<PAGE>
PIMCO Funds Prospectus
Multi-Manager Series
June 1, 2000
Share Class
D
----------------------------
GROWTH STOCK FUNDS
Growth Fund
Select Growth Fund
Target Fund
----------------------------
BLEND STOCK FUNDS
Capital Appreciation Fund
Mid-Cap Fund
----------------------------
VALUE STOCK FUNDS
Equity Income Fund
Renaissance Fund
Value Fund
----------------------------
ENHANCED INDEX STOCK FUNDS
Tax-Efficient Equity Fund
----------------------------
SECTOR-RELATED STOCK FUNDS
Innovation Fund
Global Innovation Fund
[LOGO OF PIMCO FUNDS]
This cover is not part of the Prospectus.
<PAGE>
PIMCO Funds Prospectus
PIMCO This Prospectus describes 11 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 March 31, 2000, PIMCO
Series Advisors and its affiliates managed approximately $264 billion,
including assets for 67 of the 200 largest U.S. corporations.
June 1,
2000 The Prospectus explains what you should know about the Funds
before you invest. Please read it carefully.
Share
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
Global Innovation Fund......................................... 9
Growth Fund.................................................... 11
Innovation Fund................................................ 13
Mid-Cap Fund................................................... 15
Renaissance Fund............................................... 17
Select Growth Fund............................................. 19
Target Fund.................................................... 21
Tax-Efficient Equity Fund...................................... 23
Value Fund..................................................... 25
Summary of Principal Risks....................................... 27
Management of the Funds.......................................... 29
How Fund Shares Are Priced....................................... 32
How to Buy and Sell Shares....................................... 33
Fund Distributions............................................... 35
Tax Consequences................................................. 36
Characteristics and Risks of Securities and Investment
Techniques...................................................... 36
Financial Highlights............................................. 43
</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
--------------------------------------------------------------------------------------------------------------
Select Growth Long-term growth of Common stocks of companies with 15-25
capital; income is an market capitalizations of at least $10 billion
incidental consideration
--------------------------------------------------------------------------------------------------------------
Target Capital appreciation; Common stocks of companies with 40-60
no consideration is market capitalizations of between $1 billion
given to income and $10 billion
-------------------------------------------------------------------------------------------------------------------------
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 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 of companies with below-average 50-80
capital and income valuations whose 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 $10 billion and
below-average valuations whose business
fundamentals are expected to improve
-------------------------------------------------------------------------------------------------------------------------
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
--------------------------------------------------------------------------------------------------------------
Global Innovation Capital appreciation; Common stocks of U.S. and non-U.S. 30-60
no consideration is technology-related companies with market
given to income capitalizations of more than $200 million
<CAPTION>
Approximate
Capitalization
Range
-------------------------------------------------------------------------------------------------------------------------
<S> <C>
Growth Stock At least $5 billion
Funds
--------------------------------------------------------------------------------------------------------------
At least $10 billion
--------------------------------------------------------------------------------------------------------------
Between $1 billion and
$10 billion
-------------------------------------------------------------------------------------------------------------------------
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 $10 billion
-------------------------------------------------------------------------------------------------------------------------
Enhanced Index More than $5 billion
Stock Funds
-------------------------------------------------------------------------------------------------------------------------
Sector-Related More than $200 million
Stock Funds
--------------------------------------------------------------------------------------------------------------
More than $200 million
</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 capitalization At least $1 billion
and Seeks growth common stocks
Strategies of capital
Fund Category Approximate Number Dividend Frequency
Blend Stocks of Holdings At least annually
</TABLE> 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 looks to sell 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 . Management Risk
. Issuer Risk . Focused Investment Risk
. Value Securities 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. For periods prior to the inception of the
Fund's Class D shares (4/8/98), performance information shown in
the bar chart (including the information to its right) and the
Average Annual Total Returns table 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 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 -- Class D
Highest and Lowest
Quarter Returns
(for periods shown
in the bar chart)
--------------------
Highest (10/1/99-
12/31/99) 23.79%
--------------------
Lowest (7/1/98-
9/30/98) -14.22%
[GRAPH]
Annual Return
92 93 94 95 96 97 98 99
7.08% 17.24% -4.64% 36.61% 26.30% 33.70% 17.14% 22.24%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/99)
<TABLE>
<S> <C> <C> <C>
Fund Inception
1 Year 5 Years (3/8/91)(/3/)
-------------------------------------------------------------------------
Class D 22.24% 26.99% 19.60%
-------------------------------------------------------------------------
S&P 500 Index(/1/) 21.04% 28.56% 19.75%
-------------------------------------------------------------------------
Lipper Capital Appreciation Fund Average(/2/) 41.82% 22.88% 16.55%
-------------------------------------------------------------------------
</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--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> <C> <C>
Principal Investment Objective Fund Focus Approximate Capitalization Range
Investments Seeks current income as a Income producing common More than $2 billion
and primary objective, and stocks with potential
Strategies long-term growth of capital for capital appreciation
as a secondary objective
Fund Category Approximate Number of Holdings Dividend Frequency
Value Stocks 40-50 Quarterly
</TABLE>
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in income-producing (e.g.,
dividend-paying) common stocks of companies with market
capitalizations of more than $2 billion at the time of investment.
The Fund may also invest in convertible securities and preferred
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. 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.
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 . Interest Rate 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. For periods prior to the inception of the
Fund's Class D shares (4/8/98), performance information shown in
the bar chart (including the information to its right) and the
Average Annual Total Returns table 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 distribution and/or
service (12b-1) fees and other expenses paid by Class D shares.
Prior to May 8, 2000, 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 Equity Income Fund (continued)
Calendar Year Total Returns -- Class D
Highest and Lowest
Quarter Returns
(for periods shown
in the bar chart)
--------------------
Highest (4/1/99-
6/30/99) 15.98%
--------------------
Lowest (7/1/98-
9/30/98) -10.99%
[GRAPH]
Annual Return
92 93 94 95 96 97 98 99
14.29% 8.04% -2.00% 32.94% 21.00% 30.87% 8.07% -2.22%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/99)
<TABLE>
<S> <C> <C> <C>
Fund Inception
1 Year 5 Years (3/8/91)(/3/)
------------------------------------------------------------------
Class D -2.22% 17.34% 13.83%
------------------------------------------------------------------
S&P 500 Index(/1/) 21.04% 28.56% 19.75%
------------------------------------------------------------------
Lipper Equity Income Fund Average(/2/) 4.88% 17.92% 14.28%
------------------------------------------------------------------
</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--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 Global Innovation Fund
<TABLE>
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Principal Investment Objective Fund Focus Approximate Capitalization Range
Investments Seeks capital appreciation; no Common stocks of U.S. and non- More than $200 million
and consideration is given to income U.S. technology-related companies
Strategies Dividend Frequency
Fund Category Approximate Number of Holdings At least annually
Sector-Related Stocks 30-60
</TABLE>
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in common stocks of U.S. and
non-U.S. companies which utilize new, creative or different, or
"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 (for example, companies classified as "Information
Technology" companies), and by identifying companies that derive a
substantial portion of their revenues from the manufacture, sale
and/or service of technological products. Although the Fund
emphasizes companies which utilize technologies, it is not
required to invest exclusively 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 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 looks to sell a stock when the portfolio manager
believes that earnings or market sentiment are disappointing, if
the company does not meet or exceed consensus estimates on
revenues and/or earnings or if an alternative investment is more
attractive.
Although the Fund invests principally in common stocks, the Fund
may also invest in other types of equity securities, including
preferred stocks and convertible securities. The Fund will invest
in the securities of issuers located in at least three countries
(one of which may be the United States). Although the Fund
normally invests in securities traded principally in the
securities markets of developed countries, the Fund has no
prescribed limits on geographic asset distribution and may invest
in any foreign securities market in the world, including in
emerging markets. The Fund may utilize foreign currency exchange
contracts and derivative instruments (such as stock index futures
contracts), primarily for risk management or hedging purposes.
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:
<TABLE>
<S> <C> <C>
. Market Risk . Derivatives Risk . Leveraging Risk
. Issuer Risk . Foreign Investment Risk . Credit Risk
. Growth Securities Risk . Emerging Markets Risk . Management Risk
. Smaller Company Risk . Currency Risk
. Liquidity Risk . Focused Investment 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 December 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.
9 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Global Innovation 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>
<S> <C> <C> <C> <C> <C> <C>
Distribution Total Annual
Advisory and/or Service Other Fund Operating Fee Net
Fees (12b-1) Fees(/1/) Expenses(/2/) Expenses Waiver(/3/) Expenses(/3/)
---------------------------------------------------------------------------------------
Class D 1.00% 0.25% 0.64% 1.89% 0.04% 1.85%
---------------------------------------------------------------------------------------
</TABLE>
(1) The Fund's administration agreement includes a plan for Class
D shares that has been adopted in conformity with the
requirements set forth in Rule 12b-1 under the Investment
Company Act of 1940. Up to 0.25% per year of the total
Administrative Fee paid under the administration agreement
may be Distribution and/or Service (12b-1) Fees. The Fund
will pay a total of 0.85% 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--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, which is based on estimated amounts for the
Fund's initial fiscal year, reflects the portion of the
Administrative Fee paid by the class that is not reflected
under Distribution and/or Service (12b-1) Fees, and 0.04%
representing the Fund's organizational expenses as attributed
to the class ("Organizational Expenses").
(3) Net Expenses reflect the effect of a contractual agreement by
PIMCO Advisors to waive, reduce or reimburse its
Administrative Fee for Class D shares 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 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.(/1/)
<TABLE>
<S> <C> <C>
Year 1 Year 3
-----------------------------------
Class D $188 $582
-----------------------------------
</TABLE>
(1) The Examples are based on the Net Expenses shown in the
preceding table.
Prospectus
10
<PAGE>
PIMCO Growth Fund
<TABLE>
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Principal Investment Objective Fund Focus Approximate Capitalization Range
Investments Seeks long-term Larger capitalization At least $5 billion
and growth of capital; common stocks
Strategies income is an Dividend Frequency
incidental Approximate Number of Holdings At least annually
consideration 35-40
Fund Category
Growth Stocks
</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 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 looks to
sell a stock when the portfolio manager believes that its
earnings, market sentiment or 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:
<TABLE>
<S> <C> <C>
. Market Risk . Foreign Investment Risk . Credit Risk
. Issuer Risk . Currency Risk . Management Risk
. Growth Securities Risk . Focused Investment 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 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 had Class D shares
outstanding for a full calendar year. 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.
For periods prior to the inception of Class D shares (11/1/99),
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.
11 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Growth Fund (continued)
Calendar Year Total Returns -- Class C
Highest and Lowest
Quarter Returns
(for periods shown
in the bar chart)
--------------------
Highest (10/1/99-
12/31/99) 36.21%
--------------------
Lowest (7/1/90-
9/30/90) -13.14%
[GRAPH]
Annual Return
90 91 92 93 94 95 96 97 98 99
0.29% 41.88% 2.08% 9.32% -0.75% 27.47% 17.52% 21.84% 38.90% 39.83%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/99)
<TABLE>
<S> <C> <C> <C> <C>
Fund Inception
1 Year 5 Years 10 Years (2/24/84)(/3/)
--------------------------------------------------------------------
Class C 38.83% 28.80% 18.77% 19.25%
--------------------------------------------------------------------
Class D 40.86% 29.75% 19.66% 20.14%
--------------------------------------------------------------------
S&P 500 Index(/1/) 21.04% 28.56% 18.21% 18.60%
--------------------------------------------------------------------
Lipper Growth Fund Average(/2/) 29.23% 25.03% 16.48% 16.27%
--------------------------------------------------------------------
</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--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 12
<PAGE>
PIMCO Innovation Fund
--------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
Principal Investment Fund Focus Approximate Capitalization Range
Investments Objective Common stocks of More than $200 million
and Seeks capital technology-related
Strategies appreciation; companies Dividend Frequency
no consideration At least annually
is given to income
Fund Approximate Number of Holdings
Category 40
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 new, creative or different, or "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 (for example, companies classified as "Information
Technology" companies), and by identifying companies that derive a
substantial portion of their revenues from the manufacture, sale
and or/service of technological products. 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 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 looks to sell a stock when the portfolio manager
believes that earnings or market sentiment are disappointing, if
the company does not meet or exceed consensus estimates on
revenues and/or earnings or if an alternative investment is more
attractive.
Although the Fund invests principally in common stocks, 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:
<TABLE>
<S> <C> <C>
. Market Risk . Smaller Company Risk . Currency Risk
. Issuer Risk . Liquidity Risk . Credit Risk
. Focused Investment Risk . Foreign Investment Risk . Management Risk
. Growth 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 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. For periods prior to the inception of the
Fund's Class D shares (4/8/98), performance information shown in
the bar chart (including 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. The
prior Class A performance has been adjusted to reflect that there
are no sales charges (loads) 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.
13 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Innovation Fund (continued)
Calendar Year Total Returns -- Class D
Highest and Lowest
Quarter Returns
(for periods shown
in the bar chart)
--------------------
Highest (10/1/99-
12/31/99) 80.23%
--------------------
Lowest (1/1/97-
3/31/97) -12.56%
[GRAPH]
Annual Return
95 96 97 98 99
45.33% 23.60% 9.03% 79.65% 140.42%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/99)
<TABLE>
<S> <C> <C> <C>
Fund Inception
1 Year 5 Years (12/22/94)(/3/)
-----------------------------------------------------------------------------
Class D 140.42% 53.27% 52.89%
-----------------------------------------------------------------------------
S&P 500 Index(/1/) 21.04% 28.56% 28.56%
-----------------------------------------------------------------------------
Lipper Science and Technology Fund Average(/2/) 134.77% 40.91% 40.91%
-----------------------------------------------------------------------------
</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 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--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 14
<PAGE>
PIMCO Mid-Cap Fund
--------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
Principal Investment Fund Focus Approximate Capitalization Range
Investments Objective Medium More than $500 million (excluding
and Seeks growth of capitalization the largest 200 companies)
Strategies capital common stocks
Fund Approximate Number of Holdings Dividend Frequency
Category 60-100 At least annually
Blend 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 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 looks to sell 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:
<TABLE>
<S> <C> <C>
. Market Risk . Growth Securities Risk . Focused Investment Risk
. Issuer Risk . Smaller Company Risk . Credit Risk
. Value Securities Risk . Liquidity Risk . Management 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 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. For periods prior to the inception of the
Fund's Class D shares (4/8/98), performance information shown in
the bar chart (including 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. The prior Institutional Class performance has been
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.
15 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Mid-Cap Fund (continued)
Calendar Year Total Returns -- Class D
Highest and Lowest
Quarter Returns
(for periods shown
in the bar chart)
--------------------
Highest (10/1/99-
12/31/99) 22.91%
--------------------
Lowest (7/1/98-
9/30/98) -14.46%
[GRAPH]
Annual Return
92 93 94 95 96 97 98 99
8.75% 15.32% -2.76% 36.76% 22.87% 33.65% 7.80% 12.52%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/99)
<TABLE>
<S> <C> <C> <C>
Fund Inception
1 Year 5 Years (8/26/91)(/3/)
-----------------------------------------------------------------
Class D 12.52% 22.19% 17.16%
-----------------------------------------------------------------
Russell Mid-Cap Index(/1/) 18.23% 21.85% 17.31%
-----------------------------------------------------------------
Lipper Mid-Cap Fund Average(/2/) 39.38% 23.07% 16.94%
-----------------------------------------------------------------
</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--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 16
<PAGE>
PIMCO Renaissance Fund
--------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
Principal Investment Fund Focus Approximate Capitalization Range
Investments Objective Undervalued All capitalizations
and Seeks long-term stocks with
Strategies growth of improving Dividend Frequency
capital and business Quarterly
income fundamentals
Fund Category Approximate Number of Holdings
Value Stocks 50-80
</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. Although the Fund typically invests in
companies with market capitalizations of $1 billion to $10 billion
at the time of investment, it may invest in companies in any
capitalization range. To achieve income, the Fund invests a
portion of its assets in income-producing (e.g., 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 looks to sell 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:
<TABLE>
<S> <C> <C>
. Market Risk . Foreign Investment Risk . Credit Risk
. Issuer Risk . Currency 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 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. For periods prior to the inception of the
Fund's Class D shares (4/8/98), performance information shown in
the bar chart (including 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. The
prior Class C performance has been adjusted to reflect that there
are no sales charges (loads) 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.
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 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.
17 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Renaissance Fund (continued)
Calendar Year Total Returns -- Class D
Highest and Lowest
Quarter Returns
(for periods shown
in the bar chart)
--------------------
Highest (10/1/98-
12/31/98) 18.65%
--------------------
Lowest (7/1/98-
9/30/98) -16.60%
[GRAPH]
Annual Return
90 91 92 93 94 95 96 97 98 99
-14.82% 34.22% 8.58% 22.13% -4.34% 28.55% 25.32% 35.89% 11.66% 9.90%
Calendar Year End (through 12/31/99)
Average Annual Total Returns (for periods ended 12/31/99)
<TABLE>
<S> <C> <C> <C> <C>
Fund Inception
1 Year 5 Years 10 Years (4/18/88)(/3/)
------------------------------------------------------------------
Class D 9.90% 21.86% 14.57% 14.01%
------------------------------------------------------------------
Russell 1000 Value Index(/1/) 7.34% 23.08% 15.60% 16.38%
------------------------------------------------------------------
Lipper Equity Income Fund
Average(/2/) 4.77% 18.02% 12.85% 13.54%
------------------------------------------------------------------
</TABLE>
(1) The Russell 1000 Value Index is an unmanaged index that
measures the performance of companies in the Russell 1000
Index with lower price-to-book ratios and lower forecasted
growth values. It is not possible to invest directly in the
index. The Russell 1000 Value Index replaced the S&P 500 Index
(an unmanaged index of large capitalization common stocks) as
one of the Fund's comparative indexes because PIMCO Advisors
believes the Russell 1000 Value Index is more representative
of the Fund's investment strategies. For periods ended
December 31, 1999, the 1 Year, 5 Years, 10 Years and Fund
Inception average annual total returns of the S&P 500 Index
were 21.04%, 28.56%, 18.21% and 19.06%, respectively. 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-- 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 18
<PAGE>
PIMCO Select Growth Fund
--------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
Principal Investment Objective Fund Focus Approximate
Investments Larger capitalization Capitalization Range
and Seeks long-term common stocks At least $10 billion
Strategies growth of
capital; income Approximate Number Dividend Frequency
is an incidental of Holdings At least annually
consideration 15-25
Fund Category
Growth Stocks
</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 $10 billion at
the time of investment. The Fund normally invests in the
securities of 15 to 25 issuers.
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 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 looks to sell a stock when the
portfolio manager believes that its earnings, market sentiment or
relative performance are disappointing or if an alternative
investment is more attractive. The Fund is "non-diversified,"
which means that it invests in a relatively small number of
issuers.
The Fund may invest up to 25% 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 .Growth Securities .Credit Risk
.Issuer Risk Risk .Management Risk
.Focused Investment .Foreign Investment
Risk 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, 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
D shares during the periods shown. 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. The estimated Class D
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.
The performance information on the next page reflects the Fund's
advisory fee level in effect prior to April 1, 2000 (0.57% per
annum); these results would have been lower had the Fund's current
advisory fee level (0.60% per annum) then been in effect. 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. In
addition, the Fund changed its investment objective and policies
on April 1, 2000; the performance results shown on the next page
would not necessarily have been achieved had the Fund's current
objective and policies then been in effect. Past performance is no
guarantee of future results.
19 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Select Growth Fund (continued)
Calendar Year Total Returns -- Institutional Class
Highest and Lowest
Quarter Returns
(for periods shown
in the bar chart)
--------------------
Highest (10/1/98-
12/31/98) 24.90%
--------------------
Lowest (7/1/98-
9/30/98) -11.38%
[GRAPH]
Annual Return
95 96 97 98 99
27.96% 17.95% 25.32% 41.06% 24.27%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/99)
<TABLE>
<S> <C> <C> <C>
Fund Inception
1 Year 5 Years (12/28/94)(/3/)
-----------------------------------------------------------------
Institutional Class 24.27% 27.09% 27.06%
-----------------------------------------------------------------
Class D 23.78% 26.59% 26.57%
-----------------------------------------------------------------
S&P 500 Index(/1/) 21.04% 28.56% 28.56%
-----------------------------------------------------------------
Lipper Growth Fund Average(/2/) 29.23% 25.03% 25.03%
-----------------------------------------------------------------
</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
Expenses These tables describe the fees and expenses you may pay if you buy
of the and hold Class D 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>
<S> <C> <C> <C> <C>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Fees (12b-1) Fees(/1/) Expenses(/2/) Expenses
--------------------------------------------------------------------
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--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 below 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
20
<PAGE>
PIMCO Target Fund
--------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
Principal Investment Fund Focus Approximate Capitalization Range
Investments Objective Medium capitalization Between $1 billion
and Seeks capital common stocks and $10 billion
Strategies appreciation; no
consideration is Approximate Number Dividend Frequency
given to income of Holdings At least annually
40-60
Fund Category
Growth Stocks
</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 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 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 looks to
sell a stock when the portfolio managers believe that its
earnings, market sentiment or 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
.Focused Investment
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 did not offer Class D shares
during the periods listed. Although Class D and Class A 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 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. If they did, the
returns would be lower than those shown. Unlike the bar chart,
performance for Class A shares in the Average Annual Total Returns
table reflects 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 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.
21 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Target Fund (continued)
Calendar Year Total Returns -- Class A
Highest and Lowest
Quarter Returns
(for periods shown
in the bar chart)
--------------------
Highest (10/1/99-
12/31/99) 53.05%
--------------------
Lowest (7/1/98-
9/30/98) -13.15%
[GRAPH]
Annual Return
93 94 95 96 97 98 99
24.52% 3.09% 30.31% 15.68% 15.44% 23.27% 66.25%
Calendar Year End (through 12/31/99)
Average Annual Total Returns (for periods ended 12/31/99)
<TABLE>
<S> <C> <C> <C>
Fund Inception
1 Year 5 Years (12/17/92)(/3/)
------------------------------------------------------------------
Class A 57.10% 28.28% 24.13%
------------------------------------------------------------------
Class D 66.25% 29.74% 25.13%
------------------------------------------------------------------
S&P Mid-Cap 400 Index(/1/) 14.73% 23.05% 17.55%
------------------------------------------------------------------
Lipper Mid-Cap Fund Average(/2/) 39.38% 23.07% 17.44%
------------------------------------------------------------------
</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 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 0.55% 0.25% 0.40% 1.20%
--------------------------------------------------------------------
(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-- 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 $122 $381 $660 $1,455
--------------------------------------------------------------------
</TABLE>
Prospectus 22
<PAGE>
PIMCO Tax-Efficient Equity Fund
--------------------------------------------------------------------------------
<TABLE>
<S> <C>
Principal Investment Fund Focus Approximate Capitalization Range
Investments Objective A portion of the More than $5 billion
and Seeks maximum common stocks
Strategies after-tax represented in the S&P Dividend Frequency
growth of 500 Index At least annually
capital
Approximate Number
Fund of Holdings
Category More than
Enhanced Index 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 looks to sell 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:
. Market Risk . Growth Securities Risk . Credit Risk
. Issuer Risk . Leveraging Risk . Management
. Value Securities Risk . Focused Investment 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. Past performance is no guarantee of future
results.
23 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Tax-Efficient Equity Fund (continued)
Calendar Year Total Returns -- Class D
Highest and Lowest
Quarter Returns
(for periods shown
in the bar chart)
--------------------
Highest (10/1/99-
12/31/99) 14.90%
--------------------
Lowest (07/01/99-
09/30/99) -7.33%
[GRAPH]
Annual Return
99
17.19%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/99)
<TABLE>
<S> <C> <C>
Fund Inception
1 Year (7/10/98)(/3/)
------------------------------------------------------------------------
Class D 17.19% 15.30%
------------------------------------------------------------------------
S&P 500 Index(/1/) 21.04% 20.42%
------------------------------------------------------------------------
Lipper Growth Fund Average(/2/) 29.23% 23.65%
------------------------------------------------------------------------
</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 primarily 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 7/10/98. Index comparisons begin
on 6/30/98.
--------------------------------------------------------------------------------
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--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 24
<PAGE>
PIMCO Value Fund
--------------------------------------------------------------------------------
<TABLE>
<S> <C>
Principal Investment Fund Focus Approximate Capitalization Range
Investments Objective Undervalued larger More than $10 billion
and Seeks long-term capitalization
Strategies growth of stocks with improving Dividend Frequency
capital and business Quarterly
income fundamentals
Fund Category Approximate Number
Value Stocks of Holdings
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 and below-average valuations whose business
fundamentals are expected to improve. To achieve income, the Fund
invests a portion of its assets in income-producing (e.g.,
dividend-paying) common stocks.
The portfolio manager selects stocks for the Fund using a "value"
style. The portfolio manager 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 looks to sell 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 (ADR's). 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 . Credit Risk
. Issuer Risk 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. For periods prior to the inception of the
Fund's Class D shares (4/8/98), performance information shown in
the bar chart (including 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. The prior Institutional Class performance has been
adjusted to reflect the actual distribution and/or service (12b-1)
fees and other expenses paid by Class D shares. Prior to May 8,
2000, 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.
25 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Value Fund (continued)
Calendar Year Total Returns -- Class D
Highest and Lowest
Quarter Returns
(for periods shown
in the bar chart)
--------------------
Highest (4/1/99-
6/30/99) 17.76%
--------------------
Lowest (7/1/98-
9/30/98) -13.27%
[GRAPH]
Annual Return
92 93 94 95 96 97 98 99
12.70% 15.95% -4.45% 38.37% 19.87% 25.71% 9.86% 3.88%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/99)
<TABLE>
<S> <C> <C> <C>
Fund Inception
1 Year 5 Years (12/30/91)(/3/)
-----------------------------------------------------------------------
Class D 3.88% 18.93% 14.67%
-----------------------------------------------------------------------
S&P 500 Index(/1/) 21.04% 28.56% 19.70%
-----------------------------------------------------------------------
Lipper Growth and Income Fund Average(/2/) 13.71% 21.37% 15.51%
-----------------------------------------------------------------------
</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--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 26
<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,
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, Global Innovation,
Growth, Mid-Cap, Innovation, Select 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 Global Innovation and Innovation Funds generally have
substantial exposure to this risk. The Mid-Cap and Target Funds
have significant exposure to this risk because they invest
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 The Global Innovation, Growth, Innovation, Renaissance, Select
Risk Growth 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
27 PIMCO Funds: Multi-Manager Series
<PAGE>
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- Global Innovation Fund, may experience more rapid and extreme
U.S.) changes in value than Funds that invest exclusively in securities
Investment of U.S. issuers or securities that trade exclusively in U.S.
Risk 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 Global Innovation Fund, invests a
significant portion of its assets in a narrowly defined area such
as Europe, Asia or South America, 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. The Global Innovation
Fund may invest a significant portion of its assets in emerging
markets securities.
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. The Global Innovation Fund is 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.
Focused Focusing Fund investments in a small number of issuers, industries
Investment or foreign currencies increases risk. Funds, such as the Select
Risk Growth Fund, that are "non-diversified" because they invest in a
relatively small number of issuers may have more risk because
changes in the value of a single security or the impact of a
single economic, political or regulatory occurrence may have a
greater adverse impact on the Fund's net asset value. Some of
those issuers also may present substantial credit or other risks.
The Global Innovation Fund may be subject to increased risk to the
extent that it focuses its investments in securities denominated
in a particular foreign currency or in a narrowly defined
geographic area outside the U.S. Similarly, the Global Innovation
and Innovation Funds are 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 these Funds normally "concentrate"
their investments in those companies. Also, the Funds may from
time to time have greater risk because they invest a substantial
portion of their assets in related industries such as "technology"
or "financial and business services."
Leveraging The Funds, and in particular the Global Innovation and Tax-
Risk Efficient Equity Funds, may engage in transactions or purchase
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. The
use of derivatives may also involve leverage.
Prospectus 28
<PAGE>
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 Ad- "Administrator") for the Funds. Subject to the supervision of the
ministrator 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 March 31, 2000, PIMCO Advisors and its subsidiary
partnerships had more than $264 billion in assets under
management.
PIMCO Advisors has retained investment management firms ("Sub-
Advisers") to manage the investments of the Capital Appreciation,
Mid-Cap and Tax-Efficient Equity Funds. The PIMCO Equity Advisors
division of PIMCO Advisors manages the investments of the Equity
Income, Global Innovation, Growth, Innovation, Renaissance, Select
Growth, Target and Value 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 and Value Funds 0.45%
Growth Fund 0.50%
Target Fund 0.55%
Select Growth Fund 0.57%*
Renaissance Fund 0.60%
Innovation Fund 0.65%
</TABLE>
* On April 1, 2000, the advisory fee rate for the Select Growth
Fund increased to 0.60% per annum.
The Global Innovation and Tax-Efficient Equity Funds were not
operational during the entire fiscal year ended June 30, 1999. The
annual investment advisory fee rate payable by these Funds are as
follows (stated as a percentage of the average daily net assets
each Fund taken separately): Global Innovation--1.00%; Tax
Efficient Equity--0.45%.
29 PIMCO Funds: Multi-Manager Series
<PAGE>
Adminis- Each Fund pays for the administrative services it requires under a
trative fee structure which is essentially fixed. Class D shareholders of
Fees 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.
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):
Fund Administrative Fees*
-------------------------------------------------------------------
Capital Appreciation, Equity Income, Innovation,
Mid-Cap, Renaissance and Value Funds 0.65%
*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% (0.85% for the Global Innovation Fund) Administrative Fee
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% (0.85% for the Global
Innovation Fund) Administrative Fee rate under two separate
columns entitled "Distribution and/or Service (12b-1) Fees"
(0.25%) and "Other Expenses" (0.40%) (0.60% for the Global
Innovation Fund).
The Global Innovation, Growth, Select Growth, Target 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 following
annual rates (stated as a percentage of the average daily net
assets attributable in the aggregate to the Fund's Class D
shares): Global Innovation--0.85%; Growth, Select Growth, Target
and Tax-Efficient Equity--0.65%.
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 Equity Income, Global Innovation, Growth, Innovation,
Advisors ("PIMCO Equity Advisors") Renaissance, Select Growth, Target and Value
1345 Avenue of the Americas, 50th Floor
New York, NY 10105
-------------------------------------------------------------------------------------------------------
Cadence Capital Management ("Cadence") Capital Appreciation and Mid-Cap
Exchange Place, 53 State Street
Boston, MA 02109
-------------------------------------------------------------------------------------------------------------
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 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.
Prospectus 30
<PAGE>
The following individuals at PIMCO Equity Advisors have primary
responsibility for the noted Funds. Different sub-advisory firms
served as Sub-Adviser for the Growth, Innovation and Target Funds
prior to March 6, 1999, for the Renaissance Fund prior to May 7,
1999, for the Select Growth Fund prior to July 1, 1999 and for the
Equity Income and Value Funds prior to May 8, 2000.
<TABLE>
<CAPTION>
Recent Professional
Fund Portfolio Managers Since Experience
--------------------------------------------------------------------------------
<C> <C> <C> <S>
Equity Income Kenneth W. Corba 2000 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.
Global Innovation Dennis P. McKechnie 1999 Portfolio Manager of
(Inception)+ 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.
Growth Mr. Corba 1999 See above.
Innovation Mr. McKechnie 1998 See above.
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.
Select Growth Messrs. Corba and Schneider 1999 See above.
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.
Value Mr. Schneider 2000 See above.
-------
+ Prior to PIMCO Advisors and PIMCO Equity Advisors assuming their
positions as Adviser and Sub-Adviser, respectively, of the
Global Innovation Fund, Mr. McKechnie managed the Fund's
portfolio in his capacity as an officer of the Trust.
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 March 31, 2000 of
approximately $6.8 billion.
The following individuals at Cadence share primary responsibility
for each of the noted Funds.
<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.
</TABLE>
31 PIMCO Funds: Multi-Manager Series
<PAGE>
<TABLE>
<CAPTION>
Recent Professional
Fund Portfolio Managers Since Experience
--------------------------------------------------------------------------
<C> <C> <C> <S>
Capital Peter B. McManus 1994 Director, Account
Appreciation (cont.) 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.
Bannick and Capital
McManus and Appreciation
Ms. Burdon Fund
</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 March 31,
2000 of approximately $4.5 billion.
The following individuals at Parametric share primary
responsibility for the Tax-Efficient Equity Fund.
<TABLE>
<CAPTION>
Recent Professional
Fund Portfolio Managers Since Experience
------------------------------------------------------------------------------
<C> <C> <C> <S>
Tax-Efficient Equity David Stein 1998 (Inception) 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>
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, 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 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,
Prospectus 32
<PAGE>
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 pursuant to procedures approved by the Board of Trustees.
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).
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
33 PIMCO Funds: Multi-Manager Series
<PAGE>
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, PFPC, Inc., 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.
Initial Investment Subsequent Investments
----------------------------------------------------------------
$2,500 per Fund $100 per Fund
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 Except as provided below or in the applicable Fund's or series'
Shares prospectus(es), you may exchange your Class D shares of any Fund
for Class D 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 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.
Exchange Until July 3, 2000, shareholders will not be permitted to exchange
Limitations their shares of any Fund or series of PIMCO Funds: Pacific
Investment Management Series for shares of the Global Innovation
Fund, although investors will be permitted to exchange their
shares of the Global Innovation Fund for shares of the same class
of any other Fund or series of the Trust or of PIMCO Funds:
Pacific Investment Management Series. This restriction may be
changed or eliminated at any time at the discretion of the
Distributor.
Prospectus 34
<PAGE>
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.
35 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., as gains on investments owned for more
than 12 months) when distributed to shareholders. 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
Prospectus 36
<PAGE>
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 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.
The Equity Income, Global Innovation, Growth, Innovation,
Renaissance, Select Growth, Target and Value 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 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 Global Innovation and Innovation Funds may
Market invest significant portions of their assets in smaller companies
Capitali- and therefore have substantial exposure to the risks described
zations below. The Mid-Cap and Target Funds also have significant exposure
to the risks described below 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.
The Funds may purchase securities in intial public offerings
(IPOs). These securities are subject to many of the same risks of
investing in companies with smaller market capitalizations.
Securities issued in IPOs have no trading history, and information
about the companies may be available for very limited periods. In
addition, the prices of securities sold in IPOs may be highly
volatile. A Fund may not be able to invest in securities issued in
IPOs to the extent desired because, for example, only a small
portion of the securities being offered in an IPO may be made
available to the Fund or because under certain market conditions
few companies may issue securities in IPOs.
37 PIMCO Funds: Multi-Manager Series
<PAGE>
Foreign The Global Innovation Fund will invest in the securities of
Securities issuers located in at least three countries (one of which may be
the United States). The Equity Income, Growth, Innovation,
Renaissance, Select Growth, Target and Value 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 Equity Income, Global Innovation,
Growth, Innovation, Renaissance, Select Growth, Target and Value
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.
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. The Global Innovation Fund may
invest significant portions 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. The Global Innovation Fund 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
Prospectus 38
<PAGE>
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 Global Innovation
Fund is 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 Equity Income, Global
Innovation, Growth, Innovation, Renaissance, Select Growth, Target
and Value Funds may enter into forward foreign currency exchange
contracts to reduce the risks of adverse changes in foreign
exchange rates. In addition, the Global Innovation Fund 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 Global Innovation 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 Global Innovation 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 its 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.
Derivatives Each Fund (except the Capital Appreciation and Mid-Cap 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
39 PIMCO Funds: Multi-Manager Series
<PAGE>
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 Equity Income, Global Innovation, Growth,
Innovation, Renaissance, Select Growth, Target, Tax-Efficient
Equity and Value 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.
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
Prospectus 40
<PAGE>
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.
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.
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
41 PIMCO Funds: Multi-Manager Series
<PAGE>
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.
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 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.
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.
Changes The investment objective of each of the Global Innovation, Growth,
in Innovation, Renaissance, Select Growth, Target and Tax-Efficient
Investment Equity Funds described in this Prospectus may be changed by the
Objectives Board of Trustees without shareholder approval. The investment
and objective of each other Fund is fundamental and may not be changed
Policies without shareholder approval. Unless otherwise stated in the
Statement of Additional Information, all 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.
New Funds In addition to the risks described under "Summary of Principal
Risks" above and in this section, the Global Innovation Fund is
newly formed and therefore has no history upon which investors can
evaluate its likely performance. Accordingly, there can be no
assurance that the Fund will achieve its investment objective.
Also, it is possible that the Fund may invest in securities
offered in initial public offerings and other similar transactions
which, because of the Fund's size, have a disproportionate impact
on the Fund's performance results. The Fund would not necessarily
have achieved the same performance results if its aggregate net
assets had been greater.
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 42
<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 Global Innovation, Growth, Select Growth and
Target Funds 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 (i)
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 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 (i)
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 Equity Income, Innovation, Renaissance and
Value Funds reflects results of operations under each Funds' former Sub-
Adviser through May 8, 2000, March 6, 1999, May 7, 1999 and May 8, 2000,
respectively; the Funds would not necessarily have achieved the performance
results shown above under their current investment management arrangements.
43 PIMCO Funds: Multi-Manager Series
<PAGE>
<TABLE>
<CAPTION>
Ratio of Net
Distributions Ratio of Investment
in Excess of Net Asset Expenses to Income (Loss) to
Net Realized Total Value End of Net Assets End Average Net Average Net Portfolio
Capital Gains 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 44
<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 1-202-942-
8090 for information about the operation of the public reference
room. You may also access reports and other information about the
Trust on the EDGAR database on the Commission's Web site at
www.sec.gov. You may get copies of this information, with payment
of a duplication fee, by electronic request at the following e-
mail address: [email protected], or 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]
File No. 811-6161
<PAGE>
Presenting the new PIMCO Funds Web site at www.pimcofunds.com
[GRAPHIC]
You'll find all the content you've come to rely on--at pimcofunds.com--and more.
As part of our commitment to provide our shareholders with easy access to timely
information, we're pleased to introduce a redesigned version of the PIMCO Funds
Web site (www.pimcofunds.com).
Designed to make the site user-friendly, you'll immediately notice improved
navigation accompanied by intuitive labeling and graphics that load quickly.
Content updates include expanded detail throughout the Fund Information section,
and a variety of forms and literature are now available for printing and viewing
online or for download to your hard drive.
Fund Information Section
In addition to everything we previously offered in the Fund Information section,
we now offer the following:
. Regular commentary from the manager of each fund.
. A better design without frames allows you to bookmark fund profile pages.
. Cross-links give you immediate access to literature with more detail about
each fund.
. One-click allows you to check out the NAV and year-to-date performance of any
PIMCO Fund.
PIMCO Funds Bond Center
The PIMCO Funds Bond Center continues to deliver the best research and news
about bonds and bond investing. Rely on the Bond Center to bring you the latest
information from our world-class team of investment professionals led by PIMCO
founder Bill Gross.
. Investment Outlook--Bill Gross's monthly newsletter on economic and interest
rate trends.
. Manager Commentary--Read insight from PIMCO bond managers on the economy and
its impact on their funds.
Daily Manager Commentary
PIMCO's Daily Manager Commentary provides investment insights from PIMCO's fund
managers, including their outlooks on the economy and fund strategies that
relate to the current economic climate. This commentary, on a wide range of
subjects, is uniquely provided from the manager's perspective and helps
investors make informed decisions based on information directly from PIMCO's
investment professionals.
PZ006.6/00 Not part of the Prospectus
--------------------------------------------------------------------------------
[LOGO OF PIMCO FUNDS]
PIMCO Funds Distributors LLC
2187 Atlantic Street Stamford, CT 06902-6896
<PAGE>
PIMCO Funds: Multi-Manager Series
--------------------------------------------------------------------------------
INVESTMENT ADVISOR AND ADMINISTRATOR
PIMCO Advisors L.P., 800 Newport Center Drive, Newport Beach, CA 92660
--------------------------------------------------------------------------------
PORTFOLIO MANAGERS
PIMCO Equity Advisors division of PIMCO Advisors L.P., Cadence Capital
Management, Parametric Portfolio Associates
--------------------------------------------------------------------------------
DISTRIBUTOR
PIMCO Funds Distributors LLC, 2187 Atlantic Street, Stamford, CT 06902-6896
--------------------------------------------------------------------------------
CUSTODIAN
State Street Bank & Trust Co., 801 Pennsylvania, Kansas City, MO 64105
--------------------------------------------------------------------------------
SHAREHOLDER SERVICING AGENT AND TRANSFER AGENT
PFPC, Inc., 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 PIMCOFunds, call 1-800-426-0107 or visit our
Web site at www.pimcofunds.com.
Not part of the Prospectus
<PAGE>
PIMCO FUNDS: MULTI-MANAGER SERIES
Supplement Dated June 1, 2000
to the
Prospectus for Class D Shares
Dated June 1, 2000
Disclosure Relating to PIMCO Target Fund
The Prospectus is revised by adding the following subsection to the end
of the section captioned "How to Buy and Sell Shares."
Additional Restrictions
Class D shares of PIMCO Target Fund will not be available for purchase
until June 12, 2000. Similarly, until June 12, 2000, shareholders will not be
permitted to exchange their shares of any Fund or series of PIMCO Funds: Pacific
Investment Management Series for Class D shares of PIMCO Target Fund. These
restrictions may be changed or eliminated at any time at the discretion of the
Trust's distributor, PIMCO Funds Distributors LLC.
