Operating Expenses are
estimated to be as follows: Institutional Class - 0.65%;
Administrative Class - 0.90%.
(2) Based on estimated expenses for the current fiscal year.
Underlying Fund Expenses for the Portfolio are estimated based
upon a recent allocation of the Portfolio's assets among
Underlying Funds and upon the total annual operating expenses
of Institutional Class shares of these Underlying Funds. For a
listing of the expenses associated with each Underlying Fund,
please see "Management of the Portfolios--Underlying Fund
Expenses." Total Annual Portfolio Operating Expenses and the
Examples set forth below are based on estimates of the
Underlying Fund Expenses the Portfolio will incur. Actual
Underlying Fund Expenses for the Portfolio are expected to
vary with changes in the allocation of the Portfolio's assets,
and may be higher or lower than those shown above.
Examples. The Examples are intended to help you compare the cost
of investing in Institutional Class or Administrative Class shares
of the Portfolio with the costs of investing in other mutual
funds. The Examples assume that you invest $10,000 in the noted
class of shares for the time periods indicated, and then redeem
all your shares at the end of those periods. The Examples also
assume that your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the
Portfolio's operating expenses remain the same. Although your
actual costs may be higher or lower, the Examples show what your
costs would be based on these assumptions.
<TABLE>
<S> <C> <C> <C> <C>
Share Class Year 1 Year 3 Year 5 Year 10
-----------------------------------------------------------------------------------
Institutional $72 $224 $390 $ 871
-----------------------------------------------------------------------------------
Administrative 97 303 525 1,166
-----------------------------------------------------------------------------------
</TABLE>
Taking into account the Administrative Fees waiver described in
footnote (1) above, the Examples for Years 1, 3, 5 and 10,
respectively, are as follows: Institutional Class -- $66, $208,
$362 and $810; Administrative Class -- $92, $287, $498 and $1,108.
Prospectus 10
<PAGE>
Summary of Principal Risks
The value of an investment in a Portfolio changes with the values
of that Portfolio's investments in the Underlying Funds. Many
factors can affect those values. The factors that are most likely
to have a material effect on a particular Portfolio's investments
as a whole are called "principal risks." The principal risks of
each Portfolio are identified in the Portfolio Summaries beginning
on page 5 and are summarized in this section. There is no
guarantee that a Portfolio will be able to achieve its investment
objective.
Allocation Risk
Each Portfolio's investment performance depends upon how its
assets are allocated and reallocated among particular Underlying
Funds according to the Portfolio's equity/fixed income allocation
targets and ranges. A principal risk of investing in each
Portfolio is that PIMCO Advisors' Asset Allocation Committee will
make less than optimal or poor asset allocation decisions. The
Committee attempts to identify asset classes and sub-classes
represented by the Underlying Funds that will provide consistent,
quality performance for the Portfolios, but there is no guarantee
that the Committee's allocation techniques will produce the
desired results. It is possible that the Committee will focus on
Underlying Funds that perform poorly or underperform other
available Funds under various market conditions. You could lose
money on your investment in a Portfolio as a result of these
allocation decisions.
Underlying Fund Risks
Because each Portfolio invests all of its assets in Underlying
Funds, the risks associated with investing in the Portfolios are
closely related to the risks associated with the securities and
other investments held by the Underlying Funds. The ability of a
Portfolio to achieve its investment objective will depend upon the
ability of the Underlying Funds to achieve their objectives. There
can be no assurance that the investment objective of any
Underlying Fund will be achieved.
Each Portfolio's net asset value will fluctuate in response to
changes in the net asset values of the Underlying Funds in which
it invests. The extent to which the investment performance and
risks associated with a particular Portfolio correlate to those of
a particular Underlying Fund will depend upon the extent to which
the Portfolio's assets are allocated from time to time for
investment in the Underlying Fund, which will vary. A Portfolio's
investment in a particular Underlying Fund may and in some cases
is expected to exceed 25% of its assets. To the extent that a
Portfolio invests a significant portion of its assets in an
Underlying Fund, it will be particularly sensitive to the risks
associated with that Fund.
The following summarizes principal risks associated with
investments in the Underlying Funds and, indirectly, with your
investment in a Portfolio. Each Underlying Fund may be subject to
additional principal risks other than those described below
because the types of investments made by an Underlying Fund can
change over time. The summary is not intended to be exhaustive.
For a more complete description of these risks and the securities
and investment techniques used by the Underlying Funds, please
refer to the Statement of Additional Information and the
Underlying Fund prospectuses, which are incorporated herein by
reference and are available free of charge by telephoning the
Trust at 1-800-927-4648.
Market The market price of securities owned by an Underlying Fund may go
Risk up or down, sometimes rapidly or unpredictably. Securities may
decline in value due to factors affecting securities markets
generally or particular industries represented in the securities
markets. The value of a security may decline due to general market
conditions which are not specifically related to a particular
company, such as real or perceived adverse economic conditions,
changes in the general outlook for corporate earnings, changes in
interest or currency rates, or adverse investor sentiment
generally. They may also decline due to factors which affect a
particular industry or industries, such as labor shortages or
increased production costs and competitive conditions within an
industry. Equity securities generally have greater price
volatility than fixed income securities and the Underlying Stock
Funds are particularly sensitive to these market risks.
Issuer
Risk
The value of a security may also decline for a number of reasons
which directly relate to the issuer, such as management
performance, financial leverage and reduced demand for the
issuer's goods or services.
11 PIMCO Funds: Multi-Manager Series
<PAGE>
Value Each Underlying Stock Fund may invest in companies that may not be
Securities expected to experience significant earnings growth, but whose
Risk securities the Fund's portfolio manager believes are selling at a
price lower than their true value. PIMCO Equity Income,
Renaissance, Value, Value 25, Small-Cap Value, Capital
Appreciation, Mid-Cap Growth, Small-Cap Growth and Micro-Cap
Growth Funds place particular emphasis on value securities.
Companies that issue value securities may have experienced adverse
business developments or may be subject to special risks that have
caused their securities to be out of favor. If a portfolio
manager's assessment of a company's prospects is wrong, or if the
market does not recognize the value of the company, the price of
its securities may decline or may not approach the value that the
portfolio manager anticipates.
Growth Each Underlying Stock Fund may invest in equity securities of
Securities companies that its portfolio manager believes will experience
Risk relatively rapid earnings growth. PIMCO Growth, Target,
Opportunity, Capital Appreciation, Mid-Cap Growth, Small-Cap
Growth, Micro-Cap Growth, International Growth and Innovation
Funds place particular emphasis on growth securities. Growth
securities typically trade at higher multiples of current earnings
than other securities. Therefore, the values of growth securities
may be more sensitive to changes in current or expected earnings
than the values of other securities.
Smaller The general risks associated with equity securities and liquidity
Company risk are particularly pronounced for securities of companies with
Risk market capitalizations that are small compared to other publicly
traded companies. These companies may have limited product lines,
markets or financial resources or they may depend on a few key
employees. Securities of smaller companies may trade less
frequently and in lesser volume than more widely held securities
and their values may fluctuate more sharply than other securities.
They may also trade in the over-the-counter market or on a
regional exchange, or may otherwise have limited liquidity. PIMCO
Opportunity, Small-Cap Growth, Micro-Cap Growth and Small-Cap
Value Funds generally have substantial exposure to this risk.
PIMCO Target, Mid-Cap Growth and Value 25 Funds also have
significant exposure to this risk because they invest substantial
assets in companies with medium-sized market capitalizations,
which are smaller and generally less-seasoned than the largest
companies. Smaller company risk also applies to fixed income
securities issued by smaller companies and may affect certain
investments of the Underlying Bond Funds.
Liquidity
Risk Many of the Underlying Funds are subject to liquidity risk.
Liquidity risk exists when particular investments are difficult to
purchase or sell, possibly preventing a Fund from selling out of
these illiquid securities at an advantageous time or price.
Underlying Funds with principal investment strategies that involve
securities of companies with smaller market capitalizations,
foreign securities, derivatives or securities with substantial
market and/or credit risk tend to have the greatest exposure to
liquidity risk.
Derivatives Many of the Underlying Funds may, but are not required to, use a
Risk number of derivative instruments for risk management purposes or
as part of their investment strategies. Generally, derivatives are
financial contracts whose value depends upon, or is derived from,
the value of an underlying asset, reference rate or index, and may
relate to stocks, bonds, interest rates, currencies or currency
exchange rates, commodities, and related indexes. Examples of
derivative instruments include options contracts, futures
contracts, options on futures contracts and swap agreements. An
Underlying Fund's use of derivative instruments involves risks
different from, or possibly greater than, the risks associated
with investing directly in securities and other traditional
investments. Also, an Underlying Fund's portfolio manager may
decide not to employ any of these strategies and there is no
assurance that any derivatives strategy used by a Fund will
succeed.
A description of the various derivative instruments in which the
Underlying Funds may invest and the risks associated with each
instrument is included in the Underlying Fund prospectuses and in
the Statement of Additional Information. The following provides a
more general discussion of important risk factors relating to all
derivative instruments that may be used by the Underlying Funds.
Management Risk Derivative products are highly specialized
instruments that require investment techniques and risk analyses
different from those associated with stocks and bonds. The use of
a derivative requires an understanding not only of the underlying
instrument but also of the derivative itself, without the benefit
of observing the performance of the derivative under all possible
market conditions.
Credit Risk The use of a derivative instrument involves the risk
that a loss may be sustained as a result of the failure of another
party to the contract (usually referred to as a "counterparty") to
make required payments or otherwise comply with the contract's
terms.
Prospectus 12
<PAGE>
Liquidity Risk Liquidity risk exists when a particular
derivative instrument is difficult to purchase or sell. If a
derivative transaction is particularly large or if the relevant
market is illiquid (as is the case with many privately negotiated
derivatives), it may not be possible to initiate a transaction or
liquidate a position at an advantageous time or price.
Leveraging Risk Because many derivatives have a leverage
component, adverse changes in the value or level of the underlying
asset, reference rate or index can result in a loss substantially
greater than the amount invested in the derivative itself. Certain
derivatives have the potential for unlimited loss, regardless of
the size of the initial investment. When an Underlying Fund uses
derivatives for leverage, investments in that Fund will tend to be
more volatile, resulting in larger gains or losses in response to
market changes. To limit leveraging risk, the Underlying Funds
observe asset segregation requirements to cover their obligations
under derivative instruments.
Lack of Availability Because the markets for certain derivative
instruments (including markets located in foreign countries) are
relatively new and still developing, suitable derivatives
transactions may not be available in all circumstances for risk
management or other purposes. There is no assurance that an
Underlying Fund will engage in derivatives transactions at any
time or from time to time. A Fund's ability to use derivatives may
also be limited by certain regulatory considerations.
Market and Other Risks Like most other investments, derivative
instruments are subject to the general risk that the market value
of the instrument will change in a way detrimental to an
Underlying Fund's interest. If a portfolio manager incorrectly
forecasts the values of securities, currencies or interest rates
or other economic factors in using derivatives for an Underlying
Fund, the Fund might have been in a better position if it had not
entered into the transaction at all. While some strategies
involving derivative instruments can reduce the risk of loss, they
can also reduce the opportunity for gain or even result in losses
by offsetting favorable price movements in other investments of an
Underlying Fund. An Underlying Fund may also have to buy or sell a
security at a disadvantageous time or price because the Fund is
legally required to maintain offsetting positions or asset
coverage in connection with certain derivatives transactions.
Other risks in using derivatives include the risk of mispricing
or improper valuation of derivatives and the inability of
derivatives to correlate perfectly with underlying assets, rates
and indexes. Many derivatives, in particular privately negotiated
derivatives, are complex and often valued subjectively. Improper
valuations can result in increased cash payment requirements to
counterparties or a loss of value to an Underlying Fund. Also, the
value of derivatives may not correlate perfectly, or at all, with
the value of the assets, reference rates or indexes they are
designed to closely track. In addition, an Underlying Fund's use
of derivatives may also cause the Fund to realize higher amounts
of short-term capital gains (taxed at ordinary income tax rates
when distributed to shareholders who are individuals) than if the
Fund had not used such instruments.
Foreign Many Underlying Funds (in particular, PIMCO International,
(non- International Growth, Structured Emerging Markets, Tax-Efficient
U.S.) Structured Emerging Markets, Global Bond, Foreign Bond and
Investment Emerging Markets Bond Funds) invest in securities of foreign
Risk issuers, securities traded principally in securities markets
outside the United States and/or securities denominated in foreign
currencies (together, "foreign securities"). These Funds may
experience more rapid and extreme changes in value than Funds that
invest exclusively in securities of U.S. issuers or securities
that trade exclusively in U.S. markets.
The securities markets of many foreign countries are relatively
small, with a limited number of companies representing a small
number of industries. Foreign securities often trade with less
frequency and volume than domestic securities and therefore may
exhibit greater price volatility. Additionally, issuers of foreign
securities are usually not subject to the same degree of
regulation as U.S. issuers. Reporting, accounting and auditing
standards of foreign countries differ, in some cases
significantly, from U.S. standards. Also, nationalization,
expropriation or confiscatory taxation, currency blockage,
political changes or diplomatic developments could adversely
affect an Underlying Fund's investments in a foreign country. In
the event of nationalization, expropriation or other confiscation,
a Fund could lose its entire investment in foreign securities. To
the extent that an Underlying Fund invests a significant portion
of its assets in a concentrated geographic area like Eastern
Europe, South Africa or Asia, the Fund will generally have more
exposure to regional economic risks associated with foreign
investments. Adverse conditions in certain regions (such as
Southeast Asia) can also adversely affect securities of other
countries whose economies appear to be unrelated. In addition,
special U.S. tax considerations may apply to an Underlying Fund's
investment in foreign securities.
13 PIMCO Funds: Multi-Manager Series
<PAGE>
Certain Underlying Bond Funds may invest in sovereign debt
issued by governments, their agencies or instrumentalities, or
other government-related entities. Holders of sovereign debt may
be requested to participate in the rescheduling of such debt and
to extend further loans to governmental entities. In addition,
there is no bankruptcy proceeding by which defaulted sovereign
debt may be collected.
Emerging Certain Underlying Funds (in particular, PIMCO Structured Emerging
Markets Markets, Tax-Efficient Structured Emerging Markets and Emerging
Risk Markets Bond Funds) may invest in the securities of issuers based
in countries with developing or "emerging market" economies. These
securities may present market, credit, currency, liquidity, legal,
political and other risks different from, or greater than, the
risks of investing in developed foreign countries.
Currency Many Underlying Funds may invest directly in foreign currencies or
Risk in securities that trade in, or receive revenues in, foreign
currencies. To the extent that they do so, these Funds are subject
to the risk that those currencies will decline in value relative
to the U.S. dollar, or, in the case of hedging positions, that the
U.S. Dollar will decline in value relative to the currency being
hedged. PIMCO Global Bond, Foreign Bond, Emerging Markets Bond,
International, International Growth, Structured Emerging Markets
and Tax-Efficient Structured Emerging Markets Funds are
particularly sensitive to currency risk. Currency rates in foreign
countries may fluctuate significantly over short periods of time
for a number of reasons, including changes in interest rates,
intervention (or the failure to intervene) by U.S. or foreign
governments, central banks or supranational entities such as the
International Monetary Fund, or by the imposition of currency
controls or other political developments in the U.S. or abroad.
For example, significant uncertainty surrounds the recent
introduction of the euro (a common currency unit for the European
Union) in January 1999 and its effect on the value of securities
denominated in local European currencies. These and other
currencies in which Underlying Fund assets are denominated may be
devalued against the U.S. dollar, resulting in a loss to such
Funds.
Concentration
Risk
Concentration of investments in a small number of issuers,
industries or foreign currencies increases risk. PIMCO Global
Bond, Foreign Bond and Emerging Markets Bond Funds are "non-
diversified," which means that they may invest a greater
percentage of their assets in the securities of a single issuer
than diversified mutual funds. Other Underlying Funds, such as
PIMCO Value 25 Fund, normally invest in a relatively small number
of issuers. In addition, many Underlying Bond Funds may invest a
substantial portion of their assets in the bonds of similar
projects or from issuers in the same state. To the extent that
they concentrate investments, the Underlying Funds are more
susceptible to risks associated with a single economic, political
or regulatory occurrence than a more diversified portfolio might
be. Some of those investments also may present substantial credit
or other risks. PIMCO International, International Growth,
Structured Emerging Markets, Tax-Efficient Structured Emerging
Markets, Global Bond, Foreign Bond and Emerging Markets Bond Funds
may be subject to this risk to the extent they concentrate their
assets in securities denominated in a particular foreign currency
or in a concentrated geographic area outside the U.S. Similarly,
PIMCO Innovation Fund is vulnerable to events affecting companies
which use innovative technologies to gain a strategic, competitive
advantage in their industry and companies that provide and service
those technologies because it normally concentrates its
investments in those companies.
Although each Portfolio normally invests in a number of different
Underlying Funds, to the extent that a Portfolio concentrates a
significant portion of its assets in a single Underlying Fund, it
will be particularly sensitive to the risks associated with that
Fund and any investments in which that Fund concentrates.
Leveraging Certain Underlying Funds may engage in transactions or purchase
Risk instruments that give rise to forms of leverage. Such transactions
and instruments may include, among others, the use of reverse
repurchase agreements and other borrowings, the investment of
collateral from loans of portfolio securities, or the use of when-
issued, delayed-delivery or forward commitment transactions. An
Underlying Fund's use of derivatives may also involve leverage.
Leverage, including borrowing, will cause the value of an
Underlying Fund's shares to be more volatile that if the Fund did
not use leverage. This is because leverage tends to exaggerate the
effect of any increase or decrease in the value of a Fund's
portfolio securities. The use of leverage may also cause an
Underlying Fund to liquidate portfolio positions when it may not
be advantageous to do so in order to satisfy its obligations or to
meet segregation requirements.
Prospectus 14
<PAGE>
Interest All of the Underlying Funds that invest in fixed income
Rate Risk securities, and particularly the Underlying Bond Funds, are
subject to interest rate risk. Changes in the market values of
fixed income securities are largely a function of changes in the
current level of interest rates. The value of an Underlying Fund's
investments in fixed income securities will typically change as
the level of interest rates fluctuate. During periods of declining
interest rates, the value of fixed income securities generally
rise. Conversely, during periods of rising interest rates, the
value of fixed income securities generally decline.
"Duration" is one measure of the expected life of a fixed income
security that is used to determine the sensitivity of a security's
price to changes in interest rates. Securities with longer
durations tend to be more sensitive to changes in interest rates,
usually making them more volatile than securities with shorter
durations. Accordingly, Underlying Bond Funds with longer average
portfolio durations (e.g., PIMCO Long-Term U.S. Government Fund)
will be more sensitive to changes in interest rates than Funds
with shorter average portfolio durations (e.g., PIMCO Money
Market, Short-Term and Low Duration Funds). Also, some portfolios
(e.g., those with mortgage-backed and other prepayable securities)
have changing durations and may have increasing durations
precisely when that is least advantageous (i.e., when interest
rates are rising).
Many Underlying Funds, including most of the Underlying Bond
Funds, may invest in securities that are particularly sensitive to
fluctuations in prevailing interest rates and have relatively high
levels of interest rate risk. These include various mortgage-
related securities (for instance, the interest-only or "IO" class
of a stripped mortgage-backed security) and "zero coupon"
securities (fixed income securities, including certain U.S.
Government securities, that do not make periodic interest payments
and are purchased at a discount from their value at maturity).
Credit All of the Underlying Funds are subject to credit risk. This is
Risk the risk that the issuer or the guarantor of a fixed income
security, or the counterparty to a derivatives contract,
repurchase agreement or a loan of portfolio securities, will be
unable or unwilling to make timely principal and/or interest
payments, or to otherwise honor its obligations. Securities are
subject to varying degrees of credit risk, which are often
reflecting in credit ratings provided by rating agencies such as
Moody's Investors Service, Inc. ("Moody's") and Standard & Poor's
Ratings Services ("S&P").
The Underlying Funds that invest in fixed income securities
(particularly the Underlying Bond Funds) are subject to varying
degrees of risk that the issuers of the securities will have their
credit ratings downgraded or will default, potentially reducing
the Underlying Fund's share price and income level. Nearly all
fixed income securities are subject to some credit risk, whether
the issuers of the securities are corporations, states and local
governments or foreign governments. Even certain U.S. Government
securities are subject to credit risk.
High High yield securities (commonly known as "junk bonds") are fixed
Yield income securities rated lower than Baa by Moody's or BBB by S&P,
Risk or unrated securities determined to be of comparable quality.
Underlying Bond Funds which invest in high yield securities (in
particular, PIMCO High Yield and Emerging Markets Bond Funds) may
be subject to greater volatility and higher levels of credit,
liquidity and other risks than Funds that invest exclusively in
higher quality fixed income securities (e.g., PIMCO Money Market
and Long-Term U.S. Government Funds). High yield securities are
considered predominately speculative with respect to the issuer's
continuing ability to make principal and interest payments (credit
risk). High yield securities may also be more susceptible to real
or perceived adverse economic and competitive industry conditions
than higher quality fixed income securities. An economic downturn
or period of rising interest rates could adversely affect the
market for high yield securities and reduce an Underlying Bond
Fund's ability to sell its high yield securities (liquidity risk).
Mortgage Most of the Underlying Bond Funds may invest in mortgage-related
Risk securities. Rising interest rates tend to extend the duration of
mortgage-related securities, making them more sensitive to changes
in interest rates. As a result, in a period of rising interest
rates, an Underlying Fund that holds mortgage-related securities
may exhibit additional volatility. This is sometimes referred to
as extension risk. In addition, mortgage-related securities may
involve special risks relating to unanticipated rates of
prepayment on the mortgages underlying the securities. This is
sometimes referred to as prepayment risk. Declining interest rates
may tend to increase prepayments, and these prepayments would have
to be reinvested at the then-prevailing lower interest rates.
Therefore, an Underlying Fund that holds mortgage-related
securities may have less potential for capital appreciation during
periods of declining interest rates than Funds that invest in
other types of fixed income securities of similar maturities.
15 PIMCO Funds: Multi-Manager Series
<PAGE>
Management Each Underlying Fund is subject to management risk because it is
Risk an actively managed investment portfolio. PIMCO Advisors, Pacific
Investment Management Company, and the sub-advisers and individual
portfolio managers of the Underlying Funds will apply investment
techniques and risk analyses in making investment decisions for
the Funds, but there can be no guarantee that they will produce
the desired results.
A Note on Each Portfolio may invest in PIMCO StocksPLUS Fund. While the
PIMCO investment objective of that Fund is to achieve a total return
StocksPLUS which exceeds the total return performance of the S&P 500 Index,
Fund it does so by investing substantially all of its assets in a
combination of equity-based (S&P 500 Index) derivative
instruments, backed by a portfolio of fixed income securities.
Consequently, the risks of investing in the Fund include
derivatives risk and the risks generally associated with the
Underlying Bond Funds. To the extent that the Fund invests in S&P
500 Index derivatives backed by a portfolio of fixed income
securities, under certain conditions, generally in a market where
the value of both S&P 500 Index derivatives and fixed income
securities are declining, the Fund may experience greater losses
than would be the case if it were to invest directly in a
portfolio of S&P 500 Index stocks.
Prospectus 16
<PAGE>
Investment Objectives and Principal Investment Strategies
The investment objective and principal investment strategies of
each Portfolio are described below. There can be no assurance that
the investment objective of any Portfolio will be achieved.
Because the market value of each Portfolio's investments will
change, the net asset value per share of each Portfolio will also
vary.
The Portfolios are intended for investors who prefer to have
their asset allocation decisions made by professional money
managers. Each Portfolio seeks to achieve its investment objective
by investing within specified equity and fixed income ranges among
the Underlying Funds. Each Underlying Fund is a series of the
Trust or PIMCO Funds: Pacific Investment Management Series and is
managed by PIMCO Advisors and/or its affiliates.
Portfolio 90/10 Portfolio seeks long-term capital appreciation. Under normal
Descriptionsconditions, approximately 90% of the Portfolio's assets will be
allocated among Underlying Stock Funds and 10% among Underlying
Bond Funds.
60/40 Portfolio seeks long-term capital appreciation and current
income. Under normal conditions, approximately 60% of the
Portfolio's assets will be allocated among Underlying Stock Funds
and 40% among Underlying Bond Funds.
30/70 Portfolio seeks current income. Long-term capital
appreciation is a secondary objective. Under normal conditions,
approximately 30% of the Portfolio's assets will be allocated
among Underlying Stock Funds and 70% among Underlying Bond Funds.
PIMCO Advisors serves as the investment adviser to the
Portfolios. PIMCO Advisors' Asset Allocation Committee determines
how each Portfolio allocates and reallocates its assets among the
Underlying Funds according to the Portfolio's equity/fixed income
allocation targets and ranges. Please see "Asset Allocation
Strategies" in the Summary Information section above for a
description of the allocation strategies and techniques used by
the Committee. The table below illustrates the equity and fixed
income allocation targets and typical ranges for each Portfolio
under normal market conditions.
Equity and Fixed Income Targets and Ranges
(as a percentage of each Portfolio's total investments)
<TABLE>
<CAPTION>
Typical
PIMCO Funds Target Allocation
Asset Allocation Series Allocation Range
--------------------------------------------------------
<S> <C> <C>
90/10 Portfolio
Equity--Underlying Stock Funds 90% 80% - 100%
Fixed Income--Underlying Bond Funds* 10% 0% - 20%
--------------------------------------------------------
60/40 Portfolio
Equity--Underlying Stock Funds 60% 50% - 70%
Fixed Income--Underlying Bond Funds* 40% 30% - 50%
--------------------------------------------------------
30/70 Portfolio
Equity--Underlying Stock Funds 30% 25% - 35%
Fixed Income--Underlying Bond Funds* 70% 65% - 75%
</TABLE>
* The Fixed Income portion may include a money market component
through investments in PIMCO Money Market Fund.
Each Portfolio invests all of its assets in Underlying Funds and
may invest in any or all of the Funds. However, it is expected
that a Portfolio will invest in only some of the Underlying Funds
at any particular time. A Portfolio's investment in a particular
Underlying Fund may exceed 25% of the Portfolio's total assets. To
the extent that a Portfolio invests a significant portion of its
assets in an Underlying Fund, it will be particularly sensitive to
the risks associated with that Fund. The particular Underlying
Funds in which each Portfolio may invest, the equity and fixed
income allocation targets and ranges specified above, and the
percentage of each Portfolio's assets invested from time to time
in any Underlying Fund or combination of Funds may be changed from
time to time without the approval of the Portfolio's shareholders.
Each Portfolio is also subject to certain investment restrictions
that are described under "Investment Restrictions" in the
Statement of Additional Information.
17 PIMCO Funds: Multi-Manager Series
<PAGE>
Equity The equity portion of each Portfolio will be allocated among a
Portion number of Underlying Stock Funds which represent a broad range of
of the equity-based asset classes and sub-classes and a variety of
Portfolios investment objectives and strategies. By allocating assets among
these Funds, the equity portions of the Portfolios can be
diversified in multiple ways, including the following:
By Investment Style/Category
. Growth
. Blend (Broad Market)
. Value
. Enhanced Index
. Sector-Related
By Region
. U.S. Equities
. International Developed Markets Equities
. International Emerging Markets Equities
By Size
. Large-Cap
. Mid-Cap
. Small-Cap
For a description of the Underlying Stock Funds and their
investment objectives and strategies, please see "Underlying
Funds."
Fixed The fixed income portion of each Portfolio will be allocated among
Income a number of Underlying Bond Funds which represent a broad range of
Portion fixed income-based asset classes and sub-classes and a variety of
of the investment objectives and strategies. By allocating assets among
Portfolios these Funds, the fixed income portions of the Portfolios can be
diversified in multiple ways, including the following:
By Sector/Investment Specialty
. Governments
. Mortgages
. Corporate
. Inflation-Indexed
By Region
. U.S. Fixed Income
. Developed Foreign Fixed Income
. Emerging Markets Fixed Income
By Credit Quality
. Investment Grade/Money Market
. Medium Grade
. High Yield
By Duration
. Long-Term
. Intermediate-Term
. Short-Term
For a description of the Underlying Bond Funds and their
investment objectives and strategies, please see "Underlying
Funds."
Temporary In response to unfavorable market and other conditions, each
Defensive Portfolio may invest up to 100% of its assets in PIMCO Money
Strategies Market Fund (and may deviate from its asset allocation range) for
temporary defensive purposes. A Portfolio may also borrow money
for temporary or emergency purposes. These temporary strategies
would be inconsistent with the Portfolio's investment objective
and principal investment strategies and may adversely affect the
Portfolio's ability to achieve its investment objective.
Prospectus 18
<PAGE>
Portfolio A change in the securities held by a Portfolio is known as
Turnover "portfolio turnover." Because PIMCO Advisors does not expect to
reallocate the Portfolios' assets among the Underlying Funds on a
frequent basis, the portfolio turnover rates for the Portfolios
are expected to be modest (i.e., less than 25%) in comparison to
most mutual funds. However, the Portfolios' indirectly bear the
expenses associated with portfolio turnover of the Underlying
Funds, a number of which have fairly high portfolio turnover rates
(i.e., in excess of 100%). High portfolio turnover involves
correspondingly greater expenses to an Underlying Fund, including
brokerage commissions or dealer mark-ups and other transaction
costs on the sale of securities and reinvestments in other
securities. Shareholders in the Portfolios may also bear expenses
directly or indirectly through sales of securities held by the
Portfolios and the Underlying Funds which result in realization of
taxable capital gains. To the extent such gains relate to
securities held for twelve months or less, such gains will be
short-term capital gains taxed at ordinary income tax rates when
distributed to shareholders who are individuals. The trading costs
and tax effects associated with portfolio turnover may adversely
affect a Portfolio's performance and the return to shareholders.
Changes The investment objective, the equity/fixed income allocation
in targets and ranges, and, unless otherwise noted, other investment
Investment policies of each Portfolio described in this Prospectus may be
Objectives changed by the Board of Trustees without shareholder approval. If
and there is a change in a Portfolio's investment objective,
Policies allocation target or range, or other investment policies,
shareholders should consider whether the Portfolio remains an
appropriate investment in light of their then current financial
positions and needs.
19 PIMCO Funds: Multi-Manager Series
<PAGE>
Underlying Funds
Each Portfolio invests all of its assets in Underlying Funds.
Accordingly, each Portfolio's investment performance depends upon
a favorable allocation among the Underlying Funds as well as the
ability of the Underlying Funds to achieve their objectives. There
can be no assurance that the investment objective of any
Underlying Fund will be achieved. Shares of the Underlying Funds
are not offered in this Prospectus.
Advisory PIMCO Advisors serves as investment adviser for each of the
ArrangementsUnderlying Stock Funds, except that its affiliate, Pacific
for the Investment Management Company, is the sole investment adviser to
Underlying PIMCO StocksPLUS Fund. The PIMCO Equity Advisors division of PIMCO
Funds Advisors manages the investments of several of the Underlying
Stock Funds. PIMCO Advisors retains sub-advisory firms to manage
the portfolios of other Underlying Stock Funds. These firms
include Cadence Capital Management, NFJ Investment Group and
Parametric Portfolio Associates, each of which is an affiliate of
PIMCO Advisors, and Blairlogie Capital Management, which is not an
affiliate. Pacific Investment Management Company is the sole
investment adviser to each of the Underlying Bond Funds. For a
complete description of the advisory and sub-advisory arrangements
for the Underlying Funds, please see the Statement of Additional
Information and the Underlying Fund prospectuses, which are
incorporated herein by reference and are available free of charge
by telephoning the Trust at 1-800-927-4648.
Underlying The following provides a concise description of the investment
Stock objective, main investments and other information about each
Funds Underlying Stock Fund. For a complete description of these Funds,
please see the Underlying Fund prospectuses, which are
incorporated herein by reference and are available free of charge
by telephoning the Trust at 1-800-927-4648.
<TABLE>
<CAPTION>
Approximate
PIMCO Investment Main Number of
Fund Objective Investments Holdings
---------------------------------------------------------------------------------------------------
<C> <C> <C> <S> <C> <C>
Growth Stock Growth Long-term growth of Common stocks of 35-40
Funds capital; companies with market
income is an capitalizations of at
incidental least $5 billion
consideration
-------------------------------------------------------------------------------------
Target Capital appreciation; Common stocks of 40-60
no companies with market
consideration is capitalizations of
given to income between $1 billion and
$10 billion
-------------------------------------------------------------------------------------
Opportunity Capital appreciation; Common stocks of 60-100
no companies with market
consideration is capitalizations of
given to income between $100 million and
$2 billion
---------------------------------------------------------------------------------------------------
Blend Stock Capital Appreciation Growth of capital Common stocks of 60-100
Funds companies with market
capitalizations of at
least $1 billion that
have improving
fundamentals and whose
stock is reasonably
valued by the market
-------------------------------------------------------------------------------------
Mid-Cap Growth Growth of capital Common stocks of 60-100
companies with market
capitalizations of more
than $500 million
(excluding the largest
200 companies) that have
improving fundamentals
and whose stock is
reasonably valued by the
market
-------------------------------------------------------------------------------------
Small-Cap Growth Growth of capital Common stocks of 60-100
companies with market
capitalizations of more
than $100 million
(excluding the largest
1,000 companies) that
have improving
fundamentals and whose
stock is reasonably
valued by the market
-------------------------------------------------------------------------------------
Micro-Cap Growth Long-term growth of Common stocks of 60-100
capital companies with market
capitalizations of less
than $250 million that
have improving
fundamentals and whose
stock is reasonably
valued by the market
</TABLE>
Prospectus 20
<PAGE>
<TABLE>
<CAPTION>
Approximate
PIMCO Investment Main Number of
Fund Objective Investments Holdings
---------------------------------------------------------------------------------------------------------
<C> <C> <C> <S> <C> <C>
Value Stock Equity Income Current income as a Income-producing common 40-50
Funds primary objective; stocks of companies with
long-term growth of market capitalizations
capital as a of more than $2 billion
secondary objective
-----------------------------------------------------------------------------------------
Renaissance Long-term growth of Common stocks having 50-80
capital and income below-average valuations
where the company's
business fundamentals
are expected to improve
-----------------------------------------------------------------------------------------
Value Long-term growth of Common stocks of 40
capital and income companies with market
capitalizations of more
than $2 billion that are
undervalued relative to
the market and their
industry groups
-----------------------------------------------------------------------------------------
Value 25 Long-term growth of Approximately 25 common 25
capital and income stocks of companies with
market capitalizations
of between $1 billion
and $5 billion and
below-average price to
earnings ratios relative
to their industry groups
-----------------------------------------------------------------------------------------
Small-Cap Value Long-term growth of Common stocks of 100
capital and income companies with market
capitalizations of
between $100 million and
$1.5 billion and below-
average price to
earnings ratios relative
to the market and their
industry groups
---------------------------------------------------------------------------------------------------------
Enhanced Index Tax-Efficient Equity Maximum after-tax A broadly diversified More than
Stock Funds growth of capital portfolio of at least 200
200 common stocks of
companies represented in
the S&P 500 Index with
market capitalizations
of more than $5 billion
-----------------------------------------------------------------------------------------
Enhanced Equity A total return which Common stocks 100-200
equals or exceeds the represented in the S&P
total return 500 Index with market
performance of an capitalizations of more
index (currently the than $5 billion
S&P 500 Index) that
represents the
performance of a
reasonably broad
spectrum of common
stocks that are
publicly traded in
the U.S.
-----------------------------------------------------------------------------------------
StocksPLUS Total return that S&P 500 stock index N/A
exceeds that of the derivatives backed by a
S&P 500 Index portfolio of short-term
fixed income securities
---------------------------------------------------------------------------------------------------------
International International Capital appreciation Common stocks of foreign 200-250
Stock Funds through investment in (non-U.S.) issuers
an international (developed and emerging
portfolio; income is markets) with market
an incidental capitalizations of more
consideration than $500 million
-----------------------------------------------------------------------------------------
International Growth Long-term capital An international 50-100
appreciation portfolio of common
stocks
-----------------------------------------------------------------------------------------
Structured Emerging Long-term growth of Common stocks of More than
Markets capital companies located in, or 300
whose business relates
to, emerging markets
-----------------------------------------------------------------------------------------
Tax-Efficient Structured Long-term growth of Common stocks of More than
Emerging Markets capital. The Fund companies located in, or 300
also seeks to achieve whose business relates
superior after-tax to, emerging markets
returns for its
shareholders by using
a variety of tax-
efficient management
strategies
---------------------------------------------------------------------------------------------------------
Sector-Related Innovation Capital appreciation; Common stocks of 40
Stock Funds no consideration is technology-related
given to income companies with market
capitalizations of more
than $200 million
</TABLE>
21 PIMCO Funds: Multi-Manager Series
<PAGE>
Underlying The investment objective of each Underlying Bond Fund (except as
Bond provided below) is to seek to realize maximum total return,
Funds consistent with preservation of capital and prudent investment
management. The "total return" sought by most of the Underlying
Bond Funds will consist of income earned on the Fund's
investments, plus capital appreciation, if any, which generally
arises from decreases in interest rates or improving credit
fundamentals for a particular sector or security. The investment
objective of PIMCO Real Return Bond Fund is to seek to realize
maximum real return, consistent with preservation of real capital
and prudent investment management. "Real return" is a measure of
the change in purchasing power of money invested in a particular
investment after adjusting for inflation. The investment objective
of each of PIMCO Money Market Fund and PIMCO Short-Term Fund is to
seek to obtain maximum current income, consistent with
preservation of capital and daily liquidity. PIMCO Money Market
Fund also attempts to maintain a stable net asset value of $1.00
per share, although there can be no assurance that it will be
successful in doing so.
The following provides a concise description of the main
investments of and other information relating to each Underlying
Bond Fund. For a complete description of these Funds, please see
the Underlying Fund prospectus for PIMCO Funds: Pacific Investment
Management Series, which is incorporated herein by reference and
is available free of charge by telephoning the Trust at 1-800-927-
4648.
<TABLE>
<CAPTION>
Non-U.S. Dollar
Denominated
PIMCO Fund Main Investments Duration Credit Quality(/1/) Securities(/2/)
--------------------------------------------------------------------------------------------------------
<C> <C> <S> <C> <C> <C>
Short Money Market Money market instruments ^90 days Min 95% Aaa or Prime 1; 0%
Duration Bond dollar-weighted ^5% Aa or Prime 2
Funds average maturity
------------------------------------------------------------------------------------------
Short-Term Money market instruments 0-1 yr B to Aaa; max 10% 0-5%
and below Baa
short maturity fixed
income
securities
------------------------------------------------------------------------------------------
Low Duration Short maturity fixed 1-3 yrs B to Aaa; max 10% 0-20%
income below Baa
securities
--------------------------------------------------------------------------------------------------------
Intermediate Moderate Duration Short and intermediate 2-5 yrs B to Aaa; max 10% 0-20%
Duration maturity below Baa
Bond Funds fixed income securities
------------------------------------------------------------------------------------------
Total Return Intermediate maturity 3-6 yrs B to Aaa; max 10% 0-20%
fixed income securities below Baa
------------------------------------------------------------------------------------------
Total Return II Intermediate maturity 3-6 yrs Baa to Aaa 0%
fixed
income securities with
quality
and foreign issuer
restrictions
--------------------------------------------------------------------------------------------------------
Long Duration Long-Term U.S. Long-term maturity fixed ^8 yrs A to Aaa 0%
Bond Funds Government income
securities
--------------------------------------------------------------------------------------------------------
International Global Bond U.S. and foreign 3-7 yrs B to Aaa; max 10% 25-75%
Bond Funds intermediate below Baa
maturity fixed income
securities
------------------------------------------------------------------------------------------
Foreign Bond Intermediate maturity 3-7 yrs B to Aaa; max 10% ^85%
hedged below Baa
foreign fixed income
securities
------------------------------------------------------------------------------------------
Emerging Markets Emerging market fixed 0-8 yrs B to Aaa ^80%
Bond income
securities
--------------------------------------------------------------------------------------------------------
High Yield High Yield Higher yielding fixed 2-6 yrs B to Aaa; min 65% 0%
Bond Funds income below Baa
securities
--------------------------------------------------------------------------------------------------------
Inflation Real Return Bond Inflation-indexed fixed N/A B to Aaa; max 10% 0-35%
Indexed Bond income below Baa
Funds securities
</TABLE>
1. As rated by Moody's Investors Service, Inc., or equivalently
rated by Standard & Poor's Ratings Services, or if unrated, de-
termined by Pacific Investment Management Company to be of compa-
rable quality.
2. Percentage limitations relate to non-U.S. dollar-denominated
securities for all Underlying Bond Funds except PIMCO Global
Bond, Foreign Bond and Emerging Markets Bond Funds. Percentage
limitations for these three Funds relate to securities of non-
U.S. issuers, denominated in any currency. Each Underlying Bond
Fund (except PIMCO Total Return II and Long-Term U.S. Government
Funds) may invest beyond these limits in U.S. dollar-denominated
securities of non-U.S. issuers.
Each Underlying Bond Fund invests at least 65% of its assets in
the following types of securities, which, unless provided above,
may be issued by domestic or foreign entities and denominated in
U.S. dollars or foreign currencies: securities issued or
guaranteed by the U.S. Government, its agencies or
instrumentalities ("U.S. Government securities"); corporate debt
securities, including convertible securities and corporate
commercial paper; mortgage-backed and other asset-backed
securities; inflation-indexed bonds issued by both governments and
corporations; structured notes, including hybrid or "indexed"
securities, catastrophe bonds and loan participations; delayed
funding loans and revolving credit facilities; bank certificates
of deposit, fixed time deposits and bankers' acceptances;
repurchase agreements and reverse repurchase agreements; debt
securities issued by states or local governments and their
agencies, authorities and other instrumentalities; obligations of
foreign governments or their subdivisions, agencies and
instrumentalities; and obligations of international agencies or
supranational entities.
Prospectus 22
<PAGE>
Other In addition to purchasing the securities listed above under "Main
Investment Investments," some or all of the Underlying Funds may to varying
Practices extents: lend portfolio securities; enter into repurchase
of the agreements and reverse repurchase agreements; purchase and sell
Underlying securities on a when-issued or delayed delivery basis; enter into
Funds forward commitments to purchase securities; purchase and write
call and put options on securities and securities indexes; enter
into futures contracts, options on futures contracts and swap
agreements; invest in foreign securities; and buy or sell foreign
currencies and enter into forward foreign currency contracts.
These and the other types of securities and investment techniques
used by the Underlying Funds all have attendant risks. The
Portfolios are indirectly subject to some or all of these risks to
varying degrees because they invest all of their assets in the
Underlying Funds. For further information concerning the
investment practices of and risks associated with the Underlying
Funds, please see "Investment Objectives and Policies" in the
Statement of Additional Information and the Underlying Fund
prospectuses, which are incorporated herein by reference and are
available free of charge by telephoning the Trust at 1-800-927-
4648.
Additional
Underlying Funds
In addition to the Funds listed above, a Portfolio may invest in
additional Underlying Funds, including those that may become
available for investment in the future, at the discretion of PIMCO
Advisors and without shareholder approval.
Other Risk Information
Potential PIMCO Advisors has broad discretion to allocate and reallocate the
Conflicts Portfolios' assets among the Underlying Funds consistent with the
of Portfolios' investment objectives and policies and asset
Interest allocation targets and ranges. Although PIMCO Advisors does not
charge an investment advisory fee for its asset allocation
services, PIMCO Advisors and its affiliates indirectly receive
fees (including investment advisory and administrative fees) from
the Underlying Funds in which the Portfolios invest. In this
regard, PIMCO Advisors has a financial incentive to invest a
Portfolio's assets in Underlying Funds with higher fees than other
Funds, even if it believes that alternate investments would better
serve the Portfolio's investment program. PIMCO Advisors is
legally obligated to disregard that incentive in making asset
allocation decisions for the Portfolios. The Trustees and officers
of the Trust may also have conflicting interests in fulfilling
their fiduciary duties to both the Portfolios and the Underlying
Funds of the Trust.
Year 2000 Many of the services provided to the Portfolios and the Underlying
Readiness Funds depend on the smooth functioning of computer systems. Many
Disclosure systems in use today cannot distinguish between the year 1900 and
the year 2000. Should any of the service systems fail to process
information properly, this could have an adverse impact on the
operations of the Portfolios and/or the Underlying Funds and
services provided to shareholders. PIMCO Advisors, its
subsidiaries and Pacific Investment Management Company have
surveyed the Portfolios' and the Underlying Funds' material
service providers and believe that, on the basis of the
information supplied, the service providers used by the Portfolios
and the Underlying Funds on January 1, 2000 will not be materially
adversely affected by the so-called "year 2000 problem." However,
there can be no assurance that the problem will be corrected in
all respects and that the operations of the Portfolios and the
Underlying Funds and services provided to shareholders will not be
adversely affected, nor can there be any assurance that the year
2000 problem will not have an adverse effect on the entities whose
securities are held by the Underlying Funds or on domestic or
global equity or fixed income markets or economies, generally.
Accordingly, PIMCO Advisors, Pacific Investment Management Company
and the sub-advisers to the Underlying Funds reserve the right to
vary, during the fourth quarter of 1999 and/or the first quarter
of 2000, the investments of any Portfolio or Underlying Fund to
maintain sufficient liquidity to satisfy actual or anticipated
redemption activity.
Management of the Portfolios
Investment
Adviser
and
Administrator
PIMCO Advisors serves as the investment adviser and the
administrator (serving in its capacity as administrator, the
"Administrator") for the Portfolios. Subject to the supervision of
the Board of Trustees, PIMCO Advisors is responsible for managing,
either directly or through others selected by it, the investment
activities of the Portfolios and the Portfolios' business affairs
and other administrative matters.
PIMCO Advisors is located at 800 Newport Center Drive, Newport
Beach, California 92660. Organized in 1987, PIMCO Advisors
provides investment management and advisory services to private
accounts of institutional and individual clients and to mutual
funds. As of September 30, 1999, PIMCO Advisors and its subsidiary
partnerships had more than $256 billion in assets under
management.
23 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Advisors has retained its affiliate, Pacific Investment
Management Company, to provide various administrative and other
services required by the Portfolios in its capacity as sub-
administrator. PIMCO Advisors and the sub-administrator may retain
other affiliates to provide certain of these services.
Asset PIMCO Advisors' Asset Allocation Committee is responsible for
Allocation determining how the Portfolios' assets are allocated and
Committee reallocated from time to time among the Underlying Funds. The
following provides information about the individuals who comprise
the Asset Allocation Committee and are primarily responsible for
making asset allocation and other investment decisions for the
Portfolios.
<TABLE>
<CAPTION>
Asset Allocation
Committee Member Since* Recent Professional Experience
---------------------------------------------------------------------------------------------
<C> <C> <S>
William D. Cvengros 1998 Chief Executive Officer, President and a Member of the Management
Board of PIMCO Advisors and Chairman of the Board of Trustees and a
Trustee of the Trust. Previously, he was President of the Trust and
a Director and the Vice Chairman and Chief Investment Officer of
Pacific Life Insurance Company from January 1990 to November 1994.
Timothy R. Clark 1998 Vice President of PIMCO Advisors and a Senior Vice President of
PIMCO Funds Distributors LLC. Previously, he was President of
Katonah Capital Management, Inc. from July 1995 to December 1996
and served in various capacities at Zweig Advisors Inc. from
September 1989 to July 1995.
Robert S. Venable 1998 Vice President of PIMCO Advisors. Previously, he was a Vice
President and portfolio manager at Pacific Investment Management
Company from August 1992 to August 1996.
David Young 1998 Vice President and an Account Manager at Pacific Investment
Management Company. He has served in various capacities with
Pacific Investment Management Company and its affiliates since
January 1994. Previously, he was a Vice President and portfolio
manager at Analytic Investment Management, Inc. from September 1988
to January 1994.
</TABLE>
* Each individual has served on the Committee since the inception
of each Portfolio in September 1998.
Advisory The Portfolios do not pay any fees to PIMCO Advisors under the
Fees Trust's investment advisory agreement in return for the advisory
and asset allocation services provided by PIMCO Advisors. The
Portfolios do, however, indirectly pay their proportionate share
of the advisory fees paid to PIMCO Advisors and Pacific Investment
Management Company by the Underlying Funds in which the Portfolios
invest. See "Underlying Fund Expenses" below.
Administrative
Fees
Institutional Class and Administrative Class shareholders of each
Portfolio pay an administrative fee to PIMCO Advisors, computed as
a percentage of the Portfolio's assets attributable in the
aggregate to those classes of shares. PIMCO Advisors, in turn,
provides or procures administrative services for Institutional
Class and Administrative Class shareholders and also bears the
costs of various third-party services required by the Portfolios,
including audit, custodial, portfolio accounting, legal, transfer
agency and printing costs.
The Portfolios were not operational for the entire fiscal year
ended June 30, 1999. Each Portfolio is obligated to pay monthly
administrative fees to PIMCO Advisors at an annual rate of 0.15%
based on the average daily net assets attributable in the
aggregate to the Portfolio's Institutional Class and
Administrative Class shares. In order to reduce expenses, PIMCO
Advisors has voluntarily undertaken to waive a portion of the
administrative fees it is entitled to receive for Institutional
Class and Administrative Class shares of each Portfolio until
further notice. As a result, while the waiver is in effect, each
Portfolio will pay administrative fees to PIMCO Advisors at the
annual rate of 0.10%, calculated in the manner specified above.
The Portfolios also indirectly pay their proportionate share of
the administrative fees charged by PIMCO Advisors and Pacific
Investment Management Company to the Underlying Funds in which the
Portfolios invest. See "Underlying Fund Expenses" below.
Underlying
Fund The expenses associated with investing in a "fund of funds," such
Expenses as the Portfolios, are generally higher than those for mutual
funds that do not invest primarily in other mutual funds. This is
because shareholders in a "fund of funds" indirectly pay a portion
of the fees and expenses charged at the underlying fund level.
The Portfolios are structured in the following ways to lessen
the impact of expenses incurred at the Underlying Fund level:
. The Portfolios do not pay any fees for asset allocation or
advisory services under the Trust's investment advisory
agreement.
. The Underlying Funds invest in Institutional Class shares of
the Underlying Funds, which are not subject to any sales
charges or 12b-1 fees.
Prospectus 24
<PAGE>
The following table summarizes the annual expenses borne by
Institutional Class shareholders of the Underlying Funds (based on
estimates for the current fiscal year). Because the Portfolios
invest in Institutional Class shares of the Underlying Funds,
shareholders of each Portfolio indirectly bear a proportionate
share of these expenses, depending upon how the Portfolio's assets
are allocated from time to time among the Underlying Funds. See
"Fees and Expenses of the Portfolio" in each Portfolio Summary
above.
<TABLE>
<CAPTION>
Annual Underlying Fund Expenses
(Based on the average daily net assets
attributable
to a Fund's Institutional Class shares):
Advisory Admini- Total Fund
Underlying Fund Fees strative Fees Operating Expenses
----------------------------------------------------------------
<S> <C> <C> <C>
PIMCO Growth 0.50% 0.25% 0.75%
----------------------------------------------------------------
PIMCO Target 0.55 0.25 0.80
----------------------------------------------------------------
PIMCO Opportunity 0.65 0.25 0.90
----------------------------------------------------------------
PIMCO Capital
Appreciation 0.45 0.25 0.70
----------------------------------------------------------------
PIMCO Mid-Cap Growth 0.45 0.25 0.70
----------------------------------------------------------------
PIMCO Small-Cap Growth 1.00 0.25 1.25
----------------------------------------------------------------
PIMCO Micro-Cap Growth 1.25 0.25 1.50
----------------------------------------------------------------
PIMCO Equity Income 0.45 0.25 0.70
----------------------------------------------------------------
PIMCO Renaissance 0.60 0.25 0.85
----------------------------------------------------------------
PIMCO Value 0.45 0.25 0.70
----------------------------------------------------------------
PIMCO Value 25 0.50 0.25 0.75
----------------------------------------------------------------
PIMCO Small-Cap Value 0.60 0.25 0.85
----------------------------------------------------------------
PIMCO Tax-Efficient
Equity 0.45 0.25 0.70
----------------------------------------------------------------
PIMCO Enhanced Equity 0.45 0.25 0.70
----------------------------------------------------------------
PIMCO StocksPLUS 0.40 0.25 0.65
----------------------------------------------------------------
PIMCO International 0.55 0.50 1.05
----------------------------------------------------------------
PIMCO International
Growth 0.85 0.50 1.35
----------------------------------------------------------------
PIMCO Structured Emerging
Markets 0.45 0.50 0.95
----------------------------------------------------------------
PIMCO Tax-Efficient
Structured Emerging
Markets 0.45 0.50 0.95
----------------------------------------------------------------
PIMCO Innovation 0.65 0.25 0.90
----------------------------------------------------------------
PIMCO Money Market 0.15 0.20 0.35
----------------------------------------------------------------
PIMCO Short-Term 0.25 0.20 0.45
----------------------------------------------------------------
PIMCO Low Duration 0.25 0.18 0.43
----------------------------------------------------------------
PIMCO Moderate Duration 0.25 0.20 0.45
----------------------------------------------------------------
PIMCO Total Return 0.25 0.18 0.43
----------------------------------------------------------------
PIMCO Total Return II 0.25 0.25 0.50
----------------------------------------------------------------
PIMCO Long-Term U.S.
Government 0.25 0.25 0.50
----------------------------------------------------------------
PIMCO Global Bond 0.25 0.30 0.55
----------------------------------------------------------------
PIMCO Foreign Bond 0.25 0.25 0.50
----------------------------------------------------------------
PIMCO Emerging Markets
Bond 0.45 0.40 0.85
----------------------------------------------------------------
PIMCO High Yield 0.25 0.25 0.50
----------------------------------------------------------------
PIMCO Real Return Bond 0.25 0.27 0.52
</TABLE>
Distributor
The Trust's Distributor is PIMCO Funds Distributors LLC, a wholly
owned subsidiary of PIMCO Advisors. The Distributor, located at
2187 Atlantic Street, Stanford, CT 06902, is a broker-dealer
registered with the Securities and Exchange Commission.
25 PIMCO Funds: Multi-Manager Series
<PAGE>
Investment Options --
Institutional Class and Administrative Class Shares
The Trust offers investors Institutional Class and Administrative
Class shares of the Portfolios in this Prospectus.
The Trust does not charge any sales charges (loads) or other fees
in connection with purchases, sales (redemptions) or exchanges of
Institutional Class or Administrative Class shares. Administrative
Class shares are generally subject to a higher level of operating
expenses than Institutional Class shares due to the additional
service and/or distribution fees paid by Administrative Class
shares as described below. Therefore, Institutional Class shares
will generally pay higher dividends and have a more favorable
investment return than Administrative Class shares.
. Service and Distribution (12b-1) Fees--Administrative Class
Shares. The Trust has adopted an Administrative Services Plan and
a Distribution Plan for the Administrative Class shares of each
Portfolio. Each Plan has been adopted in accordance with the
requirements of Rule 12b-1 under the Investment Company Act of
1940 and is administered in accordance with that rule. However,
shareholders do not have the voting rights set forth in Rule 12b-1
with respect to the Administrative Services Plan.
Each Plan allows the Portfolios to use their Administrative Class
assets to reimburse financial intermediaries that provide services
relating to Administrative Class shares. The Distribution Plan
permits reimbursement for expenses in connection with the
distribution and marketing of Administrative Class shares and/or
the provision of shareholder services to Administrative Class
shareholders. The Administrative Services Plan permits
reimbursement for services in connection with the administration
of plans or programs that use Administrative Class shares of the
Portfolios as their funding medium and for related expenses.
In combination, the Plans permit a Portfolio to make total
reimbursements at an annual rate of up to 0.25% of the Portfolio's
average daily net assets attributable to its Administrative Class
shares. The same entity may not receive both distribution and
administrative services fees with respect to the same
Administrative Class assets, but may receive fees under each Plan
with respect to separate assets. Because these fees are paid out
of a Portfolio's Administrative Class assets on an ongoing basis,
over time they will increase the cost of an investment in
Administrative Class shares and may cost an investor more than
other types of sales charges.
. Arrangements with Service Agents. Institutional Class and
Administrative Class shares of the Portfolios may be offered
through certain brokers and financial intermediaries ("service
agents") that have established a shareholder servicing
relationship with the Trust on behalf of their customers. The
Trust pays no compensation to such entities other than service
and/or distribution fees paid with respect to Administrative Class
shares. Service agents may impose additional or different
conditions than the Trust on purchases, redemptions or exchanges
of Portfolio shares by their customers. Service agents may also
independently establish and charge their customers transaction
fees, account fees and other amounts in connection with purchases,
sales and redemptions of Portfolio shares in addition to any fees
charged by the Trust. These additional fees may vary over time and
would increase the cost of the customer's investment and lower
investment returns. Each service agent is responsible for
transmitting to its customers a schedule of any such fees and
information regarding any additional or different conditions
regarding purchases, redemptions and exchanges. Shareholders who
are customers of service agents should consult their service
agents for information regarding these fees and conditions.
Prospectus 26
<PAGE>
Purchases, Redemptions and Exchanges
Investors may purchase Institutional Class and Administrative
Purchasing Class shares of the Portfolios at the relevant net asset value
Shares ("NAV") of that class without a sales charge or other fee.
Institutional Class shares are offered primarily for direct
investment by investors such as pension and profit sharing plans,
employee benefit trusts, endowments, foundations, corporations and
high net worth individuals. Institutional Class shares may also be
offered through certain financial intermediaries that charge their
customers transaction or other fees with respect to their
customers' investments in the Portfolios.
Administrative Class shares are offered primarily through
employee benefit plan alliances, broker-dealers and other
intermediaries, and each Portfolio pays service and/or
distribution fees to these entities for services they provide to
Administrative Class shareholders.
Pension and profit-sharing plans, employee benefit trusts and
employee benefit plan alliances and "wrap account" programs
established with broker-dealers or financial intermediaries may
purchase shares of either class only if the plan or program for
which the shares are being acquired will maintain an omnibus or
pooled account for each Portfolio and will not require a Portfolio
to pay any type of administrative payment per participant account
to any third party.
. Investment Minimums. The minimum initial investment for shares
of either class is $5 million, except that the minimum initial
investment for a registered investment adviser purchasing
Institutional Class shares for its clients through omnibus
accounts is $250,000 per Portfolio. The minimum initial investment
may be waived for Institutional or Administrative Class shares
offered to clients of PIMCO Equity Advisors, Cadence, NFJ, Pacific
Investment Management Company, Parametric, and their affiliates,
and to the benefit plans of PIMCO Advisors and its affiliates. In
addition, the minimum initial investment does not apply to
Institutional Class shares offered through fee-based programs
sponsored and maintained by a registered broker-dealer and
approved by the Distributor in which each investor pays an asset
based fee at an annual rate of at least 0.50% of the assets in the
account to a financial intermediary for investment advisory and/or
administrative services.
The Trust and the Distributor may waive the minimum initial
investment for other categories of investors at their discretion.
The investment minimums discussed in this section do not apply to
participants in PIMCO Advisors Portfolio Strategies, a managed
product sponsored by PIMCO Advisors.
. Timing of Purchase Orders and Share Price Calculations. A
purchase order received by the Trust's transfer agent, National
Financial Data Services (the "Transfer Agent"), prior to the close
of regular trading (normally 4:00 p.m., Eastern time) on the New
York Stock Exchange, on a day the Trust is open for business,
together with payment made in one of the ways described below,
will be effected at that day's net asset value ("NAV"). An order
received after the close of regular trading on the New York Stock
Exchange will be effected at the NAV determined on the next
business day. However, orders received by certain retirement plans
and other financial intermediaries on a business day prior to the
close of regular trading on the New York Stock Exchange and
communicated to the Transfer Agent prior to 9:00 a.m., Eastern
time, on the following business day will be effected at the NAV
determined on the prior business day. The Trust is "open for
business" on each day the New York Stock Exchange is open for
trading, which excludes the following holidays: New Year's Day,
Martin Luther King, Jr. Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day. Purchase orders will be accepted only on days on
which the Trust is open for business.
. Initial Investment. Investors may open an account by
completing and signing a Client Registration Application and
mailing it to PIMCO Funds at 840 Newport Center Drive, Suite 300,
Newport Beach, California 92660. A Client Registration Application
may be obtained by calling 1-800-927-4648.
Except as described below, an investor may purchase Institutional
Class and Administrative Class shares only by wiring federal funds
to the Transfer Agent, National Financial Data Services, 330 West
9th Street, 4th Floor, Kansas City, Missouri 64105. Before wiring
federal funds, the investor must telephone the Trust at 1-800-927-
4648 to receive instructions for wire transfer and must provide
the following information: name of authorized person, shareholder
name, shareholder account number, name of Portfolio and share
class, amount being wired, and wiring bank name.
27 PIMCO Funds: Multi-Manager Series
<PAGE>
An investor may purchase shares without first wiring federal
funds if the proceeds of the investment are derived from an
advisory account the investor maintains with PIMCO Advisors or one
of its affiliates, from surrender or other payment from an
annuity, insurance, or other contract held by Pacific Life
Insurance Company, or from an investment by broker-dealers,
institutional clients or other financial intermediaries which have
established a shareholder servicing relationship with the Trust on
behalf of their customers.
. Additional Investments. An investor may purchase additional
Institutional Class and Administrative Class shares of the
Portfolios at any time by calling the Trust and wiring federal
funds to the Transfer Agent as outlined above.
. Other Purchase Information. Purchases of a Portfolio's
Institutional Class and Administrative Class shares will be made
in full and fractional shares. In the interest of economy and
convenience, certificates for shares will not be issued.
The Trust and the Distributor each reserves the right, in its
sole discretion, to suspend the offering of shares of the
Portfolios or to reject any purchase order, in whole or in part,
when, in the judgment of management, such suspension or rejection
is in the best interests of the Trust.
An investor should invest in the Portfolios for long-term
investment purposes only. The Trust and PIMCO Advisors each
reserves the right to restrict purchases of Portfolio shares
(including exchanges) when a pattern of frequent purchases and
sales made in response to short-term fluctuations in share price
appears evident. Notice of any such restrictions, if any, will
vary according to the particular circumstances.
Institutional Class and Administrative Class shares of the Trust
are not qualified or registered for sale in all states. Investors
should inquire as to whether shares of a particular Portfolio are
available for offer and sale in the investor's state of residence.
Shares of the Trust may not be offered or sold in any state unless
registered or qualified in that jurisdiction or unless an
exemption from registration or qualification is available.
. Retirement Plans. Shares of the Portfolios are available for
purchase by retirement and savings plans, including Keogh plans,
401(k) plans, 403(b) custodial accounts, and Individual Retirement
Accounts. The administrator of a plan or employee benefits office
can provide participants or employees with detailed information on
how to participate in the plan and how to elect a Portfolio as an
investment option. Participants in a retirement or savings plan
may be permitted to elect different investment options, alter the
amounts contributed to the plan, or change how contributions are
allocated among investment options in accordance with the plan's
specific provisions. The plan administrator or employee benefits
office should be consulted for details. For questions about
participant accounts, participants should contact their employee
benefits office, the plan administrator, or the organization that
provides recordkeeping services for the plan. Investors who
purchase shares through retirement plans should be aware that plan
administrators may aggregate purchase and redemption orders for
participants in the plan. Therefore, there may be a delay between
the time the investor places an order with the plan administrator
and the time the order is forwarded to the Transfer Agent for
execution.
Redeeming . Redemptions by Mail. An investor may redeem (sell)
Shares Institutional Class and Administrative Class shares by submitting
a written request to PIMCO Funds at 840 Newport Center Drive,
Suite 300, Newport Beach, California 92660. The redemption request
should state the Portfolio from which the shares are to be
redeemed, the class of shares, the number or dollar amount of the
shares to be redeemed and the account number. The request must be
signed exactly as the names of the registered owners appear on the
Trust's account records, and the request must be signed by the
minimum number of persons designated on the Client Registration
Application that are required to effect a redemption.
. Redemptions by Telephone or Other Wire Communication. An
investor that elects this option on the Client Registration
Application (or subsequently in writing) may request redemptions
of shares by calling the Trust at 1-800-927-4648, by sending a
facsimile to 1-949-725-6830, or by other means of wire
communication. Investors should state the Portfolio and class from
which the shares are to be redeemed, the number or dollar amount
of the shares to be redeemed and the account number. Redemption
requests of an amount of $10 million or more may be initiated by
telephone, but must be confirmed in writing by an authorized party
prior to processing.
In electing a telephone redemption, the investor authorizes
Pacific Investment Management Company and the Transfer Agent to
act on telephone instructions from any person representing himself
to be the investor, and reasonably believed by Pacific Investment
Management Company or the Transfer Agent to be genuine. Neither
the Trust nor the Transfer Agent may be liable for any loss, cost
or expense for acting on instructions
Prospectus 28
<PAGE>
(whether in writing or by telephone) believed by the party
receiving such instructions to be genuine and in accordance with
the procedures described in this Prospectus. Shareholders should
realize that by electing the telephone or wire redemption option,
they may be giving up a measure of security that they might have
if they were to redeem their shares in writing. Furthermore,
interruptions in telephone service may mean that a shareholder
will be unable to effect a redemption by telephone when desired.
The Transfer Agent also provides written confirmation of
transactions initiated by telephone as a procedure designed to
confirm that telephone instructions are genuine (written
confirmation is also provided for redemption requests received in
writing). All telephone transactions are recorded, and Pacific
Investment Management Company or the Transfer Agent may request
certain information in order to verify that the person giving
instructions is authorized to do so. The Trust or Transfer Agent
may be liable for any losses due to unauthorized or fraudulent
telephone transactions if it fails to employ reasonable procedures
to confirm that instructions communicated by telephone are
genuine. All redemptions, whether initiated by letter or
telephone, will be processed in a timely manner, and proceeds will
be forwarded by wire in accordance with the redemption policies of
the Trust detailed below. See "Other Redemption Information."
Shareholders may decline telephone exchange or redemption
privileges after an account is opened by instructing the Transfer
Agent in writing at least seven business days prior to the date
the instruction is to be effective. Shareholders may experience
delays in exercising telephone redemption privileges during
periods of abnormal market activity. During periods of volatile
economic or market conditions, shareholders may wish to consider
transmitting redemption orders by telegram, facsimile or overnight
courier.
Defined contribution plan participants may request redemptions by
contacting the employee benefits office, the plan administrator or
the organization that provides recordkeeping services for the
plan.
. Timing of Redemption Requests and Share Price Calculations. A
redemption request received by the Trust or its designee prior to
the close of regular trading on the New York Stock Exchange
(normally 4:00 p.m., Eastern time), on a day the Trust is open for
business, is effective on that day. A redemption request received
after that time becomes effective on the next business day.
Redemption requests for Portfolio shares are effected at the NAV
per share next determined after receipt of a redemption request by
the Trust or its designee. The request must properly identify all
relevant information, such as account number, redemption amount
(in dollars or shares) and the Portfolio name, and must be
executed or initialed by the appropriate signatories.
. Other Redemption Information. Redemption proceeds will
ordinarily be wired to the investor's bank within three business
days after the redemption request, but may take up to seven
business days. Redemption proceeds will be sent by wire only to
the bank name designated on the Client Registration Application.
The Trust may suspend the right of redemption or postpone the
payment date at times when the New York Stock Exchange is closed,
or during certain other periods as permitted under the federal
securities laws.
For shareholder protection, a request to change information
contained in an account registration (for example, a request to
change the bank designated to receive wire redemption proceeds)
must be received in writing, signed by the minimum number of
persons designated on the Client Registration Application that are
required to effect a redemption, and accompanied by a signature
guarantee from any eligible guarantor institution, as determined
in accordance with the Trust's procedures. Shareholders should
inquire as to whether a particular institution is an eligible
guarantor institution. A signature guarantee cannot be provided by
a notary public. In addition, corporations, trusts, and other
institutional organizations are required to furnish evidence of
the authority of the persons designated on the Client Registration
Application to effect transactions for the organization.
Due to the relatively high cost of maintaining small accounts,
the Trust reserves the right to redeem Institutional Class and
Administrative Class shares in any account for their then-current
value (which will be promptly paid to the investor) if at any
time, due to redemption by the investor, the shares in the account
do not have a value of at least $100,000. A shareholder will
receive advance notice of a mandatory redemption and will be given
at least 30 days to bring the value of its account up to at least
$100,000. This mandatory redemption policy does not apply to
participants in PIMCO Advisors Portfolio Strategies, a managed
product sponsored by PIMCO Advisors.
The Trust agrees to redeem shares of each Portfolio solely in
cash up to the lesser of $250,000 or 1% of the Portfolio's net
assets during any 90-day period for any one shareholder. In
consideration of the best interests of the remaining shareholders,
the Trust reserves the right to pay any redemption proceeds
exceeding this amount in whole or in part by a distribution in
kind of securities held by a Portfolio in lieu of cash. When
shares are redeemed in kind, the redeeming shareholder may incur
transaction costs upon the disposition of the securities received
in the distribution.
29 PIMCO Funds: Multi-Manager Series
<PAGE>
Exchange An investor may exchange Institutional Class or Administrative
Privilege Class shares of a Portfolio for shares of the same class of any
other Portfolio or other series of the Trust that offers that
class based on the respective NAVs of the shares involved. An
exchange may be made by following the redemption procedure
described above under "Redemptions by Mail" or, if the investor
has elected the telephone redemption option, by calling the Trust
at 1-800-927-4648. An investor may also exchange shares of a
Portfolio for shares of the same class of a series of PIMCO Funds:
Pacific Investment Management Series, an affiliated mutual fund
family composed primarily of fixed income portfolios managed by
Pacific Investment Management Company. Shareholders interested in
such an exchange may request a prospectus for these other series
by contacting PIMCO Funds: Pacific Investment Management Series at
the same address and telephone number as the Trust.
An investor may exchange shares only with respect to Portfolios
or other eligible series that are registered in the investor's
state of residence or where an exemption from registration is
available. In addition, an exchange is generally a taxable event
which will generate capital gains or losses, and special rules may
apply in computing tax basis when determining gain or loss. See
"Tax Consequences" in this Prospectus and "Taxation" in the
Statement of Additional Information.
The Trust reserves the right to refuse exchange purchases if, in
the judgment of PIMCO Advisors, the purchase would adversely
affect a Portfolio and its shareholders. In particular, a pattern
of exchanges characteristic of "market-timing" strategies may be
deemed by PIMCO Advisors to be detrimental to the Trust or a
particular Portfolio. Currently, the Trust limits the number of
"round trip" exchanges investors may make. An investor makes a
"round trip" exchange when the investor purchases shares of a
particular Portfolio, subsequently exchanges those shares for
shares of a different Portfolio or other PIMCO Fund, and then
exchanges back into the originally purchased Portfolio. The Trust
has the right to refuse any exchange for any investor who
completes (by making the exchange back into the shares of the
originally purchased Portfolio) more than six round trip exchanges
in any twelve-month period. The Trust reserves the right to impose
additional restrictions on exchanges at any time, although it will
attempt to give shareholders 30 days' prior notice whenever it is
reasonably able to do so.
How Portfolio Shares Are Priced
The net asset value ("NAV") of a Portfolio's Institutional Class
and Administrative Class shares is determined by dividing the
total value of a Portfolio's portfolio investments and other
assets attributable to that class, less any liabilities, by the
total number of shares outstanding of that class.
The assets of each Portfolio consist of shares of the Underlying
Funds, which are valued at their respective NAVs at the time of
valuation of the Portfolios' shares. For purposes of calculating
the NAV of Underlying Fund shares, portfolio securities and other
assets of the Funds for which market quotes are available are
stated at market value. Market value is generally determined on
the basis of last reported sales prices, or if no sales are
reported, based on quotes obtained from a quotation reporting
system, established market makers, or pricing services. Certain
securities or investments for which daily market quotes are not
readily available may be valued, pursuant to guidelines
established by the Board of Trustees of the Underlying Fund, with
reference to other securities or indices. Short-term investments
having a maturity of 60 days or less are generally valued at
amortized cost. Exchange traded options, futures and options on
futures are valued at the settlement price determined by the
exchange. Other securities for which market quotes are not readily
available are valued at fair value as determined in good faith by
the Fund's Board of Trustees or persons acting at the Board's
direction.
Underlying Fund investments initially valued in currencies other
than the U.S. dollar are converted to U.S. dollars using exchange
rates obtained from pricing services. As a result, the NAV of an
Underlying Fund's shares may be affected by changes in the value
of currencies in relation to the U.S. dollar. The value of
securities traded in markets outside the United States or
denominated in currencies other than the U.S. dollar may be
affected significantly on a day that the New York Stock Exchange
is closed. As a result, to the extent that a Portfolio invests in
Underlying Funds that hold foreign securities, the NAV of the
Portfolio's shares may change at times when you can not purchase,
redeem or exchange shares.
Portfolio and Underlying Fund shares are valued at the close of
regular trading (normally 4:00 p.m., Eastern time) (the "NYSE
Close") on each day that the New York Stock Exchange is open. For
purposes of calculating the NAV, the Underlying Funds normally use
pricing data for domestic equity securities received shortly after
the NYSE Close and do not normally take into account trading,
clearances or settlements that take place after the NYSE Close.
Domestic fixed income and foreign securities are normally priced
using data reflecting the
Prospectus 30
<PAGE>
earlier closing of the principal markets for those securities.
Information that becomes known to the Underlying Funds or their
agents after the NAV has been calculated on a particular day will
not generally be used to retroactively adjust the price of a
security or the NAV determined earlier that day.
In unusual circumstances, instead of valuing securities in the
usual manner, the Underlying Funds may value securities at fair
value or estimate their value as determined in good faith by the
Fund's Board of Trustees, generally based upon recommendations
provided by the Fund's investment adviser and/or sub-adviser. Fair
valuation may also be used by the Underlying Fund's Board of
Trustees if extraordinary events occur after the close of the
relevant market but prior to the NYSE Close.
Portfolio Distributions
Each Portfolio distributes substantially all of its net investment
income to shareholders in the form of dividends. A shareholder
begins earning dividends on Portfolio shares the day after the
Trust receives the shareholder's purchase payment. Dividends paid
by each Portfolio with respect to each class of shares are
calculated in the same manner and at the same time, but dividends
on Administrative Class shares are expected to be lower than
dividends on Institutional Class shares as a result of the service
and/or distribution fees applicable to Administrative Class
shares. The following shows when each Portfolio intends to declare
and distribute income dividends to shareholders of record.
<TABLE>
<CAPTION>
Portfolio At Least Annually Quarterly Monthly
---------------------------------------------------------------------------
<S> <C> <C> <C>
90/10 Portfolio .
---------------------------------------------------------------------------
60/40 Portfolio .
---------------------------------------------------------------------------
30/70 Portfolio .
---------------------------------------------------------------------------
</TABLE>
In addition, each Portfolio distributes any net capital gains it
earns from the sale of portfolio securities to shareholders no
less frequently than annually. Net short-term capital gains may be
paid more frequently.
A Portfolio's dividend and capital gain distributions with
respect to a particular class of shares will automatically be
reinvested in additional shares of the same class of the Portfolio
at NAV unless the shareholder elects to have the distributions
paid in cash. A shareholder may elect to have distributions paid
in cash by calling the Trust at 1-800-927-4648. Shareholders do
not pay any sales charges or other fees on shares received through
the reinvestment of Portfolio distributions.
For further information on distribution options, please contact
the Trust at 1-800-927-4648.
Tax Consequences
. Taxes on Portfolio Distributions. A shareholder subject to U.S.
federal income tax will be subject to tax on Portfolio
distributions whether they are paid in cash or reinvested in
additional shares of the Portfolios. For federal income tax
purposes, Portfolio distributions will be taxable to the
shareholder as either ordinary income or capital gains.
Portfolio dividends (i.e., distributions of investment income)
are taxable to shareholders as ordinary income. Federal taxes on
Portfolio distributions of gains are determined by how long the
Portfolio owned the investments that generated the gains, rather
than how long the shareholder owned the shares. Distributions of
gains from investments that a Portfolio owned for more than 12
months will generally be taxable to shareholders as capital gains.
Distributions of gains from investments that the Portfolio owned
for 12 months or less will generally be taxable as ordinary
income.
Portfolio distributions are taxable to shareholders even if they
are paid from income or gains earned by a Portfolio prior to the
shareholder's investment and thus were included in the price paid
for the shares. For example, a shareholder who purchases shares on
or just before the record date of a Portfolio distribution will
pay full price for the shares and may receive a portion of his or
her investment back as a taxable distribution.
The Portfolios' use of a fund of funds structure could affect the
amount, timing and character of distributions to shareholders. See
"Taxation--Distributions" in the Statement of Additional
Information.
31 PIMCO Funds: Multi-Manager Series
<PAGE>
. Taxes on Redemptions or Exchanges of Shares. Any gain resulting
from the sale of Portfolio shares will generally be subject to
federal income tax. When a shareholder exchanges shares of a
Portfolio for shares of another Portfolio or series of the Trust,
the transaction will be treated as a sale of the first Portfolio's
shares for these purposes, and any gain on those shares will
generally be subject to federal income tax.
This section relates only to federal income tax; the consequences
under other tax laws may differ. Shareholders should consult their
tax advisors as to the possible application of foreign, state and
local income tax laws to Portfolio dividends and capital
distributions. Please see the Statement of Additional Information
for additional information regarding the tax aspects of investing
in the Portfolios.
Prospectus 32
<PAGE>
Financial Highlights
The financial highlights table is intended to help you understand
the financial performance of Institutional Class and
Administrative Class shares of each Portfolio since the class of
shares was first offered. Certain information reflects financial
results for a single Portfolio share. The total returns in the
table represent the rate that an investor would have earned or
lost on an investment in a particular class of shares of a
Portfolio, assuming reinvestment of all dividends and
distributions. This information has been audited by
PricewaterhouseCoopers LLP, whose report, along with each
Portfolio's financial statements, are included in the Trust's
annual report to shareholders. The annual report is incorporated
by reference in the Statement of Additional Information and is
available free of charge upon request from the Distributor.
<TABLE>
<CAPTION>
Net Asset Net Realized/ Total Dividends Distributions
Year or Value Net Unrealized Income from from Net from Net
Period Beginning Investment Gain (Loss) on Investment Investment Realized
Ended of Period Income Investments Operations Income Capital Gains
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
90/10 Portfolio
Institutional
Class
02/26/99-
06/30/99 $10.91 $0.05(a) $1.23(a) $1.28 $ 0.00 $0.00
Administrative
Class
02/26/99-
06/30/99 10.91 0.04(a) 1.23(a) 1.27 0.00 0.00
60/40 Portfolio
Institutional
Class
02/26/99-
06/30/99 $10.55 $0.09(a) $0.73(a) $0.82 $(0.10) $0.00
Administrative
Class
02/26/99-
06/30/99 10.55 0.09(a) 0.72(a) 0.81 (0.09) 0.00
30/70 Portfolio
Institutional
Class
02/26/99-
06/30/99 $10.09 $0.15(a) $0.23(a) $0.38 $(0.14) $0.00
Administrative
Class
02/26/99-
06/30/99 10.09 0.14(a) 0.23(a) 0.37 (0.13) 0.00
</TABLE>
- -------
*Annualized
(a)Per share amounts based on average number of shares outstanding during the
period.
(b) The information provided under Ratio of Expenses to Average Net Assets
reflects a voluntary fee waiver of 0.05% currently in effect. If this
waiver was not reflected, Ratio of Expenses to Average Net Assets would be
0.15% for Institutional Class shares and 0.40% for Administrative Class
shares of each Portfolio.
33 PIMCO Funds: Multi-Manager Series
<PAGE>
<TABLE>
<CAPTION>
Ratio of Net
Ratio of Investment
Tax Basis Net Asset Net Assets Expenses to Income (Loss)
Return of Total Value End End of Average Net to Average Portfolio
Capital Distributions of Period Total Return Period (000s) Assets Net Assets Turnover Rate
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$0.00 $ 0.00 $12.19 11.73% $11 0.10%*(b) 1.17%* 48%
0.00 0.00 12.18 11.64 11 0.35*(b) 0.95* 48
$0.00 $(0.10) $11.27 7.80% $11 0.10%*(b) 2.52%* 39%
0.00 (0.09) 11.27 7.71 11 0.35*(b) 2.44* 39
$0.00 $(0.14) $10.33 3.78% $10 0.10%*(b) 4.20%* 37%
0.00 (0.13) 10.33 3.70 10 0.35*(b) 4.03* 37
</TABLE>
Prospectus 34
<PAGE>
-------------------------------------------------------------------
PIMCO INVESTMENT ADVISER AND ADMINISTRATOR
Funds: PIMCO Advisors L.P., 800 Newport Center Drive, Newport Beach, CA
Multi- 92660
Manager
Series
-------------------------------------------------------------------
CUSTODIAN
Investors Fiduciary Trust Company, 801 Pennsylvania, Kansas City,
MO 64105
-------------------------------------------------------------------
TRANSFER AGENT
National Financial Data Services, 330 W. 9th Street, 4th Floor,
Kansas City, MO 64105
-------------------------------------------------------------------
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP, 1055 Broadway, Kansas City, MO 64105
-------------------------------------------------------------------
LEGAL COUNSEL
Ropes & Gray, One International Place, Boston, MA 02110
-------------------------------------------------------------------
<PAGE>
FOR MORE INFORMATION
Two following documents are or will be available that offer further information
on the Portfolios and other series of PIMCO Funds: Multi-Manager Series
ANNUAL/SEMI-ANNUAL REPORTS TO SHAREHOLDERS The Trust's annual and semi-annual
reports include a discussion of the market conditions and investment strategies
that significantly affected the Portfolios' performance during its last fiscal
year or other period.
STATEMENT OF ADDITIONAL INFORMATION (SAI) The SAI contains additional
information about the Portfolios. A current SAI has been filed with the
Securities and Exchange Commission, and is incorporated into this prospectus by
reference.
To request a free copy of these documents or to make inquiries about the
Portfolios, please write or call:
PIMCO Funds:
Multi-Manager Series
840 Newport Center Drive
Suite 300
Newport Beach, CA 92660
Telephone:
1-800-927-4648
1-80-987-4626 (PIMCO Infolink Audio Response Network)
Information about the Trust (including the SAI) can be reviewed and copied at
the Securities and Exchange Commission's Public Reference Room in Washington,
D.C. Information on the operation of the public reference room may be obtained
by calling the Commission at 1-800-SEC-0330. Reports and other information about
the Trust are available on the Commission's Internet site at www.sec.gov, and
copies of that information may be obtained, upon payment of a duplicating fee,
by writing the Public Reference Section of the Commission, Washington, D.C.
20549-6009. You may need to refer to the Trust's file number under the
Investment Company Act, which is 811-6161.
SEC File Number: 811-6161 PY008.11/99
[PIMCO FUNDS LOGO APPEARS HERE]
PIMCO Funds
840 Newport Center Drive
Suite 300
Newport Beach, CA 92660
